The recent announcement of the United States to relocate companies out of China and into Indonesia reiterates that Southeast Asia is a competitive alternative for manufacturing.
Amidst the COVID-19 pandemic, there is a silver lining waiting for the Philippines in the form of potential foreign investments from the exodus of manufacturing companies out of China. Sen. Imee Marcos referred to the recent news that the United States would be relocating a number of its China-based factories to Indonesia.
Sen. Marcos said that the Philippines and its economic managers should not blink and miss out on the looming opportunity. She mentioned that the government must hasten amendments concerning foreign investments in the country such as the Corporate Income Tax and Incentives Reform Act (CITIRA).
Optimistic on the BPO (Business Process Outsourcing) sector, Sen. Marcos said, "As a result, I think our BPO sector will recover sooner than predicted. If we gear up for outsourcing, we may finally derive investments in manufacturing and other essential sectors,". Facing recession threats, countries like the United States are focused on outsourcing production to cheaper supplies in order to maintain prices.
Last April, the government of Japan announced that a budget of JPY 240-B or USD 3.2-B will be provided to aid companies to restructure its manufacturing operations outside of China after the pandemic presented vulnerabilities in the supply chain of Japanese companies.
Indonesia has the largest economy among the ASEAN members and has made moves to reduce corporate income tax from 25% to 20% by 2022.BLOG COMMENTS POWERED BY DISQUS