1,200 companies might leave Philippines due to TRAIN 2, Drilon warns

MANILA, Philippines — At least 1,200 companies might leave the country while a good number of investors may have doubts on investments if incentives are removed under the government’s proposed second package of tax reform.

Senate Minority Leader Franklin Drilon revealed this during a Senate interpellation of the 2019 budget of the Department of Trade and Industry (DTI) Tuesday.

“At least 1,200 enterprises might leave the country due to a sudden shift in the policy, which would cut the incentives given to foreign investors,” he said.

Drilon was referring to the policy being pushed by the administration’s economic managers, where the government seeks to cut incentives given to investors. He said the government relies heavily on incentives to attract companies to invest in the country.

According to Drilon, the policy being pushed by the government’s economic managers does not sit well with companies enjoying these incentives, which will make them think twice about expanding their businesses if it is removed.

He said the country could also lose 150,000 jobs generated through the grant of incentives by top investment promoting agencies, namely the Board of Investment (BOI) and Philippine Economic Zone Authority due to Tax Reform for Acceleration and Inclusion 2 (TRAIN 2).

“All of these will be in jeopardy once the TRAIN 2 is passed,” he said.

“I see a very dark future insofar as the foreign direct investments (FDIs) are concerned. We will not be surprised if next year, we will still be ‘kulelat’ (at the bottom) again because of the lack of correct policy,” he also said.

Drilon said there is “no deliberate and clear path” to attract more FDIs if the said incentives will be slashed.

“Now, this grant of incentives is being muddled by these debates on TRAIN 2,” Drilon said. /je