DOF seeks rationalization of investments promotion bodies

MANILA, Philippines – The Department of Finance wants to limit the incentives given to foreign and local investors by rationalizing the incentive-granting bodies of government such as the Philippine Economic Zone Authority (PEZA) and the Board of Investments (BOI).

Finance Secretary Cesar Purisima said there are simply too many investment promotion agencies of government whose functions are already redundant and deemed unnecessary.

“We would like to rationalize the incentive granting bodies. They’re simply too many. Our thinking is that the PEZA can be converted into an incentive granting body but with no promotional roles and the Board of Investments (BOI) can be purely promotional,” Purisima said.

This way, he said, there would be no built-in conflict among the agencies.

PEZA is an agency attached to the Department of Trade and Industry. It is tasked to promote investments, extend assistance, register, grant incentives to and facilitate the business operations of investors in export-oriented facilities inside selected areas throughout the country.

Similarly, the BOI is also an attached agency of the Trade department. It is the lead government agency responsible for the promotion of investments in the Philippines. It is a sort of one-stop shop in doing business in the Philippines. Other investment promotion agencies are the Subic Bay Metropolitan Authority (SBMA) and the Clark Development Corp. (CDC).

Furthermore, Purisima said there should be a limit in the grant of incentives to investors, only with the possibility for renewing these incentives if deemed necessary.

For domestic industries, Purisima said the government prefers to grant them subsidies which, he said, would be easier to evaluate or measure.

“There should be no incentives for domestic companies but only for export companies. For domestic companies, if you want to support them, we would prefer subsidies, because they are more readily measurable,” he said.

The measure seeking to rationalize fiscal incentives and the sin tax measures are the two bills the Aquino administration wants Congress to pass by June.

Revenues to be raised from the passage of the measures would fund the government’s social services projects such as access to quality health care, economic managers have said. –Iris C. Gonzales (The Philippine Star)