European companies held back at least P25 billion worth of investments since 2018 and may continue to do so until the government makes a firm decision on the proposed Tax Reform for Attracting Better and High-quality Opportunities or Trabaho bill, the European Chamber of Commerce of the Philippines said over the weekend.
The chamber said many European firms were unsure if they would continue to manufacture in a new incentives-regime that could lessen if not curtail the profitability of their operations in the country.
“I only know, personally, a handful of companies. But I think there might be more out there,” said ECCP executive director Florian Gottein.
He said there could be 10 European companies, mostly into manufacturing, that suspended expansion plans in the Philippines.
These included companies that have been doing business in the country for decades already, he said.
These companies were among the first to be vocal about their sentiments against the proposed bill.
Based on the 2018 investments update released by the Philippine Economic Zone Authority, the drop in annual investments was substantially influenced by uncertainties brought by the propose reforms in incentives and perks under the Trabahol bill.
Investments in economic zones dropped 40.97 percent to P140.24 billion in 2018 from P237.57 billion in 2017.
Data culled from Peza showed that the number of investment projects also declined 4.51 percent to 529 last year from 554 projects in 2017
Exports from economic zones, however, increased 6.58 percent to $45.18 billion as of October 2018 from $42.38 billion a year ago.