What role does ESG, specifically green investment, play in attracting investors to sustainable projects in the Philippines?

The Philippines is actively pursuing a greener and more sustainable future, with Environmental, Social, and Governance(ESG) investments playing a crucial role in attracting investors. ESG incentives and policies are essential because they encourage companies to communicate how they are managing ESG-related risks and opportunities, which in turn builds investor confidence in sustainable projects.

By the end of 2024, One-Stop Action Center for Strategic Investments (OSAC-SI) had endorsed P4.54 trillion worth of Green Lane projects, comprising 176 projects. The Green Lane process, established under Executive Order 18, accelerates approvals for strategic investments.  The initiative aligns with the government’s goal to create a business-friendly environment and establish the Philippines as a leading investment destination for both local and foreign companies. According to the Board of Investments (BOI), major foreign investments with Green Lane certification came from Singapore, Thailand, and the British Virgin Islands.

In January 2025, the BOI reported over P639 billion in projects still awaiting Green Lane endorsement, including P584.56 billion in renewable energy, P54.3 billion in manufacturing, and P220 million in food security.

How do tax incentives support ESG-driven green investments in the Philippine tourism sector?

The CREATE MORE (Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy) law is a significant step toward boosting economic recovery and sustainability in the Philippines. By enhancing tax incentives, streamlining processes, and focusing on strategic industries, the law offers businesses greater opportunities to thrive and positions the Philippines as a prime investment destination. Its alignment with ESG principles is especially noteworthy, as it encourages investments in projects that prioritize environmental sustainability. The law aims to transform the Philippines into Southeast Asia’s hub for smart and sustainable manufacturing and services by empowering the private sector through market-based tools.

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What specific tax incentives are available for tourism investments in the Philippines?

The Philippines offers several tax incentives to encourage tourism investments. These include an income tax holiday of up to six years, with the option to extend it for another six years if the business expands or upgrades its facilities before the first six years expire. Additionally, if the business suffers a loss, it can carry over those losses to reduce its taxes for the next six years.

New tourism enterprises are subject to a 5% tax on their gross income instead of the usual national and local taxes, with the collected tax revenue divided between local governments, the national government, and the Tourism Infrastructure and Enterprise Zone Authority (TIEZA). Additionally, these businesses can import capital equipment, transportation tools, and other related goods without paying taxes or duties.

Further supporting local businesses, the government offers a tax credit for any taxes paid on locally sourced goods and services. Companies can also claim a 50% tax deduction on expenses related to environmental protection, cultural preservation, and sustainable development programs, provided these activities are approved by TIEZA. These incentives are part of the government’s effort to boost the tourism industry while promoting responsible and sustainable business practices. – Rappler.com

The content provided in this article above is for general purposes only. If you want to know more about the Pharmally case, CONSULT ACG or email us at consult@acg.ph

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