MORE liberal taxation and digitalization of the financial sector are expected to help the economy recover and entice investors to bet on the Philippines as pitched by economic managers to Japanese bankers.
Bangko Sentral ng Pilipinas (BSP) Benjamin E. Diokno invited over 300 Japanese investors to take advantage of opportunities in the financial sector.
“The Philippines aims not only to regain what was lost from the [health] crisis. We want a ‘post-Covid economy’ that is stronger, more technologically-advanced, more sustainable and more inclusive than ever before,” Diokno said during the Philippine Economic Briefing for Japan held online. Two years ago, the PEB was held in Osaka, Japan.
Diokno added the BSP is pursuing a post-Covid economy through promoting financial digitalization and sustainable finance.
He added the BSP remains committed to maintain price stability and a stable financial system that helps provide an environment conducive for businesses to prosper.
For his part, Finance Secretary Carlos G. Dominguez III expressed confidence the country’s economic recovery will be boosted by the implementation of the Corporate Recovery and Tax Incentives for Enterprises (Create) law. The law slashed corporate income tax rates and rationalized the country’s fiscal incentives regime.
Dominguez also emphasized that the law provides flexibility in granting fiscal and non-fiscal incentives.
“There is much economic energy waiting to be unleashed in the coming period. Our recovery will get a boost with the implementation of the Create law. This is the largest economic stimulus program for businesses in our recent history,” the chief of the Department of
Finance (DOF) said.
“Through Create, we see an opportunity to draw in high-value investments by incentivizing industries that will introduce new technologies and innovations, and create more jobs,” Dominguez added.
Meanwhile, Trade and Industry Secretary Ramon M. Lopez said Japan has been the Philippines’s “strong and important trading partner,” especially in areas of electronics and medical devices.
Lopez noted that Japan was the country’s second major trading partner, top export market and second-biggest import source in 2020.
“This continued for January to June 2021, as Japan was our second major trading partner with $10.34 billion of trade, an increase of 21 percent compared with the same period in 2020 with $8.56 billion,” the chief of the Department of Trade and Industry said.
Socioeconomic Planning Secretary Karl Kendrick T. Chua also expressed gratitude to Japan for being the country’s largest bilateral development partner and for its support to the administration’s infrastructure projects.
“Together with the continuous roll-out of our vaccination program, infrastructure will be key in driving economic recovery, restoring confidence and bringing back jobs,” Chua said.
Meanwhile, Philippine Ambassador to Japan Jose C. Laurel V cited the productive relationship between the Philippines and Japan.
“Our bilateral and regional work continues in various sectors, such as infrastructure development, trade and investment, defense, security, and maritime cooperation, science and technology cooperation, human resource development, and assistance for Mindanao, to name a few,” the Ambassador said in his remarks.
The PEB for Japan was organized by the Sumitomo Mitsui Financial Group, which includes the Sumitomo Mitsui Banking Corp. (SMBC) and SMBC Nikko Securities together with the Philippine Embassy in Japan. The BSP, DOF, DTI and the National Economic and Development Authority (Neda) acted as co-organizing institutions.
Officials from SMBC Group cited the benefits of doing business in the Philippines.
SMBC Nikko Securities Chairman Representative Director Yasuyuki Kawasaki noted that even amid the pandemic, the Japan Credit Rating Agency assigned an A- credit rating to the Philippines, reflecting the strength of the Philippine economy.
At the same time, with SMBC Nikko as arranger, the Philippines successfully issued its first zero-coupon Samurai bonds earlier this year, Kawasaki added.
“This shows confidence of Japanese investors in the Philippines, which is among the most important issuers in the Japanese debt capital market,” the executive said.
Ryuji Nishisaki, senior managing executive officer and co-head of the global banking unit of SMBC, said they consider the Philippines as one of the most important countries under their “expand franchise in Asia” strategy.
Nishisaki noted that the institution has been providing financial services to Japanese and local customers through its long-standing co-operative relationship with a local bank since 1975. That was the year SMBC opened a representative office in the Philippines.
SMBC also recently acquired shares in a local bank in July.
“Going forward, we will continue to contribute to the economic growth of the Philippines, such as by helping our Japanese clients to invest in the country,” Nishisaki said.