A Metro Manila congresswoman has urged the government to entice companies moving out of China due to supply disruptions caused by coronavirus disease-19 (COVID-19), which was first detected in the Chinese city of Wuhan in Hubei province in December last year.
House Assistant Deputy Majority Leader and Quezon City Rep. Precious Castelo, vice chairperson of the House committee on Metro Manila development, made the appeal in the wake of reports that Japan is offering billions in financial assistance to Japanese companies operating in China to encourage them to relocate elsewhere.
Aside from Japanese firms, Castelo said many American and European companies are considering transferring their operations in China due to supply problems they are facing because of the COVID-19 pandemic.
“We can offer these businesses incentives that are comparable or better than those available in other countries in the region to attract them to move here,” said Castelo.
Castelo added that these companies are not likely to move their operations back to their home countries where the cost of labor and other inputs and living standards are high.
She pointed out that those are the reasons that prompted such businesses to transfer their production plants to China in the first place.
“I would imagine that if they decide to relocate, they would be looking for places where it would be less expensive for them to operate and the supply chain would not be vulnerable to disruptions even in times of emergencies,” she stressed.
Castelo urged the Senate to expedite the approval of the proposed Corporate Income Tax and Incentives Reform Act or CITIRA when Congress resumes its session next month.
She said enactment of the House-approved proposed law would be a way of telling companies leaving China that “our country is prepared to do business with them.”
CITIRA seeks to reduce corporate income tax from 30 percent to 20 percent over 10 years and to rationalize fiscal incentives.
The House approved the proposed law in the latter part of 2019.