DTi bats for investor-friendly policies

To address the declining trade revenue, another “crucial local action” is needed to help businesses become competitive, especially the micro, small and medium enterprises

The Department of Trade and Industry (DTI) is urging the government to improve the country’s attractiveness to foreign investments through the passage of investor-friendly regulations and policies to compete with the new trends in the international trade arena.

Speaking with the reporters this week, Marie Sherylyn Aquia from DTI Bureau of Trade Relations said the government should work on reducing restrictions on foreign direct investments, particularly passing the proposed Comprehensive Income Tax and Incentive Rationalization Act (Citira) Bill.

Aquia said the passage of the said pending legislation could help attract businesses to locate in the Philippines.

Formerly called TRABAHO Bill, House Bill 313 seeks to gradually reduce the corporate income tax rate to 20 percent from the current 30 percent.

The bill, moreover, pursues to introduce changes to the incentive regime.

Industry groups already expressed support for the bill, saying that it allows the government to collect more revenues from foreign businesses investing in the country.

The amendment to the decades-old Public Service Act is also needed to lift the foreign ownership restriction in certain sectors such as telecommunications and transport service providers, Aquia added.

According to latest data from the DTI, the 2019 mid-year total external trade in goods amounted to $86.9 billion reflecting a slight decrease of 0.5 percent from the $87.4 billion external trade in the same period of the previous year.

Although the country started gaining trade surplus in April this year, there is still some remaining deficit from July 2018.

To address the deteriorating trade revenue, Aquia said another “crucial local action” needed is to help businesses become competitive, especially the micro, small and medium enterprises by beefing up their innovation capacities and entrepreneurial skills.

“There is a need to toughen the digital services trade by improving both hard and soft infrastructure, increasing consumer trust in the internet economy services by improving customer data protection, and mounting an efficient logistics network that can handle the increasing needs of e-commerce,” Aquia said.

The DTI officer said both the government and the business sectors should also strengthen business matching between local companies or exporters and foreign buyers and encourage firms to capitalize on reskilling and retooling of their employees.

More importantly, both sectors should team up to ensure that small businesses are protected from anticompetitive practices of big firms, Aquia added.