MANILA - The Philippines is "not getting the biggest chunk" of investments fleeing from coronavirus-epicenter China due to the country's lack of infrastructure, Trade Secretary Ramon Lopez said Thursday.
While the Philippines has "started to get the interest" of least 16 Wuhan-based companies and 119 other China-based firms, other investors from Asia's largest economy have opted to relocate to other Southeast Asian countries, Lopez told senators during a Senate Committee of the Whole hearing.
"I will admit, Mr. Senator, that we are not getting the biggest chunk. That can also be seen in the foreign direct investments," Lopez told Senate Minority Leader Franklin Drilon when asked about the Philippines' standing in the region as an alternative investment destination.
"Our effort to build the infrastructure, doon po tayo medyo talo," he said.
But the Philippines is "not entirely losing" as the country is still able to bag some new investments, the Trade chief said.
"Ang Pilipinas po nakakuha din tayo. (The Philippines is also getting some investments.) We started to talk already to companies in China," he said, without giving details on the number of new investors in the country.
Most Chinese investors seeking to relocate to Southeast Asia turn to Vietnam because of Hanoi's geographical proximity to mainland China, Lopez said.
"It is like an extension of China," he said.
PUSH FOR 'CREATE' LAW
The executive branch hopes Congress would pass its second tranche of tax reform which will "immediately" cut corporate income taxes in the Philippines to 25 percent to lure more investors to the country, Lopez said.
"We are actually offering or asking companies what [incentives] do they need to come over," he said.
"We have to continue to improve the environment sa atin through financial reforms and infrastructure," he said.
The Philippines' 30 percent corporate income tax rate is the highest in Southeast Asia, as its regional peers offer rates between 17 and 25 percent.
But under the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), an "improved version" of the Corporate Income Tax and Incentives Rationalization Act (CITIRA), a "sunset clause" will be placed on "unlimited" incentives to ensure that the government can profit from industries that have been enjoying tax breaks and holidays for decades.
The Philippine Economic Zone Authority earlier asked lawmakers to keep the status quo on incentives in economic zones which are "tried, tested and proven" to attract foreign investors, especially amid the global coronavirus pandemic.
While laws have yet to be finalized, the Philippines needs to settle uncertainties in its economic policies to benefit from the investor exodus from China, senators have said.