By Justine Irish D. Tabile, Reporter
THE Philippines will have to do more to promote itself as an investment destination to attract investment from the European Union (EU), as companies within the trading bloc consider Southeast.
On the sidelines of a briefing on Thursday, European Chamber of Commerce of the Philippines (ECCP) Executive Director Florian Gottein said that a lot of EU investments tend to go to Vietnam and, to some extent, to Thailand, Indonesia, Malaysia, and the Philippines.
“For many European investors, the Philippines is not top of mind. I think that is our job and the job of trade promotion agencies and investment promotion agencies to bring the Philippines to the top,” he told reporters.
He said Vietnam’s advantage is proximity to China, incentives, and lower power rates.
“If you look at Vietnam, I can tell you it’s mainly because of being a neighboring country to China. Many companies that are in China, since a couple of years ago, are going into what they call reshoring or China Plus One,” he said.
“So they are diversifying out of China. China is still a very important market for them, but they are not producing everything for the whole supply chain centered in one country but diversifying,” he added.
“The Philippines has, if you compare it to other countries in ASEAN, the second highest power rate after Singapore. Why is that? Because in Vietnam, it is subsidized,” he said.
“Vietnam also has a very generous incentives regime because of the nature of how the government works there. There are shorter ways of getting such incentives rather than here, where you have to bring it through the legislative process in both houses,” he added.
For the Philippines, he said that the opportunities lie in free trade agreement negotiations, further liberalization of the economy, and working on ease of doing business.
Nevertheless, ECCP President Paulo Duarte said that there is a growing interest among EU firms in exploring the Philippines, adding that a “handful” of EU companies are looking to enter the country.
“What we see is also a lot of interest from European companies to understand what is happening in the Philippines,” said Mr. Duarte.
“Last year we had multiple trade missions from European countries coming to the Philippines. They were exploratory visits but (there was) interest to look to the Philippines as an investment destination,” he added.
In particular, he said that agriculture offers strong investment prospects, as do mining, mineral processing, digitalization, and cybersecurity.
“And then circular economy, sustainability, and green economy — all of these get a lot of attention from European companies and investors. And I think the direction from the current administration towards these are also in the same direction as the EU,” he said.
However, Mr. Duarte said that the Philippines should play a stronger role in promoting itself.
“We need to do more of that because there is very fierce competition, and the fact that the Philippines is clustered in ASEAN means additional competition because it is not isolated,” he said.
“But the potential for growth compared to other countries, in our opinion, is definitely in the Philippines. The margin to progress is at the highest in the Philippines. So we are very bullish about an EU-Philippines FTA. If this materializes, then I can see a big boost,” he added.