SOUTH KOREA is looking to expand investments in the Philippines, but expressed concern over the country’s “high” corporate income tax rate, according to the Department of Finance (DoF).
A DoF statement said South Korean Ambassador to the Philippines Han Dong-man expressed concern over the country’s current 30% corporate income tax (CIT) rate during a recent meeting with Finance Secretary Carlos G. Dominguez III.
Mr. Dominguez assured Mr. Han that the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill aims to immediately cut CIT by five percentage points to 25% this year, and by an additional one percentage point every year until it hits 20%.
The CREATE bill is still pending in the Senate.
Mr. Han said the two countries should explore investment opportunities involving the manufacturing of environment-friendly vehicles, since the Philippines is among the world’s largest producers of nickel. Nickel is a key component in electric car batteries.
South Korea also committed to providing more funding support for the Philippines’ infrastructure projects.
Mr. Dominguez said the South Korean government “expressed willingness” to grant financial assistance for the proposed P65.7-billion Panay-Guimaras-Negros Bridge Project in Visayas.
He said the Philippine government affirmed its plan to advance the processing of the South Korean loans and grants in the pipeline.
This includes possible additional loans for pandemic response and more funding to support projects on maritime safety, water resources management information system, agricultural modernization and forest management.
Last month, South Korea granted $100 million (P4.8 billion) worth of loans to the Philippines to boost its war chest against the coronavirus disease 2019 (COVID-19) pandemic.
In January, South Korea also provided a $50-million (P2.4-billion) loan for the Philippines-Korea Project Preparation Facility that will fund feasibility studies and various preliminary activities for infrastructure projects under the “Build, Build, Build” program.
Mr. Dominguez also sought South Korea’s support to create a framework agreement needed to process tied financing in buying military equipment for the Department of National Defense (DND).
South Korea is ready to extend the financial support needed by the Philippines for its projects and COVID-19 response, said Mr. Han.
He also assured that the two nations are already in the final stages of negotiations on the proposed Philippines-Korea free trade agreement.
South Korea is the Philippines’ fifth-biggest source of foreign funding with ongoing loans and grants amounting to $680 million (P33 billion) as of June.
As of Oct. 2, the government has secured $9.91 billion (P480 billion) worth of loans and grants from its bilateral and multilateral partners for its coronavirus pandemic response. — B.M.Laforga