DTI details CREATE MORE Law benefits to protect jobs, boost competitiveness amid global pressure.
The Department of Trade and Industry (DTI) has unveiled a suite of fiscal incentives under the newly implemented CREATE MORE Law, targeting significant reductions in power and labor costs for the Philippine garment sector. The move aims to safeguard employment and restore the industry’s competitive edge against rising operational expenses and intense international competition.
The measures, outlined during a recent dialogue with manufacturers and exporters, directly respond to President Ferdinand R. Marcos Jr.’s directive to bolster job-generating industries. Key provisions allow new projects or registered subsidiaries of existing firms to claim a 100% additional deduction on power expenses and a 50% additional deduction on direct labor costs, effectively lowering taxable income to ease operational burdens.
Furthermore, export-oriented garment companies with at least 70% of sales abroad can qualify for VAT zero-rating or exemption, enhancing cash flow and export pricing.
DTI Secretary Cristina A. Roque emphasized that beyond cost relief, the industry must urgently modernize. Citing direct feedback from international buyers, she stated, “Automation is no longer optional; it has become a baseline requirement in the global market.” Buyers now prioritize exporters with automated equipment due to the critical demand for shorter lead times, especially from fast-fashion brands.
To support this technological shift, the DTI will collaborate with government financial institutions like Land Bank and DBP to offer flexible financing for automation and machinery. Additional support will come through incentives from the Board of Investments for mechanized production and a comprehensive package from the Philippine Economic Zone Authority (PEZA) for locators in economic zones.
The holistic support package also addresses workforce development. The DTI will partner with the Technical Education and Skills Development Authority (TESDA) to expand training programs for skilled sewers and machine technicians needed for automated operations.
For market expansion, the Department will assist manufacturers in identifying priority export markets and leverage its Foreign Trade Service Corps network to connect local producers with global buyers.
Secretary Roque affirmed the administration’s commitment to stabilizing the garment sector as a vital employment source. The DTI will implement actions within its mandate while coordinating with other agencies on broader policy issues affecting the industry. The Department is also studying further industry proposals, including potential VAT rate adjustments to match ASEAN peers and expanded fiscal support for existing firms.#
