ASEAN KEY DESTINATIONS
Philippines cut corporate income tax to 30%
Philippine Socio-economic Planning Secretary Ralph Recto is confident that the reduction of corporate income tax from 35 percent to 30 percent next year would pave the way for more business and job opportunities despite the global financial crisis, reported the Manila Bulletin.
"Lowering corporate income tax will help the private sector retained their employees. That makes us more competitive in the long term for more businesses to invest in the country," said Recto.
Recto, concurrently National Economic and Development Authority Director General, urged the private sector to consider business expansion as a result of reduced corporate income tax. The government is identifying investments and jobs that are at risk and putting in place the necessary contingency measures.
NEDA’s National Planning Policy Staff director Dennis Arroyo identified lower corporate income tax among the mitigating factors against the damage of the global economic slump in 2009.
Income tax exemption of minimum wage earners, declining oil prices, the 20 percent increase in infrastructure spending, robust overseas Filipino workers money inflows and weaker peso that boosts consumption spending could also propel economic growth next year.
NEDA expects the country’s gross domestic product (GDP) would grow between 3.7 to 4.7 percent in 2009 from this year’s projected 4.6 percent growth due to the slowdown in the services sector.
The industry sector in the third quarter of 2008 outperformed the services for the first time since the fourth quarter of 1997 on the back of the robust growth of public construction and sustained demand for real estate by the OFWs and business process outsourcing (BPO) sectors that both helped push total construction.
The Development Budget Coordination Committee’s target for export growth has been revised to one to three percent in 2009 from a high of seven percent.
"It’s a big slowdown due to the global recession in the United States, European countries and even China which contributed to the slower growth rate for exports next year," Arroyo said. BPO and tourism would be the main drivers of the service export sector’s growth in 2009.