PEZA Demands for the Lifting of NCR Ecozone Moratorium 

Last Updated on April 25, 2022 by Lamudi

The Philippine Economic Zone Authority (PEZA) calls on the government to lift the ecozone ban in Metro Manila amid the forecasted demand for office space within IT ecozones. 

The IT and Business Process Association of the Philippines (IBPAP) said that around 450,000 to 650,000 seats would be taken within IT ecozones, as reported by BusinessWorld. PEZA Deputy Director General Tereso Panga also said that there would be spillover benefits of IT growth to the countryside if the moratorium is lifted.

In June 2019, Malacañang issued Administrative Order (AO) No. 18 to halt the approval of new ecozones in Metro Manila and spur economic activities in rural areas. The moratorium, however, would not prevent locators from operating on existing ecozones in the metro. 

Imminent Growth of the IT-BPO Market

Despite the challenges of COVID-induced restrictions, the IT-BPO sector is still at the forefront of the country’s economic development. Over the past two decades, IT-BPO companies in PEZA ecozones have invested P328.6 billion, according to Philippine News Agency (PNA)

In the same report, Panga said that IT-BPO flourished since PEZA allowed the registration of IT locators and vertical ecozones in 2000. Meanwhile, during the second quarter of 2021, the sector grew around 1.4 percent in revenue and 1.8 percent in headcount, according to IBPAP President Rey Untal in an Inquirer report. 

Despite the setbacks from the pandemic, BPO firms were able to continue with operations by adopting a 70% work-from-home scheme. But as restrictions eased and with the recent return-to-office order, many firms already went back to on-site operations. 

PEZA-Registered Buildings Still in High Demand

According to BusinessMirror, PEZA currently has 410 ecozones under its regulation, and over 290 of them are IT parks and centers. In NCR, there are 167 IT parks and centers, most of which are located in Makati, Quezon City, and Pasig. As of April 2021, inquiries for IT parks and centers in Metro Manila amounted to roughly P16 billion. 

Nearly a year later, PEZA-registered office buildings in Bonifacio Global City (BGC) were also in high demand. Commercial spaces in this area have a vacancy rate of 4%, while other buildings in business districts have an average of 18% vacancy rate. BGC has the largest number of multinational companies, and it only has two PEZA-accredited office buildings with over 10,000 square meters of space. 

Despite multiple calls to lift the moratorium, the Fiscal Incentives Review Board (FIRB) thumbed down PEZA’s request. The Board’s decision is aligned with the Duterte administration’s aim to increase investments outside Metro Manila.

PEZA Ecozones as Economic Drivers

In line with its mandate to bring about investments and create vertical and horizontal ecozones in every region, PEZA assured that its existing and newly proclaimed ecozones would be among the country’s economic drivers.

In a 2020 press release, PEZA unveiled its new ecozones, comprising nine IT centers, two manufacturing ecozones, and one IT park, which are expected to bring P6.4 billion worth of investment.

Meanwhile, the largest PEZA zone is set to rise in the town of Mauban in Quezon province. Called the Quezon Techno-Industrial Special Economic Zone, the project will be the first international airport and seaport strategically located in Eastern Luzon. PEZA Director General Charito Plaza said in a PNA article that the project will house approximately 2,000 factories and will generate 200,000 jobs.

According to Plaza, ecozones, in essence, are platforms for new technology transfer and development. Local government units (LGUs) hosting ecozones must then fully recognize its significant benefits, particularly in improving their income and classification. 

Makati is one example of a city with such an improvement. Based on the latest Lamudi data, the area’s commercial properties for rent under the P100k to P200k price range attracted a large number of leads in the first quarter of the year. Offices, buildings, and retails were the most popular commercial subcategories on Lamudi for the same period. 

Sources: BusinessWorld, Philippine News Agency, Inquirer, BusinessMirror, PEZA

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