PEZA pushing for more pocket economic zones

CEBU, Philippines - As the country registered 12 percent increase in manufacturing investments, the Philippines Economic Zone Authority is pushing for the development of more pocket economic zones.

PEZA director general Lilia De Lima said that while global manufacturing investors are now shifting towards the Philippines, after China has become more expensive for such type of investments, “we have to prepare for their comeback."

Establishing more pocket ecozones in the country could lure more manufacturing companies to relocate here, thereby complementing the administration's end goal of promoting inclusive growth.

"Most our neighbors are aging societies, especially Japan. Our asset is our people. A year from now around one million Filipinos will reach the working age," De Lima said in an interview.

Eighty percent of the Philippines' total exports come from the 311 PEZA registered zones in the country composed mostly of electronics, among others.

“We need more economic zones to make it easier for these foreign businesses to choose our country as their next location. The Philippines is now on the investors’ radars after securing investment grade ratings from top international ratings agencies, thus having more ecozones will support this development,” said Lilia de Lima.

In Cebu, there are eight industrial zones registered under PEZA including the Mactan Export Zone 1 and 2, Cebu Light Industrial Park, West Cebu Industrial Park, Naga Valley Industrial park, Taft IT Zone, Asiatown IT Park, Cebu Techno Park/ New Cebu Township One, and the Cebu South Road Properties.

“We need more areas to offer to investors. Some will have to wait because there is no more area available. Many of them want it available right away,” she said.

PEZA, which is under the Department of Trade and Industry, is the Philippine government agency tasked to promote investments, extend assistance, register, grant incentives and facilitate the business operations of investors in export-oriented manufacturing and service facilities inside selected areas throughout the country proclaimed by the President as special ecozones.

Among the incentives for ecozone and IT locators are: Income Tax and Local Tax Holiday for the first three to eight years; five percent tax on gross income (sales less direct costs) during the following years in lieu of all local and national taxes; exemption from Wharfage Dues and Export Taxes, Imposts and Fees; permanent resident status granted to foreign investors and their immediate family; employment of foreign nationals; and simplified Import and Export procedures

Although high power cost remains an issue for investors, De Lima said the country’s labor force more than makes up for this. Despite the high cost of power, she noted that there are no power outages in the country’s economic zones. (FREEMAN)