With the number of Covid-19 cases zooming past 400,000, the regulator of economic zone locators reiterated a call to exempt exporters from the provisions of the Corporate Recovery and Tax Incentives for Enterprises Act (Create) bill.
Philippine Economic Zone Authority (Peza) Chief Charito B. Plaza argued investors should be permitted to keep their current fiscal incentives and, therefore, be exempted from the new tax regime to be introduced by the Create bill.
If enacted, the Create bill will reduce corporate income tax to 25 percent, from 30 percent at present. However, it will also remove incentives granted to exporter firms in its current version.
Plaza reiterated her call as investments registered in economic zones have slumped by over a fourth after lockdown measures against the Covid-19 pandemic brought the economy to near-atrophy.
In her speech last Friday, the Peza director general reported investments that flowed from January to October declined by nearly a third (27 percent) to P72.64 billion, from P99.32 billion during the same period last year.
Further, the number of new projects that were registered in the country was reduced by nearly half to 248, from 454 new registrees.
Employment in economic zones as of September also declined by more than 2 percent to 1.53 million workers, from 1.57 million workers during the same period last year.
On the positive side, exports shipped by economic zone firms from January to September grew close to 1 percent to $40.79 billion (about P1.965 trillion), from $40.54 billion (about P1.953 trillion at $1=P48.18), Plaza disclosed.
Resumption of operations in Peza zones is nearing full capacity. At present, Plaza said 87 percent of all Peza firms have reopened their factories in the pandemic, translating to a return to work for 1.2 million workers.
However, at least 13 percent of all economic zone locators have yet to restart their plants, resulting in the joblessness of almost 279,000 workers in a time of recession.
By sector, 89 percent of manufacturing firms have reopened their factories while 84 percent of business-process outsourcing operators have called their workers back to office.