DUBAI, United Arab Emirates—Department of Trade and Industry (DTI) Secretary Ramon M. Lopez and UAE Minister of State for Financial Affairs Mohamed Bin Hadi Al Hussaini signed the Investment Promotion and Protection Agreement (IPPA) on 9 June 2022, signifying closer collaboration on trade between the two nations.
Secretary Lopez stated, “The signing of the IPPA marks an important step in further strengthening the countries’ economic ties, as the countries have also launched the start of the official negotiations for the Comprehensive Economic Partnership Agreement (CEPA).”
During the Trade Secretary’s visit to Expo 2020 Dubai in February 2022, Secretary Lopez and UAE Minister for Foreign Trade Thani bin Ahmed Al Zeyoudi signed the joint statement formally announcing the intent to pursue CEPA.
The IPPA covers a wide range of areas such as protection of investments, national treatment, most favoured nation treatment, transfers, expropriation and compensation, and procedures for investor-state dispute settlement.
Investors from the UAE would find it easier and more convenient to do business in the Philippines, as the latter has introduced key economic reforms geared toward easing up foreign restrictions and facilitating a more business-friendly environment. These are in the form of competitive tax and centralized incentives regimes, lowered capitalization requirements for foreign retailers, liberalization of key public service sectors, and reduction of capital requirement for specific enterprises such as start-ups or those involved in advanced technology.
The Parties also look to capitalize on the coordination and cooperation features of the Agreement to further promote and facilitate investment flows. Under the Agreement, a Joint Committee on Investment (JCI) was established, headed by the Undersecretaries of the Philippines’ Department of Trade and Industry and UAE’s Ministry of Finance. The JCI will start investment initiatives and look into areas of cooperation between the countries.
Secretary Lopez further highlighted, “The IPPA will boost of investments between the countries and the CEPA will also pave the way for the Philippines’ enhanced access to the broader Middle Eastern region and could be UAE’s strategic hub in the Southeast Asian market.”
The Parties intend to promptly facilitate the internal procedures needed for the entry into force of the IPPA. The IPPA is projected to generate 2,500 jobs and garner over PHP7.1 billion worth of investments. Sectors of interest from the UAE include import and distribution, manufacturer of scaffolding and formwork and provider of engineering services, defense, telecommunications, tourism, poultry, aerospace, retail (such as medical equipment/devices), and renewable energy.
Priority sectors for promotion for Middle Eastern companies, including those from the United Arab Emirates, are agribusiness & agriculture, energy efficiency technologies and RE, Infrastructure and PPP Projects, Innovation (AI), IT-BPM/shared services, manufacturing, oil and gas, processed and specialty food, tourism and hospitality. On the other hand, Philippine products for promotion to UAE include: plastic and rubbers (gloves, of vulcanized rubber, and vulcanized rubber thread and cord), and spices (cloves and pepper).
One of the key steps after the signing and ratification of the IPPA is the establishment of a Joint Committee on Investments (JCI). Under the IPPA, the countries shall establish a JCI headed by the Undersecretaries of DTI and the UAE Ministry of Finance. The JCI will look for areas of cooperation and commence investment initiatives with the goal of further facilitating investment between both countries.
Sec. Lopez added, “The IPPAs just signed this week with Israel and UAE reflects the commitment of the Duterte administration to do its best until the last month of its service, in creating a very conducive investment climate tht will generate more jobs and income for the Filipinos. All these, plus the ratification of the Regional Comprehensive Economic Partnership (RCEP) hopefully in the early months of the next Congress should accelerate further the growth pace needed for our post-pandemic recovery.”
Together with the Secretary were Philippine Ambassador to the United Arab Emirates Hjayceelyn M. Quintana, DTI Undersecretary Flordelona L. Amate, Philippine Consul General to Dubai Renato N. Duenas, Philippine Consul General to Abu Dhabi Marford M. Angeles, Philippine Consulate General in Dubai Vice Consul Paola Belle D. Ebora, Philippine Trade and Investment Center in Dubai Commercial Attaché Charmaine Mignon S. Yalong. Meanwhile, Minister Al Hussaini was joined by Ministry of Finance Acting Assistant Undersecretary for International Financial Relations Ali Sharafi, Director of Minister Office Hamad Al Za’abi, Director of International Organizations and Financial Relations Abdalla Ahmed Alobaidli, Economic Expert Dr. Hamid Nasir, and Negotiator Ahmed Al Khoori. END