Secretary of Finance
September 19, 2024
Our friends and partners in Singapore; fellow workers in government; ladies and gentlemen: good morning.
Thank you for investing your time in this briefing. Let me begin by honoring the 55 years of strong diplomatic ties between the Philippines and Singapore.
If there is one thing that you should know about us Filipinos, it is that we cherish long and reliable friendships.
And Singapore, I would say, is far more than just a friend to the Philippines.
You are a trusted ally and a dependable neighbor who we look up to with admiration.
As a young nation, we are in awe of the pace of Singapore’s development—proving that size is no measure of ambition.
Your story is certainly one of our favorite models of success to learn from, particularly on how you have eradicated poverty.
And we look forward to a future of shared peace and prosperity with you by our side.
Over the years, Singapore has been a crucial pillar in the Philippines’ own story of progress.
Singapore is the Philippines’ eighth biggest trading partner.
You are our second-largest source of foreign direct investment inflows and the sixth major investor in our economic zones.
Additionally, Singapore is our ninth top source of tourist arrivals.
But what strongly binds us even more is our shared mutual respect.
We both understand that harmony and security are crucial to achieving economic prosperity. This was underscored by our recent defense cooperation pact.
Clearly, we have accomplished so much together. And we are more than ready to advance this strong partnership to the next level.
So now, allow me to share how both our nations can capitalize on opportunities and strategic complementarities to bolster our shared national and economic security.
To begin with, the Philippines is booming and has all the makings of a tiger economy. This makes us the most strategic haven for Singaporean investors.
We are a rising economic superstar in ASEAN, with GDP growth expanding among the fastest at 6.1 percent since President Marcos, Jr. took office.
All indicators from global research firms and analysts point to a strong medium-term growth trajectory.
In less than a decade, the Philippines will join the club of trillion-dollar economies. And we will continue to outpace the growth of Asia’s economic powerhouses in the coming years.
Fast forward to 2075, the Philippines will overtake France to become the 14th largest economy in the world.
With our arsenal of growth-enhancing strategies, the Marcos, Jr. administration has the right policy tools and determination to take us there.
First, we are decisively managing inflation risks stemming from geopolitical tensions.
Our whole-of-government approach allowed the Philippine Central Bank to be the first in the ASEAN region to cut its policy rate to support economic growth.
We share the view of the IMF that forecasts Philippine inflation to remain manageable and way lower than the global average.
As inflation eases, we anticipate a further acceleration in our already robust domestic demand with household consumption accounting for more than 70 percent of our economy.
This is our sturdy shield against external factors contributing to moderated global growth.
Our ascent towards becoming an upper-middle-income country next year and the world’s 13th largest consumer market by 2030 should offer a huge headroom for Singaporean enterprises to thrive in our domestic market.
The country’s strong labor force fuels the dynamism of our economy. Our unemployment rate has steadily declined and is even better than pre-pandemic.
We boast a strong and growing middle class, with the largest portion of the Filipino workforce engaged in formal, stable work.
With a median age of only 25 years old, the Philippines enjoys a demographic sweet spot.
Given Singapore’s aging population, averaging 35 years old, this presents a golden opportunity for our two countries to form a strong demographic partnership.
Singaporean investors can also find assurance in the Philippines’ resilience to trade wars, supported by hefty overseas remittances, increasing tourism receipts, and growing BPO revenues.
These, along with our low external debt and healthy reserves that exceed standard benchmarks, should keep our currency stable and resilient.
The Philippine banking system’s strength and stability are also indisputable, with capital adequacy and liquidity coverage ratios well above global standards.
Meanwhile, the Philippine government’s commitment to prudent fiscal management ensures stability for Singaporean businesses.
In response to global headwinds, we proactively recalibrated our growth and fiscal targets to be more realistic and adaptive to external issues.
Our refined fiscal program reduces our deficit and debt gradually in a realistic manner; while creating more jobs, increasing incomes, and decreasing poverty in the process.
In a word, this is our overall green blueprint for a sustainable, resilient future.
With a conservative approach to fiscal policy-making, our revenue performance is projected to increase steadily, reaching 17 percent by 2028. Spending remains above 20 percent of GDP.
We are focused on further growing our tax revenues by addressing tax leaks and enhancing tax administration, particularly in the e-commerce market, through digitalization.
Simultaneously, we have strategically tapped into non-tax revenue streams to generate additional funds without imposing new taxes on our people.
All these will enable us to reduce the fiscal deficit sustainably to only 3.7 percent in 2028.
At the same time, the Philippine economy will continue to outgrow the country’s debt with the debt-to-GDP ratio further dropping to 56.3 percent in 2028.
We also put great emphasis on the transparency of our borrowings. This principle has earned us the top spot in a recent global ranking on debt transparency, achieving a nearly perfect score.
Adding to this, the Philippines’ credit rating was recently upgraded to A minus by R&I. And our high investment rating with Moody’s was affirmed.
These summarize all our efforts in exercising fiscal discipline and prudent debt management.
Meanwhile, the Philippines has a stable political environment and an investment landscape that has never been more open and liberalized.
President Marcos, Jr. has been our primary marketer, actively engaging with leaders and investors around the world to strengthen partnerships and form alliances.
As we aggressively enhance our logistics backbone and human capital through productivity-boosting investments, Singapore’s role has never been more crucial.
We need more of Singapore’s cutting-edge expertise and technology for our 186 flagship infrastructure projects. These are green and sustainable projects.
With our new Public-Private Partnership Code, we have streamlined the process and made your involvement faster and easier.
We invite you to submit unsolicited proposals, respond to solicited ones, or explore more joint ventures with us.
As we modernize major airports across the archipelago to welcome the post-pandemic tourism surge, we are looking for more participation from top-tier partners in Singapore like the Changi Airport Group, which has excelled in managing and operating the Clark International Airport.
Given Singapore’s world-class expertise in aviation, both of us can lead ASEAN’s transformation into a global travel hub and drive the tourism boom across the region.
Singapore has also helped us craft a smart, modern, and sustainable urban and infrastructure blueprint for the New Clark City.
We will definitely rely on your competitive advantage to help us build more people-centered cities across the Philippines.
Meanwhile, we are transforming the Luzon Economic Corridor into a logistics and manufacturing hub.
This will be a perfect nexus for Singaporean investors involved in manufacturing, semiconductor supply chains, renewable energy, and sustainable agribusiness.
The new amendments to the country’s fiscal incentives regime—known as CREATE MORE—are designed to attract even more Singaporean investors to lay down roots and flourish in this booming corridor.
Set to become law within the year, CREATE MORE enhances both fiscal and non-fiscal incentives, resolves key investor concerns, responds to emerging global developments, and makes doing business in the Philippines smoother than ever.
For example, we have further streamlined business compliance by reducing documentary requirements.
A dedicated Registered Business Enterprise Taxpayer Service will be created as a one-stop shop for your transactions and concerns.
The bill also directly addresses value-added tax concerns of investors by exempting export-oriented enterprises from paying VAT.
It also provides a more attractive and competitive incentive package for registered projects with an investment capital exceeding about 260 million US dollars.
And under the enhanced deductions regime, registered business enterprises enjoy a reduced corporate income taxes of 20 percent.
Additionally, the maximum duration of tax incentives availment will be extended by 10 more years, from 17 years to 27 years. And we will allow another 10-year extension for labor-intensive projects.
Registered business enterprises will likewise benefit from the 100 percent deduction on power expenses—significantly cutting costs for the manufacturing sector.
The tourism sector also stands to gain, with an additional 50 percent deduction for reinvestment allowances on priority tourism projects or activities.
Overall, CREATE MORE offers Singaporean investors access to an attractive, streamlined, and cost-effective investment environment.
True to the bill’s name, we envision this new policy to CREATE MORE thriving economic and green corridors in every corner of the Philippine archipelago, with Singapore taking a leading role.
Simultaneously, we are actively addressing bottlenecks and streamlining processes to clear the way for your seamless participation in high-priority sectors.
These include clean energy, critical minerals, retail, digital technologies, food production, financial services, pharmaceuticals, and many more.
The Philippines now allows full foreign ownership for renewable energy projects and public services like telecommunications, airports, and shipping.
We have also lowered the minimum paid-up capital requirement for foreign retailers.
We have green lanes that will expedite business registration and approval processes.
With our comprehensive digital connectivity projects, the Philippines is ready to become the hotspot for technology-driven businesses, from hyper-scale data centers to smart manufacturing and high-tech agriculture.
And we are eager to team up with Singapore’s start-up visionaries to unlock new frontiers in emerging technologies.
To fuel this digital transformation, we have developed an Artificial Intelligence roadmap and strategy to upskill and retool the Filipino workforce.
We are cultivating a new generation of research scientists, engineers, as well as R&D and green tech innovators who will power up your forward-looking enterprises.
Meanwhile, to unlock the full potential of our mining sector valued at 6.4 trillion US dollars, we are advocating for legislation to rationalize the mining fiscal regime. You can be assured of predictability in our mining policy.
These reforms are just a fraction of the transformative changes underway in the Philippines to make us stand out as the most hospitable economy for Singaporean enterprises.
We are committed to working non-stop until good becomes better and better becomes the best for business.
So, I extend a warm invitation to all our friends here in Singapore to explore the wide range of investment opportunities waiting to be explored in the Philippines.
And if you have more concerns, you are most welcome to visit me at the Department of Finance. I will do the hand-holding to make it easier and more profitable for you to invest in the Philippines.
And if this briefing has left you wanting more, we have here with us Filipino business leaders from key industries such as banking, infrastructure, food production, and real estate.
You can hear firsthand from these successful businessmen about the predictability, stability, and sustainability of doing business in the Philippines. They are more than ready to collaborate with you.
We are very eager to work closely with you and forge new partnerships to shape an exciting shared future for both Filipinos and Singaporeans.
With that, I hope to see all of you in the Philippines very soon.
Thank you and mabuhay ang Bagong Pilipinas!
