PEZA irons out issues on new industrial zone for domestic market

MANILA, Philippines - The Philippine Economic Zone Authority (PEZA) is ironing out issues holding back the creation of a new type of industrial zone focused on firms catering to the domestic market.

In an interview, PEZA director general Lilia De Lima told The STAR she intends to push through within the year the establishment of the Domestic Economic and Export Zones amid issues hounding the proposal.

“We have not abandoned the idea,” De Lima said.

“This is what I want to push for. We’re still threshing out some concerns with the BIR,” she said.

The BIR has concerns with PEZA incentives to be given to firms operating within the proposed domestic ecozones.

De Lima said she intends to meet with Internal Revenue Commissioner Kim Henares to thresh out the issues.

PEZA said there is a clamor among foreign investors wanting to invest in the agency’s administered economic zones to serve the growing domestic market.

At present, locators in the PEZA’s ecozones are required to ship bulk or 70 percent of their output to the export market.

When PEZA-registered firms sell goods to the domestic market within the 30 percent limit, they pay only the duties and taxes on the imported raw material.

An official from PEZA earlier told The STAR the domestic ecozone plan is being deferred due to objections of several government agencies.

The official, however, said the agency is permitted under the law to allow firms catering to the domestic market to locate in the PEZA economic zones.

“We have the law for us to approve so once De Lima decides it’s a go, then it’s a go,” the official said.

The Joint Foreign Chambers has long been calling for the establishment of Domestic Economic and Export Zones managed by the PEZA which would be open even to firms producing for the domestic market.

The recommendation was made to spread out manufacturing activities and support the goal of inclusive economic growth.

De Lima earlier said that should firms catering to the domestic market would be allowed to operate in PEZA zones, the government would want such enterprises to locate in less developed areas to create jobs there.