Subic Gains Business, Jobs from CREATE MORE Act

The Subic Bay Metropolitan Authority (SBMA) anticipates a surge in investments and job opportunities in the free port following the signing of the implementing rules and regulations (IRR) for Republic Act 12066, also known as the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.

“CREATE MORE will create more investments, more jobs, and definitely more opportunities for all of us,” said SBMA Senior Deputy Administrator for Business and Investment Renato Lee III on Thursday.

Expressing excitement over the law’s implementation, Lee emphasized Subic’s openness to global business opportunities, recalling SBMA’s persistent lobbying efforts for over two years to push for its passage.

The IRR of RA 12066 was officially signed on February 17 by Department of Finance Secretary Ralph Recto and Department of Trade and Industry Secretary Ma. Cristina Roque, both co-chairs of the Fiscal and Incentives Review Board.

Recto highlighted the law’s broader impact, stating that the government aims to make CREATE MORE “not just a tool to attract investments, but a magnet to keep them here, grow them here, and give investors every reason to trust the Philippines.”

Boosting Subic’s Investment Appeal

According to Lee, the CREATE MORE Act strengthens Subic’s position as an attractive investment hub by offering enhanced tax incentives for high-impact investments. The law is expected to make Subic’s tax regime “more globally competitive, investment-friendly, predictable, and accountable.”

He outlined several key benefits that will directly impact investors in Subic, including:

• Choice of tax incentives: Investors can opt for either a 5% special corporate income tax or enhanced deductions.
• Incentives for high-value investments: Businesses with a capital of over ₱15 billion and those engaged in import substitution or export sales will receive additional benefits.
• Lower corporate income tax: The tax rate for registered business enterprises will be reduced from 25% to 20%.
• Higher deductions on expenses: The deduction for electricity expenses will increase from 50% to 100%, while expenses related to trade fairs and tourism reinvestments will get an additional 50% deduction until 2034.
• Support for BPOs: Call centers can implement flexible work arrangements without losing tax incentives.
• Expanded VAT incentives: Zero VAT on local purchases and VAT-exempt importations for export-oriented enterprises, along with tax and duty exemptions on donations to public schools and government-owned corporations.

Additionally, the law extends the benefits of the net operating loss carry-over, changing its reckoning period from the “year of loss” to the final year of a project’s income tax holiday entitlement period.

It also broadens VAT incentive coverage, shifting from the “direct and exclusive use” model to a more flexible “directly attributable” approach. This will now cover janitorial, security, financial consultancy, marketing, and administrative services, making the incentives more accessible to businesses.

A Promising Outlook for Subic

SBMA remains optimistic about a significant influx of foreign investments this year. Last month, SBMA Chairman and Administrator Eduardo Jose Aliño noted that Subic is set to generate more jobs, thanks to President Ferdinand Marcos Jr.’s aggressive push to attract global investors.

As of December 2023, Subic Bay Freeport was home to 1,909 companies with a total investment of ₱577.99 billion, providing employment for 162,891 workers.

With the CREATE MORE Act in place, SBMA expects these numbers to grow, further solidifying Subic’s role as a premier investment destination in the Philippines.