BOI seeks powers to draw more investments

MANILA, Philippines - The Board of Investments (BOI) is asking Congress for special powers in order to help counter the very generous investment incentive packages offered by the country’s Asian neighbors, particularly Thailand.

“The investment code (EO 226) is not attuned to the times. The situation before was different. We have learned many lessons from recent events,” outgoing Board of Investments (BOI) managing head Elmer C. Hernandez told reporters in an interview.

“Investment promotions agencies should be given enough leeway especially during special circumstances,” Hernandez noted.

Currently, investment agencies are not given the flexibility to assign how much tax breaks and exemptions can be given. The Congress decides on how much fiscal incentives are given to investors. The BOI is only tasked to identify who shall receive the incentives.

For instance, Hernandez said that Malaysia and Thailand can provide incentives to investors without seeking legislative action.

Hernandez noted that Thailand is now offering a “very generous” incentives package in an attempt to win back foreign investors who were put off by the political instability in its capital Bangkok at the beginning of the year.

“I saw their package and their incentives are unbelievable,” Hernandez said. According to Hernandez, the Philippines must be able to immediately respond to the changes instituted by the country’s neighbors in Asia because waiting for Congress to take action may take some time.

“Of course there must be an oversight committee to ensure that the incentives given is not abused,” he said.

The BOI has been battling with the Department of Finance for fiscal rationalization. The bill has been pending before the House

BOI seeks… From B-1

of Representatives for years but it has not yet been approved.

“This is the best time to institute reforms in our investment packages,” Hernandez said. He said that the incident in Thailand has lead to new opportunities for the Philippines. Thailand has been the favorite investment destination of multinational companies.

Likewise, he said the competitive advantage of China in terms of labor cost is slowly disappearing. “China has changed its policy with regards to labor,” Hernandez explained. Previously, labor has been cheap and workers were given little benefits. However, after an influx of investors, Hernandez said that companies are complaining because the priority of the government now is employee welfare.