The Philippine Economic Zone Authority (PEZA) expects to exceed the 10-percent investment target set for the year as growth continues to pick up.
But Tereso Panga, director-general of PEZA, cites the need to introduce amendments not just to the incentives law but the PEZA charter as well to become more competitive.
Panga said there are key reforms that have to be introduced to the 28-year old PEZA law including the removal of a presidential requirement for ecozones, reinforcement of separate customs territory and exclusive jurisdiction over ecozones, and introduction of new types of ecozones.
In a statement over the weekend, said the agency anticipates the registration of big ticket projects in the last quarter of 2023.
Panga said PEZA approved P111.2 billion investments as of September, which is 72 percent of the P154.77 billion target investments for 2023.
That represents a 180 percent increase from in January to September in 2023.
In its September 7 board meeting alone, PEZA approved P14 billion investments.
This year, Panga said PEZA expects electronics and information technology services to continue to drive investments but cited the strong potential of metals and transport with the entry of electric vehicles . Top investors are from Japan Singapore, UK, China, Taiwan and South Korea.
“We attribute the 180-percent increase in investments as of September to the country’ s macroeconomic stability and the 6 to 7 percent GDP growth forecast which makes the Philippines one of the best performing economies in the region,” Panga said.
He said other contributing factors are the Philippines’ accession to the Regional Comprehensive Economic Partnership, the restoration of incentives for investors under the Corporate Recovery and Tax Incentives for Enterprises, and the recent proclamation of ecozones .
Panga is confident the signing of the free trade agreement with South Korea will in the future bring in more investments to the country.
In a press conference over the weekend, Panga said all indicators such as investments, number of projects and direct jobs point to a positive direction.
PEZA has identified the issues that need to be addressed on incentives including the
sunset period under CREATE.
“ We feel that it’s so short so that when locators will be graduating eventually to the regular income tax rate after 10 years, I don’t think we can be competitive against Asean economies which are operating at a much lower corporate income tax rate,” he said.
Panga said PEZA also wants to retain its separate customs territory status as this has been the selling point of the agency where multinational companies are able to bring in tax and duty free their inputs for production so that they can be competitive in the global market. Irma Isip
