USUAL sources, focused industries. The Board of Investments (BOI) on Tuesday recalibrated its promotion campaign to highlight the country’s competitive advantage in five sectors, although it expects capital to still flow from traditional markets, such as United States and Japan.
The BOI launched the “Make It Happen in the Philippines” on Tuesday with the goal of netting investors to the country in the pandemic recovery period. The BOI has long been responsible for pitching the Philippines to foreign firms, and this program allows it to consolidate all efforts of investment promotion agencies (IPAs).
In a news briefing, Trade Secretary and BOI Chairman Ramon M. Lopez explained the “Make It Happen” campaign should introduce the country’s portfolio to foreign investors, particularly to those in traditional sources like the US,
Japan, South Korea and China.
“Big sources of manufacturing investments would still be Japan, Korea, Taiwan and China,” he replied, when asked what countries would the BOI be focusing in this campaign. “The US and the European Union are very substantial, and top of mind these are the countries that we would like to tap and invite in this campaign.”
Trade Undersecretary and BOI Managing Head Ceferino S. Rodolfo added the program centers its promotion on five industries: electronics, automotive, aerospace, IT and business process management (IT-BPM) and copper processing.
“This program is heavily focused in terms of sectors. It’s really focused and we are targeting these five industries because we see their potential for growth, especially in the recovery after the pandemic,” Rodolfo said.
On the other hand, Lopez argued the “Make It Happen” will only succeed if structural reforms in fiscal policies are made, as he called on lawmakers to pass the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill.
The fiscal measure slipped past the House of Representatives last year, but has been wading through rough waters in the Senate. If enacted into law, the CREATE bill will cut corporate tax rate to 25 percent, from 30 percent, the highest among Southeast Asian economies.
However, industry groups have been blocking the legislation of the bill for its second portion: it will lift incentives, particularly the 5-percent tax on gross income earned paid in lieu of all local and national taxes, granted to firms operating in economic zones.
Industry groups, representing both domestic and foreign firms, have warned that passage of the CREATE bill as is would force multinationals to shut down their operations here and relocate to another Southeast Asian competitor, leaving 700,000 workers jobless.
“We are talking of the CREATE bill that should be passed to really lower the CIT rate and at the same time rationalize some of the incentives. Senators have made substantial changes to the measure and provided longer transition period for those currently enjoying the incentives,” Lopez said.
Rodolfo, for his part, hopes the CREATE bill is submitted to President Duterte’s desk for signing before lawmakers head into recess in December.
In spite of the challenges posed by the pandemic, the BOI is confident it will breach P1 trillion in investment pledges this year. According to Rodolfo, capital registered with the agency has now reached P826 billion from January to October.
Last year, investments applied to the BOI hit an all-time high of P1.14 trillion after capital inflows from foreign firms jumped threefold to overcome uncertainties here and abroad.