Ecozone investments drop 26% in 2016

MANILA, Philippines - Investment pledges approved by the Philippine Economic Zone Authority (PEZA) dropped by over a quarter last year on uncertainties brought about by the elections and controversial pronouncements of President Duterte and US president-elect Donald Trump.

PEZA director general Charito Plaza said yesterday investment commitments approved in 2016 amounted to P218.18 billion, 26 percent lower than the P295.09 billion posted in the previous year.

With the outcome, PEZA failed to reach its target three to five percent growth for 2016 investment approvals.

“During elections, most really (put their investments) on hold because all the investors are watching who will win. That is usually the case every election year in which there will be certain periods wherein investments will be affected because of uncertainty,” Plaza said.

In particular, PEZA investment approvals during the actual election months plummeted 20 percent year-on-year, according to Plaza.

She admitted that aside from the usual decline during election season, the controversial pronouncements made by Duterte and Trump also affected investor sentiment last year.

“Of course, the pronouncements of President Duterte and Trump have had their effects, especially among American companies. Their statements have been misinterpreted, which led new business process outsourcing companies and American companies to put their investments and expansion plans on hold,” Plaza said.

Plaza said these worries are a thing of the past and have already been addressed, particularly those concerning Duterte.

As such, Plaza is optimistic there will be an improvement in investment commitments approved by the agency this year.

“With the new economic zones all over the country, we hope to triple or quadruple investments this 2017,” she said.

“This 2017, it will be a big investment leap with the new economic zones to be created and the very aggressive investment invitations we are making. Many countries are looking at the Philippines as a new investment haven because we are now the top growing economy in Asia; second because of our strategic investment location; third because they are happy with President Duterte creating the Philippines as a safe, peaceful and friendlier business environment, and the good government he is trying to create by removing bureaucratic red tape and eradication of corruption,” Plaza said.

For 2016, a total 61 new economic zones were approved by PEZA. These ecozones have a total investment cost of P70.5 billion.

The new ecozones include three manufacturing zones, five agro-industrial parks, one medical-tourism zone, 50 IT parks, and two tourism zones. A total 18 existing ecozones, meanwhile, expanded their facilities last year.

As of end-October last year, 1.32 million direct employment were generated across PEZA-accredited zones in the country. Export sales in these areas have reached $38.92 billion.