* My column in BusinessWorld on November 26, 2019.
See also:
The Philippines with 7,600+ islands and islets and 108
million population still has difficulty reaching $10 billion in tourism
revenues, something that many of our neighbors in the region had attained
nearly a decade ago (see Table 1).
During The Arangkada Philippines Project (TAPP)
Conference last week, Nov. 21, at Marriott Grand Ballroom Manila, three policy
reports were launched and discussed — on tourism, agribusiness, and power.
Among the data discussed in the tourism paper are
milestones in the country’s airport development. I summarized and shortened the
long table here, data gaps are indicated (see Table 2).
Seemingly lacking in our airport infrastructure is the
development of budget terminals or low-cost carrier terminals (LCCTs). Japan
has two (Kansai-Osaka and Narita Terminal 3), and these three tourism
powerhouses in the ASEAN have one each: Singapore (Terminal 4), Malaysia (KLIA
2), and Thailand (Don Mueang). Not as glitzy as the regular terminals, these
LCCTs are also modern yet charge lower for airlines and passengers and hence,
further attracting more foreign visitors.
Another activity during the TAPP conference was a press
conference with the heads of the Foreign Chambers of the Philippines composed
of the chamber of commerce of the US, Canada, EU, Australia-New Zealand, Japan,
and South Korea. Among the topics discussed was the Philippines’ taxation
policy to attract more foreign direct investments (FDIs).
When the TRAIN (Tax Reform for Acceleration and Inclusion
Act) law was enacted in 2017 and TRAIN 2 bill (renamed TRABAHO — Tax Reform for
Attracting Better and Higher Quality Opportunities — bill) was filed in 2018,
some 15 multinational companies with regional headquarters or regional
operating headquarters in the country have left as the special taxes they
enjoyed have been removed or to be removed. This was articulated by the
Philippine Association of Multinational Companies Regional Headquarters Inc.
Director Celeste Ilagan.
The unpopular TRABAHO bill was renamed CITIRA (Corporate
Income Tax and Incentive Rationalization Act) bill this year and it still
causes discomfort to many multinationals because the pace of reducing the
corporate income tax (CIT) is long, from 30% to 20% in 10 years, while the
removal of the gross income earned (GIE, 5%) and other fiscal incentives will
be done in the first year of implementation. Indonesia plans to cut its CIT
from the current 26% to 20% in two years.
So bottlenecks in airports and tourism and uncertainties
in taxation, these two plus other factors contribute to low level of FDIs in
the country. And I would add one more factor — some of our competition policies
as implemented by the Philippine Competition Commission seem to be
anti-multinationals.
Take the case of transport network vehicle services
(TNVS). When US multinational Uber decided to leave the Philippines (and the
ASEAN) in 2018, many factors contributed especially the heavy bureaucracies and
penalties imposed by the Land Transportation Franchising and Regulatory Board.
When Uber finally packed up in April 2018 and merged as minority investor in
the remaining TNVS multinational, Grab, Uber was also fined by the PCC for
hurrying the merger.
Recently, the PCC fined Grab P23.5 million for certain
violations in its imposed requirements, including “overcharging” the passengers
and acting as virtual monopolist.
This thing, “overcharging,” is a misnomer. If someone
held a gun at people’s heads making them ride the costly TNVS, then that is
clear overcharging and coercion. But people have many choices — jeepneys,
buses, vans, regular taxis, new TNVS, Angkas motorcycle taxis. Thus, when
people still choose the more costly TNVS, they do it for some other reasons
like safety and comfort.
So that multi-million fine would ultimately be passed on
to the public — directly via higher fare for exclusive rides, or indirectly via
low fares but longer waiting time, more shared and indirect rides than
exclusive direct rides.
When private enterprises create more jobs and provide
goods and services to consumers, they are already doing a public service.
Government should step back from more regulations and prohibitions, more
taxation and intervention.
-----------------
See also:
No comments:
Post a Comment