MANILA, Philippines - The country must be consistent with its policies and must make major revisions on the Investments Priorities Plan (IPP) because uncertainty will scare foreign investors, the American Chamber of Commerce in the Philippines (AmCham) said.
In a press conference, AmCham executive director Robert Sears said that the government should settle on particular policies and be consistent with them.
“Don’t revisit the IPP and contracts. You need to be consistent. Business hates uncertainty,” Sears told the reporters.
With regard to the fiscal incentives, Sears said he is a firm believer of fiscal incentives. “In certain industries it does not take away revenues,” Sears said. He explained that the Philippines must gain its competitive edge against other investment destinations and this can be done through incentives given the high power costs in the country.
“If we don’t have incentives and we have higher costs then how can the Philippines compete,” Sears asked.
The Board of Investments (BOI) agreed that there is a need to be consistent in the investment policies. BOI managing head Cristino L. Panlilio said that although he is in favor of the rationalization of fiscal incentives, he would like to assure investors and businessmen in the country that they will continue to enjoy the perks until it lapses.
He noted that the incentives provided by the Philippines are one of the highest when compared to other countries. Panlilio said it is time to look for other ways to attract investors aside from offering them tax breaks.
In fact, Panlilio said that real estate developers will continue to receive ITH and other incentives under the 2011 IPP despite of the move of the government to lessen tax breaks on industries that have a steady stream of investors.
A big chunk of incentives given by the Board of Investments BOI was for the developers of mass housing projects like Megaworld.
Panlilio said he will retain the incentives for mass housing project developers. “The real estate industry needs incentives because of the backlog in housing units,” he said. “The ITH will continue even for Metro Manila projects.”