MANILA, Philippines – The government is targetting a four fold increase in foreign direct investment (FDI) four times in the next three years to $8 billion.
“Our aspiration is to match their (Vietnam) FDI level,” Trade Secretary Gregory L. Domingo told reporters.
With regret, Domingo reported that the FDI level of Vietnam is four times greater than the Philippines. The FDI of Vietnam is currently at $8 billion while the Philippines is only at $2 billion. He said that his goal is to match this level in the medium term or in three-to-five years.
Domingo said he is confident that the $8 billion figure is achivable with the right policy, right infrastructure and right governance.
However, there are some controversies surrounding the investment climate in the Philippines after the Department of Finance (DOF) proposed that the income tax holiday (ITH) be abolished in six years.
When asked to comment on the matter, Domingo said that it is part of the internal discussions with the DOF but said that the two departments have very good relations.
“The ITH can be replaced with other forms of incentives that can be competitive in the region,” Domingo said.
Domingo said the incentive package is not the only consideration of investors. He said power, infrastructure, governance and peace and order are also important.
“The best determinant of how we do is in competitiveness,” Domingo said. He noted that the Philippines is in the bottom third in the National Competitiveness Council (NCC) ranking. In two to three years, he said the goal is to improve the ranking in the next two years. –Ma. Elisa P. Osorio (The Philippine Star)
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