The Philippine Economic Zone Authority warned Wednesday that more than 50 percent of the existing workforce inside the economic zones will be jobless if the government will push for the approval of the Tax Reform for Attracting Better and High Quality Opportunities, or Trabaho bill, in its current form.
Peza director general Charito Plaza said the ecozones might lose at least 700,000 full-time workers in the Information Technology-Business Process Outsourcing and manufacturing sectors.
“In fact we fear that almost all jobs will be impacted. The biggest jobs are from IT-BPOs and manufacturing who can easily transfer to their other branches in other countries,” she said in a messaging correspondence while visiting Malaysia for a business roadshow
Data showed that full-time/direct jobs at the ecozones totaled more than 1.49 million. Peza said with a multiplier effect of eight indirect jobs, ecozones were responsible for 9.88 million jobs which would be at the mercy of Trabaho bill which represents the second package of the tax reform program.
“This will happen if the incentives, currently enjoyed by our locators are affected. IT industries can easily move out. Manufacturing can start transferring to their other branches in other countries. The only ones left with no choice but to stay are the ecozone developers who will also lose their industry, their clients and locators; the logistics hubs; brokers and the domestic suppliers; facility and utility enterprises serving the exporters including our farmers local suppliers,” Plaza said.
Senator Sonny Angara said the Senate committee would not proceed with its deliberation of the Trabaho bill unless the government could present definitive data on the impact on jobs.
The Finance Department insisted that more jobs would be created in the long run under the Trabaho bill or House Bill 8083 as passed by the House of Representatives.
The Labor Department confirmed that the second package of tax reforms, which aimed to lower corporate income tax while cutting out incentives, might lead to job losses.
The department said that based on its job displacement monitoring, some 30,000 jobs in the industry and services sectors were lost in the first quarter of 2018.
Following the passage of HB 8083, the Semiconductor and Electronics Industries in the Philippines Foundation Inc. released a statement that the bill would force them to lay off 140,000 workers.
SEIPI said several multinationals were now locating their expansions outside the country, amid the uncertainty over the status of tax incentives here.
HB 8083 provides for P500 million to be used for cash grants for displaced workers. An additional P500 million would be allocated for targeted trainings and skills upgrading.