BMI sees investment slowdown as tax reform creates ‘uncertainty’

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Private equity firms are attracted to sectors that will benefit from strong consumption such as health care, education and financial services as well as opportunities presented by digital transformation. -- BW FILE PHOTO

Investments could slow over the next few months amid uncertainties over corporate taxes, BMI Research said, noting that the second tax reform package being pushed by the government could do more harm than good for businesses.

“While the proposed tax reforms may be fiscally prudent, it will likely make the Philippines less competitive versus its regional peers. Investment could slow over the near-term as the proposed conditional corporate tax reduction and repealing of fiscal incentives create uncertainties for businesses,” the unit of Fitch Group said in a research note.

“Although the quid pro quo approach may be fiscally prudent, it creates more uncertainty for businesses. We believe that this could weigh on investment over the near-term as investors adopt a wait-and-see approach.” — Melissa Luz T. Lopez