09 October 2020 (Friday)
Pasay City – Philippine Economic Zone Authority (PEZA) Director General Charito “Ching” Plaza has thanked the US Department of State (DoS) for recognizing PEZA that regulates and operates special economic zones as providing a better business environment due to its regulatory transparency, no red-tape policy, and one-stop shop services for investors.
In its official 2020 Investment Climate Statements communicated through the Philippine Embassy in the US and to the Department of Trade and Industry, the US Department of State made the specific statement that the “While the Philippine bureaucracy can be slow and opaque in its processes, the business environment is notably better within the special economic zones, particularly those available for export businesses operated by the Philippine Economic Zone Authority (PEZA), known for its regulatory transparency, no red-tape policy, and one-stop shop services for investors.”
It further said that, “Noteworthy advantages of the Philippine investment landscape include free trade zones, including economic zones, and a large, educated, English-speaking, and relatively low-cost Filipino workforce.”
“Learning positive feedback and impressions from the DoS and from foreign and local partners and stakeholders about PEZA’s brand of service and performance solidify our position that PEZA is the top export-oriented investment promotion agency bringing investments, export income, and jobs to many Filipinos and making the Philippines as investment hub in Asia,” said Plaza.
She added, “Even during these times filled with the uncertainties brought about by COVID-19 and the future of the CREATE bill, we express our sincerest gratitude to the US Department of State for acknowledging PEZA’s contribution to the Philippine economy and its vital role in making a competitive and positive business environment enticing investors in the country.”
According to the PEZA Chief, “We Filipinos should be proud that PEZA is known worldwide for its best practices and historically one of the leading creators of ecozones. The efficiency and best practices of PEZA over the years is recognized by foreign investors and international institutions such as the IFC World Bank.”
More positive impressions on PEZA
Moreover, PEZA continue to receive positive impressions from business groups and industry associations who testify on PEZA’s efficiency and best practices over the years.
“PEZA enjoys the trust and confidence of companies both from its parent, local and subsidiaries worldwide. PEZA should retain its authority to grant incentives to its registered export-oriented enterprises. The “One Stop Shop for Exporters” approach of PEZA greatly aids exporters in ease of doing business also,” said Mactan Export Processing Zone Chamber of Exporters and Manufacturers (MEPZCEM Chamber, Inc).
The IT and Business Process Association of the Philippines (IBPAP) also stated “The one-stop-shop nature of the Philippine Economic Zone Authority (PEZA) have been an effective proponent of the country as a premier investment destination.”
According to Mr. Ralph Morales of Texas Instruments Phils., Inc. which is located in Baguio City Economic Zone, “The 40 years’ of operations of Texas Instruments in the Philippines is already more than enough manifestation of how we greatly appreciate and value the services of PEZA.”
AMKOR Technology Phils. President Norberto Viera also added that “If I have my way, I would say that we have to expand PEZA and even convert the whole country into a PEZA zone.”
Retention of PEZA powers and incentives
With these testimonies, PEZA continues to call for the retention of its powers and its tried, tested, and proven to be globally competitive incentives which compensate in the country’s high cost of doing business and lack of efficiency factors.
“An unattractive and changing incentives law will adversely affect investments that will negatively impact on jobs and exports,” said Plaza.
Echoing this, Plaza stated “CREATE is a good bill but it is best to be implemented to domestic enterprises who are the most vulnerable due to the pandemic.”
“Let us not change the rules in the middle of the game especially in this crucial period of the pandemic and world recession. Changing and tinkering of the rules and incentives that are working will destabilize investment and the economy as it would lose the trust and confidence on the stability and attractiveness of the Philippines to FDIs and export enterprises,” explained Plaza.
Senate President Pro-Tempore Ralph Recto also pointed out that even when the passage of the bill will end the agonizing uncertainty for investors, they must be very careful with its negative implications. “If we make a mistake and pass a bad law on rationalizing fiscal incentives, we will miss the boat … We might be killing the goose that lays the golden eggs as well in the process,” said Recto.
Likewise, Senator Richard Gordon called for caution in tinkering around with something that is not broken especially on rationalizing incentives given by IPAs. “It may not be the right time to do this. Let us take a step back and look at our situation because COVID is going to exacerbate it. Let us not tinker around too much with what is working because we might end up in a bigger abyss,” he said.
You can read the full US Department of State 2020 Investment Climate Statements here: https://www.state.gov/reports/2020-investment-climate-statements/philippines/