Press Release
November 26, 2020

Opening Statement of Sen. Pia S. Cayetano
Chair, Senate Ways & Means Committee During the Create Bill Period of Amendments

Part 1

I would like to start this day with a brief overview of where we are. Because we were very close to passing it on second reading yesterday, and a lot of our colleagues graciously joined us again to be sure that we were complete.

I'd like to take this opportunity that everyone is - most are online, and we have quite a number on the floor - to just explain to you the major changes that we have gone through. Dear colleagues, this is a very different product that we have before us today, compared to what it first was in CITIRA, and then what it was later on when it was reinvented and even renamed to CREATE right after the COVID hit us. And then today, after daily patagalan sa gabi na interpellations and amendments that I have accepted.

So I'd like to point out. I think most of you now know that the major change on the corporate side is the 30 percent to 25 percent income tax for corporations. Immediately, we lowered by 5 percent. Hindi na yan 1 percent per year. But I am not sure if all of you know that just the other day, we also accepted a major change introduced by the Senate President Pro Tempore on the corporate income tax. It is now only 20 percent, for those with income below five million. It's a big step forward, dear colleagues. Andaming nag-aabang nito. And also for those who did not catch the heart wrenching speech or statement of our Majority Floor Leader, he spoke on behalf of all the other MSMEs... na nag-aantay nitong break na ito. Wala silang natatanggap na incentives, wala silang inaantay na favorable income tax returns or any holiday. They are simply toiling away day in and day out and yung pagbaba ng CIT to 25 percent, anglaking bagay na. And yet, many who were earning much less, yung mga may tindahan, talyer, marami tayong mga kabataan ngayon, nag-start ng business from the homes, if they put up a corporation, 20 percent na lang ang tax. So that's something I am very proud of and I really thank the leadership, the Senate President, the Majority Floor Leader, the Senate President Pro Tempore who very patiently worked with me so that I could grasp these concepts and discuss it with DOF. I thank you for those interventions also, our Minority Floor Leader. So we were able to put this together over time. Hindi ito minadali. We've come in daily to complete this work, to keep checking with DOF and pushing hanggang kaya.

And then on the incentives side, dear colleagues, I understand that there are still some who do not understand what we are trying to do on the incentives side. It's very simple. We have investors who have invested in our country. Some have been here for a few years, some have been here for a decade. And the problem is, for a lot of them, we have no idea if the incentives that we have given them, have they paid back in terms of creating jobs, in terms of creating the business environment [inaudible] for our economy? We have no basis of knowing that. Wala tayong data. And that's the reason for the creation of the FIRB, for all the IPAs to be able to work with the FIRB to provide the data that is needed so that we can do our cost-benefit analysis, so that there can be accountability. Remember, this is foregone revenues. Katulad ng sinabi ni Majority Floor Leader, ang mga MSMEs nagbabayad ng tax. Ito po, we gave them a special privilege na hindi magbabayad ng tax. All we're asking in return is that there is accountability. Hindi kayo magbabayad ng tax, pero yung mga condition that were given to you, we'll now monitor it to ensure that yung mga pinangako niyong job creation, capital investment, nandyan. Ano naman ang masama doon?

Alam ko na maraming nagtatawag na mga governors na concerned sa probinsya. Dear governors, you have nothing to worry about. The magic number of 5 percent GIE, which was the privilege or the special rate granted to the investors in the ecozones in your areas, will remain. Hindi ho tatanggalin. Angtagal ho natin itong trinabaho with DOF. In the early version, they wanted to make it 10 percent. It is now 5 percent. So yung existing investors niyo will continue, I repeat, continue to enjoy 5 percent. So kung nakakarinig ako ng aalis sila, ibig sabihin, hindi kayo nakinig. Ibig sabihin, hindi kayo nakipagpuyat sa amin habang dini-discuss namin ito na we retained the 5 percent for those who are currently invested here for 10 years. Dati, 2-7 years yun under CITIRA. Under CREATE, naging 4-9 years. Ngayon, regardless kung sino ka, may 10 years ka. So by that time, mga 60 years old na si MFL, after that, you can reapply. Kung pasok naman ang business mo, up to 17 years. So by that time, mag-80 na si MFL.

So my dear colleagues, please, let's be responsible. Wala naman akong inaano naman na.... I wouldn't know because none of you have told me directly, asking for clarifications, which you know I would happily give. Pero please help me explain this to your governors, to your mayors, who are calling you panicking and then you recite facts to me as if naman tayo dito sa Senate, we would allow something to happen that would close down these businesses. I think that is not fair to our colleagues.

Siguro kahit ako, sabihin niyo, I have to defend the DOF position. Pero I work with our colleagues and we have been able to secure that 5 percent for practically 27 years henceforth. So can we put an end to this miscommunication, this misinformation, that yung binigay natin na package eh makakasira. Kasi, mas gumanda pa siya for other businesses. Depending on the IPA and the business, some of them are not granted income tax holiday. Ngayon, yung mga bago, magkaka-income tax holiday pa. It got even sweeter.

So dear colleagues, I hope that answers the questions. Again, I am happy to answer more questions, kahit na tapos na ang period of interpellations, I think the Majority Floor Leader, the Senate President, the Senate President Pro Tempore can defend me on that. Wala akong tinanggihan na questions niyo. Pero sana naman, magkatulungan naman tayo to spread the right information. I ask that of you. Because it's not fair din naman sa atin na akala nila eh napipilitan kayong magpasa ng hindi magandang terms. That's why ine-explain ko po sa inyo ang terms na ito.

Now, I think this is my last point. Early on, before we tackled the budget, we already presented - actually it was the Senate President Pro Tempore who presented the options on how to deal with the incentives. One option was to remove from the coverage of the FIRB and CREATE IPAs. And then the second option was - actually I ended up choosing the second option and a hybrid of the third, which is retaining a very favorable income tax rate, which is the one I've been explaining to you. So we have rejected already that option of the IPAs being carved out of CREATE. That has already been rejected. And instead, we created a very favorable environment for export industries separately, and for domestic industries separately. So in this case, kahit saan ka pa mag-invest, if you are an exporter, you will benefit from the package that we created. It is not just for one particular IPA. And the same way, if you are a domestic manufacturer, you will benefit from it kahit saan ka rin maging locator. So that is what we did that has already been approved. All the provisions in the bill that we have now revolve around that kind of system. So I just finally like to emphasize that that is the essence of CREATE: that there will be an FIRB, which again based on the compromise version coming out of the period of amendment, investments P1 billion and below, the IPAs will handle it. P1 billion and above, the FIRB will handle it, but it will still go through the IPAs. kung ano ang trabaho ng IPA ngayon, yun pa rin ang trabaho nila. Sila pa rin ang makikipag-meeting, sila pa rin ang makikipag-negotiate, and they process the papers, and if it's P1 billion and above, then they submit it for the final approval of the FIRB.

This is the essence of CREATE, so that we have checks and balances. If we will take a different position, wala nang CREATE. What is the purpose of passing it? If we go through the motions of passing it, I believe it will be vetoed because the whole essence of CREATE was to create an FIRB that will ensure that all the IPAs are keeping track of what their investors are investing, what they are doing, if they are complying with the labor laws. Because as of now, we do not have info that tells us that they have been compliant.

So I leave it at that. I am sorry that it took more than 2-3 minutes. But I really wanted to take this opportunity to keep our colleagues up to speed on the changes we have made in the last few days. Thank you very much.

I did emphasize already that when we studied CREATE, from the start we knew, and we made it very clear that carving out IPAs from the FIRB is not an option. Because it is the essence of FIRB that lahat ma-monitor. Wala naman hong masama doon kasi it's our checks and balances. It's accountability, which I believe, as a senator, I am proud na nangunguna tayo to demand accountability. May standards naman po tayo. Tandaan niyo, the best example I can give is yung sinabi nga po ni Majority Floor Leader, Migz Zubiri, the average micro, small, medium, businessman, does not receive any incentives. Buong tax bayad siya. Ni 1 percent dun, walang benefits. Here we are, thousands of investors, walang tax, go ahead, mag-negosyo kayo dito walang tax. Why? Because nangako sila that they will create thousands of jobs, that they will be bringing in technology and sharing that with the Filipino people, that they will invest in training. So marami silang pangako, natupad ba? Sana. but we don't know. And that's all we're asking for. The accountability. And that is why this is very important. Kapag tinanggal natin yan, mavi-veto siguro ito. Because that was the whole essence of this. And what is the effect? Ma-veto ito, pati yung lahat ng trinabaho natin. Yung pinaganda natin yung tax rate, binabaan natin from 30 to 25 to 20, we are now making all these investors accountable to us, wala lahat yun. Sayang naman.

So yun lang, dear colleagues. I hope I have been able to enlighten you somehow because I know you also have constituents, maybe businessmen friends, governors, asking you. I hope you will be able to explain to them and be proud about the work we are doing here. Thank you.

Part 2

I would like to thank his honor, Sen. Gordon for the statements he made and there's always something to learn when Sen. Gordon takes the floor. And I'd like to clarify that wala ho talaga akong pinaparinggan na hindi nakikinig because I really trust all our colleagues. This is a very technical matter. So I just take time to explain it again in the way that I also needed to be explained to me paulit-ulit din sa staff ko. So ine-explain ko lang kasi baka rin may mga important amendments na tinanggap ako and excited ako about, and that's the only reason na uulitin ko for the sake of our colleagues and other local officials who are listening to us because I am so proud and happy about the version that we have now, which is a product of the input of our colleagues. That's the only reason po pinauulit-ulit ko ang sinasabi ko. I never take it against anyone whether they are listening for a few minutes or a few hours because I know we have our own way of working on our bills.

And also, I'd like to take this opportunity to really thank his honor because I for one truly recognize the work that he does. I have always been inspired by his honor's work. I speak from the heart. I have known him since I was a young girl. And my admiration has never changed. In fact, I would like to put this on record, because I want his honor to know that I take his views, opinions, very seriously because he is a man of much experience, he is a very intelligent person and I admire him.

My brother, Lino, who is the Mayor of Taguig City, sent me this message, to tell him that he, my brother, is a testament to how fast and decisive Sen. Gordon's leadership is and has been in the Red Cross that allows testing. Taguig City is currently the lowest comparative to the cities all over the world and that is because of the leadership and inspiration that my brother says comes from no less than Sen. Gordon. So ganun ho talaga ang paghanga ko sa inyo, Sen. Gordon. Please don't ever think that I think otherwise. It just so happens that I have this job right now that requires that I take into consideration the position of the government, and I am trying my best to consolidate the positions of our colleagues, including his honor's own views on this.

With that, again, I express... I will never tire of expressing my thanks for his honor for the work that he does and for the input that he provides to the Senate and the guidance that he also gives me.

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