Investments to Surge through 'Economic Corridor'

The Philippines is currently discussing with Taiwan over establishing an "economic corridor" between the Philippine free trade zones of Subic Bay and Clark and all the export processing zones in Taiwan, Manila Economic & Cultural Office Director of Commercial Affairs Dita Angara-Mathay said.

Angara-Mathay says that the corridor aims to provide easy and efficient flow of capital, labor, products and services between Subic Bay, Clark, and Taiwan. The corridor she adds will essentially integrate these areas into one seamless economic zone where greater production and bigger market share can be achieved at lower costs for the mutual benefit of the two closest neighbors.

The economic corridor can allow Taiwan companies to set up their manufacturing plants and facilities in the Philippines, gain access to the Philippine market as well as to third markets such as ASEAN which the Philippines have trade agreements with, Angara-Mathay said. These will be extended to the markets of Japan and Korea as soon as Philippine trade agreements with these countries are ratified and enter into force.

The Philippines is looking to gain more investments and technology transfer from Taiwan companies which the nation needs, said the director, who added that the further opening of trade ties would be natural given the close proximity of Taiwan and the Philippines.

Officials from both sides have recently conducted talks on the establishment of the corridor.

Angara-Mathay said that the Philippines is preparing to offer 90-day visa free arrangements to personnel of Taiwan companies which will operate in the economic corridor.

The Philippines is also preparing to offer 4-6-8 year income tax holidays, duty free importation of capital equipment and raw materials, and hassle free movement of technical and professional personnel of Taiwan companies operating and planning to set up operations in the economic corridor, said Angara-Mathay.

Subic Bay authorities have made known that they are preparing to offer preferential rates to Taiwan companies on utilities and rent, Angara-Mathay said.

Other points that both economies are discussing include encouraging Taiwan and Philippine banks to issue loans to Taiwan companies in the proposed corridor and increasing Taiwan equity participation in the development of Subic Bay and Clark industrial parks.

In addition to the proposed economic corridor, Angara-Mathay said that the Philippine government has identified certain sectors and industries for foreign investment.

Service industries such as information communication technology (ICT), health & wellness, and logistics, electronics products, and the agricultural and aqua cultural industry are some of the areas which the Philippine government encourages Taiwanese foreign investments.

In ICT, while the Philippines has developed a solid reputation as a global player in the call center industry serving primarily the North American market, the Philippines offers huge investment opportunities in business process outsourcing and knowledge process outsourcing. Angara-Mathay explained that the Philippines will become a strong regional service provider of business processing, medical and legal transcription, engineering design services, computer graphics and animation and software development services.
By Stephen Che The China Post