9th Meeting of the Sub-Committee on Improvement of Business Environment convened under JPEPA

The ninth meeting of the Sub-Committee on the Improvement of Business Environment under the Japan-Philippines Economic Partnership Agreement (JPEPA)was held on 23 January 2015 in Manila. Ambassador of Japan, H.E. Kazuhide Ishikawa,and Undersecretary of the Department of Trade and Industry (DTI), Hon. Adrian S. Cristobal, Jr., co-chaired the meeting.

Representatives from various Philippine government agencies, Embassy of Japan in the Philippines, Japan International Cooperation Agency (JICA), Japan External Trade Organization (JETRO) and Japan Bank for International Cooperation (JBIC) attended the meeting. The private sector was represented by Mr. Yoshio Amano, President, Japanese Chamber of Commerce and Industry of the Philippines, Inc. for the Japanese side and Mr. Jake Ogana, Program Officer, National Competitiveness Council (NCC) for the Philippines side.

JPEPA, which entered into force in December 2008, is an important framework for enhancing economic ties between the two countries. Both sides noted that recent trade and investment figures are very encouraging. The existence of JPEPA has successfully promoted Japanese investment to the Philippines. The abundant, diligent, and English-speaking workforce in the Philippines is finding jobs in and out of the country, helping Japanese companies’ overseas expansion. Such win-win relationship is expected to be further fostered by frequent bilateral summit meetings, Japan’s on-going cooperation in Typhoon Yolanda relief and rehabilitation, support for peace and development in Mindanaoas well as other Official Development Assistance (ODA) projects.

During the meeting, both sides of the panel noted encouraging progress in some agenda topics; the most recent of which was Importer Clearance Certificate (ICC). In addition, issues discussed in the meeting included retroactively imposed VAT refund procedures, electricity shortage in 2015, port congestion in Manila and automobile incentives. A review of issues that were raised in the previous discussions was also done such as inconsistency between national tax incentives and local taxes, application procedures of reduced tax rates under the bilateral tax treaty, taxes on foreign maritime transport services, additional surcharges introduced by Subic Bay Metropolitan Authority (SBMA), promotion measures for utilization of Batangas port and Subic port and deregulation to render the Philippines a Human Resource Development (HRD) hub.

Among the JPEPA framework, the Sub-Committee on Improvement of Business Environment serves as an important forum for dialogue between public and private sectors of both countries to discuss specific issues in order to ensure transparent, predictable and consistent business environment. This regular semi-annual dialogue with parties concerned is indispensable for further improvement of business environment. Both sides agreed to make further efforts to reduce outstanding issues before the next meeting of the Sub-Committee and that continuous dialogues with business communities are important to attract more investments into the Philippines. The Sub–Committee is an essential instrument to achieve this goal.

Results of the meeting will be reported to DTI Secretary, Hon. Gregory L. Domingo in an appropriate timing by both sides. The next meeting of the Sub-Committee would be held later in this year.