JFC: Philippines to attract $128 billion FDI by 2030
MANILA, Philippines — The Joint Foreign Chambers of the Philippines (JFC) has raised its foreign direct investments target to $128 billion by the end of 2030 as it banks on recently passed reforms that provide significant opportunities for FDI.
In a press conference yesterday, American Chamber of Commerce of the Philippines (Amcham) executive director Ebb Hinchliffe said the JFC revised to $78 billion its earlier FDI target of $50 billion for 2021, which it set during the 9th Arangkada Philippines Forum in December 2020.
On top of this, he said an additional $50 billion worth of investments was targeted to come in until 2030.
“We set the target to $50 billion (in 2020) and now it’s at $78 billion. We have raised it [to] make it a total of $128 billion by the end of 2030,”Hinchliffe said.
The JFC is a coalition of the American, Australian-New Zealand, Canadian, European, Japanese and Korean chambers and the Philippine Association of Multinational Companies Regional Headquarters Inc.
The group pointed out that the Philippines is showing its ability to rapidly recover from the negative impact experienced at the height of the COVID-19 pandemic, citing that it registered a 7.6 percent growth in its gross domestic product (GDP) in the third quarter, the second highest in the ASEAN region.
It said the country also brought in record high net FDI of $12.4 billion in 2021.
The foreign chambers expect the strong economic performance to continue with the recent undertaking of reforms and policy directions that can provide significant opportunities for foreign investment, job creation and improved services.
Among these are the amendments to the Foreign Investments Act, Retail Trade Liberalization Act, and Public Service Act; reforms to develop important sectors of the economy such as the Creative Industries Development Act and the Electric Vehicles Development Act; the opening up of the renewable energy sector to more foreign investment through the amendment of the implementing rules and regulations of the Renewable Energy Act of 2008; the revision of the build-operate-transfer (BOT) Law IRR to address private sector concerns and reinvigorate PPP in the country; and the decision to allow information technology-business process management (IT-BPM) firms to implement alternative work arrangements without losing incentives.
In addition, the JFC also expressed optimism for the country’s economic team.
“We believe that a highly experienced and competent economic team is in place and we trust they will manage appropriate interventions to influence inflation, supply chain blockages, and similar major challenges and headwinds to economic growth,” the group said
Asked what sectors could the target volume of FDIs come from, Hinchliffe cited the energy sector as one.
“Energy will be a big part. I know there’s a lot of interest from the energy side especially as we shift away from coal to more renewable energy,”Hinchliffe said.
With the amendment of the IRR of the RE Act, which allows up to 100 percent foreign equity ownership in the solar, wind, and tidal energy projects, big interest has been seen from European investors.
European Chamber of Commerce of the Philippines (ECCP) president Lars Wittig shared the same sentiment with Hinchliffe, as he pointed out that the recent amendment to the RE Act IRR, would “result in billion dollar investments from Europe alone”.
The German-Philippine Chamber of Commerce and Industry Inc. (GPCCI) earlier affirmed this interest.
“The renewable energy sector has always been an interest for many German investors when they consider doing business in the Philippines,” GPCCI executive director Christopher Zimmer said in an earlier statement.
“Germany has a strong RE industry with a lot of know-how and experience that could contribute to the energy transition of the Philippines. We look forward to seeing the rules finalized so more companies can explore this sector’s large potential for cooperation and energy generation,”he said.
Apart from energy, Hinchliffe said that investments may also come from other sectors such as manufacturing, particularly semiconductors, as well as agriculture.
While the JFC expressed overall optimism for more FDIs, it reiterated its call for the passage of additional reforms to further improve the country’s investment climate.
“The JFC and our partner Philippine business groups have recommended an initial list of 24 legislative measures for enactment in the 19th Congress, which include liberalization of foreign equity restrictions in the Constitution, the further lowering of barriers to entry in the telecommunication sector, and additional improvements to the tax system, among others,” the group said.
“We also look forward to the issuance of the IRR of the amendment Public Service Act as well as the Philippine Senate’s ratification of the Regional Comprehensive Economic Partnership,”it said.