Around 5,000 workers retrenched in ecozones due to COVID-19 —AFAB, SBMA

At least two investment promotion agencies (IPAs) on Friday lamented the retrenchment of thousands of Filipino workers in economic zones in the Philippines due to the COVID-19 pandemic.

During a Senate budget hearing, Authority of the Freeport Area of Bataan (AFAB) chairman and administrator Emmanuel Pineda said around 3,000 out of the 44,000 workers employed within their jurisdiction had been laid off.

The livelihood of around 18,000 more were put on hold.

"Most of those that have reduced their operations are still hoping to get new orders. That's why currently they are not retrenching as of yet. They just put their workers on forced leave," Pineda said.

The Subic Bay Metropolitan Authority (SBMA), which has a 138,000-workforce, has a similar experience.

"We've lost around 2,738 employees because of COVID, either through retrenchment or shortening of [operation] hours," SBMA chairperson and administrator Wilma Eisma said.

She explained that the halt in maritime transactions hampered the delivery of raw materials needed by the manufacturers.

"Some of our manufacturers were forced to put some employees on forced leave while waiting for those raw materials," Eisma said.

Apprehensions on CREATE bill

The two IPAs also expressed misgivings about the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill which seeks to rationalize fiscal perks that investors currently enjoy.

"Honestly, we could have brought in many more investors and created more jobs if there weren't apprehensions regarding the impending revisions on the incentives regime," Pineda said.

While saying that the AFAB supports the CREATE bill's thrust of making incentives time-bound and performance-based, he stressed that there should be mechanisms in place to ensure equity as the features of different economic zones and freeports vary.

Eisma agreed and said rationalizing the fiscal incentives is like "changing the rules in the middle of the game."

"When they (investors) came in here, to their mind they are supposed to enjoy the benefits infinitely, and now suddenly you're changing the rules in the middle of the game. Other Asian neighbors are in fact improving even their incentives," she said.

Aside from rationalizing incentives, the CREATE bill also seeks an outright reduction on corporate income tax rate from the current 30% to 25% to help companies sustain operations and retain their employees amid the global pandemic.

The provision on changing the incentives regime is the contentious part, as observed during the period of debates in the Senate. There were different proposals to make it more acceptable to stakeholders.

The bill is still being amended and will be taken up by senators again on November 9 when session resumes.—LDF, GMA News