Tax perks granted to P288 billion projects

MANILA, Philippines — The Cabinet-level Fiscal Incentives Review Board (FIRB) has approved 25 projects worth P288 billion since the Marcos administration took office.

In a briefing, Finance Secretary and FIRB chairperson Benjamin Diokno said the agency has greenlit 25 projects with total investment capital of P287.9 billion since end-June 2022 until July this year.

This follows the enactment in 2021 of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law that slashed corporate income tax rates to make them comparable with the ASEAN region.

The 25 projects are expected to generate around 24,617 jobs, with foregone revenue of nearly P30 billion.

“We look at the benefit-cost analysis rather than potential revenue loss. The purpose of the FIRB is that we are able to track how much we are giving away,” Diokno said.

He noted that the projects approved under the first year of the administration is a “pretty decent performance.”

The Finance chief noted that the government is taking advantage of the structural reforms that were started by the Duterte administration to further enhance the investment environment for the country.

These include the amendments to the Public Service Act, Foreign Investments Act, and the Retail Trade Liberalization Act, as well as the CREATE.

“We have made progress with FIRB. When they (investors) come in, they ask for incentives, so we continue to do so because we made a lot of progress,” Diokno said.

Nonetheless, Diokno noted that investors remain concerned on power costs in the country, as well as the ease of doing business.

Based on the FIRB data, the biggest investment approved by the Marcos administration at P147.49 billion was for Unity Digital Infrastructure Inc., a joint venture telecommunications infrastructure platform by the Aboitiz Group and leading global private markets firm Partners Group.

The firm is poised to be the market leader in the local common tower industry, as it looks to support the government’s drive to roll out 50,000 towers by 2030.

This is followed by the P36.07-billion investment of LBS Digital Infrastructure Corp., a digital infrastructure platform with a medium-term focus on telecommunication towers ownership and leasing.

The third biggest investment is the P16.02 billion of Enovate Motors Corp., which operates electric vehicles for lease to government and private corporations.

Apart from telecommunication infrastructure and energy, other sectors that were granted tax perks by FIRB include manufacturing, tourism, healthcare, housing, and information technology and business process management.

Most of the projects approved are located outside Metro Manila such as in Bulacan, Laguna, Negros Occidental, Batangas, Iloilo, Isabela, Cavite, Davao de Oro, Quezon, Davao del Norte, Pangasinan, and Zambales.

Pursuant to the CREATE Law, the FIRB is mandated to oversee the grant and administration of incentives of investment promotion agencies (IPAs).

Under the law, IPAs approve the incentives of projects below P1 billion, while the FIRB selects the tax perks for business activities above P1 billion.