The government is looking to provide liquidity support and tax incentives to firms and stimulate employment as it prepares for the coronavirus disease 2019 recovery period.
“So the whole idea here is a way to provide immediate cash flow to the firms so that they can manage through this difficult time of their operations,” said acting Socioeconomic Planning Sec. Karl Kendrick Chua.
Chua presented the details of the economic recovery plan from the Covid-19 pandemic dubbed as “PH-PROGRESO” Philippine Program for Recovery with Equity and Solidarity.
He said the Bangko Sentral has reduced reserve requirements and lowered interest rates which the banks could use to provide liquidity support for lending to the businesses.
On tax incentives, Chua, also acting National Economic and Development Authority director general, said they are proposing to reduce taxes across the board.
“So currently from the 30 percent corporate income tax, we will reduce it immediately to 25 percent to help the small businesses. We will enhance net operating loss carry over from three to five years so your losses can be credited to the future and effectively lower your tax payments. For new investors, we will actually seek them out and ask them what they would need as incentives to contribute to job creation in the Philippines,” he added.
The chief socio-economic planner said the government would “not change anything” in the next four to nine years for existing investors to enable them adjust from the impact of Covid-19.
“For countryside, we will have targeted incentives so that we can support the (government’s) Balik Probinsya, Bagong Pag-asa (program),” he said.
Apart from support for businesses, Chua said the country aims to also restart the “most impactful” Build, Build, Build projects.
“The whole idea here is first to restore confidence so that we feel that we will not get sick. We restore the most basic needs of the people which is food, and we will provide as many jobs by stimulating the healthcare system, the food value chain, and our priority infrastructure program provided all of them adhere to the minimum health standards,” he added.
He said the recovery phase is expected in June to December this year.