CREATE ACT IRR, BIR issuances affect investments; Clark investors leaving

The Clark Freeport Zone is losing precious investments.

This, as some investors in the Clark freeport have reportedly put on hold their expansion plans and already moving elsewhere, according to The Horizon, the official newsletter of the Clark Investors and Locators Association (CILA).

The CILA, once a staunch supporter of the state-run Clark Development Corporation (CDC), was apparently losing confidence on the capability of CDC to attract more investments in the former US military facility.

CDC is now being led by President and CEO Agnes VST Devanadera.

CILA President Frankie Villanueva said the continuing application of Implementing Rules and Regulations of CREATE Act and the subsequent issuance of BIR Revenue Regulations RR-21-2021, RMC 24-2022 had impacted on the sustainability of investors in the Clark Freeport Zone.

Villanueva said it has received reports that investors in the Clark freeport have put on hold or relocated various expansion projects.

He said “this move is seen to have ultimate effect on the local and national economy.”

“Some companies are now thinking twice about putting in more investments in Clark. Some of them have either made a decision or have actually started expansion somewhere else. These are lost revenues, lost economic opportunities for the Philippines,” said Villanueva.

“The investors are supposed to be enjoying a sound business climate in Clark as promised them. Now they find themselves in a battle for survival due to the IRR of CREATE Act and the adverse revenue regulations,” said CILA Chairman Chris Magdanagal.

Locators have decried “uncompetitive incentives” in Clark which they say pales in comparison when compared to Asian neighbors. They fear that a possible exodus of investors may take place if the economic woes caused by the IRR and BIR revenue regulations remain unaddressed.

CILA has identified companies which allegedly suffered because if the non-suspension of IRR and BIR issuances. They were not identified to avoid reprisals. Among them include:

  • Alpha Company – a foreign firm that was set to build a new multibillion peso township after its success in hotel and other tourist attractions abandoned the plan
  • Bravo Company – an ongoing hotel construction had to discontinue as the imposition of VAT on materials make it impossible to scrimp on available funds
  • Charlie Company – a manufacturing firm, already big not just in name but also in demand and market, had to relocate to another country its multimillion dollar expansion project
  • Delta Company – a planned massive resort and mixed-use district at New Clark City is also in peril as funds, secured through loans, may no longer be enough for the project
  • Echo Company – The local suppliers. With many Clark enterprises being levied VAT they are now opting to just purchase raw materials from abroad as they cost less even with shipping and handling fees
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