WB country director Joachim Von Amsberg said the Philippines can join the ranks of developed East Asian countries by developing its human resources.
According to Von Amsberg, the country has great assets and potential, citing that Filipino workers are strong in the electronics and business services industry.
However, he said some government policies may have an adverse effect on the country’s growth like tax incentives given to some industries.
In the same vein, he urged the government to remove its focus on tax incentives as a means to improve the business environment and instead look at strengthening rules of law in order to entice investments.
Von Amsberg said incentives to some industries are far less important to the overall growth. "What is important is strengthening rules of law... there’s a lot of space for simplifying tax incentives," he explained.
He said the country must improve tax collection and honor contracts made with private corporations in order to develop a favorable business environment.
Most developing countries, including the Philippines, use various tax incentive schemes to entice the much-needed inward investments and to encourage the setting up of businesses in their respective territories.
The package of incentives may contain fiscal and non-fiscal grants where fiscal incentives may consist of either one or a combination of full exemption from the payment of certain taxes, special allowable deductions from gross income and/or preferential tax rate.