MANILA -- The Philippines can lure foreign investors on the back of its young workforce and ongoing infrastructure and economic reforms, the head of Congress' tax-writing committee said Monday, as he made the case for the removal of "forever" tax breaks.
Manila is the most generous in Southeast Asia in giving tax breaks, which resulted in P504.2 billion in foregone revenues in 2017, said Albay Rep. Joey Salceda, citing his own figures.
Salceda said there were ongoing talks for more foreign investments in the Philippines, including a potential Australian investor in Subic Bay's Hanjin shipyard that was being negotiated by a US firm.
"Who said it's about incentives? It's all about managing the economy and what is your national goal and do you demonstrate the capacity to demonstrate your national strategy," said Salceda, an economist and former economic adviser to former President Gloria Macapagal-Arroyo.
The second tranche of tax reforms or Corporate Income Tax and Incentive Rationalization Act (CITIRA) was passed on third and final reading at the House of Representatives last week.
Incentives will be "conditional" under the House bill, so that job generation will not be an "afterthought," Salceda said.
Citing 2015 figures, Salceda said companies in Philippine Economic Authority or PEZA zones were granted 235 billion in incentives and generated 1.26 million jobs.
In the same year, the semiconductor industry group produced 345,000 jobs with P158 billion in incentives while the business process outsourcing industry produced 1 million jobs with P14 billion in incentives, he said.
"Sa BPOs, walang mawawala sa kanaila, lalong-lalo na kung lalo sila mag-hire," he said.
(For BPOs, they will lose nothing, especially if they will continue hiring.)
Salceda said he was confident the Senate could pass a counterpart measure, given President Rodrigo Duterte's majority in the chamber.
"This is the best investment of his political capital," he said.
Salceda said PEZA no longer accounted for bulk of foreign investments. "Hindi sila pumapasok dito (They are not coming here) for incentives, there must be something we are doing right," he said.
"Where will you find the single biggest pool of the most young and mobile professionals? Where do you find a culture predisposed to Western culture?" he said.