Press Release
September 29, 2019

Gatchalian to DOF: protect the jobs of Filipino workers

Senator Win Gatchalian has urged the Department of Finance (DOF) to carefully study how it plans to protect the jobs of thousands of Filipinos if Congress approves the proposed Corporate Income Tax Incentives Reform Act (CITIRA).

Gatchalian, vice chairman of the Senate Committee on Economic Affairs, expressed his apprehension over the passage of CITIRA, especially when the job security of 700,000 Filipinos are at stake as a result of removing the incentives being enjoyed by many Philippine-based companies and corporations.

To support his claim, the lawmaker cited a provision of Section 312 of CITIRA stating that "the following amount shall be appropriated to compensate workers that maybe displaced by rationalization of fiscal incentives to improve employability and so on."

"Even the bill recognizes job losses. It recognizes displacement," Gatchalian pointed out. "Mahirap ho sa amin suportahan ang isang batas kung alam naming marami ang mawawalan ng trabaho."

"So we are creating jobs on one hand but we are also displacing people on the other. And that is embedded in the bill. The bill itself gives us a signal that there will be job losses," he added.

During the recent Senate hearing on CITIRA, the Joint Foreign Chambers (JFC) of the Philippines estimated that around 703,000 jobs are at stake should the proposed fiscal incentive system under the proposed tax plan be approved.

American Chamber of Commerce senior adviser John Forbes, who represented the JFC during the hearing of Senate Committee on Ways and Means, defended the Philippines' existing fiscal incentives regime, which he said compensated for the high cost of investing here in the country.

Should Congress pass the CITIRA law, Forbes warned that 121,000 direct jobs and 582,000 in indirect employment would be cut. On the other hand, retaining the current tax perks would sustain a 5 to 10% annual increase in the labor sector or equivalent to 1 to 2 million direct and 4 to 8 million indirect jobs generated in the next 10 years.

For this reason, Gatchalian urged Finance Undersecretary Karl Kendrick Chua to thoroughly study the impact of CITIRA on the job security of many Filipinos, as well as to conduct a comparative analysis on the costs of producing goods and doing business in our country, among others.

"I want to demonstrate that to the Committee because we have to cover all of these things in order to come up with an educated decision to be able to support this bill, or to at least come up with some adjustments," the lawmaker said.

"We are very sensitive to job losses and we are very sensitive to job creation. I think everyone is striving to create jobs," he added.

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