Gov't urged to defer measures removing incentives in order to attract more investors amid COVID-19 crisis
A local business group urged on Monday the government to defer the passage of new tax bills, including those which remove incentives for businesses, in order to attract investors, particularly those leaving China, in the wake of the coronavirus disease crisis.
In a virtual media forum, Philippine Chamber of Commerce and Industry President Benedict Yujuico noted that companies leaving China have been relocating to Vietnam or Thailand, but not in the Philippines.
"Why not in the Philippines? One of the issues is (the government) is removing tax incentives," he said.
Yujuico proposed to suspend bills that would remove the incentives from businesses.
"For example, on the schedule, they (government) want to remove incentives...better to defer it in the meantime...in order to be more attractive, more competitive (to investors)," he said.
He cited the incentives that the government is planning to take away for investors within the Philippine Economic Zone Authority.
One of the priority measures pending in Congress is the passage of Corporate Income Tax and Incentives Rationalization Act.
Under the CITIRA bill, the government will cut and rationalize the incentives of some businesses to boost micro, small and medium enterprises.
Yujuico also expressed doubt on the reason of Honda Philippines for stopping its production operations in the country.
He wondered why a company like Honda would close its operations here considering that the Philippines is a big market for automobiles.
The former ambassador said it did not make any sense to him.
Honda closed its production plant in Sta. Rosa, Laguna last March, displacing 387 workers, as it was part of the company's overall "global decision" and had nothing to do with the Philippine management, according to the Department of Trade and Industry.
Meanwhile, with the COVID-19 affecting most economies, Yujuico said this is the time to attract more investors.
He also urged the government to do a balancing act between health concern and the need to resume the operations of some businesses, like business process outsourcing and Philippine Offshore Gaming Operator.
While admitting that he has establishments being used by some POGOs, he said BPO and POGO industries have brought huge income for the Philippines.
"POGO generally generated lots and lots of money for our social services...we have to find some middle ground," he said.
Yujuico also welcomed the government's financial assistance for small businesses.
But he said the aid could only last for two to three months.
"I think we are here for a long haul. No one knows. What we can look at what other countries have been doing. May be we can get something from them, which the Philippines can also do," he said, noting that some of those countries, such as Germany and Italy, have started to open some businesses already.
President Rodrigo Duterte has declared a Luzon-wide lockdown last March 17 and this was extended until April 30.
Other areas outside Luzon have been implementing their own respective quarantine measures to contain the spread of COVID-19. Celerina Monte/DMS