THE Philippines should seek a free trade agreement (FTA) with Canada to keep Philippine trade goods competitive and make it a better destination for foreign direct investment (FDI), Canadian Chamber of Commerce of the Philippines President Julian H. Payne said.
Speaking at the Kapihan sa Manila Hotel Monday, Mr. Payne said: “We need an FTA between Canada and the Philippines. It can be multilateral or bilateral. For the benefit of the Philippines, any would work.”
“If you don’t have an FTA, you face tariffs when you enter Canada that you will not face if you have an FTA. The one that looks most likely is the ASEAN-Canada (agreement). I believe that foreign direct investment serves both parties. I also believe that the Philippines should be investing in Canada,” he added.
On May 5, the Philippine Tariff Commission conducted a public consultation on the proposed Association of Southeast Asian Nations (ASEAN)-Canada FTA (ACANFTA).
According to the Department of Trade and Industry (DTI), Philippine service exports to Canada are set to grow. Canada is a net importer of services from the Philippines.
It added that with ACANFTA, Canada will serve as a gateway for Philippine goods to North America.
ASEAN and Canada announced ACANFTA negotiations in November. A feasibility study conducted in 2018 indicated that the Philippines would grow its gross domestic product (GDP) by 2.63%, equivalent to $7.4 billion, after joining ACANFTA. The trade deal will also boost ASEAN GDP by 1.6% while Canada’s GDP will increase by 0.3% if it signs on to the deal.
Mr. Payne noted that investors are awaiting the implementing rules and regulations (IRRs) of the economic liberalization measures, particularly the amended Foreign Investments Act (FIA) and the Public Service Act (PSA).
“Until you get the IRRs, companies are not going to just jump in. The IRR for the PSA, that’s a very complicated issue, we’re waiting to see how it works. But I think there’s no question that those two acts will increase foreign investment,” Mr. Payne said.
Under the amended PSA, full foreign ownership was allowed for more industries such as telecommunications, airlines, railways, and shipping. These were previously covered by the 40% foreign ownership limit.
The amended FIA allows foreigners to own 100% of small and medium enterprises. — Revin Mikhael D. Ochave
