CREATE TO BOOST INVESTMENTS

The recently-passed Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill is seen to lead to the inflow of more investments into the country, according to Trade Secretary Ramon Lopez.

The said law, which was passed last February 5 in the bicameral conference of Congress will push forward the country's National Employment Recovery Strategy (NERS) aimed as a response to the COVID-19 pandemic that has led to the closure of the many businesses and the lay-off of several workers.

As head of the Task Force that is co-chaired by the Department of Labor and Employment (DOLE) and the Technical Education and Skills Development Authority (TESDA), Lopez said, “The landmark tax and incentives reform bill that we expect to be signed by the President is expected to bring in massive inflow of investments that will create more jobs, especially as we focus efforts in the National Employment Recovery during this period of the pandemic and beyond."

The passing of CREATE will firm up the tax and incentive reforms that will make the investment climate significantly more attractive than the current tax and incentive regime, Lopez added.

“The bill will certainly encourage more investments with the lowering of the corporate income taxes rate from 30% to 20% for Micro, Small, and Medium Enterprises (MSMEs), and 25% for large corporations.

Modernizing the incentives system likewise makes the incentives such as Income Tax Holiday (ITH), Special Corporate Income Tax Rates (SCIT) or Enhanced deductions (ED), available to industries considered Strategic, Critical or export-oriented,” he added. “Based on our estimate and those from Cong. Joey Salceda, CREATE can bring in over P200B of new investments that can generate 1.4-2 million incremental jobs,” he added.

The NERS 2021-2023 is a medium-term plan anchored on the updated Philippine Development Plan 2017-2022 and ReCharge PH by expanding the Trabaho, Negosyo, Kabuhayan initiative and improving access and security of employment. The strategy also takes into consideration the changes in the labor market brought about by the pandemic and the fast adoption of Fourth Industrial Revolution (FIRe) technologies.

The Trade Secretary further stressed the importance of continuing with our calibrated and safe reopening of the economy to allow the country to regain the growth momentum that it had before the pandemic.

The vaccine rollout is also another complementary program that will help further improve consumer and business confidence as immunity of the majority of the population is achieved.

Sec. Lopez said: “Vital wide-ranging and integrated policy measures are needed. These should focus on: stimulating the economy and jobs; supporting enterprises, employment and incomes; and protecting workers in the workplace, including occupational safety and health.”

DOLE Secretary Silvestre Bello III, on the other hand, said: “This JMC will fortify our collective undertaking as a Task Force working to develop a policy environment that encourages the generation of more employment opportunities, improves employability and productivity of workers, and supports existing and emerging businesses.”

CREATE will help boost investments in the Philippines, which would support the 2021 target of the Board of Investments (BOI) of P1.25T investment approvals. A report by the United Nations Conference on Trade and Development (UNCTAD) had also estimated that the Philippines bucked the trend in Southeast Asia, and had increased its foreign direct investments (FDIs) during the pandemic by 29% last years.

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