Taguig City – In response to Congressman José María Clemente "Joey" Salceda, Philippine Economic Zone Authority (PEZA) Director General Charito “Ching” Plaza clarified on Monday that she is neither delaying the passage of the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill, formerly known as the Corporate Income Tax and Incentives Reform Act (CITIRA), nor going against the Government and the President’s efforts for economic reforms.
“It is unfortunate that by merely upholding my responsibility and faithfully performing my duty as the Director General of PEZA, I will be accused as the cause of delay of the passage of CITIRA or CREATE and maligned of going against the President and the PEZA Board because of my reasoned, pro-investment, pro-people position and constructive comments about the CITIRA or CREATE,” said Plaza.
Plaza stated that “Any challenge or constructive comments to CITIRA/CREATE should be welcomed by Congress because a healthy debate based on factual data and correct information from various stakeholders will help in attaining a legislation that is mutually acceptable to the government, investors, and the stakeholders of a bill.”
Contrary to claims, the PEZA Chief emphasized that her continuous plea for a status quo on PEZA’s incentives and powers is supported not only by the entire PEZA Management but also the PEZA-registered enterprises and industries associations like the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), Information Technology and Business Process Association of the Philippines (IBPAP), Confederation of Wearable Exporters of the Philippines (CONWEP), Philippine Ecozones Association (PHILEA), the Joint Foreign Chambers (JFC), as well as the foreign direct investor groups.
“What the PEZA Board voted is to support the tax reform measures and allowing PEZA to introduce the appropriate amendments to keep our existing investors, attract more investors and enhance the economic gains under the Duterte Administration,” stated the PEZA Chief.
“Our appeal is an institutional decision to oppose specific provisions of the CITIRA/CREATE because of its adverse effects to PEZA-registered enterprises and the Philippine economy in general. Moreover, this is also the official position of the stakeholders particularly our registered enterprises and industries associations who will be most affected by the major change in the fiscal incentives they are currently enjoying and compensate for the lacking efficiency factors, which made the cost of doing business very high,” said Plaza.
Furthermore, the PEZA Chief stated that “Our position is likewise being supported by credible economists and members of the academe like Ateneo School of Government Dean Dr. Ronald Mendoza and UP Economics Professors Dr. Ramon Clarete and Raul Fabella and Mr. Alex Cabrera, who held similar views that CITIRA/CREATE will drive existing companies away from the Philippines and will result to massive unemployment.” She added that this is not mere threats of job losses, but industries had actual reports of reducing operations due to the uncertainties of tax reform even before the pandemic.
Status quo on PEZA incentives
“We are lacking a lot of efficiency factors that investors are looking for, however our tax incentives, for which appeal for status quo, continues to attract investors to the country,” explained Plaza.
“Amid the COVID crisis, we are not even a choice for transferring companies because of our unstable incentive policies and rules. This is creating fear and frustration to our existing investors,” explained Plaza.
Since 1995, the incentives of PEZA have been tried, proven, tested and globally competitive. PEZA economic zones, which now totalled to 408, generated ₱3.871 Trillion in investments from 1995-2019. Total exports from 1995-2019 amounted to US$815.102 Billion. PEZA also takes great pride that our PEZA Export Enterprises immensely contribute annually to the total Philippine Commodity Exports. In 2019, 58% of our country’s total commodity exports came from our PEZA Export Enterprises. Not only this, the combined export revenues of our Export and IT Enterprises in 2019 of US$54.597 Billion constituted 15.49% of the Philippines total GDP in 2019.
According to Plaza, “The status quo of the fiscal incentives and enhanced economic stimulus can make our investors stay as well as attract more ecozone developers to create more ecozones in the countryside, allowing the spread of investment and jobs. Likewise, this will promote total development as mandated by Administrative Order (AO) No. 18 and Executive Order (EO) No. 114, the Balik Probinsya program, to ensure OFWs and the unemployed Filipinos to go back to their home provinces.”
“No other government agency aside from PEZA can contribute this huge export receipts for our country. Thus, why should the government fix something when it is not broken? Why should we change the rules in the middle of the game?” said Plaza.
The Director General added that, “By putting the interests of our registered enterprises above our individual interests to keep our current positions, PEZA is fulfilling its duty to its registered enterprises of red carpet treatment and utmost service which we promised when they registered with PEZA. Who else will speak and support them but the IPA that enticed them to locate in the Philippines and operate in our economic zones.”
‘Insulting and underestimating’
“Albay Rep. Salceda is insulting and underestimating the wisdom and intelligence of our industry leaders, economists, and our respected Senators who are carefully evaluating the state of our economy and investment attractiveness,” noted Plaza.
“I am just among the many voices expressing to our lawmakers to study carefully the CITIRA/CREATE bill to keep our 4,542 export companies and its 1,601,492 workers employed by our export companies who can easily transfer their operations to other branches in a more investor-friendly countries,” noted Plaza
“I am just acting as a fiscalizer, the voice of our enterprises, and the protector of the interest of the Filipino people who deserves jobs and a comfortable lives,” noted Plaza.
Plaza added that “If there is anyone in this administration who wants the President to succeed, it is PEZA. We are fiscalizing and standing as the lone voice in government of our ecozone enterprises and industries and would-be investors, which have contributed enormously to the economic development of our country.” #