Bicam OKs CREATE bill for business recovery

MANILA, Philippines — Senators and congressmen have ironed out their conflicting versions in the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill during their bicameral conference committee meetings, and the tax reform measure is now ready for signing

“It’s finished. Both panels are now ready to sign,” Albay Rep. Joey Salceda, chairman of the ways and means committee of the House of Representatives, said over the weekend as both houses of Congress try to help the national government accelerate the country’s ailing economy.

The CREATE bill is a proposed reform of corporate income tax and fiscal incentives for businesses, or Package 2 of the Comprehensive Tax Reform Program of the five-year-old Duterte administration.

Salceda said that on the part of the House, the major items the Senate concurred with are shorter incentives for domestic enterprises; stringent controls against illicit trade in certain ecozones, and longer incentives for all areas outside the National Capital Region (NCR).

“Once the revenue estimates are out, I believe we will have saved likely P100-120 billion in forgone revenues compared to the initial Senate version,” the veteran administration congressman said.

Salceda revealed some $18 billion (about P864 billion) in foreign direct investments were lost over the past three years of uncertainty over the delays in passing the reform. “Now that it’s done, I expect the investment overhang to close. Investors can now stand on more solid footing.”

“As far as investment uncertainty over tax regime is concerned, that’s finished. The secretariats are now preparing the final copy as we speak,” the Bicolano legislator said, adding ratification may come either today or tomorrow at the latest.

He said the final version of CREATE will carry both a VAT exemption and a duty exemption for coronavirus vaccines until 2025. This will help expedite vaccine procurement, especially by the private sector.

“Vaccine rollout is the most important economic stimulus measure. We are happy to report that CREATE/CITIRA (Corporate Income Tax and Incentives Rationalization Act) will also help get it done,” Salceda said.

Rep. Alfredo Garbin Jr., chairman of the committee on constitutional amendments, said that while the House has already passed trade liberalization bills, they remain pending in the Senate.

Garbin underscored that under the leadership of Speaker Lord Allan Velasco, the chamber has passed the Foreign Investment Act (FIA), Public Service Act (PSA) and Retail Trade Liberalization Act.

He said this should rectify misconceptions that congressmen are out to amend prohibitive economic provisions in the 1987 Constitution while failing to pass trade liberalization bills.

“The House has also finished the CREATE Law. The gap lies with the restrictive economic provisions which can only be addressed by amending the Constitution,” the Ako Bicol congressman said.

“We also finished here in the House the ARISE (Accelerated Recovery and Investments Stimulus for the Economy), which will also stimulate the economy. So, what are they telling us to do when we already did our part?” Garbin asked.

In pushing for the so-called fourth mode in introducing piecemeal legislation aimed at amending the prohibitive economic provisions, he said Congress “must seek to resolve the issue along with encouraging the inflow of FDI (foreign direct investments).”

‘More stimulus’

A House leader also urged the Duterte administration to accelerate spending, which has been the lowest in the region.

“Our spending is the lowest in the ASEAN,” House Deputy Minority Leader Stella Quimbo declared, referring to the 10-member Association of Southeast Asian Nations in terms of stimulus packages.

She said Brunei had an economic stimulus of $188.2 million (about P9 trillion), Indonesia had a total of $35.35 billion (P1.69 trillion), Malaysia had $62.56 billion (about P3 trillion) and Thailand had $6.76 billion (P324 billion), and even plans to borrow $30.6 billion (P1.46 trillion) for its latest stimulus package.

As far as the Marikina congresswoman is concerned, the P82.5 billion allotted in this year’s budget – P72.5 billion from the General Appropriations Act and P10 billion from Bayanihan 2 – is still insufficient to cover even the government’s vaccine rollout program.

“The road to resilience of the Philippine economy is long and possibly winding. We must take the first step now,” Quimbo insisted.” If businesses are subsidized, then we can help minimize the risk of job loss for our workers.”

For his part, Taguig-Pateros Rep. Alan Peter Cayetano is preparing a proposal for the distribution of cash assistance worth P10,000 to every Filipino family amid the recent spike in prices of basic goods like vegetables and pork, among others.

“The problem with the price increase is that it is coming just as we are recovering. When we give P10,000 for each family, the economy will benefit because it is just like taking from one pocket and placing it in the other,” the former speaker said.

Quezon City Rep. Alfred Vargas also filed a resolution calling for more Kadiwa rolling stores to be deployed in a bid to help Filipinos cope with the continued spike in food prices.

Kadiwa is a market system launched in 2019, which sells major agricultural goods at reasonably low prices to help poor Filipino households. The goods are sourced directly from farmers and fisherfolk.

While growth is expected to remain slow as restrictions to movement are still in place and the rollout of the vaccination against COVID-19 has yet to begin, Sen. Sonny Angara said businesses should go online to remain competitive.

Angara said this is especially necessary for micro, small and medium enterprises (MSMEs) under the new normal to help provide a much needed boost to the economy under the pandemic-induced recession.

The Department of Trade and Industry (DTI) said the registration of MSMEs soared to 88,000 as of end-2020 from a mere 1,700 before COVID-19 hit the country.

The senator said the key to success for MSMEs now is to move into e-commerce, which will not only expand their market share, but will also be more cost effective than operating physical stores.

Yesterday, Vice President Leni Robredo urged the Duterte administration to take reports that showed the Philippines lagging behind in containing the pandemic seriously.

The Philippines ranked 79th among 98 nations in the COVID Performance Index released by Australian think tank Lowy Institute last week.

“It seems like we are still justifying our slow response to the pandemic. It would have been better if we find ways to address this,” Robredo said in her program BISErbisyong Leni over dzXL. – Paolo Romero, Helen Flores