Several Chinese companies plan to relocate to the Philippines, but the Finance Department’s push to remove the tax incentives may discourage these new investments, according to the Philippine Economic Zone Authority.
Peza director-general Charito Plaza said she would seek an audience with President Rodrigo Duterte to reconsider the lifting of tax incentives given to investors under the Tax Reform for Attracting Better and High-Quality Opportunities or Trabaho bill in order to attract the Chinese companies.
Plaza said many Chinese investors were moving out of China and were planning to transfer their manufacturing base in the Philippines to take advantage of the incentives the country enjoys under the Generalized System of Preferences scheme with the US.
“They’re not are looking at Indonesia, Vietnam and others. They want to be here in the Philippines because of the talented and skilled workforce. I will inform the president about that,” Plaza said.
She said she was optimistic about getting a positive response from the president. Peza send a letter to the Office of the President two days ago.
Plaza said while the principals of the Chinese companies started discussions with Peza, the executives said they might look elsewhere if the incentives would differ from the usual set of perks.
She said the ongoing trade war between the US and China was hurting Chinese exporters and many of them decided to bring their business to the Philippines which enjoys export incentives to the US.
Plaza said once the Trabaho bill forced foreign locators to shut down operations in the Philippines and transfer to other countries, it would be very difficult for Peza to woo these investors again.
“Enough of the warnings, enough of the bullying, enough of the scolding, I have to speak up because I am protecting the interest of the country,” she said.
“The impression is that our policies are unstable. The government does not respect contracts it entered into with the investors. This is a big blow to our credibility compared to the policies and laws of the government,” Plaza said.