PEZA eyes 10 new ecozones to lure investors amid pandemic
MANILA, Philippines — Ten new economic zones were approved for establishment by the Philippine Economic Zone Authority (PEZA) in a bid to lure in investors believed to be key to the country’s economic revival from the pandemic.
Of the 10 new ecozones, one each will be constructed at the Cordillera Administrative Region (CAR), Ilocos Region, Western Visayas and Davao Region, the agency said in a statement on Wednesday.
The bulk of new tax-free areas, however, will be located in the Calabarzon and Central Luzon regions which will get four and two more ecozones, respectively. PEZA Director-General Charito Plaza said the plan would still need President Rodrigo Duterte’s final approval before proceeding.
“The approval of new projects and investments is the agency’s positive action to continuously support the Philippine economy in our endeavor to maintain our competitiveness for investments despite the impact of COVID-19,” Plaza was quoted as saying in the statement.
Ecozones are areas where tax holidays and other fiscal perks are offered investors so they relocate in the country. But while the intention to attract more investments is good, Ruben Carlo Asuncion, chief economist at UnionBank of the Philippines, doubts if more ecozones are what are needed this time.
“The investment climate at this time is very, very challenging. I just want to think that this is preparation for better times,” Asuncion said in an online exchange. As of May, PEZA investments were down 31.6% year-on-year to P29.54 billion.
“And if these are located outside of the usual economic centers, this move supports some sort of economic development decentralization that this government has stressed in the past…,” he added.
Indeed, Duterte last year issued Administrative Order No. 18 that imposed a moratorium on building economic areas in Metro Manila, where the bulk of existing ones operate. The order however garnered cool reception from some industries like business process outsourcing which benefits highly from tax incentives, but would also want the skilled workforce only the capital region has to offer.
40 more projects
New ecozones form part of the P22.5 billion worth of investments approved last Friday. The projects, once completed, are expected to generate 8,917 jobs.
Apart from them, 40 new projects in existing tax-free locations were likewise approved last Friday by the PEZA Board, an interagency panel composed of representatives from the finance, labor, trade, agriculture and energy departments, among others.
Broken down, 16 projects will be undertaken by exporters, while 15 new investments will come from the IT sector. Seven facilities enterprises will also be built, while two logistics programs will likewise be constructed.
By nationality, 55.6% of investors are foreign nationals from the US, Australia, China, Japan and Singapore, among others. The balance of 44.2% are Filipinos, PEZA said.
By location, 22 projects will be built in Calabarzon, while seven are to be located in existing ecozones in Metro Manila. The rest are shared by Ilocos, Western Visayas, Central Visayas, Davao and Central Luzon regions, as well as CAR.
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