Business groups embrace TRAIN

MANILA, Philippines — The country’s leading business groups said they are ready to embrace the final version of the government’s first tax reform package amid their persisting apprehensions on its potential impact to the country’s competitiveness.

“By and large, we are okay, primarily because the intention is to support the government’s infrastructure projects. However, we would still need to study the other taxes and its impact,” Management Association of the Philippines (MAP) national issues committee chair Perry Pe said.

Philippine Chamber of Commerce and Industry (PCCI) president George Barcelon also expressed his support to the first tax reform package, known as the Tax Reform for Acceleration and Inclusion (TRAIN) bill, but said he would have preferred it differently regarding some of its provisions. 

“I would have wanted all of these excise taxes for longer period, not just three years. But anyway, it’s there. Let us bear with it and just see how competitive we are. Remember, the fight now internationally is you have to be competitive,” Barcelon said.

He warned though that certain provisions in the TRAIN would make the Philippines a more expensive, destination for businesses, thus affecting the country’s attractiveness compared to its neighboring countries.

“It will increase our cost. Like on power, our power it has always been the highest and yet it is bound to increase further,” he said.

“We can talk about it that Philippines is a very attractive area but if our cost of manufacturing and cost in the labor sector is high, then foreigners may not be too convinced that we are indeed an attractive area. They may not be so aggressive in expanding here,” the business leader said.

Among the contentious provisions of the TRAIN which local and foreign business groups have opposed are the taxes on coal, petroleum, sugar sweetened beverages and automobiles. 

“While other countries are gaining momentum, as people would not have second thoughts going to Vietnam or Thailand, we, as the new kid on the block, we’re just getting warmed up and then suddenly we’re drenching ourselves with cold water,” Barcelon said.

“Again, I’m supportive of the TRAIN but the manufacturing side of it is a concern because all of these taxes are really affecting the manufacturing sector. In manufacturing you use power, logistics and tracking, and all are part and parcel of your costs,” he added.