The Philippine Economic Zone Authority (PEZA) Board gave a nod on 50 new projects, which are set to generate P22.5 billion investments and almost 9,000 job opportunities, as reported on their official website.
Among the approved initiatives, 33 ventures are in existing or operating locator companies. By estimation, these will create investments worth P13.8 billion and work opportunities amounting to 7,116. Meanwhile, 10 are ecozone proposals, and seven are ecozone facilities enterprise projects. They are expected to bring in P8.7 billion worth of investments and 1,801 employees.
PEZA Director General Charito Plaza shared that the approval on the new projects is the office’s initiative to prop up the economy and sustain the quality of investments despite the threat of the coronavirus outbreak.
She added that the agency will continue to register and oversee public and private economic zones, as they encourage investors to set up businesses in the country even in the midst of the crisis.
According to the latest figures recorded in May 2020, PEZA has generated investments worth P29.54 billion, giving a green light on 113 projects. As of January 2020, they were able to give jobs to 1.6 million people. In terms of exports, about $4.3 billion was generated.
Earlier in June, the investments arm of the trade department appealed to the government to maintain status quo on incentives, with the aim of retaining investors in the country in the midst of the crisis. Plaza recognized the possibility that export firms were most likely to save resources by closing branches in countries that didn’t have a stable economic environment.
According to her, the status quo can lend security among registered businesses and integrity on the government’s end, as it continues to acknowledge existing contracts and agreements, despite the global emergency. In line with this, PEZA recommended retaining the current gross income tax policy on registered enterprises.
Mid-June, the agency approved tax reductions and allowed companies that are already using the five percent gross income earned incentive to include coronavirus-related expenses as a deductible expense, as reported by Manila Bulletin. These costs are those directly related to managing operations during the quarantine period, such as housing workers, deploying shuttle services, sanitizing work areas and operation facilities, and testing of employees.
PEZA extended its assistance to registered enterprises in the form of suspended rental payments. According to Memorandum Circular 2020-2, businesses in four government-owned ecozones can settle the fees over 90 days. Deferred payment is likewise provided for utilities and processing. Meanwhile, old and unpaid accounts are given grace periods. PEZA encouraged privately-owned ecozones to do the same to offer assistance to investors.
On top of these efforts, the agency endorsed a minimum of five years of rehabilitation, enabling exporters to recover from the impact of the pandemic, which directly hit global trade.
Aside from tax incentives and financial reprieve, PEZA has forwarded its inputs on the Philippine Economic Stimulus Act (PESA) bill to the Congress. The proposed legislation seeks to provide funds for the promotion of the country’s growth and development after the coronavirus outbreak. The agency particularly recommended allocating P150 billion to create an investor-friendly environment in the country, attracting more businesses to set up shop in different locations all over.
P100 billion is proposed for developing public economic zones in every region of the country. The budget would cover the construction of infrastructures, the creation of IT, logistics, and transportation centers, and improvement of utility and facilities with the aim of reducing the costs of doing business.
Prioritizing education, PEZA asked Congress to designate P13 billion to set up PEZA Institute and Knowledge Resource Centers, learning hubs where Filipinos will be equipped to become knowledgeable, skillful, and world-class workers. The training centers will be stationed in four public ecozones, as the programs will be in partnership with state universities and colleges.
Meanwhile, P1.3 billion of the proposed budget will be spent on the creation of accommodations for employees working in ecozones in Cavite, Baguio, Bataan, and Mactan. Such public ecozones are envisioned to be equipped with medical facilities as well, which is why PEZA proposed an P800-million budget for a 100-bed capacity hospital constructed for each of the locations mentioned.
The government’s effort to support investors, including approved project proposals, economic relief from the crisis, and future-oriented infrastructures all over the country, are expected to strengthen and improve investments, re-establishing a vibrant economy.
Sources: PEZA, Manila Bulletin