The Philippines Department of Finance has published a press release about a recent event in London clarifying various tax incentives for British investors.

The Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy or Create More Act, which offers incentives to boost the economy, was approved by the Philippine Senate on 9 September 2024 and is set to be enacted soon.

“If you are looking for a place to grow your business and make more money, I’d say: Choose the Philippines. Make it happen in the Philippines. Because there is no other country in the world, at this moment, that holds so much potential to boost your investments,” Finance Secretary Ralph G. Recto said in his keynote address at the Philippine Economic Briefing (PEB) in London on 31 October 2024.

The PEB in London served as a platform to highlight the Philippine government’s current initiatives to further improve the ease of doing business and fast-track economic progress.

According to Secretary Recto, among the strategic investment advantages of the Philippines is its vibrant labor force with a young, well-educated, and English-speaking workforce.

“If there is one country that can stand witness to the best that the Philippines can give the world, it is most probably the United Kingdom. The presence of around 250,000 Filipinos here in the UK today is a testament to this, with more or less a fifth of them providing critical services to the British healthcare system,” he said.

Secretary Recto likewise spotlighted the country’s stable political environment, strong economic potential, on-track fiscal consolidation path, healthy external accounts, growing middle class, and the country’s decelerating inflation rate as key factors creating a more conducive investment climate for British enterprises to flourish in the Philippines.

Given that the Euro market has been a vital source of financing for the Philippines, the Finance Chief urged British investors to increase financial integration, especially as the country enters into JP Morgan’s Bond Index soon.

With the new Public-Private Partnership (PPP) Code, he also encouraged business leaders to submit unsolicited proposals, respond to solicited ones, or explore more joint ventures with the Philippines on its 186 flagship infrastructure projects.

With the Philippine Digital Infrastructure Project and the National Broadband Program in place, the Secretary said the Philippines is ready to become the hotspot for the UK’s technology-driven businesses such as hyper-scale data centers.

To fuel this digital transformation, Secretary Recto explained that the government has developed an Artificial Intelligence roadmap and strategy to upskill and retool the Filipino workforce.

To facilitate British investors’ swift entry into the Luzon Economic Corridor, he likewise announced that the government will soon enact new amendments to its fiscal incentives regime, known as the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE).

“This policy is specifically designed to address your concerns and tailor fiscal and non-fiscal incentives to meet your specific needs,” he told investors.

The CREATE MORE bill further streamlines business compliance by reducing documentary requirements, and resolves value-added tax (VAT) concerns by exempting export-oriented enterprises from paying the latter. It also offers a very competitive incentive package for projects with investment capital exceeding GBP 199.67 million (PHP 15 billion).

Meanwhile, registered business enterprises benefit from a reduced corporate income tax rate of 20%.

The maximum duration of tax incentives availment will be extended from 17 years to 27 years. Incentives for labor-intensive projects can even be extended for another decade.

Registered business enterprises will likewise benefit from the 200% deduction on power expenses and an additional 50% reduction for reinvestment allowances on priority tourism projects or activities.

Secretary Recto also told investors to watch for a proposal to reduce the tax on stock transactions from 0.6% to just 0.1%, which will lower friction costs and align the Philippines with its regional peers.

The London event follows after Finance Secretary Ralph G. Recto held an investment summit in Singapore on 19 September 2024, where he assured investors that the upcoming CREATE MORE Act would simplify business processes for Singaporean investors.