‘Location matters more than tax’

Increasing economic opportunities in the country and its skilled labor force matter more in attracting long-term investors, Finance Assistant Secretary Antonio Joselito Lambino II said on Friday.

According to Lambino, this was pointed out by various business leaders, including a top executive from the American Chamber of Commerce of the Philippines Inc. (AmCham).

He claimed AmCham board director Ariel Lacsamana said that investors can manage even without fiscal incentives given their investments’ strategic placements.

According to him, locators at the various export processing zones and in those near shipping points such as ports who do not have to deal with congestion and other shipment issues do not mind operating without a tax incentive.

“New Clark City, for example, is a good one,” Lacsamana said.

The Department of Finance (DoF) is also furthering its proposal to reduce the corporate income tax (CIT) rate from the current 30 percent to 20 percent on a staggered basis as part of the larger goal of attracting more foreign businesses to the Philippines.

Finance Secretary Carlos Dominguez III reiterated the proposed reduction should benefit 99 percent of corporations and businesses in the country.

To recall, 91 percent of the small and medium enterprises (SME) who participated at the Sulong Pilipinas forum a year-ago support the proposed corporate tax reform as indicated by a third-party survey.

That survey found that 92 percent of SME in the forum consider the pending Tax Reform for Attracting Better and High-quality Opportunities (TRABAHO) bill an important factor in the country’s economic development.

Lacsamana, president and managing director of 3M Philippines, said multinational corporations plan for the long-term and consider connectivity and strategic location as very important considerations in making overseas investments.

“You just have to be smart. The incentive helps you at least at the start because you look at it as multinationals would look at the whole region. When we look at investments, the Philippines is one of the good options because of the growth rate, by itself. Second, where else can you find a country where north to south, you’ve got English-speaking people. So, the labor force itself is attractive,” he explained.

In addition, the 3M executive said Filipinos adapt quickly in terms of new technologies available compared to counterparts in the region.

“If we want to grow, this is the place where we can have a good chance of growing because we’ve got a great labor force. Training the people here even in my short two years has been amazing,” Lacsamana said.