MANILA, Philippines — The passage of the proposed amendments to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act is seen speeding up the country’s move to upper middle-income status, according to the Philippine Economic Zone Authority (PEZA).
In a statement, PEZA director general Tereso Panga said President Marcos has included the CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill as one of the administration’s priority legislative proposals.
“This will accelerate our country’s bid to graduate to upper middle-income economy as we position the Philippines as the smart investment choice in the region,” Panga said.
National Economic and Development Authority Secretary Arsenio Balisacan said the country is expected to achieve upper middle-income status by next year if the economy grows by at least six percent this year and sustains a robust economic performance next year.
Data released by the World Bank earlier this month showed the Philippines remained a lower middle-income country with its gross national income (GNI) per capita of $4,230 in 2023.
Lower middle-income economies are those with a GNI per capita between $1,146 and $4,515, while countries in the upper middle-income grouping have a GNI per capita between $4,516 and $14,005.
A higher GNI per capita reflects greater economic prosperity and a higher standard of living.
Panga said the CREATE MORE would enable PEZA and the other IPAs to deliver on the President’s promise of creating a conducive business climate for investors that can compete with other Southeast Asian countries.
“Despite the global economic headwinds, CREATE MORE will usher in parity with the benefit packages offered by our neighbors,” he said, noting this would enable the country to attract more long term hard foreign direct investments (FDIs) in the near future,” the PEZA chief said.
During the Post-State of the Nation Address discussions yesterday, Special Assistant to the President for Investment and Economic Affairs Frederick Go said the CREATE MORE would speed up the processing of applications for fiscal incentives for FDIs, as well as domestic market enterprises.
“One of the major features of that bill is to empower IPAs in our country to be able to process majority of applications within their levels,” he said.
According to Go, the CREATE MORE bill also aims to simplify and clarify the value-added tax (VAT) provisions that have become clouded by the previous laws.
In addition, Go said the CREATE MORE would address VAT refund issues raised by stakeholders.“So there will be more clarity and streamlining of VAT refund applications in the CREATE MORE,” he said.
In a statement, the American Chamber of Commerce of the Philippines (AmCham) said the group is optimistic of the passage of legislative measures being pushed such as CREATE MORE and the amendments to the Electric Power Industry Reform Act (EPIRA) after these measures were mentioned during the SONA.
“We appreciate that today, the President highlighted EPIRA amendments to help boost energy security and economic development and CREATE MORE to update the country’s investment incentive policies to strengthen competitiveness,” AmCham said.
With the administration’s investment-led growth strategy and ongoing roadshows, the European Chamber of Commerce of the Philippines said in a statement “we are optimistic about seeing even more tangible results soon.”