PH To Invest On Technology And Human Capital To Attract FDIs

Standard Chartered Bank (Stanchart) released a report saying the Philippines is expected to invest more in human capital, science, and technology development, and innovation capabilities to ensure sustainable growth for the reopening economy and to compete with its Asian neighbors in attracting foreign direct investments (FDI).

In the insight report, “Winning in ASEAN”, Stanchart said the Philippines “aims to expand economic opportunities across a broad range of sectors, such as agriculture, forestry, fisheries, manufacturing, and the digital economy.”

Stanchart added that technology and human capital will play a key role in driving change supported by foreign investment, particularly in manufacturing and information technology.

The report was based on a survey of 480 C-suite and senior business leaders across four key sectors in the region which showed that 52% of business leaders have a positive outlook on the overall Philippine market.

Based on the survey, 32% of the population are young adults or between 20 to 39 years old in 2021 with the highest percentage among the ASEAN-6.

Stanchart said the Philippines is “one of the strongest economies in Asia” due to a “young and dynamic English-speaking workforce.”

“The government has sought to attract foreign investments to improve the economy by liberalizing rules and regulations, such as simplifying business registration and providing tax holidays,” Stanchart added.

The following FDI factors were cited: the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE Act) which allowed businesses to enjoy income tax holidays and special corporate income tax; the Special Economic Zones (SEZs) for foreign companies to come in with tax breaks and other incentives; the 2020 Investment Priority Plan (IPP); the amended Foreign Investment Act; and the revised Public Service Act.

Certain players such as the British bank’s local CEO, Lynette Ortiz, said that the country’s GDP growth is backed by a strong consumer demand, supported by a  “vibrant labor market, sound economic fundamentals, and a globally competitive workforce.”

“The government’s commitment to further boost infrastructure spending and its focus on digitalization and sustainability are expected to drive the country’s economic rebound and growth momentum,” said Ortiz.

She added that the bank is “well-positioned to help clients tap the growing business and investment opportunities in the country and contribute to its continuing progress.”

Overall in ASEAN, the Stanchart report said 93% of business leaders are confident about the regional growth prospects, while 81% think FDIs will increase in the trade bloc.

Stanchart affirmed the effectiveness of public-private partnership (PPP); trade agreements; digitalization; and the green transition to accelerate recovery and resilience in ASEAN and beyond.

It also emphasized the top four growth sectors in the region are construction and infrastructure; consumer products; pharmaceutical and healthcare; and digital and eCommerce.

Stanchart noted that when looking for a banking partner, business leaders want their bank to have these: digitized platforms for foreign exchange and other real-time access; multi-currency settlement services for their foreign exchange hedging; strong cash management capabilities; and widespread cross-border network.

Source: Manila Bulletin