TRADE WAR EFFECT? | US-based companies see PH as viable site for relocating operations

TRADE WAR EFFECT? | US-based companies see PH as viable site for relocating operations
News 5 10 Nov 2019

November 10, 2019 – American companies consider the Philippines as a viable site in relocating operations from China amid the two superpower countries’ growing trade war.

The US Chamber of Commerce said that investors have seen the efforts of the Philippine government to upscale its business climate, citing the annual Ease of Doing Business Report by the World Bank. The report shows a big leap in the Philippines’s ranking from 124th to 95th in the 2020 edition.

“I think that demonstrates that you see an ongoing effort in the Philippines to improve the business climate, improve the investment environment and so I think that countries are paying attention and that there are business opportunities in that market for sure,” USCC Executive Director for Southeast Asia John Goyer said.

The challenge remains though for the Philippines and other Southeast Asian nation on how to lure investments with a number of factory owners looking at migrating from China due to the trade tension between Beijing and Washington.

“How can the Philippines and other countries best position themselves to capture some of that business whether it’s the shifting of supply orders or actual new green field investment. So this is what every Filipino is thinking about,” Goyer explained.


American investors remain to have a positive outlook towards the Philippines as investor confidence peaks at an all-time high, according to an official of the Philippine Embassy in Washington.

“When President Duterte unveiled his choices for the senior economic positions, there was a huge sigh of relief in Washington because these are people they know. They are confident, with integrity and that has been reinforced by their visits in the course of two to three years then interacting with the US business community,” Economic Affairs Minister Jose Victor Chan-Gonzaga of the Philippine Embassy in Washington said.

The growth of the gross domestic product of the Philippines to 6.2 percent in the third quarter of the year from a four-year low of 5.5 percent in the previous quarter is an assurance for the US business community of the competence of the Philippine economic team and their commitment to alleviate poverty in the country.

“As far as the Embassy is concerned, we have not seen any lack of commitment on the part of the US government and business community on how they can be of help to the Philippines. Obviously those issues they raised I think that doesn’t detract at all from their confidence in the economy,” he said.

For the US-ASEAN Business Council, the position of the Philippines remain at a very good level.

UABC senior manager Lilibeth Almonte-Arbez said that it is what US companies are looking for in terms of a longer investment horizon though a clarity on the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA), particularly on the rationalization of the fiscal incentives would benefit the Philippines more, in terms of investments.

Aside from this, a long standing issue on the foreign ownership in the Philippines has always been a concern for investors.

Better incentives from other countries give the Philippines a stiff competition, at least according to US Philippines Society president John Maisto.

Maisto said the country should find a way to lure investors to compensate the issues on the foreign ownership limit and on tax and incentives.

“We always tell investors look at the growth factor, look at the dependability of the Philippine work population from all levels, look at the English language advantages,” Maisto said. (Dale De Vera/TGC)