Total investments approved by the Board of Investments (BOI) reached the P1 trillion level last year, but was down 11 percent compared to 2019 amid the pandemic.
BOI chairman and Trade Secretary Ramon Lopez said during the SME Bayani: Beating the Odds webinar over the weekend that the value of total approved investments, which reached P1.02 trillion last year, is the second highest level achieved by the agency.
“That shows really the confidence of many investors registering with the BOI,” he said.
Compared to the all-time high of P1.14 trillion worth of approved investments in 2019, however, last year’s investments was 11 percent lower.
To improve the investment climate and entice firms to do business in the country, Lopez said the BOI is pushing for the passage of various legislative measures, including the proposed Corporate Recovery and Tax Incentives (CREATE) Act, which seeks to cut the corporate income tax (CIT) rate to 25 percent from the current 30 percent.
For micro, small and medium enterprises, he said the CIT rate would immediately be reduced to 20 percent under the proposed measure.
Under the bill, an eligible firm engaged in a priority project or activity can enjoy four to seven years of income tax holidays (ITH).
After availing the ITH, the firm will have an option to enjoy the five percent tax on gross income earned or enhanced deductions for 10 years.
The Senate and House of Representatives are reconciling provisions of the CREATE.
“This is one game-changer, the bill that we are really trying to push for. We hope it can be passed right away by Congress so that it can immediately signed by the President,” he said.
Other bills being pushed by the BOI to help create a more conducive environment for investment are amendments to the Retail Trade Liberalization Act and Public Services Act.
Lopez said the agency is also promoting intellectual property generation and commercialization as this would encourage confidence in the business sector to invest in the Philippines.
The BOI is likewise providing incentives for investments outside of metropolitan areas for rural development.
In November last year, the BOI launched its new marketing campaign Make it Happen in the Philippines to position the country as an ideal destination for investments with aerospace, copper, automotive, information technology and business processing management, and electronics identified as priority sectors to attract foreign firms.
Despite the pandemic and its impact on businesses last year, Lopez said the Department of Trade and Industry (DTI) has a positive business outlook for 2021, citing improvements in different indicators such as the country’s gross domestic product, unemployment rate, purchasing managers’ index and exports.
As of December last year, he said online businesses registered with the DTI reached 86,000 from just 1,700 in March 2020.
“That shows that many Filipinos were affected and lost their jobs but really looked for a business. It’s still a good time to do business and a good time to invest,” he said.
He said the DTI continues to extend support for micro and small businesses affected by the pandemic through various programs including the COVID-19 Assistance to Restart Enterprises (CARES) by providing loans.
The DTI was able to extend P1.27 billion worth of loans to 17,632 borrowers under the CARES 1 program, while P430.11 million have been approved for 2,215 borrowers under CARES 2.
With a total of P10 billion worth of loans allocated for CARES 2 under the Bayanihan 2 Law, Lopez said the DTI aims to provide loans to 60,000 borrowers.