Former government officials push bill

MANILA, Philippines — Former finance and socioeconomic planning officials, state bankers and economists have called for the swift passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill.

In a joint statement released on Wednesday, 17 former officials of the DOF, National Economic and Development Authority (NEDA) and Bangko Sentral ng Pilipinas (BSP), as well as private economists, cited the need for the immediate passage of the CREATE bill as it is seen to help the economy recover from the fallout from the coronavirus disease 2019 or COVID-19 pandemic.

“We, former secretaries of finance, former socioeconomic planning secretaries, and Filipino economists, reiterate our support for the immediate passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, formerly known as the Corporate Income Tax and Incentives Reform Act (CITIRA), as a much-needed boost to the recovery of the Philippine economy, and as a necessary policy tool for retaining and creating jobs that will help our people secure their livelihoods against the adverse impacts of COVID-19,” they said.

According to the signatories, the immediate five-percent cut in the corporate income tax would benefit all businesses, especially micro, small and medium enterprises (MSMEs).

“The immediate five-percent cut in the corporate income tax strikes a good balance between the fiscal needs of our country and the need to support businesses. The reduction in the tax rate will provide businesses more resources to pay for their expenses and keep their employees,” the statement read.

“The rate reduction could be conditional on job retention or creation. The immediate cut sends a strong, clear signal to both the local and international business community that the Philippines is serious about competing for investments,” it added.

Moreover, the signatories said the extension of the net operating loss carryover (NOLCO) by two years would provide businesses more resources to pay for their expenses and keep their employees amid the economic fallout from the pandemic.

“Allowing the President, upon the recommendation of the Fiscal Incentives Review Board (FIRB), to grant longer incentives or additional non-fiscal incentives repositions the country to compete for investments that will serve the public interest above and beyond more typical investments,” they said.

The signatories noted that there has been greater support for the CREATE bill now as even sectors that had reservations over CITIRA in the past have signified their support.

“The shift in industry sentiment toward CREATE demonstrates what the undersigned have always asserted: that any delay in passing the reform causes undue business uncertainty, and costs the Filipino people inordinate amounts of foregone opportunities for better jobs and better business prospects,” they said.

Among those who signed the joint statement were former BSP governor Amando Tetangco Jr., former DOF secretaries Roberto de Ocampo, Margarito Teves, Jose Camacho and Jose Pardo, former prime minister Cesar Virata, Monetary Board (MB) member and former NEDA secretary Felipe Medalla, former NEDA secretary and Ateneo professor Cielito Habito, MB member Bruce Tolentino, and former finance undersecretary and Foundation for Economic Freedom (FEF) vice chairman Romeo Bernardo.

Asian Development Bank Institute (ADBI) board member Fermin Adriano, Joel Tan-Torres of the University of the Philippines (UP) Virata School of Business, professor Renato Reside of UP School of Economics (UPSE), UPSE Alumni Association (UPSEAA) president Jeffrey Ng, former Philippine Institute of Development Studies (PIDS) president Gilberto Llanto, and Action for Economic Reforms (AER) coordinator Filomeno Sta. Ana also signed the manifesto.