Aerospace firms back fiscal incentives for manufacturing sector

aerospace firms back fiscal incentives for manufacturing sector - Aerospace firms back fiscal incentives for manufacturing sector

THE aerospace sector backed calls for fiscal incentives to prop up manufacturers and the construction industry to help the economy recover from the coronavirus disease 2019 (COVID-19) pandemic.

The Department of Trade and Industry (DTI) has proposed to Congress incentives for companies that retain their workers and relocate to the provinces, addressing areas not tackled by the Bayanihan II stimulus bills now being harmonized in bicameral conference sessions.

The Aerospace Industries Association of the Philippines (AIAP), in a letter dated Aug. 12 to Senator Juan Edgardo M. Angara and Representative Luis Raymund F. Villafuerte, Jr.,  said that they support the DTI proposals, including income tax holidays for companies that retain 90% of their workers.

The business group representing aerospace parts manufacturers and suppliers said that the manufacturing sector has been “badly affected” by the pandemic.

“Some of our members have repurposed their equipment to help in fighting the pandemic. The Bayanihan II can help the country recover faster since there is a huge decline in air travel thereby affecting the whole aerospace industry,” the group said.

The group supports proposals to relax nationality restrictions for foreign investors relocating production facilities to the Philippines, ease requirements for industrial and service facilities that meet certain requirements to be proclaimed as export zones, and extend preferential treatment to domestic suppliers in government procurement.

AIAP also backed the expansion of government loan programs for micro, small, and medium-sized enterprises as well as the year-long grace period on loan payments.

Finance Secretary Carlos G. Dominguez III asked to further shorten the proposed grace period to 45 days, after the Bicameral Conference Committee working on the Bayanihan to Recover as One Act (Bayanihan II) bill agreed to cap it at 60 days.

AIAP said that a loan payment freeze would help the sector recover while it waits for demand to return.

The group also supports a state bank’s involvement in a joint-venture special holding company to help companies affected by the pandemic to address solvency issues.

“As of now, most airline-associated supply chains are greatly affected and this provision can maintain and sustain the industry so it can get back on track if there is a need for the government to be part of that company to ensure the survival of certain companies deemed strategic,” AIAP said.

Separately, the Chemical Industries Association of the Philippines also supported the Trade department’s proposals.

In a letter to Secretary Ramon M. Lopez on Aug. 12, the group said that a resurgence of the manufacturing sector would help create employment opportunities.

“We fully support the inclusion of the Manufacturing Sector and the Construction Industry in the funding allocations provided for in the consolidated bill that will be deliberated on by the Bicameral Committee of the Philippine Congress,” it said. — Jenina P. Ibañez

Leave a Reply

Your email address will not be published. Required fields are marked *