Philippines’ new tax incentives to boost BPO industry growth: official
MANILA, PHILIPPINES — Philippine economic czar Frederick Go elaborated on how the newly enacted Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act is poised to benefit the business process outsourcing (BPO) industry.
In an interview on ANC’s Beyond the Exchange, Go explained that this legislation addresses previous issues from the original CREATE law and aims to make the Philippines more attractive for foreign investments.
Resolving BPO industry concerns
Go highlighted that the BPO sector stands to gain significantly from the CREATE MORE Act. He mentioned that representatives from the BPO industry were among the first to express concerns about earlier legislative challenges.
“CREATE MORE, I believe, solved a vast majority of the issues,” Go stated, emphasizing the law’s potential to streamline operations and reduce costs for BPO companies.
Boosting competitiveness and investments
The CREATE MORE Act is designed to enhance the Philippines’ competitiveness by improving business processes and reducing operational expenses.
Go acknowledged that countries like Thailand, Indonesia, and Vietnam have been attracting more foreign direct investments (FDIs), but he expressed optimism that this new law would help reverse this trend.
“We have missed the boat in the last many years,” he admitted, but with CREATE MORE, “we’re going to see a rush of investors knocking on our doors.”
Strategic incentives for economic growth
The law introduces a strategic investment priority program offering tax incentives based on investment tiers, potentially including income tax holidays and enhanced deduction regimes.
These incentives are expected to boost both manufacturing and service sectors, including BPOs. Go projected that these measures could create hundreds of thousands of jobs across various sectors over the next few years.
Long-term economic impact
Go emphasized that while immediate effects might not be visible, the long-term goal is to achieve economies of scale that can lower prices and enhance self-sufficiency. He stressed that attracting large-scale investments would create an ecosystem conducive to further economic growth.
“The theory is if you’re able to bring in a lot of investments, you achieve economies of scale,” he explained.
Recent investment pledges under CREATE MORE
Go also revealed that recent investment pledges totaling approximately US$4 billion are now being realized due to the CREATE MORE Act.
With over 160 registrations in the green lane for strategic investments, the economic secretary said that there is significant interest in the Philippines among global investors.
“They’re all singing praises right now,” Go noted, predicting a surge of investors in the coming months.
Strengthening U.S.-Philippines relations
In addition to domestic economic reforms, Go highlighted positive developments in international relations, particularly with the United States.
He revealed that Philippine President Ferdinand Marcos, Jr. had a successful conversation with President Trump, who has previously shown interest in a free trade agreement with the Philippines.
“I think what we’re banking on is that the Philippines is recognized to be a key ally of the United States,” Go stated, expressing optimism about future bilateral ties.
A positive outlook
As Secretary Go continues his efforts to attract more investments into the Philippines, he remains optimistic about the potential of the CREATE MORE Act to transform the country’s economic landscape.
With a focus on reducing bureaucratic hurdles and fostering a more business-friendly environment, this legislation is poised to benefit key industries like BPOs significantly and contribute to broader economic development.
