Investments seen to hit P300B

MANILA, Philippines – The Board of Investments (BOI) is projecting investments for 2010 to reach P300 billion, well over its target of P287 billion.

For the first 10 months of the year, investments recorded by the agency had reached P237 billion.

“We are projecting that we will overshoot our fighting target based on the checklist,” BOI executive director Lucita P. Reyes said in a press conference.

The revised yearend target of BOI was P287.27 billion which was the same figure recorded in 2008. “We will not only match the 2008 level, we will surpass it,” Reyes said.

Earlier, Reyes said at least two companies located in China have agreed to transfer their operations here in the Philippines. She said that an American manufacturing firm in China said it will be moving here from China after the communist nation decided to impose additional taxes on the investors.

“They told us that since they are export oriented firms, it is not viable for them to locate in China anymore because of the additional taxes,” Reyes noted.

A European firm involved in the manufacture and export of food products is also expected to transfer operations here from China, she said.

“Based on the applications, we will be able to hit our target,” Reyes said.

She noted that most of the investments came after the country was able to hold a peaceful and credible election. In fact, June investments was the highest for the first semester with P126 billion from P549 million June 2009.

However, investments may not be as strong in the coming years as the Department of Finance (DOF) is looking at totally removing income tax holidays (ITH) for investors in the next six years, a ranking government official said.

A ranking government official, who spoke on condition of anonymity, said the DOF has a draft order rationalizing fiscal incentives with the end in view that income tax holidays will be totally removed in six years. This move, the official said, will surely make the country less competitive in terms of attracting more investors.

BOI managing head Cristino L. Panlilio said the DOF is initiating moves to rationalize and streamline the incentives. Panlilio, who is also a Trade Undersecretary, said the DOF is proposing a stricter incentive plan.

“We want to see the master plan. We are in favor of incentives. Other countries have more liberal incentive programs than us,” Panlilio said.

He said he has formed a task force to deal with the rationalization of incentives and they will sit down with the DOF to discuss the matter. –Ma. Elisa P. Osorio (The Philippine Star)