Taiwanese investors prefer locating in Vietnam and Indonesia than in the Philippines, as labor cost in these two Southeast Asian economies are apparently more competitive, according to a diplomat.
Taipei Economic and Cultural Office in the Philippines Economic Counselor Alfred Wang said the Philippines is at a disadvantage in terms of securing capital from Taiwanese businessmen. He said Taiwanese investors prefer to locate operations in other Southeast Asian countries as they apparently find wages here too “burdensome.”
“What we are doing is attracting more Taiwanese investors to be here, [so] we can tell them the advantages and the disadvantages [in investing in the Philippines],” Wang told reporters last week.
“Advantages are there are many young people here, the labor force is no problem and most people speak English. However, comparing the wage level, the Philippines is not as competitive with Vietnam and Indonesia,” he added.
The Metro Manila wage board in November of last year increased the daily pay rate of nonagricultural workers in Metro Manila to P537, from P512.
However, in an issuance on June 7, the wage board denied petitions filed by four labor groups in April. It said it cannot yet entertain petitions to raise daily pay rates due to the rule that prevents the government from processing new wage-hike demands until after a year their previous wage order took effect, or unless there is a supervening event.
The Philippines is in a position to attract more Taiwanese capital under Taipei’s New Southbound Policy, implemented by President Tsai Ing-wen, under which the East Asian state is heavily shifting its trade and investment activities to economies south of its location.
“I cannot say the Philippines is the most favorite location [in Southeast Asia for Taiwanese investors]. Vietnam, Indonesia and Thailand have more competitive regimes,” Wang said.
Last year investments from Taiwan fell by 61.21 percent to P4.2 billion, from P10.83 billion in 2017, which Wang attributed to a number of factors, including uncertainties brought about by the government’s plan to rationalize tax incentives of economic zone firms.
However, Wang said Taiwanese firms in the Philippines, such as the New Kinpo Group, are here to stay. NKG, the world’s leading consumer electronics maker, announced in May its plans to put up a new 24,000-square-meter facility in Batangas and increase employment to 18,000, from 11,000 at present, over the next three years.
“There are no Taiwanese investors already making an investment in the Philippines that would move out to other Southeast Asian countries,” Wang said.
The Taiwanese envoy called on Manila to take advantage of Taipei’s aggressive economic policy to pour capital into South Asian and Southeast Asian economies. He said holding investment briefings, such as those conducted by the Department of Trade and Industry, will help beef up Taiwanese investments in the Philippines.
Source: BusinessMirror.