DoF wants grant of investment incentives streamlined

The study authored by University of the Philippines economics professor Renato Reside said 95 percent of the incentives given by the Board of Investments, 10 percent of those given by the Philippine Economic Zone Authority, 17.5 percent of those given by the Subic Bay Metropolitan authority and 36.3 percent of those given by the Clark Special Economic Zone were “redundant.”

The Department of Finance (DoF) has again called on Congress to streamline the grant of financial incentives for investments, saying the government loses billions of pesos annually by giving out of “redundant” perks.

“We underscore that it is also because of wasteful resources from redundant tax incentives that government has been financially ill-equipped to address poor infrastructure and a substandard educational system,” the DoF said in a position paper submitted to Congress.

It cited a study showing that the government lost P62.5 billion in potential revenues in 2004 by granting incentives that were “redundant” -- the investors would have proceeded with their investments even without the incentives.

The study authored by University of the Philippines economics professor Renato Reside said 95 percent of the incentives given by the Board of Investments, 10 percent of those given by the Philippine Economic Zone Authority, 17.5 percent of those given by the Subic Bay Metropolitan authority and 36.3 percent of those given by the Clark Special Economic Zone were “redundant.”

The study also said incentives were not a major factor for deciding to invest in the Philippines. It said the major factors were access to customers, political stability, ease of doing business, reliable infrastructure, labor cost, and availability of skilled labor.

The DoF proposed that laws granting investment incentives be consolidated into one, and that incentives be given only to priority exporters and businesses located in the poorest provinces. Michelle V. Remo; with INQUIRER.net