Ecozone investments jump 17% to 9-year high of P204.4B in 2010

MANILA, Philippines - Investments in the country’s economic zones jumped 17 percent to a nine-year high of P204.4 billion in 2010 as electronic firms continue to expand, the Philippine Economic Zone Authority (PEZA) said.

“This is the highest investment level since 2001,” PEZA director general Lilia B. De Lima told reporters. Last year, ecozone investments reached P175.37 billion.

“We are coming from a very high base. When others were posting a decline last year, we had growth,” De Lima noted.

This year, she said they have exceeded their target of a 15-percent growth in investments due to the continued confidence of PEZA locators. The number of projects approved rose to 518 from 502 a year ago.

Meanwhile, PEZA employment and export data as of November showed average direct employment grew 20.12 percent to 728,318 from 606,350 while export sales surged 24 percent to $37 billion from $30 billion a year ago.

Earlier, the government announced it will be removing the income tax holidays (ITH) of international firms whose countries have existing tax treaties with the Philippines. At the same time, the government said it will be stricter in giving incentives to companies catering to the domestic market.

Trade Secretary Gregory L. Domingo explained that firms in countries with tax treaties are not so sensitive to ITH because he said that whatever income tax that is unpaid here will be paid in their home country.

Domingo added they will be stricter with the incentives they dole out to firms catering to domestic demand as opposed to export-oriented companies since firms that export can easily move to another country.

“It will be easier to get incentives if you are an exporter,” Domingo noted.

In spite of the pending changes in the incentive programs, Domingo vowed not to touch PEZA. “We agreed that we will try to protect PEZA because it caters to exporters and exporters are very mobile,” he said. “The PEZA formula is working really well.”

Domingo said that PEZA is home to the two fastest-growing industries namely, the electronics and the business process outsourcing (BPO) sectors.