The Department of Finance (DOF) is optimistic that changes to the country’s fiscal incentives system will address the concerns of Japanese investors. The Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill aims to rectify disparities in the existing CREATE Act by expanding and refining current fiscal and nonfiscal incentives offered to investors.
One key aspect of the bill is simplifying the value-added tax (VAT) system and making it more transaction-based, as well as improving the refund process. Finance Secretary Ralph Recto stated during the Philippine Economic Briefing in Tokyo that the bill would exempt export-oriented enterprises from paying VAT refunds, addressing a long-standing concern of Japanese investors.
Recto also highlighted other economic liberalization policies introduced in recent years, such as amendments to the Retail Trade Liberalization Act and changes to the Public Service Act to allow full foreign ownership of public services. These reforms, along with the country’s growing economy and strategic alignment with Japan, position the Philippines as a strategic safe haven for Japanese investors.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that Japan’s net direct investments in the Philippines reached $137.91 million in the January-March period, the highest among Asian countries. The briefing in Japan, attended by around 500 Japanese business leaders, investors, and government officials, emphasized the potential for more investments and economic growth in both countries.
