Ecozone investments plunge 53%

Investments in the country’s special economic zones took a 53-percent plunge during the first eight months this year as the country begins to feel the full-blown impact of the decline of the electronics industry.

The Philippine Economic Zone Authority (PEZA) revealed over the weekend that new locator investments from Jan. 1, 2001 to date amounted to P26.23 billion compared to new locator investments last year which amounted to P56.08 billion.

PEZA said that although there were selected expansion projects undertaken by existing locators, new investments came in trickles in most industries. Electronics were particularly weak as the global market continued to contract as it completes its cycle before staging a recovery.

Last month, PEZA approved only P2.861-billion worth of new economic zone locator investments that was estimated to generate annual average exports of $561.43 million and 3,891 direct employment.

PEZA investments rose 19 percent to P19.76 billion in the first six months this year from P16.54 billion a year ago. The PEZA approved 196 projects which are expected to create 33,286 new jobs.

Despite the bleak outlook in the country’s primary export markets, the Board of Investments (BOI) plans to double its investment target this year to P100 billion as new investments mostly by local investors rose higher than expected in the first six months of the year.

Investments registered with PEZA and the BOI nearly doubled in the first six months this year but the bulk of these projects were made before the wave of security scandals that is expected to depress new investments this year.

Based on a report by the Department of Trade and Industry, investments approved by the BOI and PEZA reached P51.01 billion from January to mid-June this year, up 90 percent from P26.81 billion during the same period last year.

The BOI saw its project approvals soar by 203 percent to P31.34 billion in the first six months this year from P10.26 billion a year ago. The BOI approved 83 projects that are expected to generate 11,938 new jobs. The top two projects approved by the BOI were capital-intensive projects in telecommunications (Smart Communications’ P17.1-billion venture) and mining (Rapu-Rapu Processing Inc.’s P2.747 billion undertaking).

Trade Secretary Manuel "Mar" Roxas II refused to rveal the actual target but he said the agency has already surpassed its P50-billion investment goal with five more months to go this year and he expects the trend to continue for the rest of the year.

At P100 billion, the new target would be 130 percent better than last year’s P43.611 billion, the agency’s lowest in 12 years as foreign and local investors avoided the Philippines due to the political crisis during the period.