Philippines needs more ecozones to attract foreign investors

CEBU, Philippines — French consul general Christian Hue said the Philippines has to develop more economic zones and offer tax incentives to invite more foreign investors into the country.

In an interview at his visit in Mactan Economic Zone (MEZ) 2 last Saturday, Hue said French companies in general continue to be bullish on the Philippines economic potential despite the criticisms received by the current administration on its war against the illegal drug trade.

"The country has its own policies and we respect that," the consul said.

"Economic (matters) are separate from political," he also said.

He said the country's sound economic fundamentals and its cheap labor are what make it attractive to potential foreign investors.

He said the tax-free economic zones have been aided in attracting foreign investors.

"If there are tax incentives, people will come as they help companies to be better and competitive," the French official said.

He noted that French companies are keen on investing in sectors such as transportation, infrastructure, aeronautics, education, finance and energy in the Philippines.

He also cited that Philippine exports to France are seen to increase by 20 percent with the Generalized System of Preferences Plus (GSP+) which allows the Philippines to export over 6,000 products to European Union nations like France with zero tariff.

In 2016, trade between France and the Philippines stood at €1.66 billion, dropping 30 percent compared to 2014 (€2.365 billion).

French exports totaled €818 million while Philippine exports to France are growing steadily and increased from €492 million in 2014 to €845 million in 2016.

The trade deficit now stands at €27 million in contrast with the record surplus of €1.4 billion recorded in 2014.

"Our bilateral trade remains highly dependent on sales in the aviation industry which account for 76 percent of our exports to the Philippines. Outside that sector, our main export items are agri-food products, electronic components, pharmaceuticals and steel structures," according to the French Embassy.

France is the Philippines’ 14th largest supplier and 18th most important client.

Among EU member states, France is also one of the Philippines’ most important trading partners.

In 2015, commercial exchange between France and the Philippines amounted to €1.44 billion.

Commercial exchange between the two countries is expected to further develop, against a backdrop of the prevailing strong growth of the Philippine economy, and the supply of French aerospace components in 2018 and 2019.

In 2015, the commercial exchange between the European Union and the Philippines reached €12.9 billion, with a slight trade surplus of €641 million in favor of the Philippines.

The European Union is the Philippines’ fifth most important trading partner, accounting for 11 percent of all trade, after ASEAN member countries (20 percent), Japan (15 percent), China (14 percent) and the United States (13 percent), and before Taiwan (6 percent) and South Korea (5 percent). Moreover, the European Union accounts for about 10 percent of ASEAN foreign trade.

In 2015, the European Union was the Philippines’ most important client, accounting for 12 percent of all its exports, after Japan (21 percent) and the United States (15 percent) and just before China (11 percent). Philippine exports to the European Union reached €6.8 billion.

With respect to imports in 2015, the European Union was the Philippines’ fourth largest supplier, after China, the United States and Japan. (FREEMAN)