Press Release
March 23, 2011


Senator Edgardo J. Angara has filed a bill that aims to rationalize fiscal incentives awarded to enterprises, stressing the need to put our fiscal house in order especially in the aftermath of the global economic crisis.

Senate Bill No. 2755, also called The Investments and Incentives Code of the Philippines, will harmonize the country's existing incentive system which is presently provided under different laws with differing provisions.

Angara said the disparate incentive offerings has regrettably created competition among various economic zones vying for limited investments that flow into the country. The Philippines' foreign direct investment in 2009 totaled $1.948 billion, which is far lower than what our neighbors in the region receive.

"Unequal incentive regimes have fostered unnecessary rivalry among our own ecozones, when they should be working together to build up our total investment portfolio," Angara said.

He added, "The incentives we give investors must be clearly defined and comparable across the board, otherwise we risk putting off potential investors instead of attracting them. We should ensure that our incentives remain competitive with those of our Asian neighbors."

Moreover, the bill will help spur development in the countryside and other underdeveloped areas by granting tax incentives to investors who would locate in our poorest provinces. It will also promote export-oriented enterprises, whether these are located inside or outside economic zones.

"The proposed Investments and Incentives Code of the Philippines wants to ensure that progress will be as equitable as possible," said Angara.

At the same time, the bill will reform institutions -- primarily the Board of Investments -- that grant incentives by clarifying their mandates and enhancing their capacity to monitor and implement the incentive system.

"Congress has been considering this bill for so long. It's high time we finally pass this urgent fiscal reform measure," said Angara.

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