Philippines optimistic of attracting more investors

KUALA LUMPUR (Nov 30, 2012): The Philippines is optimistic about attracting more foreign direct investment into the country, especially to Mindanao, following the recent consolidation of the peace framework with rebel groups.

Mindanao, the second biggest island in the Philippines archipelago, has a population of 22 million and climatic conditions which facilitate agriculture. Mindanao’s agricultural land area constitutes 38% of the country’s total farming area, inter alia, accounting for 88% of the Philippines’ pineapple production, 82% of bananas and 75% of coffee.

Filipino ambassador to Malaysia, Jose Eduardo Malaya said this provided an opportunity for Malaysian investors to tap into the huge potential opportunities in Mindanao’s agricultural sector, including coconut, coffee, palm oil and rubber plantations and seaweed production.

“Now we have palm oil plantations in the Kota Batu area in Mindanao, operated by the locals. They need assistance in areas such as seedling, advance technology and additional capital,” Malaya told reporters after the opening of the Business Networking Forum for Mindanao here yesterday.

Malaysian construction companies and investors could also explore opportunities in mining and infrastructure development, as Mindanao needs infrastructure “such as development of a seaport, upgrading of the airport and roads”.

Prominent Malaysian companies operating in the Philippines include Berjaya Corp Bhd, Resorts World Hotels, Shangri-La Hotels, MTD Capital Bhd and Malayan Banking Bhd.

According to the International Trade and Industry Ministry deputy secretary-general Mohd Ridzal Sheriff, about 45 Malaysian companies are currently operating in the Philippines primarily in the service, construction, real estate, trade, transportation and manufacturing sectors.

Malaysia was the Philippines’ ninth largest trading partner in 2011, with total trade amounting to US$3.7 billion. Malaysian investments in the Philippines have exceeded US$203.03 million over the last six years (2005-2010).

The Philippines government is keen to attract foreign investors with both fiscal and non-fiscal incentives.

Fiscal incentives being offered include income tax holiday, reduced duty for importation of capital equipment, exemption from taxes and duties on imported spare parts, additional deductions and tax credits.

Non-fiscal incentives include employment of foreign nationals, simplification of customs procedures and importation of consigned equipment.

Mindanao Development Authority chairperson Luwalhati Ricassa Antonino said Mindanao contributed 30% of the Philippines’ national gross domestic product last year.

“The investment climate is much better now as we have good networking, connectivity into the region,” said Antonino, who is “very optimistic as big companies in Malaysia have shown huge interest to invest in Mindanao”.

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