IPAs get P58 billion budget support

MANILA, Philippines — Investment promotion agencies (IPAs) have received P58 billion worth of budgetary support from the government, which was used for capital outlays and maintenance spending.

The Cabinet-level Fiscal Incentives Review Board (FIRB) yesterday said the Bases Conversion and Development Authority (BCDA) received the largest volume of government support at P7.47 billion between 2017 and 2021.

The BCDA group is composed of Clark Development Corp., the John Hay Management Corp. and the Poro Point Management Corp.

On the other hand, Finance Assistant Secretary and FIRB secretariat head Juvy Danofrata said the Authority of the Freeport Area of Bataan used its budgetary support for capital outlays. With the state financing, the IPA bought new assets to attract investors to locate in Bataan.

Also, the Subic Bay Metropolitan Authority as well as the Tourism Infrastructure and Enterprise Zone Authority allocated 100 percent of their budgetary support for maintenance expenses. In particular, the IPAs used the government financing to improve their operational activities.

Finance Secretary and FIRB chairman Carlos Dominguez has asked IPAs to boost their investment campaigns to contribute to the recovery of the economy from the pandemic.

“This report only shows that the Philippine government has always been supportive of our IPAs in their operations and investment promotion efforts,” Dominguez said.

“It is only right that they maximize the budgetary support they get from the national government, and translate their efforts into attracting more economically stimulating and productive foreign investments, especially in this time of the pandemic, that would create jobs and supercharge our economy,” he said.

The FIRB also said that the Aurora Pacific Economic Zone and Freeport Authority, the Board of Investments and the Cagayan Economic Zone Authority received budgetary support from the government. The Zamboanga City Special Economic Zone Authority was also given state financing from 2017 to 2021.

In contrast, the Philippine Economic Zone Authority and the PHIVIDEC Industrial Authority received no budgetary support at all. The two IPAs were listed as self-sufficient through the fees and other charges they demand from their locators.

Investment approvals made by IPAs declined for the past three years due to the difficulties posed by the pandemic in enticing new investors.

Approved investments of IPAs dropped by a third to P756.63 billion in 2021 from P1.14 trillion in 2020, after falling by 13 percent from the pre-pandemic level of P1.31 trillion in 2019.