Investment pledges in economic zones plunged due to the economic disruptions caused by the new coronavirus disease 2019 (COVID-19) pandemic that led to the closure of 802 companies and the displacement of nearly half a million workers.
Charito Plaza, director-general of the Philippine Economic Zone Authority (PEZA) in a virtual press conference yesterday said investments dropped 31.6 percent to P29.5 billion in January to May from P43 billion last year. The number of projects registered were also significantly lower, 113 from 196 a year ago.
In its last board meeting on May 26, PEZA approved 26 projects with a project cost of P13 billion of which 10 are in manufacturing, 9 are in IT, four ecozone developments , two are facilities providers and one is a logistics service provider.
Plaza admits the impact of the COVID disruptions would be felt hard in the second quarter of the year, especially on jobs and exports.
Exports generated by companies in ecozones as of the first quarter or pre- lockdown amounted to $4.3 billion, 8 percent higher than the $4 billion in the same period in 2019.
Total jobs to be generated by the new investments as of May will be a net of around 100,000.
As of May, Plaza said PEZA approved P10.4 billion worth of projects in manufacturing, down 8 percent from P11.3 billion last year.
Pledges in information technology and business process outsourcing (IT-BPO) more than doubled to P10.7 billion from P5 billion a year ago.
However, Plaza estimates around 100,000 workers in the sector have gone out of work as 33 percent of the IT-BPOs stopped operations as of June due to difficulties in shifting to alternative work arrangements and logistics issues.
Plaza said some workers in the sector have chosen not to work.
Plaza said 816 companies in ecozones have stopped operating, displacing 445,052 workers in the process. Those represented 25 percent and 28 percent, respectively, of the total companies and employment in PEZA zones.
About 19 percent of manufacturing ecozone companies stopped operating due to various constraints including the absence or lack of raw materials and the strict implementation of shuttle and housing requirements.
About 2,401 ecozone companies or 75 percent of total PEZA-registered companies are operating with some of them in skeleton staffing, assuring 72 percent or 1.12 million out of 1.6 million workers in these companies of steady jobs.