Some investors in information and technology-business process management (IT-BPM) are skeptical about investing in the country, as some local government units (LGUs) continue to violate the CREATE MORE Act and Ease of Doing Business Act, which assure that government processes are fast and incentives for investors are in place.
Republic Act (RA) No. 12066 Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE), as its aim states, should make the country’s tax incentives regime more globally competitive, investment-friendly, predictable, and accountable.
RA 11032, or the Ease of Doing Business Act, on the other hand, aims to entice entrepreneurs to open up their businesses in the Philippines by expediting business and non-business transactions, including the issuance of permits and licenses, and holding government officials accountable for graft and corruption.
In a press briefing on Monday night for its Solaia 2 at The Sentosa, Taguig City, IT & Business Process Association of the Philippines, Inc. (IBPAP) chief operating officer Celeste Ilagan revealed that some LGUs in Metro Manila and outside the National Capital Region weigh in more on their ordinances rather than the two laws sealed by President Ferdinand Marcos Jr.
“There is an agreement for the DTI (Department of Trade and Industry), the DoF (Department of Finance), and the Department of the Interior and Local Government to seal a joint memorandum circular. We have seen the draft of the JMC that has undergone a round of consultation. That will specify how LGUs should interpret and what they should follow in imposing fees, charges, and permit requirements. These are the typical problems: the permitting and the imposition of charges,” Ilagan said.
She said the problem is also that there is no standard that the LGUs follow in imposing taxes.
Ilagan said that under the CREATE MORE, in terms of special corporate income tax, it says that the enterprise pays 5 percent tax on gross income, three percent of that goes to the national government via the Bureau of Internal Revenue, while the other two percent goes to the LGUs.
“Enterprises remit the 2 percent directly to the LGU. The CREATE MORE says that even if companies are already paying a 2 percent tax on gross income, they will not need to pay any more charges. That’s very clear in the law, however, some of the LGUs continue to impose these fees,” she revealed.
“They say they have their ordinances that they need to follow; therefore, even if there is CREATE MORE, they are obligated to follow their ordinance. There are several of them, both in Metro Manila and outside Metro Manila. They are violating the said laws in continuing to charge these enterprises,” according to Ilagan, stressing that LGUs believe their law is their ordinance, ignoring national laws.
On June 2, 2025, key government agencies convened for the ceremonial signing of the JMC titled “Strengthening the Coordination Mechanism Between and Among the Investments Facilitation Network Members and Integration of the Provisions of Executive Order No. 18 (Green Lane facilitation), series of 2023.”
The JMC institutionalizes the Investment Facilitation Network (INFA-Net)—a coalition of 38 government agencies chaired by the Department of Trade and Industry-Board of Investments, and co-chaired by the Anti-Red Tape Authority, to streamline investment-related processes such as the issuance of permits, licenses, certifications, or authorizations.
So much investors
For his part, IBPAP president and CEO Jack Madrid said that despite regulatory issues, IBPAP continues to receive applications from foreign and local investors.
“We are happy to say that our office is being visited by locators and investors, both existing investors who want to expand their footprint in the Philippines, and also prospective investors who are seriously considering setting up operations in the country,” he said.
Further, he said that the countryside remains a bright spot for the IT-BPM investors, instead of crowding in Metro Manila.
“Before Covid, we were only 25 percent. Today we are at 32 percent of a bigger base, and according to our Roadmap projections, we see that growing to 40 percent by 2028. Congestion in Metro Manila is an issue, so the countryside helps to decongest Metro Manila, which is a good thing,” Madrid said.
To date, the IT-BPM industry workers have grown to 1.82 million, hitting 1.9 million by the end of 2025, closing in on the 2-million-mark workforce.
In terms of export revenues, Madrid said they are gearing to hit $40 billion, a growth of 5 percent over the last year, and 4 percent in jobs over the previous year.