CREATE, RCEP to hasten Phl econ recovery plan

CREATE and RCEP will play a significant role in achieving the country’s post-Covid 19 economic recovery plan.

Game-changing reform Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, together with the country’s inclusion in the Regional Comprehensive Economic Partnership (RCEP) Agreement, will play a significant role in achieving the country’s post-Covid 19 economic recovery plan.

During the online Roundtable Discussion on the Reconfiguration of Global Value Chains (GVC), organized by the Trade Department’s Board of Investment (BoI) and the World Bank, BoI managing head Ceferino Rodolfo told counterparts that the CREATE Act, waiting to be signed into law by President Rodrigo Duterte, will reduce the corporate income tax rates and grant incentives to exporters and critical sectors to allow the country’s economy to recover amid the pandemic and boost its growth in the long-term.

For RCEP, Rodolfo said the law is perceived be a game-changer and is expected to generate P12 trillion in combined domestic and foreign investments over the next 10 years, including an estimated $90 billion in foreign investments.

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It is also expected to generate around 1.8 million jobs once implemented, along with the proposed economic amendments in the Constitution, deemed to provide up to 8.4 million jobs.

While RCEP, a free trade agreement between the Asia-Pacific nations matches the government’s existing initiatives to develop the country as a manufacturing and services hub in the region, including through investment incentives reform and addressing its value chain gaps.

Rodolfo even shared that as per the National Economic and Development (NEDA), RCEP will result in better trade facilitation and estimated that the country’s exports will add around $47 billion to $60 billion by 2025.

He said that as of 2020, RCEP’s 15 member countries accounted for about 30 percent of the global population (2.2 billion people) and nearly a third of global GDP ($26 trillion), easily among the largest trading blocs in the world. It was signed on 15 November 2020 in a virtual ASEAN Summit hosted by Vietnam.

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For its part, WB lead economist and program leader for Equitable Growth, Finance and Institutions Souleymane Coulibaly underscored that “the Philippines post-Covid-19 recovery could also benefit from the reconfiguration of its leading export sectors in three GVC clusters: Industrials, Manufacturing and Transport (IMT); Technology, Media and Telecommunication (TMT); and Health and Life Science (HLS).”

Coulibaly clarified that the IMT should build on the country’s robust position in electronic intermediates, which account for the majority of its total exports, while TMT should leverage the country’s strong IT-BPM services.

“On the other hand, the country’s healthcare professionals and pharma sector can serve as the anchor for the growth of the HLS cluster,” the World Bank executive added.

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Article and Photo originally posted by Tribune last March 6, 2021 2:30am and written by Raffy Ayeng.

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