The Philippine Economic Zone Authority eyes a 7% increase in investment pledges for 2021
The growth target is an improvement from last year’s P95.03 billion in registered pledges, or an increment of about P6 billion
The increase is expected following recent passage of the Corporate Recovery and Tax Incentives for Enterprises Act
The Philippine Economic Zone Authority (PEZA) is eyeing a 7% increase in investment pledges for 2021, an improvement from last year’s P95.03 billion in registered pledges, PEZA deputy director general for policy and planning Tereso Panga said during a recent online press briefing.
“We are looking at an increment of about P6 billion and we have a strong basis for this projection because of the increasing foreign direct investments,” Panga said.
Helping growth would be more interest from investors and the positive effect of the recent passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
He noted the United Nations Conference on Trade and Development in 2020 reported FDIs in the Philippines rose by 29% despite the pandemic, while other Southeast Asian countries have generally shown the opposite trend.
Panga said the PEZA Board already approved 57 projects worth P25.382 billion in the first quarter, 53.87% higher than last year’s approved projects.
Of the total, 22 are export projects and 15 are information technology projects, while seven projects are for facilities, three for logistics, one for utilities, and one tourism enterprise. The rest are ecozone development projects.
PEZA remains positive it can attract more investments to the Philippines, especially with the enactment of Republic Act (RA) No. 11534 or the CREATE Act. The new law aims to gradually lower corporate income tax from 30% to 25%, and to streamline government’s fiscal incentives for both foreign and domestic investors.
PEZA earlier welcomed the signing of the new law even though it said the law offers “win some, lose some” opportunities for different industries. The act sustained the authority’s argument to place a high premium on export-oriented enterprises in terms of provision of fiscal incentives, particularly perks for new projects that will be applied with investment promotions agencies like PEZA.
Meanwhile, PEZA said it will seek clarification from government on its request to lift the moratorium on new economic zones in Metro Manila, particularly for investments in the information technology (IT) sector.
Panga said provisions of the CREATE law allow eligible projects, including IT projects, to operate with incentives in Metro Manila, adding that the new law should supersede Administrative Order 18, which provides the moratorium on new eco zones.
“But nonetheless, the strategy of PEZA is to get the categorical position from OP (Office of the President) if we can already proceed with proclamation of ecozones in Metro Manila,” Panga said.
PEZA will also seek clarification on the matter with the Department of Finance and the Fiscal Incentives Review Board, which oversees the administration and grant of tax incentives by investment promotion agencies.
PEZA director general Charito Plaza noted that in Metro Manila, only Makati, Ortigas, Quezon City, Alabang, and Taguig currently host IT-business process outsourcing zones.
Plaza said other cities in Metro Manila that currently do not host IT-BPO zones are also seeking the lifting of the moratorium under AO 18.