A SENIOR legislator said he believes foreign direct investment (FDI) could rise to $20 billion within five years, following a major tax reform and three key liberalization bills.

“The goal should be $20 billion in FDI by 2026, or five years after CREATE (Corporate Recovery and Tax Incentives for Enterprises),” House and Ways Chairman and Albay Rep. Jose Ma. Clemente  S. Salceda said in a statement.

“I think with CREATE, PSA (Public Service Act) amendments, and the other liberalization measures and doing business reforms, we will get there.” 

CREATE is the second package of the Comprehensive Tax Reform Program. It reduces the corporate income tax rate to 20% from 30%, and makes fiscal incentives more time-bound and performance-based. It was signed into law by President Rodrigo R. Duterte on March 26, 2021.

The amendments to the PSA allows full foreign ownership in industries formerly classified as utilities, including telecommunications, air carriers, domestic shipping, railways and subways, and canals and irrigation.

Mr. Salceda said he has been told by the Department of Trade and Industry (DTI) of the completion of final draft of the Strategic Investment Priorities Plan (SIPP), presented it to the Fiscal Incentives Review Board, and will send it to the President for approval.

“(DTI) Usec. (Ceferino S. Rodolfo) told me they will transmit this to (the Palace) next week,” he said.

“That means all the basic implementing guidelines of CREATE will be in effect before (the President’s) term ends. That’s a very big gift to whoever the next president will be.”

The SIPP is a companion document to CREATE and identifies the industries where investors will enjoy tax breaks.

“Give it around a month, and the President will likely be ready to issue it,” he said. —  Jaspearl Emerald G. Tan