Comparatively, Malaysia and Thailand have a slight advantage in terms of incentives. In addition, loss carry over is a benefit for Malaysia. Also, in the case of Thailand, losses sustained during ITH may be carried forward and will be used as deductions for profits earned after income tax holiday. Considering that Philippines is behind Malaysia and Thailand in terms of investment even with the current package, it is with more reason that the Philippines will worry about its attractiveness as a site to house foreign investments. Furthermore, Semiconductor firms are not limited to locate their projects in the Asian Region.
Some companies have assembly and test sites in Malaysia and China.
While Malaysia is maintaining its current incentive package, Philippines is trying to diminish incentives. From a decision point of view, assuming all other factors equal, companies may opt to locate their new and future projects in Malaysia and may even extend its choice outside Asian Region. In addition, losses can be carried forward till the date, an enterprise earn some profit. So, it is worth mentioning that the Philippines should not be less attractive in terms of incentives with other countries. The Philippines should even exceed its attractiveness by improving the incentives further rather than making them less beneficial.