Projects with tax perks under CREATE hit P1.5 trillion

MANILA, Philippines — The government has approved 1,500 projects worth P1.5 trillion since the enactment of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.

Based on the annual report of the Cabinet-level Fiscal Incentives Review Board (FIRB), total investment capital from approved priority activities with incentives under the CREATE Law reached P1.49 trillion as of end-2024.

Bulk or nearly 70 percent of the investment capital worth P1.03 trillion was approved by the FIRB.

This is equivalent to some 58 big-ticket tax incentive projects in the sectors of information and communication technology, transportation and storage, manufacturing, energy, economic zone operation, mass housing, tourism, human health activities and IT-business process management.

The remaining 30 percent or P466.68 billion came from investment promotion agencies (IPAs) covering 1,446 projects.

Further, the 1,500 projects are expected to generate some 209,897 jobs within its incentivized period, with the labor-intensive manufacturing sector having the highest number of approved projects among the priority sectors.

Under the law, IPAs approve the incentives of projects below P15 billion, while the FIRB selects the tax perks for business activities above P15 billion.

IPAs include the Board of Investments, Philippine Economic Zone Authority, Subic Bay Metropolitan Authority, Clark Development Corp., Bangsamoro Board of Investments, Tourism Infrastructure and Enterprise Zone Authority, Authority of the Freeport Area of Bataan, Aurora Pacific Economic Zone and Freeport Authority and Zamboanga City Special Economic Zone Authority.

CREATE cut the corporate income tax rates to make them comparable with the ASEAN region.

The law also adopted a simpler and more effective fiscal incentives system, ensuring that incentives are performance-based, time-bound, targeted and transparent.

Incentivized projects and activities under the structural tax reform need to meet performance metrics to ensure that the grant of fiscal support to registered business enterprises leads to higher economic returns.