The Philippine Economic Zone Authority (Peza) is planning to launch 10 programs next year to dispel the uncertainty created by a bill that sought to rationalize fiscal incentives given to economic zone locators.
The attached agency of the Department of Trade and Industry (DTI) is planning to roll out the programs during its celebration of its silver anniversary next year.
Investments registered with the Peza last year slumped 40.97 percent to P140.24 billion, from P237.57 billion in 2017. A total of 529 fresh projects represented these investment pledges, from the 554 projects in 2017.
Although the year has yet to end, Plaza disclosed the Peza has generated P109.19 billion in investments as of November.
Economists attributed the wait-and-see stance of investors to the proposed Corporate Income Tax and Incentives Rationalization Act (Citira), which seeks to rationalize the fiscal incentives being enjoyed by economic zone locators.
In her Christmas message, Peza Director General Charito B. Plaza said 10 programs are aimed at “revolutionizing the agency to be more competitive, regionalized and increase its performance in the coming years.”
All of these programs, she disclosed, will either be launched or inaugurated within the whole of 2020 in line with the Peza’s 25th year anniversary.
These programs include the creation of the Philippine economic zone map; creation of green, healthy, sustainable and smart economic zones; establishment of the Special Economic Zone Institute; putting up of eco-towns, eco-cities and new metro areas in every region; and the expansion of the Peza’s investment promotion partnerships.
The Peza will also promote its new brand “Galing Pinas” slogan—a word play for quality items of the Philippines from the Philippines—and enhance the organization’s structure toward decentralization and regionalization. Further, it will affiliate Peza workers as military reservists that can respond to man-made and natural disasters; will create a food terminal, transportation and logistics hub in every region; and the institutionalization of the Development Outreach for Labor and Livelihood Advancement of Resources.
“Each of the programs will be launched or inaugurated within the whole year of 2020, which is in line with the agency’s silver anniversary celebration,” Plaza said in the message.
“We are committed to implement the Peza new programs in the coming years and realize Peza’s mandates in creating export investments, generate massive employment, facilitate transfer and creation of homegrown technology, development and responsible utilization of idle lands thereby achieving total development, peace and prosperity,” she added.
Accomplishments
Plaza also boasted of the agency’s accomplishment that since the Peza’s institutionalization in 1995, it is now operating and regulating 404 economic zones at present, from just 16. These economic zones are comprised of 286 in information technology; 74 in manufacturing; 22 in agro-industrial works; 19 in tourism; and three in medicine.
According to the Peza chief, 396 of these economic zones are developed by the private sector. She also shared the number of firms registered with the Peza now stands at 4,478 as of September, from just 313 in 1995.
Economic zone firms are also employing some 1.57 million workers, and have exported $45.34 billion worth of goods and services as of October.
“And as we welcome the New Year, we remain steadfast in our mandate to generate investments, employment for Filipinos, and export income for our economy. We are bolstered by the issuance of the Administrative Order 18 this year by President Duterte, which ordered government agencies to hasten the development of special economic zones in rural areas and spread development outside of Metro Manila,” said Plaza.
“It inspires us in our work that indeed ecozones are key economic drivers that immensely contribute to economic growth and easing poverty in the host areas of ecozones,” she added. The Peza is one of the most challenged government agencies this year, having to take the side of industries in the debate on whether to pass the Citira bill.
The Citira bill will reduce corporate income tax on one end, and will rationalize incentives granted to economic zone firms on the other. Economic zone locators are opposed to the Citira bill, as it will lift some tax perks they deem crucial for staying in the Philippines, such as the 5- percent tax on gross income paid in lieu of all local and national taxes.
The Joint Foreign Chambers of the Philippines earlier warned over 700,000 jobs will be lost if the Citira bill is passed as a consequence of investors relocating to other countries.