The Philippine Economic Zone Authority (PEZA) is encouraging San Miguel Corp. (SMC) to register its special economic zone and Freeport project in its $15-billion airport city in Bulacan with the agency.
This after President President Ferdinand Marcos Jr. on July 1 vetoed a bill proposing the creation of the ecozone and Freeport, citing “substantial fiscal risks” and “contrary to government’s objective of developing a tax system with low rates and a broad base.”
Charito Plaza, PEZA director-general, said SMC can register the ecozone under the aerotropolis model of the agency where it will be able to enjoy the generous incentives granted to big-ticket projects.
Plaza said the project can easily qualify under PEZA’s special ecozone design concept that incorporates logistics and transportation hub, warehouses , manufacturing with commercial , residential , industrial areas designed into a township.
Plaza said if SMC so decides to apply, PEZA can accept the application following the criteria and parameters provided in the Corporate Recovery an Tax Incentives for Enterprises Act and the Strategic Investments Priorities Plan.
Plaza said since this is a big- ticket project, it will have to be approved by the Fiscal Incentives Review Board and can vie for the most generous incentives if their project will meet the minimum $1 billion capital investment. “Under our framework, they will have to apply first as an ecozone developer,” Plaza said.
Plaza said ecozones formed through legislation create another bureaucracy or ecozone authority that must have annual budget allocation, which is a financial burden to government.
Unlike in PEZA, Plaza said the investor or ecozone developer as well as locators will take care of the development of the entire project.
Plaza said as an ecozone, the project needs to go through presidential proclamation after the PEZA gives it the green light.
“PEZA’s special ecozones are for specific products and specialized activities,” Plaza said.
She cited as an example agro-industrial ecozones which are agricultural lands where investors include those engaged in food processing, plantation of crops, livestock, poultry, agro chemicals, fertilizers, agro- equipment, tools, machineries. Agro-forestry ecozones are in timber lands and can has businesses in wood-based industries like plywood, veneer, furniture-making, and paper-making.
“The advantage of PEZA’s special ecozones are these are self-reliant, self-sustaining and resource-generating where the capital investment is poured in by the ecozone developers or jointly or separately by the investors. Government investment counterpart are roads leading to the logistics and transportation hubs . Big investors in fact , invest by building their own seaport and airport, power, utilities and facilities exclusive for company’s use. This will lower the cost of govt and generally, lower the cost of doing business in the country,” Plaza explained.
