Philippine Fiscal Incentives: A Note on Design, Administration, and Context

The main idea of this paper on Philippine Fiscal Incentives written by Cristina Morales-Alikpala, is that while fiscal incentives, in their current design, administration, and context, may have proven to be of little value when it comes to encouraging investments, the notion of providing effective subsidies to worthy investors should not altogether be abandoned.

This paper aims to review the economic rationale behind investment incentives, particularly in the Philippine context, and formulate recommendations for future policy decisions that will hopefully enrich the discourse on the desirability of investment incentives. The following section focuses on the economic rationale for investment incentives. Afterwards, the structure of Philippine fiscal incentives is discussed. Two papers assessing Philippine fiscal incentives, Medalla (2006) (2006) and Reside (2006; 2007), are reviewed in detail. In an effort to enrich the ongoing discourse regarding rationalization of fiscal incentives, a review of strategic industrial promotion strategies employing such fiscal incentives is presented. Finally, policy recommendations are set forth and future directions for research are suggested.

Full text of the paper can be downloaded here. (in .pdf, 37 pp.)

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