‘Pivotal legislative reforms’ seen to attract Qatar FDI for key Philippine projects

The Philippines has implemented pivotal legislative reforms or “key economic liberalisation laws” as part of its transformative agenda to enhance its attractiveness for foreign direct investments (FDIs), such as those from Qatar and other countries.

The government has embarked on a strategic shift to attract more FDI, fostering an environment more conducive for foreign investors and driving economic growth and development, said Alfredo E Pascual, the secretary of the Department of Trade and Industry (DTI).

Pascual said these key economic liberalisation laws include the following: the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act (or Republic Act No 11534); Amendments to the Foreign Investments Act of 1991 (RA No 11647); Amendments to the Retail Trade Liberalisation Act (RA No 11595); Amendments to the Public Service Act (RA No 11659); Amendments to Section 19 of the Implementing Rules and Regulations of the Renewable Energy (RE) Act of 2008; RA No 11032 or the Ease of Doing Business and Efficient Government Act; Executive Order (EO) No 18, Series of 2023 Constituting Green Lanes for Strategic Investments; and revised guidelines and procedures for entering into joint venture (JV) agreements between government and private entities.

In a previous interview with Gulf Times, Pascual identified several specific sectors or industries that could be infused with Qatari investments. These priority sectors include agribusiness/agriculture; energy efficiency technologies and RE; infrastructure and public-private partnership (PPP) projects, such as real estate development and logistics; Artificial intelligence (AI); Information Technology and Business Process Management (IT-BPM); manufacturing; oil and gas; processed and speciality food (Halal food); and tourism, including hospitality.

Pascual emphasised that the CREATE Act harmonised the differing incentive packages offered by the Philippines’ various Investment Promotion Agencies (IPAs) into a single and unified incentive menu.

“Through this, we aim at providing greater certainty to foreign investors as to ‘incentives availment’. We believe that this could also potentially help attract more FDIs in the country through the Strategic Investment Priority Plan (SIPP),” Pascual told Gulf Times.

Through RA No 11647, Pascual said the Philippine government reduced the minimum paid-up capital requirement from $200,000 to $100,000 (subject to certain conditions on technology use and domestic employment, among others) for foreign investors to set up and fully own domestic enterprises, including small and medium-sized enterprises.

“This is established under the Inter-Agency Investment Promotion Co-ordination Committee (IIPCC), which is tasked to integrate all promotion and facilitation initiatives to encourage foreign investments,” he said.

Similarly, Pascual said RA No 11595 has lowered the minimum paid-up capital requirement from $2.5mn to $500,000.00 for foreign retail investors. This has enabled setting up foreign retail investments easier through the removal of the certification of pre-qualification requirements, the removal of the public offering of shares, and the reduction in the minimum investment requirement per store, he said.

He said the Philippines has liberalised foreign ownership of projects engaging in exploration, development, and utilisation of solar, wind, hydro, and ocean resources to hasten the transition to RE resources.

As of April 2024, the DTI, through the Board of Investments (BOI), has granted green lane endorsement to 59 projects, covering investments in manufacturing, digital infrastructure, and food security, among others amounting to P1.90tn.

He said the Revised Guidelines and Procedures for Entering into JV Agreements between Government and Private Entities was designed to enhance competition for projects under JVs.

“We work to enhance the performance of private sector parties and strengthen checks and balances to ensure the technical and financial viability of government projects,” Pascual added.