Investments in ecozones seen to expand by 10% in 2011

MANILA, Philippines - Investments in the country’s ecozones are expected to grow by 10 percent to P225 billion as more foreign electronics and manufacturing firms are seen to locate in the Philippines, the Philippine Economic Zone Authority (PEZA) reported.

In an interview with reporters, PEZA director general Lilia B. De Lima announced that their target for 2011 is to grow investments, exports and employment by 10 percent.

“We want to be conservative because we are coming from a very high base. The target is 10-10-10 which means 10 percent growth in investments, employment and exports,” De Lima explained. This figure is slightly slower than the growth recorded this year.

“There will be a tapering off of investments because we already got the big ticket investors,” De Lima said.

Investments this year grew by 17 percent to P204 billion from P175 billion in 2009. “This is the highest investment since 2001,” De Lima said.  

“We are coming from a very high base. When others were posting a decline last year we had a growth,” De Lima noted.

For this year, she said they have exceeded their target of 15 percent growth because of the continued confidence of PEZA locators. Projects approved were 518 from the 502 a year ago.

Meanwhile, employment and export data was only for November because they receive the data a month late. De Lima said that average direct employment generated grew by 20.12 percent to 728,318 from 606,350 while export sales grew by 24 percent to $37 billion from $30 billion a year ago.

Earlier, the government announced they will be removing income tax holidays (ITH) of international firms whose countries have existing tax treaties with the Philippines. At the same time, the government said they will be stricter in giving incentives to companies catering to the domestic demand.

Trade Secretary Gregory L. Domingo explained that firms in countries with tax treaties are not so sensitive to ITH because he said that whatever income tax that is unpaid here will be paid in their home country.

Domingo said they will be stricter with the incentives they dole out to firms catering to domestic demand as opposed to export oriented companies. Domingo said that firms that export can easily move to another country that is why there is a need to give sweeteners to them.