THE Japanese ambassador to Manila told the Department of Finance (DoF) that Japanese companies are considering the Philippines for manufacturing investments, particularly once the uncertainty hanging over a key tax reform bill clears up.
The DoF said in a statement Monday that Ambassador Kazuhiko Koshikawa indicated the Japanese firms’ interest in the Philippines as a possible option for relocating manufacturing operations.
The newly-appointed ambassador made the remarks to Finance Secretary Carlos G. Dominguez III during a recent courtesy call, the DoF said.
Mr. Koshikawa was quoted as saying that Japanese investors will consider it a favorable development if key points of the Senate’s version of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill make it into the final law.
The CREATE bill aims to cut the corporate income tax rate to 25% this year from 30% currently for all businesses except small domestic enterprises with a total net income not exceeding P5 million. The latter will receive an outright reduction of corporate income tax to 20% retroactive to July 2020. The tax rate for bigger businesses will be gradually trimmed by one percentage point each year between 2023 and 2027.
The CREATE measure goes into the bicameral conference committee when legislative sessions resume next month.
Finance Secretary Carlos G. Dominguez III said the two countries are “demographic partners,” with the Philippines’ young population complementing Japan’s highly skilled workforce.
Mr. Koshikawa said Japan will continue extending support for the Philippines’ disaster risk reduction and mitigation programs.
Japan is the Philippines’ top source of foreign funding, with loans and grants amounting to $10.1 billion at the end of June, or 38.53% of the official development assistance portfolio. — Beatrice M. Laforga