The following story and editorial were lifted from “The Horizon”, the official newsletter of the Clark Investors and Locators Association, in light of the many challenges being faced by locators inside the Clark Freeport Zone, particularly the Implementing Rules and Regulations of the CREATE Act and the subsequent issuance of BIR Revenue Regulations RR-21-2021, RMC 24-2022.
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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 has heavily impacted on sustainability of investors and locators in Clark Freeport and Clark Special Economic Zone.
Already, the Clark Investors and Locators Association (CILA) has been receiving reports of Clark enterprises that have put on hold or relocated various expansion projects. This move is seen to have ultimate effect on the local and national economy.
“It is sad that 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,” Dr. Frankie Villanueva, CILA President, said.
CILA has listed below unnamed but verifiable companies that have suffered as a consequence of non-suspension of IRR and said BIR issuances. They asked not to be named in order to avoid reprisals. They 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
“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.
