The Department of Finance and the United States on Monday discussed proposals on a free trade agreement and a mechanism that will screen foreign direct investments in the Philippines.

Finance Secretary Ralph Recto opened up talks on opportunities for an FTA between the Philippines and the US in a meeting with US officials led by Deputy Assistant Secretary of the Treasury for East Asia Robert Kaproth on Monday.

“He (Recto) also broached the potential of having an FTA with the US and further enhancing security and military ties between the two nations,” the DoF said in a statement.

FTA benefits

An FTA allows countries to exchange certain goods and services under specific terms, such as lower taxes or zero quota on import volumes. In return, consumers enjoy cheaper prices while local businesses are forced to improve their products and services to attract more customers.

Recto said the FTA is part of the aggressive approach of the Marcos administration in expanding foreign direct investments to the Philippines.

The recently amended laws and policies include the Retail Trade Liberalization Act, Foreign Investments Act, Public Service Act, and Public-Private Partnership Framework.

These involve provisions for more foreign staff, full business ownership by foreigners, and simplified process for business partnerships.

As ordered by President Ferdinand Marcos Jr., Recto said the DoF will continue to provide potential investors with a “red carpet” welcome.  

Deepening partnership

“In response, the US officials welcomed these developments and expressed optimism about further deepening partnership with the Philippines, pointing out that the country’s young, English-speaking population and strong macroeconomic fundamentals underscore its attractiveness as a viable investment destination,” the DoF said.

Other US officials along with Kobroth who met with Recto yesterday were US Treasury Financial Attache to Southeast Asia Daniel Hall and representatives of the US Embassy namely Chargé d’Affaires and Deputy Chief of Mission Robert Ewing, Economic Counselor Phil Nervig and Economic officer Eileen Vickery.

The agency added,  “The US (officials) likewise expressed interest in helping the Philippines establish an investment mechanism to help the country screen foreign direct investments for national security purposes.”