Finance Secretary Benjamin E. Diokno introduced the Philippines’ as one of the fastest-growing emerging markets and investment hubs in Southeast Asia during the first Philippine Economic Briefing (PEB) in the Middle East on September 12, 2023 at the Ritz-Carlton, Dubai International Financial Centre in Dubai, United Arab Emirates (UAE).
“With the Philippines’ favorable demographic profile, open investment regime, thrust for public-private partnerships [PPPs], and diverse investment and financing modes, we present a wellspring of investment opportunities for the Middle East business community,” Secretary Diokno said in his keynote message.
The Finance Secretary recognized the UAE as an important economic partner of the Philippines considering it is the 6th largest source of remittances from overseas Filipino workers (OFWs), 17th major trading partner, 21st largest export market, and 16th largest import supplier.
Apart from oil, Dubai’s largest sectors are trade and tourism, among others. As such, the country serves as a strategic gateway to trade in the Middle East. Its technological and infrastructure expertise are some of the areas where the Philippines can benefit from.
In light of this, Secretary Diokno invited Middle Eastern investors to explore investment opportunities in physical connectivity, health, and water resources, among other projects in the 197 infrastructure flagship projects (IFP) approved by the National Economic and Development Authority (NEDA) Board.
He also informed investors on the latest enhancements to the Philippines’ investment policies, such as a more stable and predictable environment for PPPs.
“The Marcos, Jr. administration has made it a policy thrust to wield the power of public-private partnerships to help boost the development of much-needed infrastructure in our priority sectors,” Secretary Diokno said.
Reforms to the PPP policy framework allow for the speedy approval of projects, uphold high standards of transparency and accountability, enhance the bankability of PPP projects for private partners, and ensure optimal risk allocation between the government and the private sector.
Apart from PPPs, the Philippines also boasts of a competitive fiscal incentives system through the Corporate Recovery and Tax Incentives for Enterprises (CREATE), which introduced an incentives system that is performance-based, time-bound, targeted, and transparent.
Recognizing the crucial role of foreign direct investments (FDIs) in a country’s development, Shada Elborno (Managing Director and Regional Head of Standard Chartered Bank’s Global Subsidiaries, Client Coverage – MENAP Corporate, Commercial and Institutional Banking) took stock of the structural reforms that have been enacted in the Philippines to help accelerate investment and trade.
This includes the recently passed Maharlika Investment Fund (MIF)––the Philippines’ first-ever sovereign wealth fund, which Secretary Diokno says is set to be operationalized by the end of the year.
“As the region continues to look eastward for its investments, the Philippines becomes an increasingly attractive destination––and areas include transition to net zero, digitization, manufacturing, services, and tourism,” Shada Elborno said in her welcome remarks.
She also stated that sovereign and private investors need to leverage locally available Philippine knowledge and expertise in the deployment of capital.
In his opening remarks, Philippine Ambassador to the UAE Alfonso Ferdinand A. Ver acknowledged the country’s stellar performance that renewed interest from around the world, and encouraged Middle Eastern investors to take advantage of the opportunities in the Philippines.
“The UAE’s capital and technical expertise, coupled with the Philippines’ natural and human resources and its strategic location as a gateway to the Asia Pacific are a potent combination that will mutually reap rewards for both our countries,” he said.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Francisco G. Dakila, Jr. assured investors of the Philippine banking system’s resiliency, while Department of Budget and Management (DBM) Secretary Amenah F. Pangandaman briefed investors on the Philippines’ priority expenditures.
The Budget Secretary also told investors that the Philippines has allocated PHP 74.35 billion to uplift the lives of those in the Bangsamoro Autonomous Region of Muslim Mindanao (BARMM).
Meanwhile, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan discussed the Philippines’ PPP projects in detail.
As of September, 180 PPP projects are under implementation, while 104 are in the pipeline.
During the moderated discussion, Secretary Diokno answered questions on the MIF, which he said is intended to be an additional funding source for some of the projects in the Philippines’ IFP list.
“Without the Maharlika Investment Fund, we estimate that around 55 percent of projects will be funded through official development assistance (ODA), around 10 percent through the national budget, and around 30 percent through PPPs,” he said.
The Finance Secretary explained that the creation of the MIF is in preparation for the Philippines’ imminent transition to upper middle-income country status.
“The Republic of Philippines offers a world of possibilities with a compelling investment landscape characterized by strong economic growth, strategic positioning, a welcoming business environment, and diverse investment opportunities,” Elyas Algaseer (Chief Executive Officer of GCIB MENA and Co-Head of DIFC Branch – Dubai MUFG Bank, Ltd.) said in his closing remarks.
He commended the Philippines for its six-year development plan, sound credit profile, and robust external account, among others and expressed his gratitude to Filipinos for helping build infrastructure and growth in the region.
More than 80 senior executives of UAE-based funds and corporates, business group representatives, industry associations, the financial community, and public sector attended the briefing session.
The PEB in Dubai was organized by the BSP Investor Relations Group (IRG) and Department of Finance (DOF), in partnership with Citi, Deutsche Bank, Dubai Islamic Bank, Embassy of the Republic of the Philippines-United Arab Emirates, Goldman Sachs, HSBC, MUFG Bank, Philippine Trade and Investment Center-Dubai, and Standard Chartered.