Around $3.6 billion and 25,000 jobs in the electronics sector are going down the drain following the flight of investments from the Philippines to other countries in the region.
Dan Lachica, president of the Semiconductor and Electronics Industries of the Philippines Inc., said some $3.2 billion investments of five companies went to their sites in Vietnam, Thailand and China instead of the Philippines, while another $400 million worth of investments by two more companies are set to be invested elsewhere.
Lachica did not provide details.
“There are concerns, it’s capital flight really,” Lachica told a dialogue with Sen. Imee Marcos hosted by the Philippine Economic Zone Authority (PEZA) yesterday.
Lachica said investors raised concerns about an existing order by the Bureau of Internal Revenue (BIR) to conduct audit of registered business enterprises on their compliance to the work on-site order as well as the provisions of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law.
“The reduction of local income tax is good (under CREATE), no question about that. But as you know, the incentives rationalization, despite the belief of certain quarters, is really, really detrimental to investments,” Lachica said.
He added the creation of the Fiscal Incentives Review Board has reduced the effectiveness of PEZA on policies like the workfromhome and in the approval of investments.
“That has a major negative impact at the investors, the perception of corruption, the consistent policies in the previous government. If I were to rank the (concerns) in order of priority, it’s the incentives rationalization, the threats of government regulations that are detrimental, the work-from-home, BIR audit, BOC (Bureau of Customs) issues,” he added.
