Rationalization of Fiscal Incentives in Investment Promotion in the Philippines: A Policy Reform Challenge

This paper looks into the problems confronting the fiscal incentives rationalization (FIR) or reform initiatives in the Philippines. The current system of investment incentives system is beset with complexities and problems like proliferation of investment promotion agencies and laws, weak monitoring system and substantial revenue forgone. Hence, the rationalization effort has been instigated and placed high on the reform agenda. It has been ongoing for the last twenty years but to no avail. The paper utilized Kingdon’s Multiple Streams or Streams metaphor in trying to understand the role of stakeholders and the problem, policy and politics streams or activities in FIR and their effect on the reform process. Understanding why the attempts at enacting a FIR law has been unsuccessful, this paper proposes a simple way forward by which the possibility of enacting a FIR law may be increased.