THE government will tailor-fit incentives to be granted to Samsung Electro-Mechanics Philippines Corp. (SEMPHIL) for its planned $1-billion investment in the Philippines, according to Secretary Frederic Go of the Office of the Special Adviser to the President on Investment and Economic Affairs.
“It’s in process,” Go told reporters on the sidelines of a roadshow on the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) on Friday.
“CREATE MORE is very defined… once you’re over P50 billion, it’s open. So that has to be processed because it’s not an exact definition of incentives,” Go added
The implementing rules and regulations of the CREATE MORE Act posted on the website of the Department of Finance says the President may, in the interest of national economic development, modify the mix, period, or manner of tax incentives to be granted or to craft the appropriate fiscal and non-fiscal support package for a highly desirable project or a specific industrial activity.
The IRR adds that to qualify, the project or activity should have a minimum investment capital of P50 billion or its equivalent in US dollars, or a minimum direct local generation of at least 10,000 jobs.
“They have asks. So we have to process those asks,” Go said, but declined to elaborate.
When asked if the processing will be finalized within the first half of the year, Go replied: “I hope so.”
“They’re rushing it… the agency discussions,” Go said.
A high-ranking government source said the SEMPHIL’s project involves new investments in the manufacture of multi-layer ceramic capacitors for automotive.
The official said SEMPHIL’s project is pending with the Fiscal Incentives Review Board which evaluates the incentives to be granted to the company.
The source said, if approved, SEMPHIL’s project will be the first to be granted tailor-fit incentives under the CREATE MORE whose IRR was signed last month.
The source declined to disclose the location of the planned investment but said SEMPHIL was established in 1997 in Calamba, Laguna where it manufactures MLCC, tantalum capacitor, inductor and chip resistor commonly used in electronic gadgets.
Under the IRR, the president may grant an income tax holiday not exceeding 10 years followed by a 5-percent special corporate income tax (SCIT) or enhanced deduction rate; or a 5 percent SCIT or EDR immediately at the start of commercial operations “provided that the total period of income tax-based incentive availment that may be granted by the President shall not exceed 40 years.”
The IRR says a desirable project or activity can also enjoy “non-fiscal support and budgetary support, limited to the utilization of government resources, such as use of land and budgetary support under the annual General Appropriations Act.”
Meanwhile, Go remains positive that the Luzon Economic Corridor (LEC) — an initiative that aims to enhance the connectivity of Luzon’s key economic hubs Subic, Clark, Metro Manila and Batangas — will proceed during the Trump administration.
“It’s alive, it’s still on,” Go said, adding the Philippines is “waiting for more concrete updates from their side.”
After their meeting on Nov. 22, 2024, the LEC steering committee has yet to schedule the next meeting.
While the LEC is a trilateral initiative of the US, Japan and the Philippines, Go said the LEC is “our project” and it has generated much interest from other countries like the United Kingdom, South Korea, Australia, Sweden and Canada.
