PRESIDENT Duterte’s approval of 12 new economic zones in the first half of the year is seen to have secured for the economy more than P6 billion worth of investments at a time the government is struggling to attract capital to the Philippines.
According to the Philippine Economic Zone Authority (Peza), the President’s proclamation of 12 new industrial parks across the country will bring in P6.4 billion of investments. Duterte signed the papers between January and June licensing their operations as economic zones.
Mostly located in Luzon, the first half approvals are made up of nine information technology (IT) centers, two manufacturing zones and one IT park, disclosed Peza Director General Charito B. Plaza on Wednesday.
“Peza is grateful to the President for his wise approval for the proclamation of new ecozones in the country amid the Covid-19 pandemic,” Plaza said. “Once export companies invest in these newly proclaimed ecozones, these will surely multiply investment and economic activities and opportunities in the Philippines.”
“Majority of the new ecozones—composing 67 percent of the total—will be located in Luzon, whereas the other 33.33 percent will be positioned in the Visayas and Mindanao,” she added.
The President issued the proclamations of Abiathar Commercial Complex, TDG Innovation and Global Business Solutions Center, Ayala Bacolod Capitol Corporate Center and Silver City 4, all of which are IT centers, in January. During the same month, he signed the papers of Millennium Industrial Economic Zone, a manufacturing park.
In May and June the Chief Executive authorized IT centers GLAS Office Development, Bench City Center, Ortigas Technopoint Tower 1 & 2, NEX Tower and Robinsons Luisita 2 to operate as economic zones.
During the same period, manufacturing park Davao del Sur Industrial Economic Zone received the green light from Malacañang. IT park Batangas State University Knowledge, Innovation and Science Technology Park also got its presidential nod.
Plea for incentives
With the investments the Peza is bringing in to the economy, Plaza pleaded before lawmakers to allow the agency to retain its menu of fiscal incentives granted to investors, but which are now on the verge of being overhauled under the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill filed in Congress.
Under the CREATE bill, corporate income tax will be reduced to 25 percent, from 30 percent at present, on its first year of implementation. In exchange, incentives being enjoyed by economic zone locators, including the 5-percent tax on gross income earned paid in lieu of all local and national taxes, will be lifted after four to nine years.
“Despite the lacking efficiency factors, we’re able to continue to attract investors in the country because of our incentives which are tried, tested and proven to be globally competitive,” Plaza argued.
The Peza chief added it is the agency’s best practices, one-stop shop character, ease of doing business and menu of tax perks that make it viable in the investment competition globally. She said it is important for the Peza to retain these policies in order to keep on attracting investors to the Philippines in the time of the coronavirus pandemic.
“This is the reason we are appealing for the status quo of Peza’s incentives and powers,” Plaza said, recommending legislators to concentrate on the passage of stimulus packages instead of the CREATE bill.
The Peza is trying to recover from two consecutive years of double-digit investment declines. In 2019 capital registered with the agency fell by over 16 percent to P117.54 billion, from P140.24 billion in 2018, on uncertainties caused by the move to rationalize incentives.
Economic zones, which the Peza oversees, employ roughly 1.6 million workers nationwide and contribute a huge sum into the country’s export receipts.
2 comments