As the global economic recession takes its toll on jobs held by Filipinos, the Department of Finance (DOF) and the Board of Investments (BOI) have decided to set aside policy differences on the issue of incentives versus revenue generation to speed up this year’s edition of the Investment Priorities Plan (IPP).
Trade Undersecretary and BOI managing head Elmer Hernandez said the debate over the grant of perks to domestic-oriented industries will not get in the way of the IPP as the DOF, the Office of the President (OP) and the National Economic and Development Authority (Neda) have conceded that the need to save jobs cuts across all sectors.
“We are all in agreement that saving jobs is the most important task at hand. And if the grant of incentives through the IPP is the way to do it, then so be it,” Hernandez told the BusinessMirror.
Representatives of the DOF, BOI, Neda and OP, during core group meetings for crafting the 2009 IPP, cited the need for such unity, he said.
Now, Hernandez said the BOI expects smooth sailing in presenting the new IPP to different agencies concerned and having it signed by Malacañang before February ends.
In previous years, the BOI and the DOF had been at loggerheads because finance department officials were on the lookout for revenue leaks in the grant of incentives.
The BOI, however, believes that incentives attract new investments.
The DOF is also opposed to giving domestic-oriented firms the perks on grounds that these companies don’t need government support to be viable and would invest with or without incentives because of the domestic market.
The BOI, Hernandez said, has already approved this year’s IPP framework, a deviation from previous listings because it now has two parts.
The first part outlines the incentives and corresponding conditions distressed companies will get if these will continue to operate without resorting to retrench workers or implement reduced working hours.
The second part would list the type of priority activities eligible for government incentives, such as income-tax holidays and duty-free importation of capital equipment and raw materials.
Hernandez said the BOI would complete the draft IPP this week.
After consultations with different agencies, Hernandez said the draft would be presented to the stakeholders in public hearings in Metro Manila, the Visayas and Mindanao.
Hernandez said the objective is to convince companies about to shut down to instead lay off workers or reduce the workweek. The objective, when it comes to companies that will lay off employees, is to opt for lesser work schedules.
“Of course, our primary target is to stop [the companies] from doing any of the three and just be on a status quo. That is the best scenario that we want to achieve,” Hernandez said.
“It’s like an incentive to stop the bleeding,” he added.
Another option the BOI is looking at, Hernandez said, is to exclude 2009 from the number of years that a company is qualified to get the income tax holiday. This means if a company has two years left in its income tax holidays it will still have two years starting in 2010.