NEWSFLASH

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INCENTIVES FOR LOCAL BUSINESS THRU PEZA

Manila, Feb. 19, 1998 - The Department of Trade will allow domestic enterprises to avail of incentives through the Philippine Economic Zone Authority (PEZA).

DTI Undersecretary Melito Salazar Jr., managing head of the Board of Investments, said the policy would spur investments even if the BOI incentives have been reduced to the minimum.

"There is no need for any congressional approval for the expansion of PEZA's coverage, because this provision is already in the PEZA charter. We just had not activated this provision in the past," Salazar explained.

The PEZA's incentive package is now more attractive to investors than the incentives granted by the BOI. Companies registered with PEZA can import capital equipment and raw materials duty- free. On top of that, they only pay 5% tax on gross income compared to the standard 35% corporate tax.

The Trade Department said there is a need to make the Philippines' incentive package competitive vis-a-vis the incentives offered by other ASEAN nations.

With the region in an economic crisis, nations are depending on foreign direct investments to spur growth. Bigger investments go to the countries which offer the best incentives.

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