Incentives for companies in economic zones help offset high operating costs in the Philippines, making the country more attractive to foreign investors, the head of a manufacturing group said Monday.
The second tranche of tax reforms or TRAIN 2, which seeks to rationalize corporate duties, is the “primary concern” of foreign investors said Dan Lachica, president Semiconductor and Electronics Industries in the Philippines Inc.
“Uncertainty” over TRAIN 2, which failed to pass in Congress before last Monday’s midterm elections, led to the “disappearance of expansion investments” which would have amounted to $1 billion (P52.6 billion) and generated 10,000 jobs, Lachica said.
The Philippines is valued for its English-speaking workforce but in rival investment destination Vietnam, power and labor are cheaper by 40 percent and 30 percent, respectively, he told ANC’s Early Edition.
“At the end of the day, it’s still dollars and cents in terms of unit costs, in terms of where you’re gonna produce your product,” Lachica said.
“Don’t take away the incentives, which hopefully offsets this disadvantage in operating costs,” he said.
Lachica said SEIPI was hoping for a dialogue with newly elected legislators on TRAIN 2.
“It’s an uphill climb and we’re willing to work with government and hopefully, they can hear our concerns about TRAIN 2,” he said.