Government mulls tightening grant of incentives

MANILA, Philippines -  The government will be more strict in the granting of fiscal incentives to investors in order to ensure compliance on their investment commitments.

In an interview with reporters, Trade and Industry Secretary Gregory L. Domingo said that they will tighten the incentives approval process, putting in place possible penalties on those who do not put in the entire committed investments.

He said they will proportionately scale down incentives for firms that were not able to infuse a significant level of their committed investments, adding a review of the Investment Priorities Plan (IPP) for next year is on the drawing board to impose penalties against those who do not fulfill their commitments.

Earlier, Domingo said investment perks on industries that attract a host of businesses will be removed in order to facilitate a more robust revenue collection by the government.

“The incentives should be rationalized. They should not be given to just any industry. You want to give incentives to industries where you think we cannot get, but if those industries are coming in anyway or setting up shop, then why do you have to give incentives,” Domingo said.

While he did not name which industries will retain their incentives package, he said they will have to study the existing tax breaks.

At the same time, Domingo said there is a need to provide the Board of Investments (BOI) more leeway in terms of granting incentives under special circumstances, especially when the Philippines is competing against another country for a big investment.