ASEAN KEY DESTINATIONS
Philippines may cut perks for locals
Finance Secretary Cesar Purisima said the Philippines has "too many agencies administering incentives, and these should likewise be cut to as few as possible."
He is referring to agencies such as the Board of Investments, Philippine Economic Zone Authority, Subic Bay Metropolitan Authority, Clark Development Corp., Cagayan Economic Zone Authority, and Aurora Special Economic Zone Authority.
Part of the plan, Purisima said is to strengthen the "sunset" provision, which he said is susceptible to extension each time it nears its prescriptive period.
Under the current law, the government grants by up to six years of ITH, and duty free importation of equipment in favor of investments approved by incentive-giving bodies.
"Incentives are necessary, but only insofar as big ticket investments are concerned and would not otherwise come [in the Philippines] without the incentives," Purisima said.
"We must minimize the grant of incentives to domestic companies that would make the investments here anyway so we don't waste incentives. We must offer incentives not as a set but must be flexible," he said.
He said agencies such as the Departments of Finance (DOF), of Trade and Industry (DTI), and the National Economic and Development Authority (NEDA) are studying the matter through its joint technical working group to draft the new proposal to Congress.
"The NEDA's input would be very useful in respect to the rationalization of fiscal incentives, through which we will determine the overall economic impact of our proposal before we submit it to Congress," Purisima said.
He said that such proposal would come out within the first quarter of next year as Congress would resume its session within the same period after its adjournment on December 18.
"We are one in agreement that we need to revise the incentives law," he said.
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