In a statement today, Action for Economic Reforms (AER) criticized the statement of some leaders of Philippine Economic Zone Authority (PEZA) locators, asking that the CREATE (Corporate Recovery and Tax Incentives for Enterprises) Bill, already approved by both chambers of Congress, be still amended.
Some PEZA locators want to raise the threshold amount for investments that the Fiscal Incentives Review Board (FIRB) will approve. The bill states that any amount of PhP 1 billion and above requires approval of the FIRB. AER criticized the Semiconductor and Electronics Industries in the Philippines Foundation (SEIPI), Inc., among others, for its self- serving, shallow argument. Essentially, said AER, the goal of SEIPI and its allies is to render the FIRB toothless.
Refuting the SEIPI, AER said that the FIRB is a key reform, for it introduces a consolidated structure of governance and oversight in the granting of incentives. Otherwise, the many independent investment promotion agencies (IPAs) will be left to their own devices, which can lead to incoherence, inconsistency, and weakening accountability. All this in turn can make decision-making uncertain, something that investors dislike.
AER further said that even if the bicameral conference committee would convene to reconcile the House and Senate versions of the bill, legally, it cannot insert the amendment that some industry leaders are asking, for the said amendment cannot be found in either the House bill or the Senate bill. AER said that it is patently illegal to make insertion on a bill at the bicameral conference committee, if such insertion was not approved on third reading by either the Senate or the House of Representatives.
AER also called on both Houses to dispense with the bicameral conference committee and adopt what the Senate had already approved. AER took note that the Senate version is far from perfect, but it likewise recognized that the Senate bill reflected the compromises to accommodate the opposition to the bill. Mr. Filomeno Sta. Ana III, coordinator of AER, said: “Give something that they want, and they will want to take more. Sobra na!”
Mr. Sta. Ana called the demand of some industry leaders unreasonable, saying that these few locators only want to escape the rigorous scrutiny of FIRB. “It is but proper that more diligence be put in place for bigger amounts of investments,” he added.
Professor Lingling Patalinghug of the University of the Philippines College of Business agrees with AER. He said, “The FIRB guarantees that incentives are targeted, time- bound, and performance-based. Investors dealing and negotiating directly with PEZA and various IPAs would provide opportunities for rent-seeking, bribery, and corruption.” Professor Patalinghug also said that “big investors are better off dealing with a more transparent and professional FIRB.”
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