MANILA - The Philippines must "settle" its policies on businesses to tame uncertainties and attract coronavirus-worried investors who are exiting China to relocate to the Philippines, at least 2 senators said Thursday as the global pandemic continued to take a toll on the world economy.
The Philippines may have to "reduce taxes" in some sectors to compete with Vietnam and other regional peers, which are willing to grant tax breaks and delay land use fees for investors to cushion the economic impact of the coronavirus crisis, Sen. Imee Marcos told reporters in an online press briefing.
"'Wag tayo lagi galit sa negosyo kasi kung minsan may tono na pipigain ang negosyo for more taxes. Kailangan i-rationalize natin ang approach natin," said Marcos, who chairs the Senate Committee on Economic Affairs.
(Let us not always be hot at businesses because sometimes our tone is to squeeze more taxes out of businesses. We have to rationalize our approach.)
"'Yung ibang sector kailangan bawasan ang tax (We should reduce taxes in other sectors). We really need to look at CITIRA again," she said, referring to the proposed Corporate Income Tax and Incentives Rationalization Act, a revenue-neutral measure that streamlines incentives for various industries.
Senate Finance Committee chair Sen. Sonny Angara backed Marcos' proposal, adding that the government must also minimize red tape and expand ports and airports to benefit from investors' exodus from Asia's largest economy.
"CITIRA has evolved and maybe just a review [is] needed in light of recent developments, but we need to settle the policy uncertainty soon," Angara told ABS-CBN News in a text message.
While CITIRA gradually reduces corporate income taxes in the country to 20 percent, it places a cap on how long incentives should be given to companies.
Japan, which reportedly allocated $2.2 billion (P110 billion) to help Japanese factories relocate outside China, has not considered the Philippines as a new investment destination due to "perceptions" that the country is "disinterested in manufacturing."
"The Japanese have been looking elsewhere because they interpret our policies lately as being disinterested in manufacturing, which shouldn’t or isn’t the case, but perception is reality in a highly competitive environment," he said.
"We shouldn’t market exclusively to manufacturing companies because many manufacturing companies also have research and back room requirements so we should be looking to get them to locate here too," he said.
Senate Ways and Means Committe chair Pia Cayetano, who is also the sponsor of CITIRA, earlier said that the measure needs to be amended to cater to the Philippines' needs during the coronavirus crisis.
Cayetano said she was open to granting more incentives to businesses willing to operate in provinces as the Philippines moves to decongest its capital region to stem the spread of COVID-19, which can easily be transmitted in congested areas.
Businesses producing medical equipment and other goods essential to the fight against the global pandemic may also be entitled to more incentives, she said, without detailing what perks would be given to these industries.
The Senate is expected to tackle the CITIRA and other coronavirus-related measures when it resumes session next week.
Sonny Angara, Imee Marcos, CITIRA, Pia Cayetano, investor exodus from China, coronavirus disease 2019, COVID-19, coronavirus, taxes, business incentives, economy, investments