MANILA, Philippines – Department of Finance (DOF) Secretary Carlos Dominguez III is proposing a “more proactive” and “targeted” investment promotion strategy to attract the kind of foreign investors that the government wants to relocate here as part of the efforts to restart the country’s economy.
In a statement, Dominguez said these investors may be offered a set of tax and non-tax incentives tailor-fit to their needs.
Dominguez said the government should discard its old “one-size-fits-all” incentives program and shift to a demand-driven approach where it identifies the types of industries that the economy needs to flourish.
He explained that these incentives can be granted based on the specific requirements of the industry players that the government wants to set up shop in the country.
“What we should be doing is identifying these industries and then going to each of the companies–each of the leading companies in those industries around the world—and asking them: what do you need for you to come to the Philippines? Instead of waiting for them to apply, we should be going to them and offering them a package,” Dominguez said during a virtual press briefing held on the sidelines of the recently concluded online “Sulong Pilipinas: Youth Partners for Progress” workshop.
“These industries include those that are labor-intensive and thus create stable, decent-paying jobs; provide excellent technology transfers that improve the skills of the country’s workforce; and have stable markets,” he added.
Dominguez said the “obsolete one-size-fits-all” formula of attracting prospective investors has “failed to make the Philippines an investment magnet, with the country persistently lagging behind its Southeast Asian counterparts in terms of the volume and amount of foreign direct investment (FDI) inflows despite being among the first economies in the region to offer fiscal incentives.”
He said the administration’s economic team and the Congress are now in the process of crafting a comprehensive stimulus program to revive the economy waylaid by the coronavirus disease 29019 (COVID-19) pandemic.
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