Economic team proposes tax cut for COVID-19 recovery

The Philippines' economic team is proposing a COVID-19 recovery package called PH-Progreso, which includes a one-time reduction of the corporate income tax rate from 30 percent to 25 percent.

This proposed tax cut aims to be implemented in July, subject to congressional approval, as part of a broader plan to help the economy recover.

The PH-Progreso plan also seeks budget and procurement flexibility to reprioritize the 2020 budget towards resuming infrastructure projects, job creation, income generation, and providing equity and liquidity to businesses.

Additionally, the plan includes financial sector guarantees and targeted tax incentives for investors.

The economic team anticipates that PH-Progreso could lead to a 'V-shaped' economic recovery, following a 0.2 percent contraction in the first quarter and an expected deeper contraction in the second quarter, with a projected GDP decline of 2-3.4 percent for the entire year 2020.