CREATE MORE Act could generate over 140K jobs

lawmakers in the House of Representatives welcomed the enactment of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act, a new law expected to generate up to 140,000 high-quality jobs. 

Republic Act 12066, signed by President Ferdinand "Bongbong" Marcos Jr. on Monday, seeks to entice both global and domestic investors, resulting in a boosted economy and additional room for employment. 

The law will amend the National Internal Revenue Code of 1997, strengthening the country’s fiscal incentives policy and the initial CREATE Act, lowering the nation’s corporate income tax — among the highest in Southeast Asia — from 25 percent to 20 percent in line with global trends.

According to House Speaker Martin Romualdez, one of the law’s principal authors, the CREATE MORE aims to resolve confusion and ambiguities that have arisen on tax incentives the CREATE law had granted to local corporations since its enactment in March 2021.

Romualdez cited the complaints of investors on the alleged ambiguity on some provisions of CREATE, particularly those on value-added-tax incentives.

“We acted fast to make adjustments in the law to preserve existing investments and to attract additional capital,” Romualdez said. “We hope the changes will satisfy our existing investors and entice more foreign capitalists to invest in the country.”

Jobs, jobs, and more jobs

Albay Rep. Joey Salceda, chairperson of the House Committee on Ways and Means, is optimistic that the “largest pro-labor legislation" will directly create roughly 142,000 high quality jobs, and indirectly induce the creation of 860,000 other employment. 

“It increases the demand for labor by encouraging more investments. This is the only way to truly sustain higher wages,” the seasoned economist said. 

The Philippine economy remained one of the fastest-growing economies in Asia but still lagged behind its neighbors in attracting foreign direct investment due to foreign ownership restrictions and high power costs that keep foreign investors away.

Salceda, however, said that the new law will now quell the longstanding issue of expensive energy by establishing the double deduction for power expenses for those under the enhanced deduction regime. 

“This lifts the largest roadblock to foreign direct investments in the country. By encouraging investments from outside, we increase the bargaining power of the Filipino worker, who are currently in the chokehold of a few domestic players who get to set wages,” he remarked.

Salceda added, “Foreign investors, especially export industries, also tend to pay a significantly higher wage, as much as 47 percent higher than the average employee elsewhere,” he added.

“It also enshrines the right to work from home in the export service sector, especially the BPO sector. Companies who have work from home schemes will continue to be eligible for tax incentives,” the lawmaker concluded. 

Apart from the this act, Salceda said Congress is also gearing up to reform taxes on the capital markets, which would also spur investments.