INVESTMENTS made in economic zones dropped by nearly a fifth last year to barely P95 billion, as the Covid-19 lockdowns prevented investors, especially Filipinos, from opening up new factories and expanding their existing plants.
The Philippine Economic Zone Authority (Peza) on Thursday disclosed that registrations it approved last year declined 19.15 percent to P95.03 billion, from P117.54 billion in 2019. Bulk of the fresh investments came from foreign sources, as domestic firms held on to their capital in the peak of the Covid-19 pandemic.
Broken down, foreign investments jumped more than 21 percent to P59.73 billion, from P49.26 billion, while local inflows plunged over 48 percent to P35.3 billion, from P68.29 billion.
Overall, the 2020 investments in economic zones translated into 326 projects, from 540 in 2019. The manufacturing sector obtained 217 of these new projects, while the information technology and business process management industry secured the remaining 109.
The Peza identified the United States, European economies United Kingdom, Belgium, Ireland and Spain, and Asian countries China, South Korea, Singapore, Saudi Arabia and Taiwan as the largest sources of foreign capital last year.
As for location, 146 of the new and expansion projects will be put up in Southern Tagalog, while 74 of them will be built in Metro Manila. As part of the government’s policy to attract investors to the countryside, tens of operations will also be situated in the rural areas: 39 in Central Visayas, 34 in Central Luzon and 33 in the rest of the regions.
With the 19-percent decline last year, the Peza marked its third consecutive year of double-digit drop in investment registrations.
In 2019, investments applied with the agency slipped by over 16 percent to P117.54 billion, from P140.24 billion in 2018, on uncertainties brought about by the move to reform the tax structure. The Peza, backed by industry groups, had tried to block the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
Now awaiting the deliberations of the bicameral conference committee, the CREATE Act brings down corporate income tax to 25 percent, from 30 percent, and lifts the fiscal incentives granted to investors to introduce new ones.
In a statement, Peza Director General Charito B. Plaza said her agency remains committed to its mandate to secure investments, produce exports and create jobs in spite of the challenges in shifting to the new normal. The hope this year is to attract investments to the shore to help the economy recover from all the losses it squandered to the pandemic, she added.
Likewise, Plaza thanked the investors who chose to maintain their operations in the Philippines even in the most trying of times.
Economic zones, which the Peza regulates, employ about 1.6 million workers nationwide. They also contribute a huge sum to the country’s export total.