The UAE's Ministry of Finance has signed an agreement with the Philippines to boost mutual investments and protect them from non-commercial risks, it said in a statement on Thursday.
The partnership will bolster economic and commercial co-operation and create an investment-friendly climate to attract capital-intensive foreign investments, said Mohamed Al Hussaini, Minister of State for Financial Affairs.
“We are keen to strengthen international relations and sign agreements that enhance the investment climate and elevate the business-incubator environment,” he said.
“These agreements serve as a key international policy tool to encourage foreign direct investment and provide legal protection for both parties’ investments in accordance with international law, thereby stimulating business initiatives to achieve sustainable economic development.”
The UAE, the Arab world’s second-largest economy, has maintained strong trade momentum despite pandemic-induced headwinds and has been strengthening its relationship with vital trading partners globally.
The UAE is the Philippines’ biggest export partner in the Middle East. Total trade between the two countries grew by about 35 per cent to reach Dh3.5 billion ($953 million) in 2021 from Dh2.6bn ($705m) in 2020, official data show.
The Emirates also ranked as the 17th-biggest source of approved investments in the Philippines in 2019, cumulatively valued at Dh48m.
In February, the UAE and the Philippines also agreed to initiate talks to establish a Comprehensive and Economic Partnership Agreement to solidify trade and investment ties between the two countries.
The Protection and Promotion of Investments agreement aims to protect mutual investments from non-commercial risks such as nationalisation, expropriation (taking property from its owner for public use or benefit) and sequestration (taking legal possession of assets until a debt has been paid or other claims have been met), unless it is for the purpose of public interest and in accordance with the law, the statement said.
It provides investors compensation for their investments, provided the value is in “accordance with the market value of the investment prior to its nationalisation or expropriation — with the exception of natural resources from the provisions of the agreement”.
The agreement also provides compensation if investments are destroyed because of war, conflict, civil disobedience or demonstrations.
However, investors are not covered under the provisions of the agreement if the goal is to benefit from it without having an investment activity in the country, the statement added.
The agreement also aims to set out the dispute settlement procedures between investors and the state, the ministry said.
So far, the UAE, represented by the Ministry of Finance, has signed 107 bilateral agreements to protect and encourage investment.
