Vol. XXI, No. 231 [ BusinessWorld Online ]
Wednesday, June 25, 2008 | MANILA, PHILIPPINES
THE PHILIPPINES is expecting a surge in Taiwanese investments in Subic and Clark after the Subic Bay Metropolitan Authority (SBMA) allowed Taiwanese firms engaged in high-technology ventures to use free ports for free.
SBMA Administrator Armand C. Arreza said the rent-free incentive was agreed upon during the joint economic conference between Taiwan and the Philippines last week.
Philippine and Taiwanese officials also signed an agreement during the conference granting Taiwanese locators reduced tariffs under the common effective preferential tariff scheme of the Association of Southeast Asian Nations (ASEAN) Free Trade Area.
The agreement also allows Taiwanese experts to assist the Philippines in training integrated circuit designers.
The rent-free incentive, applicable to Subic and Clark free port locators, will be good for three to five years.
But investors firms must have a minimum investment commitment of $25 million, Mr. Arreza said.
He said this was aimed at attracting more high-technology firms to invest in the Philippines.
"We’ve been pushing to attract companies in information and communication technology, software design, biotechnology and the like, and this new incentive is a concrete manifestation of our intentions to build our capabilities and be globally-competitive," Mr. Arreza said.
Latest data from Taiwan’s Ministry of Economic Affairs showed there are 79 Taiwanese firms in Subic, with total investment commitments of $780 million. In Clark, eight Taiwanese companies have put up ventures worth $360 million.
The SBMA said Taiwanese firms are the second biggest investor group in Subic in terms of investment value next to Korean firms.
The biggest South Korean project is the $1.6-billion shipyard project of Hanjin Heavy Industries Corp.
The SBMA earlier said it had approved 30 new projects in the first two months of the year, with total investments of $13.2 million.
The newly approved projects bring the total number of investors in the former US naval base to 961.
Among the new investors are Korea’s Hanafil Golf & Tour, Inc., which plans to develop a recreational facility for $3 million and create 1,495 jobs; Malaysian firm Palm Gold International Ltd., which had committed to invest $1.9 million; and real-estate developer Grand Pillar International Development, Inc., with $1.9 million.
New investments in Subic reached $1.42 billion and $1.67 billion in 2006 and 2007, respectively, the SBMA said. — B.S. Sto Domingo
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