I recently attended a webinar entitled ‘FYI ASEAN: Philippines Webinar on Expanding Trade & Investment Opportunities,’ hosted by the Singapore Business Federation.
The discussion was on CREATE Act, Investment Priorities Plan and other policy reforms that might positively impact partnerships and business prospects between Singapore and the Philippines, as well as the hot sectors in the Philippines right now. The value of cross-border investment between Singapore and the Philippines in 2020 was US$201.37 million.
CREATE Act has been effective since 11 April 2021. The bill has been updated to make it easier for big multinational conglomerates and SMEs, especially ones from Singapore, to invest and do business in, and with, the Philippines.
Carla Regina P. Grepo, a Commercial Counsellor Designate at the Philippine Trade and Investment Center Singapore, explained during the webinar that the CREATE Act is the ‘largest fiscal stimulus package for businesses in the country’s history, providing private enterprises more than US$20.023 billion worth of tax relief over the next 10 years with a significant cut on the tax rate for corporations.’
Other benefits include the reduction of corporate income tax from 30% to 25%. For both resident and nonresident international firms’ sale of shares of stock (that aren’t traded on the stock exchange), capital gains tax will be 15%. There is also an additional 50% deduction on both labour and power expenses, to name a few.
Doing business in, and with, the Philippines has become much more straightforward too. However, it is crucial to know which industries to invest in. And Anna Rellama, the Director of Philippines YCP Solidiance, gave an overview of this during the webinar.
Due to the Covid-19 pandemic, there was a spike of 325% in online shopping in the Philippines, she pointed out. There’s also been a 53% increase in web traffic to shopping sites. E-commerce is prospering with a generally young population of 109 million.
The pandemic has also given the healthcare industry room to grow. In the Philippines, healthcare access is still generally unattainable for many, and the private sector dominates. Consequently, digital consumer health will continue to be profitable, especially with a global pandemic still raging. For instance, KonsultaMD, a telehealth membership service business, reported a 461% increase in telehealth consultations from 2019 to 2020.
Another area of opportunity is in energy infrastructure, said Rellama. Natural gas supply is running out in the islands, and there will be huge demand for renewable energy. Six companies are already focused to set up liquefied natural gas terminals in the nation and will be investing close to PHP82.93 billion (US$1.61 billion).
The Philippines is ’ASEAN’s second most populous and third largest economy’ and it is a land of opportunity. The economy is growing rapidly and international investments are welcome from everywhere, especially from Singapore.