Leechiu Property Consultants (LPC) said lifting the moratorium on the establishment of economic zones (ecozones) in Metro Manila will bring in new information technology and business process management (IT-BPM) companies to the Philippines.
In a statement, the property consultancy said more ecozones in the National Capital Region (NCR) will help achieve the target of 1.1 million jobs creation by 2028, and generate another 3.3 million indirect employment.
According to LPC, new IT-BPM entrants typically open their headquarters in the NCR which as of 2021 had about 70 to 75 percent of the industry headcount.
Ecozones which are registered with the Philippine Economic Zone Authority (PEZA) enjoy fiscal incentives. Locators enjoy the one-stop-shop services given by PEZA for all their permits, licenses, and taxes.
In 2019, Administrative Order 18 was passed imposing a moratorium on new applications for Metro Manila PEZA ecozones to help disperse investments to provinces.
LPC said this created a barrier to entry for new IT-BPM tenants preferring to locate in Metro Manila
The Corporate Recovery and Tax Incentives for Enterprises law allowed the same investment incentives similar to the PEZA accreditation, albeit not necessarily within ecozones. But these companies will need to liaise with multiple national government agencies and the local government.
According to LPC, IT-BPM companies have been the primary growth driver of Philippine real estate for more than 20 years.
In the first half of 2023, 24 percent of the total office space leased in the country were to IT-BPM firms in Metro Manila.
“Opening up applications for new Metro Manila PEZA locations will encourage new tenants and hasten new employment,” LPC said. – Irma Isip
