Transcript of Senator Pia S. Cayetano's manifestation
On the status of the CREATE Bill
16 December 2020

Thank you, Mr. President.

Mr. President, this is just a manifestation and an update for our colleagues and the members of the business sector who have reached out to me on the status of CREATE.

Dear colleagues, you will recall that the Senate tackled CREATE on a daily basis with the support of the Senate President, the Majority Floor Leader, Sen. Zubiri cleared the schedule on the floor for roughly three weeks for daily tackling of the CREATE Bill.

But because we had to go into the national budget, we had to suspend deliberations on every bill and so we resumed immediately after the national budget was on the floor, and again, we did this on a daily basis.

So on 26 of November 2020, the Senate passed the CREATE bill on second and third or final reading. And on the same day, the Senate received word that the Senate version would be adopted by the House of Representatives. But two weeks after the passage of the bill in the upper chamber, there was no further word on this and we did not receive any official action from the House.

This Monday, December 14, a news report came out about the House designating bicameral conference members, and then there was an official letter to that effect received by the Senate yesterday, indicating that in fact, they have designated members for the bicameral conference, with the intention of holding a bicameral conference.

Mr. President, as your Chair of the Senate Committee on Ways and Means, I would like to put on record that this delay in the passage of CREATE this year is a huge setback. Precisely why we had daily deliberations to the extent of setting aside other very important bills is because we recognize the importance of this bill particularly for the MSMEs and the business sector. It will be noted that the CREATE version of the Senate immediately lowers the Corporate Income Tax from 30 to 25 percent, immediately, Mr. President.

If you would compare this to the House version, their version is only a lowering of Corporate Income Tax by one percent every year. Further, for MSMEs, if their earning is less than P5 million, they would only be paying 20 percent corporate tax.

I know that many of our colleagues have concerns and we deliberated for long hours. But in the end, I believe that we were all excited about this measure. And the Majority Floor Leader is nodding his head because he even stood up here and gave a very personal and impassioned... He shared his story about being a medium sized business and not receiving any incentive whatsoever.

Which brings me to the second part of CREATE. The second part of CREATE is the incentive portion. And I'd like to put on record that the Senate worked very carefully. I'd like to thank all our colleagues. There was even a news article that said, ito yung early na pamasko ng senators para sa mga taumbayan. I'd like to point out that the reason the incentives portion was so important was because we wanted to plug the leakages and we wanted accountability. There is roughly P400 billion last recorded, I believe that was 2017, unaccounted for incentives that are being given away.

So, I just want to say that the importance of this measure was simply for accountability and transparency. These are incentives that otherwise would have been tax collections by the government. And that's why I mentioned MSMEs kasi sila wala silang incentives. They pay taxes. So if we will incentivize a business and say, "You are entitled not to pay taxes, you'll get incentives," all the bill seeks to do is to ensure that there is accountability; that there is the FIRB that will ensure that nalalagay sa tama itong incentives and that the commitment of those companies would be delivered - commitment to create jobs, etc, etc.

So on that note, we came up with a package that I believe was really well thought of. There's a 10-year transition period for companies that are currently receiving incentives, much longer than the version of the House, even longer than the original version of the Senate. And then, when they apply, for new applicants or those who will reapply, also very generous provisions.

So on that note, that is my report to our colleagues... I am sad to say that there will be no immediate decrease in the Corporate Income Tax, there will be no rationalization and certainty. What the businessmen had asked us is certainty. So that when the new year starts, they know ano papasukan nilang negosyo. Unfortunately, this will not happen, not because of the Senate though. I thank our colleagues and I thank the Senate President once again for his leadership and helping us pass this measure on our part.

But that is as far as we can go. Thank you, Mr. President.