BOI-DOF at loggerheads: Lopez refutes Dominguez

Published October 8, 2020, 4:43 PM

by Bernie Cahiles-Magkilat

The Department of Finance (DOF) and the Board of Investments (BOI), which is under the Department of Trade and Industry (DTI), are at loggerheads again.

Finance Secretary Carlos G. Dominguez III and DTI Secretary and BOI Chairman Ramon M. Lopez both used the 46TH Philippine Business Conference to air their sides over the way the country’s investment promotion campaigns are being implemented.

On Wednesday, Dominguez, the guest speaker at the opening of the PBC, criticized the BOI for sitting on their job and for its failure to convince any of the investors who are leaving China to locate in southeast Asia during this pandemic.

Today, Thursday, was Lopez’s turn to refute Dominguez allegations.

“We are catching some of the investors amid the pandemic and jobs for our people,” said Lopez in his speech at the conclusion of the two-day conference, the country’s largest annual business gathering.

In fact, he said, 9 investments with estimated project cost of P3.2 billion have been realized from Netherlands, Taiwan, US and China. These projects involve the manufacture of tennis balls, travelling bags and internet accessories and audio.

There are also 14 ongoing leads including the manufacture of optical devices, expansion of electronics manufacturing, home appliances, and printing devices. There are also interests being pursued in the areas of motorcycle and auto assemblies, integrated copper, textile, personal protective equipment, engine assemblies, agriculture and beverage and bottle caps.

There are also other areas that are considered as investment leads for 2020 from Taiwan, Japan, US and Korea in the IT-business process management, energy, high tech household appliances and motor vehicle manufacturing and optical devices.

Without naming names, Lopez refuted the claims by the finance chief that BOI failed to attract a single lens manufacturer for camera phones stressing “Now, we have 11 single lens manufacturers. In fact, we are one of the top exporters of these products.”

The finance chief in his earlier speech at the same venue cited as an example the manufacturing of camera lenses, which demand has grown multifold in the smartphone sector. “How many cameras are there usually in a cell phone? At least two, possibly three, and sometimes four. You know we don’t have a single lens manufacturer in the Philippines,” he said.

Lopez corrected the country’s chief tax collector Dominguez, with the Bureau of Internal Revenue and the Bureau of Customs directly under his department, pointing out that the image stabilizer at the back of your smartphones is done by one of Japan’s largest manufacturer located in Bataan, Batangas and Cebu exporting their products out of the Philippines. The firm is employing over 30,000 Filipinos.

In addition, the BOI chairman said, there are also some investors wanting to continue their investment plans in the country amidst the pandemic expressing hopes that they will pursue their plans to generate more jobs for Filipinos.

Dominguez, the chief economic manager of the Duterte administration, believes that the agency “does not see itself as a marketing organization.”

“The most important thing is to talk directly to these companies that have the potential of moving out and offer them,” Dominguez said.

Dominguez generally likened the BOI mandate to that of a hotel owner. “Like if you’re in the hotel business, you don’t just advertise and say, ‘okay, come here, we’ll wait for you guys.’ You have to make offers. You identify [your potential clients] and offer them a deal,” the finance chief explained.

Dominguez said that aside from formulating investment rules, the BOI should go out and negotiate with “high-tech” industries that create a lot of jobs and transfer technology to Filipinos.

“Why doesn’t the BOI go out and say okay this is the industry we want to bring in, it is high-tech,” he said. “Rather, they sit down, write the rules and expect everybody to come.”

Dominguez said “that is not the role of the BOI. The BOI should be going out, identify the industries that we want. Identifying the companies that we want to bring in, and offering them our package of incentives.”

This is not the first time that the two agencies are at loggerheads. Being the investment promotion agency, the DTI/BOI has to protect and use tax incentives as one way to attract investors. But the DOF, being the chief fund maximizing agency of the government, has to hold the purse of the government closely to its chest and is therefore against the granting of tax incentives to investors.

Earlier, the finance chief called out the BOI for opposing the DOF-backed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, formerly called corporate income tax and incentives rationalization act (CITIRA).