Albay Rep. Joey Sarte Salceda, House Ways and Means Committee chair, seeks to lead a “relentless policy effort to secure whale-sized trading and investment opportunities for the Philippines” worth as much as $20 billion, amidst the escalating US-China trade tensions that push global manufacturing investors to diversify their value chains.
Salceda, who also chairs the House’s tax committee and a former well-regarded equity analyst in the Asian markets, said “a chaotic global order, while fraught with challenges, is also full of opportunities for countries with strong fundamentals” like the Philippines.
“I think we can easily target annual post-Covid FDIs of $20 billion. Our resistance is at $10 billion right now. I will bring the trade and finance chiefs together to get us to target $20 billion, annually. I disdain small national dreams for a country with gigantic potential. Let’s go big or go home with national objectives,” he said.
“We have the youngest labor force in ASEAN. We are largely English-speaking. We have an increasingly more productive workforce. Our citizens are tech-savvy. Our fiscal ship is tight, and our economic potential is immense. With aggressive trade and investment policy, we can take significant chunks of global trade and investments for our country,” Salceda pointed out.
In a recent budget interview with Trade Secretary Ramon Lopez, Salceda said he wants an even more active investment policies using unconventional tools to attract trade and investments.
The Albay lawmaker has recently filed the Financial Technology Industry Development Act (bill) to pursue investors seeking to relocate from Hong Kong, in the wake of seious concerns about tightening government regulations in the Special Administrative Region.
His proposal includes provisions for special visas for fintech executives and investors, to be recommended by the governor of the Bangko Sentral ng Pilipinas (BSP). He also said the swift approval and enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) will help attract overdue investments that were postponed due to uncertainties in the fiscal regime.
“Passing CREATE will be the lowest-hanging fruit. We have easily foregone USD12 billion in investments in the past two years that we have delayed its passage. If the version passed by the Senate is fiscally sustainable, I will go for its adoption by the House. No “forever” in tax incentives, no bicam needed,” he added.
Salceda said he will ask the Departments of Trade and Industry (DTI) and Finance (DOF) secretaries for a united front on the country’s international tax strategy.
“Double tax agreements, not even preferential tariffs yet, helped Vietnam convince Korean companies to invest big in their country. I want us to think out of the free-trade agreement box and come up with innovative trade strategies such as DTAs. We need to be very cunning, however, with our strategy,” the tax chair said.
Presently, the Department of Trade (DTI) is focused on: “Deepening Trade relations with strategic partners such as EU, US and Korea through bilateral FTAs; Enhancing trade relations with major markets such as Japan, China, Australia and New Zealand via Regional Comprehensive and Economic Partnership (RCEP) agreements;
Maximizing the Generalized System of Preferences (GSP) status it has from countries such as the US and EU to access their market at preferential duties, using the FTAs and GSP leverage to encourage manufacturers to establish operations in the country, and be able to access the market of the countries with established FTAs ties.”