TRADE Secretary Ramon M. Lopez will ask President Duterte to extend the transitory period of his moratorium on economic zone development in Metro Manila, as over P34 billion worth of projects are at risk of getting derailed by the ban.
Although supportive of the
policy, Lopez said he will write the President a request to extend the
transition of the moratorium to at least three months. This should provide
developers more time to comply with the documents
required by the Office of the President (OP).
“I will just review [how] many months [are needed], but I think three months is good enough,” Lopez said in an interview with reporters last week.
Under Administrative Order 18, Duterte directed the Philippine Economic Zone Authority (Peza) to no longer accept, process or evaluate applications for the putting up of economic zones in Metro Manila. Applications endorsed to the OP and with complete documents are exempted from the order.
On the other hand, applications already on the President’s table but are insufficient in requirements were imposed a deadline of 30 days from June 22—the publication of the moratorium in a national newspaper—to be completed.
According to Peza Deputy Director General Tereso O. Panga, there are 22 proposals to establish information technology (IT) centers and parks in Metro Manila that are pending with the OP but lack certain documents. These projects amount to P34.23 billion, he said.
Peza officials plan to ask for a transitory period of at least six months to provide developers until the end of the year to submit their requirements, which are apparently time-consuming to obtain, such as land titles. The President placed the ban to force investors to locate their operations outside Metro Manila. By doing so, he hopes to boost investment activities in the rural areas and create jobs in the process.
“The policy is really good. We need to push [investors to the rural areas] because the talents are outside [of Metro Manila] also. Remember, what is happening is that the talents are compelled to go here in Manila,” Lopez said.
Aside from the 22 projects that could be derailed if Duterte maintains the 30-day deadline, there are 131 proposals to put up IT economic zones in Metro Manila approved by the Peza Board but have yet to be endorsed to the OP. Peza executives vowed to appeal for their exemption from the moratorium.
Industry players are worried the ban will put business-process outsourcing (BPO) firms, which are mostly operating in Metro Manila, in an office space crunch.
The BPO industry expanded 420,000 square meters last year, and needs 450,000 square meters this year to accommodate expansions and new operations. With a head count of 1.23 million workers as of 2018, the industry accounts for at least 32 percent of office spaces in the Philippines.
According to data from the Peza, there are 262 IT economic zones—211 are centers and 51 are parks—operating across the country as of 2017.
Nearly 60 percent, or 155, of the operational IT centers and parks are located in Metro Manila. Peza officials argued the government has to first improve Internet infrastructure in the countryside before it can attract BPO firms to locate there.
Reflecting the general decline in investments registered with the Peza, investments in the IT industry from January to April fell 7.08 percent to P4.63 billion, from P4.98 billion during the same period last year.