January 15th, 2023
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) said in remarks made and a white paper distributed during the Indo-Pacific Business Forum on January 12 that the Philippines stands to benefit from the United States Creating Helpful Incentives to Produce Semiconductors or CHIPS Act, and from fostering closer ties with Taiwan, as multinational semiconductors companies try to diversify their supply chains.
“I was in Taiwan for 5 days for a study mission with the Taiwan Economic and Cultural Office. I learned much about our future in semiconductors from that trip.”
“The Philippines has the following going for it. Geostrategic location, because among Indo-Pacific countries, we are the closest to Taiwan, which makes 90% of advanced chips. Some 1.25 million Filipinos are eligible for the Taiwan Overseas Compatriot Identity Certificate, and some 250,000 OFWs are in Taiwan already working in semiconductor businesses.”
“Our workforce is highly trainable, Western-predisposed workforce with high educational attainment – good for product testing, assembly, packaging, and research and development in chips.”
“We have one of the most attractive tax incentives regime in the region And we have long-standing and strategic relations with the United States – with the only mutual defense treaty in Asia Pacific.”
Salceda also cited that the country’s workforce has the highest fertility rate, the highest tertiary enrollment rate, the highest share of English speakers, and the lowest median age compared to India and Vietnam, whom Salceda sees as the country’s competitors for businesses seeking to shift supply chains from China.
Congress to make PH more competitive in semiconductors
Salceda, who was the only member of Congress in the VIP Panel of the internationally-streamed event, also enumerated the actions Congress is taking to help boost the country’s competitiveness in semiconductor manufacturing. The panel discussion was streamed to counterparts in Tokyo.
“We are Trying to solve the issue of input VAT for indirect exporters, since this will be among the biggest compliance and friction costs. We are also exploring ringfencing for excised industries and for reexporters, so that we can be looser with input VAT enforcement with semicons.”
“My committee [House Committee on Ways and Means] is also instructing DTI to create the comprehensive list of SIPP-eligible industries under CREATE Law. We are also recommending the guidelines for the super-incentives package under CREATE.”
“Of course, we are also trying hard to address power costs and ease of doing business.”
“We are also trying to fund or support international airports near 5 ecozones – CEZA, John Hay, Poro Point, Subic, and Clark,” Salceda added