Cartoon By: Aaron Paul C. Caril
EDITORIAL
Will the CREATE MORE Act generate more
foreign investments?
President Ferdinand Marcos, Jr., recently signed
Republic Act No. 12066, the Corporate Recovery and
Tax Incentives for Enterprises to Maximize
Opportunities for Reinvigorating the Economy Act
(CREATE MORE), into law. The President has touted
that the law will make the Philippines a destination
of choice for investments.
The buzz created by the law’s passage centers
more on whether CREATE MORE will make the
country attract more investors.
The Philippines has carved out a niche in the
foreign direct investment (FDI) landscape, especially
in the services sector, with Business Process
Outsourcing (BPO) leading the charge. While it
might not pull in as much manufacturing investment
as some neighbors, like Vietnam, it’s been steadily
growing its FDI, making it a reliable and appealing
spot for foreign investors. Key to its success is a
young, English-speaking workforce and robust
domestic demand, which together give it a unique
edge in the region.
On paper, the CREATE MORE Act seems
promising. It aims to simplify the tax incentives
regime, making it more predictable and globally
competitive. By lowering corporate income tax rates
and offering more attractive tax incentives, the law
is designed to create a more favorable business
environment. This could attract more foreign
investors looking for a stable and profitable market.
However, the success of the CREATE MORE Act
will largely depend on its implementation. While past
tax laws looked uncomplicated to implement,
revenue regulations make it more difficult to comply,
with heavy penalties hovering like the sword of
Damocles. A transparent and efficient rollout is
crucial to ensure that the incentives are accessible
and appealing to potential investors.
While the CREATE MORE Act is a step in the
right direction, it’s not a magic bullet or panacea
that will cure the Philippine economy of all malaise.
The government must address other barriers to
doing business in the Philippines, such as
bureaucratic red tape and infrastructure issues.
To create a truly investment-friendly
environment, both the government and the private
sector will need to work together. Only time will tell
if the CREATE MORE Act can deliver its promise of
boosting foreign investments and driving economic
growth.