Businesses should invest heavily in digitalization and innovation to stay competitive as the world rapidly transitions to a new post-pandemic global economy, the government’s chief economic manager said.
In a statement, Finance Secretary Carlos G. Dominguez III said on Monday, June 14, that technology has driven abrupt and disruptive changes, thus businesses must evolve with it and take advantage of these fast-changing technological innovations.
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Dominguez explained that investing in digitalization and innovation will allow businesses to better respond and adapt to the demands and challenges of the new global economy.
“Technological innovations will build new industries and create many employment and investment opportunities,” Dominguez said in his pre-recorded keynote speech at a Department of Science and Technology (DOST) event.
“These will allow us to bounce back stronger from the pandemic and help ensure the long-term recovery of our economy,” he added.
On Monday, DOST inaugurated its Advanced Manufacturing Center (AMCen) that aims to be the technological hub and research center for additive manufacturing in the Philippines.
Dominguez said the AMCen, home to the Philippines’ first 3D printing research and development (R&D) institution, will help transition the country’s manufacturing sector to the Fourth Industrial Revolution (FIRe).
“I expect the inauguration of more forward-looking projects to bring the Philippines closer to our goal of becoming a major player in the digital economy,” Dominguez said.
Dominguez said the new Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law will help strengthen the culture of innovation and research and R&D in the country.
He said CREATE offers not only a reduced corporate income tax rate (CIT) for investors but also attractive fiscal and non-fiscal incentives, such as a 100-percent additional deduction on R&D expenses.
CREATE lowered the CIT from 30 percent to 20 percent for micro, small and medium enterprises (MSMEs) and to 25 percent for all other businesses.
Dominguez said the Department of Finance (DOF) uses this fiscal policy under CREATE as a tool “to promote a regime that rewards innovation and the creation of new knowledge.”
“Under CREATE, the types of investments that will be pursued are activities consistent with the Fourth Industrial Revolution. These would spur the development of new production techniques and business models,” Dominguez said.
He said that along with tapping the incentives under CREATE, companies can also team up with AMCen to explore ways on how they can adopt additive manufacturing practices to improve their respective production lines.
“This Center could also serve as a good starting point to upskill and retool our workers on advanced manufacturing technologies,” Dominguez said.
Dominguez said the launching of AMCen “is very timely” as the COVID-9 pandemic has highlighted the urgency of adopting new technologies to the way we used to do things.
“This accelerated trend towards an economy driven by technology will continue into the future. The Philippines must evolve and take advantage of these abrupt changes to better respond to the demands and challenges of the new global economy,” Dominguez said.
“As our country recovers from the pandemic and industries get back on their feet, businesses will require heftier investments in innovation and technology in order to stay competitive,” he added.