In a talk with newsmen, European Chamber of Commerce of the Philippines (ECCP) executive vice president Henry Schumacher noted that the Philippines at present is not even a primary investment destination for most foreign investors.
Thus, withholding investment incentives, Schumacher said, may affect the competitiveness of the country.
"The Philippines is not investment target No. 1. If incentives offered are not competitive then it becomes more difficult to attract new investors," Schumacher said.
Schumacher admitted that there is nothing wrong with streamlining incentives.
In fact, Schumacher agrees with the view of former Trade Secretary and now Sen. Manuel A. Roxas III that tax incentives may not be necessary especially since the government already provides for a Net Operating Loss Carry Over (NOLCO) provision which allows companies to deduct their losses over a certain period of time.
However, Schumacher prefers that the government extend incentives for investments that would involve training or education of the work force and reverses the current brain drain.
Trade Secretary Peter B. Favila has indicated that the government is studying the possibility of withholding some incentives in a temporary effort to improve the country’s fiscal position.