Government urged to lift ecozone ban in Metro Manila

MANILA, Philippines — The government may consider lifting the moratorium on the establishment of economic zones based in Metro Manila in order to spur more economic activity and growth for the entire country, a local official said.

In June 2019, the Duterte administration issued Administrative Order 18, “Accelerating Rural Progress Through Robust Development Of Special Economic Zones In The Countryside,” which effectively imposed a ban on applications for ecozones in the metro until the Office of the President sees fit to lift the moratorium.

“While I understand the rationale behind the moratorium, our country’s competitive landscape, investment priorities, and the entire global economic situation has undergone seismic shifts since then,” said Navotas Mayor John Rey Tiangco.

“Consider our case in Navotas, for example. Currently, we have no IT parks or ecozones, despite the conduciveness of our city. This moratorium effectively deprives us of the opportunity to establish such centers, which could serve as hubs for technological innovation, job creation, and economic growth in our area,” he said.

Less than a year after AO 18 was issued, the global pandemic hit, prompting the legislative branch to pass RA 11534, also known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. The primary intent of the CREATE law was to help business recover from the pandemic, and clearly states in its implementing rules and regulations that   investments in the National Capital Region be prioritized.

With RA 11534 in place, the legal assumption was that AO 18 was no longer in force, given that administrative or executive acts shall be valid only when they are not contrary to existing laws or the Constitution. However, when Philippine Economic Zone Authority (PEZA) director general Tereso Panga officially wrote to Executive Secretary Lucas Bersamin seeking clarity on the matter, the Office of the President denied the appeal, and insisted that AO18 and its moratorium be upheld.

Tiangco expressed support for the call of PEZA and other industry groups to lift the moratorium. “Navotas actually wrote to PEZA in July 2019 to include our city in their request to the Office of the President for exemption from the moratorium,” Tiangco said. While the request for exemption was filed, there was no further action thereafter.

“Lifting the moratorium would give us an opportunity to establish IT centers that would not only provide employment opportunities but also stimulate other economic activities, contributing significantly to our city’s overall development,” he said. “Hence, I respectfully urge a reconsideration of the moratorium or the implementation of alternative measures to allow ecozone establishment in our city.”

According to the Department of Trade and Industry’s Export Marketing Bureau, exports in 2023 finally breached the $100-billion mark, driven by the information technology business process management (IT-BPM) and tourism sectors.