PEZA: Reforms worrying investors
Investments registered by the Philippine Economic Zone Authority (PEZA) dropped by 36.5 percent during President Rodrigo Duterte’s second year in office as investors were spooked by the government’s plan to limit incentives.
PEZA promotions and public relations manager Elmer San Pascual told reporters that investments recorded from July 2017 to June 2018 amounted to P170.41 billion, significantly lower than the P268.36 billion posted during Duterte’s first 12 months in office.
The number of projects likewise went down by 9 percent, to 512 from 564, while jobs generated plunged by 50 percent to 37,189 from 81,842.
“The number of projects had a negative 9 percent [result]during the second year of the present administration because of the threat of the change in incentives,” San Pascual said.
Package 2 of the government’s Comprehensive Tax Reform Program calls for the modification of tax incentives to make these “performance-based, targeted, time-bound and transparent” in addition to gradually lowering corporate income taxes to 25 percent from 30 percent.
By industry, San Pascual said investments in the manufacturing sector went down by 51 percent to P46.37 billion; information technology, 46.13 percent to P14.39 billion; ecozone development, 17 percent to P104.49 billion; and other sectors, 75 percent to P5.15 billion.
PEZA, San Pascual said, wants the current incentive list to be retained.
“We are advocating for the maintenance of our incentives because if you look at the incentives being given now by our Asean neighbors, they have been improving, particularly on income tax holidays,” he said.
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