Philippines Seeks to Boost Foreign Investments with Power Subsidies in CREATE MORE Bill

NEW CLARK CITY – In a recent announcement, the Philippine government outlined plans to introduce additional power subsidies for investors under the Corporate Recovery and Tax Incentives for Enterprises Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill. This move aims to attract more foreign direct investments (FDIs) into the country.

According to Philippines News Agency, speaking at the Build Better More Infrastructure Forum, economic managers are evaluating the viability of increased subsidies as part of the broader CREATE MORE initiative. This priority legislation of the Marcos administration seeks to reduce income taxes from 25% to 20% and streamline the tax refund process, alongside the proposed power subsidies.

The push for these subsidies follows observations by the Philippine Chamber of Commerce and Industry at the Power Summit 2024. George Barcelon, the chair, highlighted the comparative disadvantage the Philippines faces due to higher electricity rates compared to Southeast Asian neighbors, which has been a significant barrier to attracting FDIs. For example, in 2023, the average power rate in the Philippines was USD0.19 per kilowatt-hour, substantially higher than rates in Thailand, Indonesia, Vietnam, and Malaysia.

The disparity in power costs has been reflected in FDI flows, with the Philippines trailing behind Indonesia, Vietnam, Malaysia, and Thailand in 2022. Barcelon emphasized that subsidies viewed as investments could accelerate economic growth and help the Philippines catch up with its neighbors.

Special Assistant to the President for Investments and Economic Affairs, Secretary Frederick Go, also supported this perspective, stating that the CREATE MORE bill would not only attract more FDIs but also create job opportunities for Filipinos.