The hearing highlights the imbalance in the Philippines-Cambodia economic relationship, with numerous Philippine firms in Cambodia but negligible Cambodian investment in the Philippines. Proponents justify the DTAA as a forward-looking tool to attract future investment and support existing Filipino exporters, while skeptics question the immediate value and potential for revenue loss.
The DTAA is framed not just as a tax measure but as a strategic instrument to make Filipino service exporters (in IT, engineering, creative industries) more competitive abroad. By providing a stable, rules-based tax framework and reducing tax burdens on royalties and services, the agreement aims to encourage market entry and expansion for Philippine businesses.
The committee chairman repeatedly demands data-driven justifications for the DTAA, moving beyond theoretical benefits. He requests a comparative analysis of past DTAAs with other ASEAN nations to establish a precedent for approving an agreement with a country that has no existing major investments.
The chairman argues that tax treaties alone are insufficient to attract FDI. He points to more significant obstacles in the Philippines, such as bureaucracy, red tape, and concerns over political stability and peace and order, which can deter investors regardless of tax incentives.
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