Leading car manufacturer Toyota Motor Philippines (TMP) said more investments would enter the country if the government is consistent with its incentives plan.
“It would be better if the Investments Priorities Plan (IPP) is not changed yearly,” TMP vice president Rommel Gutierrez told The Star in an interview.
Gutierrez explained that companies usually plan their investments three to five years in advance. He said it would be difficult to take into consideration the incentives offered if it changes yearly.
He said it would be better if the government would stick to a one IPP longer than a year.
In an earlier interview, the government already said that they are planning to change its tax perks program every six years instead of every year.
Board of Investments (BOI) Managing Head Elmer C. Hernandez said it is better to make the IPP consistent with the administration’s Medium-Term Philippine Development Plan (MTPDP) which will be in effect till 2010.
Currently, the Department of Trade and Industry (DTI) in coordination with other government agencies, make an annual IPP. The IPP is a list of priority projects of the government that will receive tax perks.
“The administration has its own plan for the entire term and the IPP must be consistent with this,” Hernandez explained.
According to him, similar to the MTPDP, the IPP must be subject to revision as the need arises but it should not be changed yearly for the sake of consistency.
“This will help investors plan well. Multinational companies take a long time to decide whether it will invest and because the IPP is changed yearly, it might scare off investors because the incentives they are eyeing this year might be gone next year,” Hernandez noted.
In a related development, DTI defended the tax breaks given to investors saying it is one of the best ways to attract foreign businessmen to locate in the country.
“Everyone in the region (ASEAN) is offering fiscal and non fiscal incentives. We need it to be competitive,” Trade Secretary Peter B. Favila said.
According to Favila, the competition between ASEAN member nations for foreign locators is very stiff.