EDC told to woo Japanese firms moving out of China

The chairman of the House Committee on Ways and Means has urged the Department of Finance and the Department of Trade and Industry to come up with “proactive strategies” to attract Japanese firms moving out of China.

In letters to Finance Secretary Carlos G. Dominguez and Trade Secretary Ramon M. Lopez, Albay Rep. Joey Sarte Salceda asked the Cabinet members to craft a strategy to capture Japanese investors following Prime Minister Yoshihide Suga’s announcement that the Japanese government will subsidize Japanese companies who move out of China and into the Association of Southeast Asian Nations (Asean).

In his letter to Dominguez, Salceda requested for the Economic Development Cluster's (EDC) strategy to capitalize on this development.

"Please keep us abreast, as well, about potential double taxation agreements [DTAS] that we can undertake with Japan to maximize this policy,” he said in his letter to Dominguez.

“I understand that getting such a strategy carried out quickly by the Executive will require your support. I recommend that the EDC take this matter up, so that we could form a unified government front on this matter. I assure you that the Speaker also watches this development closely and takes my counsel on this issue. We will take up policy recommendations from the Executive, on this matter, with urgency."

Meanwhile, in his letter to Lopez, Salceda asked for the country’s strategy to maximize this policy pronouncement from the Japanese government.

“Structural weaknesses on this matter that could be addressed by policy, and proposed policy language, if ever; and a menu of nontax incentives that we could offer potential locators,” he said.

Earlier this month, Salceda proposed a “20-20-20” goal- setting agenda. He said the country should train 20 million highly-skilled workers, attract $20 billion in foreign investments every year, and lower corporate income tax to 20 percent before 2030 comes, to be a globally competitive economic power.

“It’s an evolve-or-die scenario. We either meet those 20-20-20 goals, or we lose our edge as a country. That’s why I’m working with the economic managers to get foreign investments coming in."

To implement the agenda, the lawmaker said the Congress should pass the Corporate Recovery and Tax Incentives for Enterprises (CREATE) and the 3 bills liberalizing the restrictions on foreign investments.

“It is the minimum that we should pass CREATE and the investment liberalization triplets. These are the amendments to the Public Service Act, the Foreign Investments Act, and the Retail Trade Liberalization Act,” he said. “The House has already approved them. All are pending in the Senate. Unless we get all four items passed on time, we will remain among the most investment restrictive economies in the world.”

Salceda said the Organization for Economic Cooperation and Development (OECD) consistently ranks the Philippines as the most Fdi-restrictive nation in Asean.

He also said the new House leadership is working to study energy issues to lower manufacturing costs and make the country more attractive for investors. “The biggest challenge to heavy industries in the country is energy. It’s not tax. It’s not labor. It’s energy cost. Under the new Speaker, who has worked for years as chair of the Committee on Energy, we have significant advantage in the area,” Salceda said.