Photo courtesy of the Department of Finance Philippines
Manila, Philippines–The Philippine government has taken a major step toward strengthening its investment landscape with the signing of the Implementing Rules and Regulations (IRR) for the “Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy” also known as the “CREATE MORE” Act.
Finance Secretary and Fiscal Incentives Review Board (FIRB) Chair Ralph G. Recto emphasized during the signing that the event sends a clear message to the world that the Philippines is open for business and ready to compete.
“We are ready to compete. We are a dependable economic ally. We offer stability amid uncertainty. And yes—we are Trump 2.0-ready,” Recto said during the signing ceremony.
Refining Tax Incentives for Global Competitiveness
Enacted on November 8, 2024, the CREATE MORE Act builds on the foundations of the 2021 CREATE Act by making the tax incentives system more predictable, transparent, and competitive. The newly signed IRR clarifies key provisions of the law to ensure its smooth implementation, particularly for businesses transitioning from the previous tax regime.
One of the major highlights of CREATE MORE is its refined tax incentives for Registered Business Enterprises (RBEs). The IRR provides clearer guidelines on transitory rules, allowing pre-CREATE RBEs to continue enjoying their granted incentives while enabling those registered under CREATE to access additional benefits under the new act.
The said IRR also tackles a long-standing concern of investors—the issuance of the value-added tax (VAT) zero-rating certificate. The new guidelines define the eligibility criteria and compliance requirements, bringing more clarity and efficiency to the process.
Expanding Benefits for Enterprises
Under CREATE MORE, the corporate income tax (CIT) rate for RBEs under the Enhanced Deductions Regime (EDR) is reduced from 25% to 20%, aligning the Philippines with global tax standards and making the country more attractive for foreign investment. It also expands deductible expenses for energy consumption, trade fairs, research and development, and net operating losses, ensuring that businesses can maximize their cost efficiencies.
A significant provision under the law extends the maximum period for tax incentives from 17 to 27 years, providing long-term stability for investors. Additionally, high-value domestic market enterprises (HVDME) with investments of at least PHP 15 billion (US$255 million) or export sales of US$100 million can benefit from a 0 percent VAT on local purchases and VAT exemptions on imports, boosting large-scale investments in strategic industries.
Fiscal Prudence and Sustainable Growth
Beyond offering incentives, the CREATE MORE IRR also upholds fiscal prudence in tax administration. The FIRB is tasked with conducting impact evaluations to ensure that tax incentives generate tangible economic benefits. The IRR also prohibits double registration of projects to prevent redundant tax breaks and ensure responsible fiscal management.
Secretary Recto assured stakeholders that the government is committed to making CREATE MORE an effective tool not only for attracting investments but also for ensuring their long-term success in the country.
“On the part of the government, we are committed to making CREATE MORE not just a tool to attract more investments—but a magnet to keep them here, grow them here, and give every reason for investors to place their trust in the Philippines. Again and again,” Recto stated.
The signing ceremony was attended by key officials, including Department of Trade and Industry (DTI) Secretary and FIRB Co-Chair Ma. Cristina Aldeguer-Roque, Senator Sherwin T. Gatchalian, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan, and representatives from various investment promotion agencies (IPAs).
With the CREATE MORE IRR now in place, the government expects an influx of investments that will generate high-quality jobs, boost economic growth, and strengthen the Philippines’ position as a premier business destination in Southeast Asia.
Implications for French Businesses in the Philippines
The CREATE MORE Act presents significant opportunities for French businesses operating or looking to invest in the Philippines. With the newly refined tax incentives and clearer regulatory framework, French companies—particularly in sectors like manufacturing, renewable energy, and technology—stand to benefit from reduced corporate tax rates and expanded deductions.
Additionally, the enhanced VAT zero-rating and extended incentive periods make the Philippines a more attractive destination for long-term investments. The CREATE MORE Act further strengthens this appeal by streamlining the tax incentives application process for foreign investors through the RBE Taxpayer Service, improving overall ease of doing business.
Moreover, the emphasis on predictability and fiscal prudence under CREATE MORE aligns with the priorities of many French investors seeking stability in emerging markets. The strengthened investment climate could encourage further collaboration between French and Philippine enterprises, fostering increased trade and innovation in key industries.
With these developments, French businesses are well-positioned to expand their presence in the Philippines, leveraging the country’s evolving economic landscape to drive growth and profitability.