FINANCE Secretary and Fiscal Incentives Review Board (FIRB) Chairman Carlos G. Dominguez III said investment promotion agencies (IPAs) should maximize the budgetary support that they get from the national government and focus on attracting more foreign investments amid the Covid-19 pandemic.
Dominguez made the remark in response to the report of the FIRB Secretariat that the national government spent a whopping P58 billion for its budgetary support to IPAs in the last five years.
Of the total, P5.07 billion was received in 2021 alone by the IPAs from the government, according to DOF Assistant Secretary and FIRB Secretariat Head Juvy Danofrata.
“This report only shows that the Philippine government has always been supportive of our IPAs in their operations and investment promotion efforts,” Dominguez was quoted as saying during a recent DOF Executive Committee meeting.
“It is only right that they [IPAs] maximize the budgetary support they get from the national government, and translate their efforts into attracting more economically stimulating and productive foreign investments, especially in this time of the pandemic, that would create jobs and supercharge our economy,” he added.
However, the Philippine Economic Zone Authority (Peza) and the PHIVIDEC Industrial Authority (PIA) were not included in the list of budgetary support recipients, as the two agencies are already self-sufficient and do not receive budgetary support from the national government.
Among the IPAs that received budgetary support from the government are: the Authority of the Freeport Area of Bataan (Afab), Aurora Pacific Economic Zone and Freeport Authority (Apeco), Board of Investments (BOI), Bases Conversion and Development Authority (BCDA) Group, Cagayan Economic Zone Authority (Ceza), the Subic Bay Metropolitan Authority (SBMA), the Tourism Infrastructure and Enterprise Zone Authority (Tieza), and the Zamboanga City Special Economic Zone Authority (ZCSeza).
Danofrata also said Afab allocated all of its budget to capital outlays or the purchase of new assets while SBMA and Tieza allocated 100 percent of their budget to maintenance and other operating expenses (MOOE).
On a five-year average from 2017 to 2021, the BCDA group, which consists of the Clark Development Corporation (CDC), the John Hay Management Corporation (JHMC), and the Poro Point Management Corporation (PPMC), have received the largest budgetary support at P7.47 billion combined, with 83 percent of the budget allocated to the group’s MOOE. This is in addition to the authority of the IPAs to exact fees and other charges from their locators and registered business enterprises (RBEs).
To recall, the Cabinet-level FIRB earlier denied Peza’s appeal to allow 100 percent work-from-home (WFH) arrangement for the RBEs in the Information Technology Business Process Management (IT-BPM) sector until September 12 this year, arguing that their decision was meant to encourage post-pandemic recovery by stimulating economic activity.
The FIRB upheld its Resolution No. 19-21, allowing the WFH arrangement not exceeding 90 percent of the total workforce of registered IT-BPM enterprises only until March 31 this year.
The DOF also pointed out that IT-BPM companies in ecozones and are registered with IPAs are free to adopt WFH arrangements but they must give up their tax incentives.