MANILA -- President Ferdinand Marcos Jr. has signed into law the proposed amendments to the country's corporate taxes and incentives law which are expected to boost the country as an investment destination.

The Philippine leader signed teh CREATE MORE or the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities in a ceremony held in Malacanang Monday morning. The law amends the National Internal Revenue Code of 1997 and further enhances the country's fiscal incentives regime to make the Philippines more inviting for investments.

“Through this law, we seek to attract both domestic – and this is an important point – both domestic and global investments, focusing on strategic industries that will shape our future,” Marcos said in his speech before government officials, lawmakers, and business leaders.

According to Marcos, the CREATE MORE “clarifies the rules of availment of VAT and duty incentives, and further extends its coverage to include non-registered exporters and high-value domestic market enterprises.”

“We restore to our registered business enterprises (RBEs) a vital support they once knew—the eligibility for VAT incentives for costs that are directly attributable to the conduct of their business. This means that essential expenses—those reasonably necessary and incidental to their operations—may once again be enjoyed zero-rated, as they were prior to the CREATE Act,” he said.

Finance Secretary Ralph Recto welcomed the signing of the law saying it will boost investments-led economic growth for the Philippines.

“I’ve not seen any projections (on Foreign Direct Investments) for the moment, but clearly this law will be useful in attracting investments surely because we're reducing income tax rates. And then reducing the cost of doing business by reducing duties and VAT as well, especially for exporters,” Recto said.

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The country’s Finance chief brushed aside concerns about possible revenue losses that will result in the passage of the law. 

“We reduce the corporate income tax rate, but then you want more volume of investments and we need those investments, jobs will be created. There would be withholding taxes, so I don’t think it will erode the tax base. Of course, it’s always a tough balancing act between giving incentives and raising revenues,” he said.

Presidential Adviser Frederick Go, meanwhile, says that the CREATE More Act has already triggered considerable interest from major foreign direct investors.

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“We have for electronics, we have in steel, we have in offshore wind, we have in renewable energy, other forms of renewable energy, a lot, shipyard building, so a lot of sectors,” he said.  

“We have actually from Korea, from China, even. We also have from the Japanese. And of course, you know, the Australians, the British and the Americans are all super interested. I just don't have any specifics from them. Australia has the renewable energy, the solar," he added.

Albay Second District Representative Joey Salceda, meanwhile, said the expected loss in government revenues in the initial phase of the law’s implementation will be offset by revenue from the expected increase in investments in the country.

“We expect the velocity of the economy to offset the reduction in rates basically through new investments. If they won't invest, there is nothing to erode," he said.

Salceda said the CREATE More Act addresses the concerns raised by investors in the Philippines, particularly the high cost of power in the country and the ease of doing business.

“Kung baga nagsimula ito sa mga reklamo ng mga IPAs (Investment Promotion Agencies) na yung mga locators nila umaalis kasi nga yung VAT treatment nila," he noted.

"So dito nasa ITH (Income Tax Holiday) pa lang, yung power cost mo meron 200 percent. Double deduction. Basically double deduction. So since ITH ka, ica-carry over mo doon sa period na may tax ka na,” he said.

The lawmaker echoed criticisms that the implementation of the original CREATE law did not increase investments in the country.

“Binalahura ng BIR (The BIR ruined it). Quote me on that,” he said.

He said the BIR disallowed many incentives for locators in special economic zones, such as retaining incentives during the transition period into CREATE.

The Philippines is a laggard in terms of attracting foreign investments when compared to its neighbors in Southeast Asia.