Philippines’ Iloilo city pushes tax breaks to boost BPO investment
ILOILO CITY, PHILIPPINES — Iloilo City Mayor Jerry Treñas is spearheading a proposal to grant real property tax (RPT) incentives to developers of business process outsourcing (BPO) companies. This initiative aims to address concerns over the 2024 RPT hike, which drew criticism from property owners and businesses for its financial impact on investments and households.
The plan includes amending the Iloilo City Economic Recovery Incentive Ordinance of 2021 and updating investment incentives in strategic development zones.
Strategic investment zones for BPO growth
The proposed incentives target key areas, including Corazon Aquino Avenue, Sen. Benigno Aquino Jr. Avenue, Pison Avenue, Iloilo Sunset Boulevard, and the coastal road and radial road. Developers of BPO facilities in these zones could receive RPT exemptions while awaiting Philippine Economic Zone Authority (PEZA) accreditation.
Treñas highlighted that these areas are primed for growth, making them ideal for BPO expansion. The city government is also encouraging the development of idle lands to meet the growing demand for office spaces.
Comprehensive tax relief package
Under the proposal, businesses investing in these zones could enjoy significant tax reductions over five years:
- Year 1: 100% reduction
- Year 2: 100% reduction
- Year 3: 75% reduction
- Year 4: 50% reduction
- Year 5: 25% reduction
These incentives aim to enhance Iloilo City’s competitiveness as an investment hub while generating jobs for Ilonggos.
Balancing public revenue and investment climate
The initiative follows public backlash against the RPT hike implemented in 2024 under City Tax Ordinance No. 2023-226. Critics argued that the increase discouraged investments and burdened homeowners. To ease this strain, the city council recently extended a 40% discount on RPT payments until 2026.
Treñas reiterated that the tax adjustments are vital for funding public projects and employee benefits but acknowledged the need to balance this with investor-friendly policies.
“This development opens up countless possibilities for 2025,” he added, emphasizing the influx of new companies and job opportunities.
Iloilo’s growing BPO ecosystem
With over 107 BPO companies employing approximately 45,000 workers in Iloilo City, the sector remains a key driver of economic growth. The city government continues to position itself as a premier destination for BPOs by offering competitive incentives and infrastructure support.
The proposal will undergo further discussions before final approval by the city council.
