AER brands Sen. Recto as the Donald Trump of the Philippines, lambasts his disruption of the CREATE Bill discussions
On Wednesday, local think tank Action for Economic Reforms (AER) lambasted Senator Ralph Recto for his disruption of the CREATE Bill discussions and labeled Recto as “the Donald Trump of the Philippines.”
“Senator Recto’s actions show us that he is the Donald Trump of the Philippines; someone who imposes his will on the Senate and will do anything to get his way,” said Filomeno Sta. Ana III, coordinator of AER.
On Monday, November 9, the Senate resumed its regular plenary session, with finalizing the amendments to the CREATE Bill prioritized on the legislative agenda. The amendments currently being ironed out are the major amendments proposed by Senator Ralph Recto.
AER slammed Recto for his proposed amendments, citing that they derailed and paralyzed the process of reform, specifically for the country’s fiscal incentive regime. Sta. Ana said that the current incentive regime results in the loss of billions of pesos worth of government revenues yearly due to its vulnerability to abuses. “We have been too generous in granting incentives, many of these which are unnecessary and redundant. Thus, there is a need to restructure our system,” Sta. Ana added.
Recto’s proposed amendments which AER strongly opposed include: the grandfather rule which seeks to retain the tax perks of existing registered companies, the exclusion of certain investment promotion agencies from the incentive package requirements in CREATE, and the creation of a distinction between domestic and export enterprises in granting fiscal incentives.
“By insisting on these proposals, Recto has demonstrated that he is adamant on serving the interests of the businesses who continuously benefit from the arbitrary dispensation of incentives,” Sta. Ana said.
AER also rebuked Senator Recto’s argument that retaining the current incentive system through his proposed grandfather rule will relieve businesses of the economic burden brought about by the pandemic. During the period of interpellations for CREATE, Recto argued that restructuring the incentives for all enterprises under CREATE would make the Philippines less competitive in terms of foreign investment.
“The objective of CREATE is to make incentives targeted, performance-based, time-bound, and transparent, which will keep firms alert and competitive. The fiscal incentive rationalization under CREATE will reduce the uncertainty that prevents many businesses from investing and locating in our country,” Sta. Ana said.
AER called on senators to reject Senator Recto’s proposed amendments. “We appeal to the Senate to pass the CREATE Bill at the earliest possible time for us to finally modernize our fiscal incentive regime, improve the governance and institutions in granting tax incentives, and for it to serve as a stimulus during this economic downturn,” Sta. Ana said.