EDITORIAL - Creating more investments

The 2026 Strategic Investment Priority Plan or SIPP is out, with Malacañang signing the order on May 21 identifying activities that are eligible for tax incentives.

Memorandum Order 47 lists tiers of preferred activities that may qualify for tax breaks under Republic Act 12066, the CREATE MORE Act. Under this law, the tax incentives may be enjoyed for 14 to 27 years, depending on the priority tiers and location of the investment.

The tiers cover a wide range of activities, from agriculture to manufacturing, waste treatment, defense-related services as well as science and technology. The Board of Investments drew up the SIPP in consultation with the Fiscal Incentives Review Board, investment promotion agencies and the private sector.

CREATE MORE stands for Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy. It is being rolled out as the country faces an unprecedented fuel crisis arising from the continuing conflict in the Middle East. This has been compounded by bitter political warfare and an unresolved large-scale corruption scandal that have dampened business confidence, put many public infrastructure projects on hold and spooked investors.

The business community has welcomed CREATE MORE, whose incentives include reduction in corporate income tax, easing of work-from-home rules in economic zones as well as higher deductions on power expenses.

As in most laws in this country, however, much will depend on the implementation. Consistency, predictability and efficient implementation are critical in making CREATE MORE succeed in attaining its goal of generating investments that provide meaningful jobs.

Tax breaks also constitute just one of the many components that make a country attractive to investments. In this area, the country has become the regional laggard.

The inadequacy of public infrastructure – among the top concerns raised by investors – has been compounded by the corruption scandal that paralyzed not only flood control projects but also other government construction activities for many months. High power costs and unreliable power supply in many areas have also dampened manufacturing activities.

Corruption, red tape starting at the barangay level, an unpredictable regulatory environment and the weakness of the rule of law have deterred both local and foreign investments.

The deterioration in the quality of education has weakened innovation, national competitiveness and what used to be one of the country’s greatest assets, its human resources.

Addressing all these issues must go hand-in-hand with the provision of tax breaks and other investment incentives.