The government should encourage more entrepreneurs to operate small and medium-scale businesses by providing them tax perks, a ranking Trade official said.
In an interview, Trade Undersecretary and Board of Investments (BOI) managing head Elmer C. Hernandez said that for 2008, the government should focus on encouraging the development of small and medium-sized enterprises (SMEs).
“The focus now should be SMEs. They should be given full incentives. In turn, non-SMEs will receive limited incentives unless it is a strategic investment,” Hernandez explained.
A strategic investment means a one-time investment which will not enter the country if tax breaks are not given.
Meanwhile, Hernandez said the government is on the right track in terms of attracting foreign and local businesses in locating in the country.
During the past year, among the big-ticket investments that came in include Texas Instruments $1 billion expansion of its operations in Clark Freeport Zone and the $2 billion investment of Korean firm Hanjin Heavy Industries and Construction Corp. for the construction of a shipyard complex in Mindanao.
It was a good year. We were able to hurdle all the obstacles,” Hernandez said, noting that among the instrument deterrents include the continuous political noise instigated mainly by the critics of President Arroyo and the botched coup toward the end of November.
“It is important to note that inspite of the Makati siege wherein [Senator Antonio] Trillanes and [Gen. Danilo] Lim took over Manila Peninsula, the investors were not scared,” Hernandez explained.
“The investments were not withdrawn. Those that were in the pipeline and were scheduled to come in December still pushed through,” he added.
Hernandez said investors are coming into the country due to sound economic fundamentals.
He pointed out that the domestic economy has managed to post impressive growth rates and the inflation rate, which measures the movement of prices of basic commodities, under control of rising oil prices.
Also, he said the performance of the stock market has been stellar and the currency exchange rate remains attractive.