24 February 2020 (Monday)
Taguig City – The Philippine Economic Zone Authority (PEZA) today celebrates its 25th year anniversary despite odds, threats and challenges in the country and around the world, including the Novel Coronavirus disease (NCov or COVID-19) and the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill for passage by Congress.
PEZA Director General Charito B. Plaza said that “the Philippines’ global competitiveness should be enhanced and protected in the face of global competition and crisis happening due to trade and military wars, coronavirus, and other natural disasters. The PEZA’s one-stop-shop and working incentives should be carefully sustained because they kept hold of our investors and helped to contain the transfer of companies abroad, especially the footloose companies.”
“The COVID-19 illness and the proposed CITIRA bill both had economic implications and created uncertainty in the local and international market; endangering the status of our globally competitive investors in the Philippines. Such concern has been echoed by PEZA’s industries associations like the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI),” explained Plaza.
With the effects of COVID-19, SEIPI President Dan Lachica expressed in news reports this month their concern on their growth forecast. “We’re banking on the electronics sector for growth this year. They expect around five percent growth. However, our five percent growth forecast for 2020 is at risk because 40 percent of our supply comes from China and Taiwan,” he said.
As for CITIRA, Plaza has explained that “for two years in a row, export industries kept hold their expansion plans while new investors are having a ‘wait-and-see’ attitude, hoping for an enhancement instead of a decrease of incentives given by PEZA to its investors under the CITIRA bill.”
Plaza noted that “PEZA has passed its proposed enhancements to the CITIRA bill in the Senate.” The proposed enhancements include a longer transition period or the retainment of the grandfather rule.” She hopes that “a final CITIRA that is investor-friendly will be finalized to end the agony of the investors.”
“Let’s keep praying. We must not quit for miracles happen every day. So, never stop believing. God can change things very quickly in our life. Maybe to many of us, waiting is wasting. But, to God, waiting is working the best plan for our lives,” said Plaza.
“There must be no fear in love, for if we have true love, it drives out fear because fear has to do with being afraid of punishment. The one who fears is not made perfect in love,” she added.
PEZA Milestones (1995 to 2020)
Plaza noted that, “When PEZA took over the functions of the former Export Processing Zone Authority (EPZA) in 1995, the Authority worked on its mandate in promoting investments, generating exports, and creating jobs for the country.
The PEZA Chief lauds President Duterte’s signing of Administrative Order No. 18 last 2019 which ordered the spreading of development of ecozones to the countryside. “This paves the way for utilizing and making idle lands productive and for bringing about the transfer of technology.”
From EPZA’s 16 operating ecozones, PEZA now has a total of 404 operating ecozones nationwide with the IT sector having the majority at 286. Meanwhile, PEZA now has a total of 4, 478 locator companies as of September 2019. As of December 2019, PEZA has generated P117.541 Billion investments and $54.597 Billion exports, 540 number of projects, and employed 1,601,492 Filipino workers.
Meanwhile, one of the challenges PEZA identifies is the lack of a comprehensive or official Cost and Benefit Analysis by the NEDA. In addition to this, PEZA will be affected by removal, if not reduction, of its authority to administer ecozones by the creation of Fiscal Incentives Regulatory Board (FIRB) under the proposed CITIRA bill.
Notwithstanding, the largest investment promotion agency in the country is still doing its best efforts to perform its goals and attract more investors to the Philippines. PEZA has a 10-point programs and special projects that will be successively launched and implemented this year.
These are as follows:
1. Creation of the online Philippine ecozones map;
2. Creation of different types of green healthy, sustainable, and smart ecozones;
3. Establishing Special Economic Zone (SEZ) Institutes;
4. Building eco-towns, eco-cities, and new metropolitan areas in every region;
5. Expanding PEZA’s investment promotion partnerships with its Ka-PIPPS (i.e. foreign and domestic industry associations and business chambers);
6. Creating the Ecozone Tourism Investment as inbound business-matching activity;
7. Enhancing PEZA’s structure towards decentralization and regionalization;
8. Affiliation of PEZA employees, ecozones developers and industries as Military Reservist Units and Disaster Resilience and Emergency Management (DREAM) response teams;
9. Creation of food terminals, transportation, logistics hubs, communication and information and support infrastructures in every region;
10. Development Outreach for Labor and Livelihood Advancement of Resources (DOLLAR) program; and
0. Special projects and programs.
PEZA is mandated by the Special Economic Zone Act of 1995 (Republic Act No. 7916 as amended by Republic Act No. 8748) which was enacted on February 21, 1995.