Philippines cuts corporate tax to 20% to boost investment

Philippines President Ferdinand Marcos Jr attends the 12th ASEAN-US Summit at the National Convention Centre Oct 11 2024 REUTERS-Yonhap — Philippines' President Ferdinand Marcos Jr. attends the 12th ASEAN-U.S. Summit at the National Convention Centre, Oct. 11, 2024. REUTERS-Yonhap

SEOUL, November 12 (AJP) - Philippine President Ferdinand Marcos Jr. signed an act Monday reducing corporate tax rates from 25 percent to 20 percent and extending tax incentives for strategic investments from 10 to 27 years.

"We have taken a decisive step toward our vision of a globally competitive, investment-driven Philippine economy," Marcos said at the signing ceremony. "Through this law, we aim to attract both domestic and global investments in strategic industries that will shape our future," he added.

The move comes as the Southeast Asian nation seeks to boost foreign direct investment, which stood at $6.2 billion last year, significantly lower than regional peers Singapore ($159.7 billion), Indonesia ($21.6 billion), and Viet Nam ($18.5 billion), according to UNCTAD data.

The presidential palace estimates the tax cuts will result in revenue losses of approximately $106 million over the next three years. Finance Secretary Ralph Recto said, "This law will significantly reduce costs in the manufacturing sector."

AJP