Foreign firms push retention of incentives package in Philippines

MANILA, Philippines — The Joint Foreign Chambers (JFC) in the Philippines wants government to retain the incentives package it offers to investors, saying this compensates for the country’s comparative disadvantages with its regional counterparts.

The JFC, a coalition of the American, Australian-New Zealand, Canadian, European, Japanese and Korean chambers and the Philippine Association of Multinational Companies Regional Headquarters Inc., has called for a status quo in the incentives packages.

“We must be careful not to reduce this country’s ability to attract foreign investments into the PEZA zones and special economic zones. Around the world in successful economies, such zones are hubs of investment, innovation, job creation, and progress, as they are in the Philippines,” Japan Chamber of Commerce and Industry of the Philippines president Hiroshi Shiraishi said.

Shiraishi said international companies have invested in the country because of the quality of Filipino workers and fiscal incentives promised by the Philippine government.

“These incentives compensate for the comparative disadvantages of locating in the Philippines instead of in China, Malaysia, Thailand, Vietnam, or elsewhere,” he said.

“We prefer the status quo, but we understand the government now wants to change that. We must work together and strengthen – not weaken – our public-private partnership so that our businesses and the Philippines continue to prosper together,” Shiraishi added.

The JFC’s call is in line with the proposed second tax reform package of the Department of Finance which seeks to rationalize incentives and reduce corporate income tax rates.

Shiraishi, however, pointed out the JFC agrees that old, redundant and unnecessary fiscal incentives are no longer necessary.

“In recent years, foreign direct investments in the Philippines has reached record levels nearing $8 billion. None of us want to stop expanding or to consider relocating,” he said.

JFC members represent over 3,000 member companies engaged in over $100 billion worth of trade in goods and services and some $30 billion in investment in the Philippines and employ over two million Filipinos.