DUBAI – The Philippines and the United Arab Emirates (UAE) are headed for stronger economic relations as the two countries have concluded negotiations for the Investment Promotion and Protection Agreement (IPPA) and jointly announced the start of official discussions on a Comprehensive Economic Partnership Agreement (CEPA).
On the sidelines of the Philippines’ National Day at Expo 2020 Dubai last Feb. 11, Trade Secretary Ramon Lopez and UAE Minister of State Ahmed Ali Al Sayegh recognized the signing of the start of negotiations for the CEPA and committed toward the eventual signing of the IPPA.
After the bilateral meeting, Lopez and UAE Minister for Foreign Trade Thani bin Ahmed Al Zeyoudi signed the joint statement formally announcing the intent to pursue CEPA.
This is an opportune time for UAE investors as the Philippines develops the necessary investment landscape through significant economic and regulatory reforms such as the liberalization of the Public Service Act, Retail Trade Law, Foreign Investments Act, the CREATE Act and the aggressive Build Build Build programs of the Duterte administration.
These are supported by the Philippines’ efforts to improve ease of doing business by streamlining government processes, reducing processing time and cutting bureaucratic red tape.
The opportunities for foreign direct investment (FDI) into several activities are broader and coupled with the IPPA, these FDIs will reap the benefits of all reforms and agreements.
“The IPPA is modern, business friendly and comprehensive, covering promotion, facilitation and protection of investments. The Agreement provides for the establishment of a Joint Committee on Investments, which will serve as a platform to more closely coordinate and collaborate in implementing a focused investment promotion that create greater impact to both our economies. I urge both sides to quickly convene so we can soon realize the objectives of the Agreement,” Lopez said.
To further maximize the opportunities for complementation in shared areas of interests and priorities, the Philippines and the UAE are also in the process of finalizing a Memorandum of Understanding on Economic and Technical Cooperation, which, together with the IPPA, will provide the solid foundation for pursuing the Comprehensive Economic Partnership Agreement.
“These initiatives are expected to boost trade and investments between the two countries, leading to more diversified economic activities, development of new industries, employment generation and higher consumer spending as we partner for shared prosperity. The Philippines may serve as UAE’s strategic hub for the Southeast Asian region, as economic activities continue to shift to Asia. Active engagement between government and business sectors is key in ensuring that both countries will maximize benefits of the Agreements, including diversifying and expanding economic interests,” the trade chief continued.
The Department of Trade and Industry secretary was accompanied in the bilateral meeting by Sen. Aquilino Pimentel III, special envoy of the President and presidential adviser on foreign affairs Robert Borje, Philippine Ambassador to the UAE Hjayceelyn Quintana, Reps. Julienne Baronda, Christopher de Venecia and Stella Quimbo, Agriculture Secretary William Dar, Labor Secretary Silvestre Bello III, Presidential Communications Operations Office Secretary Martin Andanar and acting Public Works Secretary Roger Mercado.
More UAE investments
The IPPA is an important pillar for realizing investment opportunities from the UAE, especially those that will tap into their sovereign wealth funds (SWFs) with combined assets of over $1.6 trillion. Four of the world’s largest funds are based in the UAE – the Abu Dhabi Investment Authority, Investment Corp. of Dubai, Mubadala Investment Company and ADQ.
The UAE’s SWF will benefit from investing in key sectors in the Philippines, such as agribusiness/agriculture, energy efficiency technologies/renewable energy, IT-BPM/shared services, manufacturing, oil and gas, processed and specialty food, tourism and hospitality and real estate development.
The Philippines welcomed Letters of Intent from GCC companies during the Philippines Country Business Briefing held on the same day. These LOIs are expected to bring in $600 million worth of investments and generate 4,000 jobs in the country’s health care, energy, tourism and hospitality and dairy industries.