According to the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI), over $3…
Over P7 billion in investments are expected as a result of the new Philippines-UAE agreement.
MANILA, Philippines — With the signing of investment promotion and protection agreement between the Philippines and the United Arab Emirates (UAE), over P7 billion in investments are expected (IPPA).
The IPPA was signed last June 9 by Trade Secretary Ramon Lopez and UAE Minister of State for Financial Affairs Mohamed Bin Hadi Al Hussaini, according to a statement released by the Department of Trade and Industry (DTI).
“The IPPA is expected to generate 2,500 employment and over P7.1 billion in investments,” according to the DTI.
Import and distribution, scaffolding and formwork manufacturing, engineering services, defense, telecommunications, tourism, poultry, aerospace, retail (medical goods or devices), and renewable energy are all areas of interest for the UAE.
The IPPA covers a wide range of topics, including investment protection, national treatment, most favored nation treatment, transfers, expropriation, and compensation, as well as processes for resolving investor-state disputes.
A Joint Committee on Investment, chaired by the undersecretaries of the Philippines’ Department of Trade and Industry and the UAE’s Ministry of Finance, was formed as part of the IPPA to begin investment projects and explore areas of cooperation.
“The IPPA is a significant step forward in further expanding the countries’ economic links since the governments have also begun formal negotiations for the Comprehensive Economic Partnership Agreement (CEPA),” Lopez stated.
Lopez and UAE Minister of Foreign Trade Thani bin Ahmed Al Zeyoudi signed the joint statement for the formal announcement of the intent to pursue a CEPA during Expo 2020 Dubai in February.
The IPPA would make it easier for UAE investors to do business in the Philippines, which recently approved important economic changes aimed at attracting more foreign investment.
More competitive tax and centralized incentive regimes, reduced capitalization requirements for foreign retailers, liberalization of key public service sectors, and lower capital requirements for specific enterprises such as start-ups or those involved in advanced technology are all part of these reforms.
“The IPPA will stimulate bilateral investment, and the CEPA will open the path for the Philippines to have more access to the larger Middle Eastern region, and the Philippines could become the UAE’s strategic hub in the Southeast Asian market,” Lopez added.
Agribusiness and agriculture, energy efficiency technologies and renewable energy, infrastructure and public-private partnership projects, innovation (artificial intelligence), information technology-business process management or shared services, manufacturing, oil and gas, processed and specialty food, tourism, and hospitality are among the priority sectors for Middle Eastern companies, including those from the UAE.
Meanwhile, plastic and rubber (vulcanized rubber gloves, vulcanized rubber thread, and cord), as well as spices, will be promoted in the UAE (cloves and pepper).
Both countries want to expedite the internal procedures required for the IPPA’s entry into force as soon as possible.
“The IPPAs signed this week with Israel and the United Arab Emirates underscore the Duterte administration’s resolve to do all possible till the end of his term to create a highly favorable investment climate that would generate more employment and income for Filipinos,” Lopez said.
“All of this, together with the approval of the Regional Comprehensive Economic Partnership (RCEP) in the early months of the next Congress,” he added, “could accelerate the growth pace required for our post-pandemic recovery.”