By IRMA ISIP

Trade Secretary Peter Favila yesterday said that 85 to 90 percent of tallied investments pushes through proving that the Philippines attracts serious investors.

Favila said that with this scenario the government may be able to let go of certain incentives that drain government coffers. He added that he is having these numbers reviewed and considering industry proposals in setting investment target for the year.

But, he added, the DTI will go along with the study conducted by the Joint Foreign Chambers that the Philippines can attract $9 billion in foreign direct investments between 2007 and 2010.

He cautioned that the final form of the incentives rationalization bill, particularly if the income tax holiday is removed – as well as the higher cost of power would determine the investment picture for the year.

Favila sees investments growth exceeding 12 percent this year as the DTI has surpassed that growth rate in 2007.

Preliminary statistics would show that combined investments registered with the Philippine Economic Zone Authority (PEZA) and the Board of Investments (BOI) in 2007 reached P353.232 billion, beating the P305-billion goal for the year.

Favila said the JFC study findings as well as DTI’s own assessment would be taken into consideration with the whole DTI planning would meet for target-setting this March yet.

"We are revalidating all these studies because we want to see the numbers first before we set the 2008 targets," Favila said.

He warned though that the fiscal incentives rationalization would impact on our ability to attract investments. When Congress resumes sessions January 29, the priority bill up for discussion "If the handling of communication of the bill is not done well, this could send some signals to investors," Favila said.

He hinted that it might not be time to give up on the income tax holiday (ITH) as suggested by one version of the bill.

"We are not prepared for a scenario if you take away something, what would you give up. If we approve ITH, we also have to show how much incentives were really availed of," Favila said, adding that the economic managers are prepared to strike a balance between the need to raise revenues and get investments.

The BOI is now gearing up ITH for strategic investments, small and medium enterprises and exports.

Favila said he is optimistic that with the rising prices of oil in the world market and the weakness of the dollar, the Philippines can position itself as an outsourcing site for multinational companies wishing to cut down on their production cost.

The JFC in a workshop in 2006 said the Philippines has the capacity to attract $9 billion in FDIs up to 2010 due to the continued improvements in the Country’s investment climate, labor quality, and physical infrastructure.