Trade and Industry Secretary Alfredo E. Pascual has called for the grant of full tax and fiscal incentives to investors as provided under the law as he cautioned against crafting an implementing rules and regulations (IRR) that will introduce additional restrictions that are not provided for in the law.
This was pointed out by Pascual at the Post SONA Economic Briefing where he put strong emphasis on the DTI plans and programs to support and develop the country’s manufacturing sector by encouraging private sector capital.
“If there are incentives given in a particular law, I would like us to be very careful in crafting the IRR so that no additional restrictions are added outside the law,” said Pascual, who cited the Renewable Energy Act IRR where foreign ownership restriction was introduced although there was no provision in the law.
The new DTI chief was thinking of the IRR of the CREATE law, which provides generous incentive packages for investors in the Philippines. “I hope that whatever tax incentives provided will be implemented as provided for in the law,” he said.
The issue of incentives to investors came about as Pascual said that DTI is focusing on the support, development and growth of the manufacturing sector on areas where the country has strategic advantage. He noted that many Filipinos are already in the digital type of jobs and their skills can be fully utilized in the manufacturing sector.
According to Pascual, the DTI would be able to encourage the private sector to invest in manufacturing by further empowering them. “It is very important that we encourage our private sector, both local and international investors, and we have to make it easy for them,” Pascual said.
With that, Pascual said that industrialization is a focus during his term, particularly in the manufacturing potential for the country’s copper, nickel and cobalt raw materials.
“Unfortunately, we are exporting these metals as coarse and not able to maximize with no value addition. We need to move to further processing for local value addition,” he urged emphasizing that these locally available raw materials - nickel, copper and cobalt – are very critical in new industries such as batteries for electric vehicles and hyperscaler devices need for emerging industries.
Another challenge being faced by companies is the issue of “bigness” wherein Pascual noted of a “tendency to constrain” the growth of companies. “I think we need to encourage and support the growth of Philippine companies particularly those going to compete in the international market because in the globalized and highly contestable global market, the players are big so we need big companies to compete with their counterparts from foreign countries,” he added.
For micro, small and medium enterprises (MSMEs), Pascual said the CREATE Law will help the DTI address the challenges of the sector in the promotion of Philippine exports and the development of a Philippine brand.