PEZA approved investments in Jan-Sept down 23%

• 63 billion total approved investments in 148 new and expansion projects in PEZA ecozones from January to September 2022

• From January to August 2022, PEZA-located industries generated a total of US$43.17 billion in exports and provided 1.798 million direct jobs, 6.07% and 6.52% higher year on year

• From January to September 2022, PEZA approved 20 big-ticket projects that are expected to bring in a total of P24.75 billion in investments, produce US$654.338 million worth of exports, and create 9,649 direct jobs

• PEZA remains bullish about hitting its target of 6-7% increase in investments this year

The Philippine Economic Zone Authority (PEZA) approved a total of P39.63 billion investments from January to September 2022, down 22.6% from $51.202 billion recorded in the same period last year.

The approved investments for the first nine months of the year cover 148 new and expansion projects, PEZA said in a statement.

For the January-August period, PEZA-based industries generated a total of US$43.17 billion exports and provided 1.8 million direct jobs, which 6.07% and 6.52% higher year on year than during the same period last year.

Specifically for the July-September period, the PEZA Board has approved 58 new and expansion projects that are expected to bring in P17.14 billion worth of investments, $877.81 million worth of exports, and create 13,904 jobs.

Of these projects, 21 are export-related, 19 are in the information and technology sector, seven in facilities, and three in tourism.

In addition, eight economic zone development projects were approved to boost PEZA’s countryside development strategy – four manufacturing ecozones in Cavite, Batangas, Bulacan, and Pampanga; two IT parks in Iloilo and Davao; and two agro-industrial zones in Iloilo.

PEZA said it was also able to register and approve strategic investments in the country.

From January to September, PEZA approved 20 big-ticket projects (with minimum P1 billion capital per project) that should bring in P24.75 billion worth of investments, produce $654.34 million worth of exports, and provide 9,649 direct jobs.

These investments will be manufacturing various products including electronics parts and offering services such as short messaging and enhanced messaging; accommodation, real estate activities, office administration, and business support activities.

These companies include Cebu Mitsumi Inc.; Robinsons Land Corp., and TDK Philippines Corp.

PEZA’s ecozone exports accounted for the biggest share in the country’s total annual exports in the first half of the year.

Based on a report by the Philippine Exporters Confederation Inc., the country’s total exports of goods in the first half of 2022 rose 7.9% to $28.26 billion from $26.19 billion during the same period last year. Exports of services grew faster at 13.5% to $17.79 billion, from $15.67 billion.

For the first half of each of 2019 to 2022, ecozone exports accounted for an average of 66.77% of the country’s total exports, 77.46% of the total goods exports, and 52.23% of the services exports.

From January to June 2022, PEZA ecozones’ exports grew 7.7% while the country’s total exports increased 10%.

PEZA officer-in-charge and deputy director general for policy and planning, Tereso Panga, said the authority remains bullish about achieving its target of 6-7% increase in investments for this year.

Panga said this takes into consideration “the firm growth forecasts for 2022 of our winner ecozone sectors at 10- 15% for IBPAP [IT and Business Process Association of the Philippines] and 10% for SEIPI [Semiconductor and Electronics Industries in the Philippines Foundation Inc.].”

Panga said PEZA is taking advantage of new and amended laws to boost competitiveness in the market, and facilitate the growth of investments in the country.

At the same time, PEZA is looking into new frontiers in ecozone development to cater to unique, strategic, and big-ticket investments coming into the Philippines.

These new types of ecozones include, among others, the knowledge, innovation, science and technology parks; mineral processing, renewable energy hubs, aquamarine, halal hubs, bio-tech centers, defense industrial complexes, and pharmaceutical parks.

Guided by the new strategic priorities of the Department of Trade and Industry, Panga said PEZA is also looking to attract high-tech industries and emerging technologies in industrial manufacturing transport, technology media and telecommunications, health and life sciences, and mineral processing of green metals.

As regards the work-from-home (WFH) scheme, PEZA and the IT sector locators are eagerly awaiting the Board of Investments’ guidelines on allowing the registration of 100% WFH activity by IT locators operating in their respective IT centers.

PEZA said the guidelines will complement the Fiscal Incentive Review Board’s (FIRB) resolution and the Department of Labor and Employment’s guidelines on the conduct of WFH and a hybrid work arrangement.

To resolve the issue on the WFH scheme, FIRB had earlier allowed IT-business process management (IT-BMP) firms to transfer their registration from PEZA to BOI so they can continue their WFH arrangement while still enjoying their existing incentives beyond December 2022.

READ: IT-BPM staff may work from home beyond December

In registering with BOI, IT-BPM firms will not be subjected to Republic Act No. 11534’s (Corporate Recovery and Tax Incentives for Enterprises Act) jurisdictional requirement, which states that registered business enterprises (RBE) and/or registered activities must be conducted within the geographical boundaries of the ecozone or freeport where they are located to be entitled to fiscal incentives.

PEZA, however, had expressed earlier its preference for a law that will institutionalize the hybrid workplace especially for IT locator companies to put them on an equal footing with the BOI RBEs, which are not subject to the jurisdictional requirement.

“With the interim ‘paper transfer’ arrangement, we hope that it will allow as well for a re-registration mechanism for transferee RBEs in the IT centers that may want to restore their PEZA status once the enabling law is in place,” Panga said.