Plenty of new opportunities for Singapore companies

WITH the recent liberalisation of its foreign investment rules and tax regime, the Philippines offers attractive new opportunities for Singapore companies looking to grow their business in the region.

Already, Singapore is a key trading partner and top investment source for the Philippines. Latest trade figures show that Singapore was the Philippines' sixth-largest trading partner last year and trade flows in both directions are strong. The Republic was the fifth-largest export market for the Philippines and the sixth-largest import supplier to the country. Singapore also ranked as the fourth top source of investments for the Philippines in 2020, with approved investments amounting to US$201.37 million.

Although this was a huge decline from the US$3.40 billion approved investments in 2019 when Singapore was the top investor in the Philippines, the country is optimistic that Singapore will remain as one of its top investment sources, says Katrina Banzon, commercial attache at the Philippine Trade and Investment Center for Malaysia and Singapore, in an interview with The Business Times.

Ms Banzon highlights that under the new Corporate Recovery and Tax Incentives for Enterprises (CREATE), recently signed into law, foreign investors enjoy many new benefits.

Key features include the removal of export and nationality bias, and lower tax rates. The president of the country also has flexibility to grant incentives for highly desirable projects with minimum investment capital of 50 billion pesos (S$1.4 billion) or the generation of at least 10,000 jobs (total period of availment will not exceed 40 years). Upon the recommendation of the Fiscal Incentives Regulatory Board, the president may modify the mix, period or manner of availment of incentives, or craft the appropriate financial support package for a highly desirable project or a specific industrial activity.

Under "Make it happen in the Philippines" (MIH), the new international investment promotion campaign of the country, there are five priority investment sectors. "The campaign aims to generate foreign direct investment (FDI) from 18 countries in the Asia-Pacific, Europe, and America, and will initially focus on key industries that have the most potential for foreign investment such as automotive, aerospace, electronics, information technology and business process management (IT-BPM), and copper/ nickel," says Ms Banzon. (For more information on MIH, visit: https://philippines.business/)

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"Companies from Singapore can take advantage of these sectors, especially manufacturing and administrative and support services, which historically has been the major investment industries for Singapore-based companies," she notes.

Highlighting the importance of trade between the two countries, Ms Banzon says that Singapore is a significant market for her country's electronics and electricals sector, with exports amounting to US$2.73 billion, which is 73 per cent of total exports of the Philippines to Singapore.

Ms Banzon says that a number of Philippine companies service clients in Singapore, providing them with highly reliable and quality end-to-end electronics manufacturing solutions for long product life cycle segments such as automotive, industrial electronics, aerospace, and defence markets. In addition, these companies are capable of providing engineering, manufacturing, and support and fulfilment capabilities to diverse industries in Singapore and globally. These capabilities cover design and development, prototyping, test development, and order fulfilment.

Should any company be interested, the Philippine Trade and Investment Center in Singapore (through Singapore@dti.gov.ph) can connect with the industry association, Semiconductor and Electronics Industries in the Philippines Inc (SEIPI), or directly with the company of interest, adds Ms Banzon.