Gma Assures Strategic Investors Gov't Will Maintain Incentives

GMA assures strategic investors gov't will maintain incentives

5th October 2006

Business, Balita - http://biz.balita.ph/html/article.php/20061005160003217

President Gloria Macapagal-Arroyo assured investors Thursday that her administration will keep and enhance the incentives the Philippines offers to strategic and foreign investors, especially exporters, as the government strives to achieve its $ 3 billion annual foreign direct investment (FDI) target.

In her message at the American Chamber of Commerce of the Philippines-organized workshop on FDI, "How the Philippines Can Attract $ 3 Billion a Year" held at the Hotel Intercontinental in Makati, the President said the incentives may not be fiscal incentives but "competitive elements" such as infrastructure, reduction of red tape, technology, power and workers.

"The incentives need not be fiscal. The incentives you want are the competitive elements: the workers being paid well enough in terms of affordable food; the technology, in other words, our continuing knowledge worker richness in our economy, the infrastructure, the power and the reduction of red tape," she said.

She stressed that the investors and other businessmen in the Philippines "will not become less competitive in the fiscal incentive" that the government offers to both foreign and local investors.

The President also said she was aware of the concern of businessmen over the effect of the continuing strength of the peso on export. She added that while she leaves it to the market forces to determine the value of the country's currency, her economic team is undertaking concrete steps to assist the export sector.

She said her support for Charter change includes the removal from the Constitution of restrictions on foreign investments "because it should be Congress that should legislate them and not the Constitution."

"We want foreign equity rules to be done by Congress and the Department of Trade and not the Constitution," she added.

The President told the over 300 workshop participants that the FDI target of $ 3 billion a year for the Philippines is highly achievable given the latest data from the Bangko Sentral ng Pilipinas that for the first semester of 2006, total net inflow reached 6 million.

"If the trend continues for the second semester, this will almost be $ 2 billion for one year and therefore, we only have to work for an additional $ 1 billion a year," she said.

The workshop participants projected some $ 8.5 billion FDI every year for the Philippines over the next four years, or roughly $ 34 billion in four years with the opening up of greater opportunities in the health care, mining, tourism, information technology and manufacturing sectors, among others.

With the projections and investment plan of investors for the country, "we will quite be able to succeed in getting that additional $ 1 billion a year," the President said as she thanked the investors for their confidence in the Philippine economy.

The Chief Executive also underscored the need to lure more foreign direct investments so as to create more jobs and stop the migration of Filipinos in search of jobs abroad.

"We know that the successful implementation.the implementation of the solution to the problem is our nation's biggest challenge," she said.

The President said the Philippine economy is on an extended bull run as she expressed confidence that the people would "keep the pace going" until the country achieves an economic takeoff.

She also called on the "business people, but specially the ordinary people, to sustain the momentum by upholding excellence, productivity and unity that will assure them of a fair share of the benefits of growth." (PNA)