EDC supports measures on granting incentives

CEBU, Philippines - The Export Development Council (EDC) has expressed its support to the legislative measure that seeks to ensure continuous granting of investment incentives.

In a statement, EDC emphasized that exporters, with the end view of promoting substantial social and financially sustainable economic growth, across income classes and across provinces, and are consistent with international treaties, should be given utmost support.

However, EDC said these proposed legislations should not result to deprivation of existing incentives granted to Filipino exporters.

EDC emphasized further that incentives such as exemptions or refund from taxes and duties should not be considered as a “favor” for investors, but just adherence to international practice which is part of the tax law of the country.

This is under the “Destination Principle” where goods and services are taxed only in the country where these are consumed.

In addition, the “Cross Border Doctrine” mandates that no VAT shall be imposed to form part of the cost of the goods destined for consumption outside the territorial jurisdiction of the taxing authority.

Hence, refund of taxes and duties paid by exporters should not be based on any export performance such as the 70 percent or 50 percent as provided for in existing laws.

According to EDC, this is in line with the findings of the study commissioned by the organization under the PH-EU (Philippine-European Union) Trade Related Technical Assistance Project 2.

Meanwhile, EDC also announced its effort earlier to improve the competitiveness in the country in order to help the weak export performance, which is battered by several factors such as fierce competition in the world market.

Recently, EDC has teamed up with the National Competitiveness Council (NCC) to revive its advocacy on bringing down the domestic shipping cost as well as port charges in the Philippines.

Although the Philippines has managed to improve slightly on its competitiveness ranking, EDC is determined to further bring up the country’s competitive edge, pushing the country’s products to make considerable interest from the overseas market.

The high domestic shipping cost and port changes have been identified as one of the greatest concerns among processed food exporters, who source their raw materials and inputs all over the country.

Other exporting sectors, like furniture and home furnishing industries that also source their raw materials from different regions in the country likewise suffer from the problem.

Based on a study conducted by local think-tank groups and even by the World Bank submitted to EDC, it revealed that shipping costs to and from the country are competitive with neighboring countries, but inter-island shipping is more costly. (FREEMAN)