The Philippines is opening its doors to foreign investment as it tries to bounce back from the pandemic, Trade Secretary Ramon Lopez said Wednesday, touting corporate income tax cuts and structural reforms that can withstand political successions.
“We are looking forward to a much lower corporate income tax rate in the months to come,” Lopez said in an interview with Bloomberg Television’s David Ingles, citing a bill that would cut corporate tax rates from 30% to 25% to start, and eventually to 20%.
“Over the years, you’ve seen how the Philippines and especially economic policies have been insulated from changes in government and administrations,” Lopez said. “Essentially, it’s one direction toward improving the business environment,” regardless of who’s in power, he said, citing efforts to reform tax incentives and offer other economic support measures.
The bill, currently pending in the Senate, seeks flexibility in granting fiscal and other incentives as the Philippines competes for high-value investments. Rationalizing tax perks aims to make the system performance-based, targeted and time-bound, though some business groups have voiced concerns that it might lead to job cuts and loss of new investments.
A Board of Investments campaign to woo foreigners is focusing on certain priority sectors, including automotive, aerospace, electronics, copper-nickel products, and IT and business process management. The campaign is “our way to attract our investor friends from all around the world to look into the Philippines,” Lopez said.
The Philippines entered a recession this year as it grapples with the second-worst coronavirus outbreak in Southeast Asia. Consumer sentiment weakened after movement restrictions closed businesses and eliminated millions of jobs. Spending is starting to pick up lately, as evidenced by the economy’s quarter-on-quarter growth, Lopez said. Consumer confidence and the pace of recovery remain risks for the outlook, the trade chief said.