PEZA opposes new ecozone authorities

Published February 27, 2020, 12:00 AM

by manilabulletin_admin


The Philippine Economic Zone Authority (PEZA) has strongly objected to bills pending in the Lower House calling for the creation of 9 new ecozone and freeport authorities stressing this will only further burden the government coffers with estimated ₱18-billion cost and dilute or mess up the investment promotion agency (IPA) as the authority over ecozone developments in the country.

In a statement, PEZA Director-General Charito B. Plaza also echoed the position of the National Economic and Development Authority (NEDA) against the pending bills in the Lower House calling for the creation of 9 new ecozone and freeport authorities, which calls for ₱2 billion each in government expenditures or a total of ₱18 billion.

On Wednesday, PEZA submitted its position paper to the House of Representatives’ Committee on Ways and Means to express its disagreement on 9 pending house bills.

Instead of creating multiple new ecozone and freeport authorities, PEZA Director General Charito B. Plaza emphasized these new ecozones must be developed by the private sector or in joint venture with PEZA and placed under PEZA.

“PEZA fully supports the creation of more economic zones as these are the driver for economic growth in localities hosting them. However, creation of ecozones should continue to be under one PEZA framework or enabling law,” said Plaza.

Plaza explained, “There is no need for legislating another or more ecozone and freeport authorities. It is unnecessary for this will just burden our bureaucracy, add cost to government operations, and create internal competition of ecozone authorities in the country instead of having a united IPA.”

She pointed out that in accordance with Republic Act (RA) No. 7916, as amended, also known as “Special Economic Zone Act of 1995,” PEZA is the principal government agency which is tasked to operate, administer, manage and develop export-oriented economic zones in the country. PEZA is the agency that operates ecozones nationwide, except for few areas which have their own investment promotion agencies and it promotes the flow of foreign or local investors into the economic zones. PEZA celebrates its 25th anniversary this year as RA 7916 was enacted on February 21, 1995.

Plaza pointed out: “The law creating PEZA gave it the mandate to establish special economic zones which is suitable to the land in the area and to strategic locations in the country. The creation of ecozones, do not need to be from government coffers, but through options like joint venture, or Public Private Partnership either with foreign or domestic entities.”

Since 1995, PEZA actively pushed for private sector-led ecozone development so that PEZA can focus on its role as a regulatory agency and as an “enabler of business” given the Authority’s role as an IPA. The government should not compete with the private sector as they can do the job better as ecozone developers; also, considering the many restrictions and challenges on the government’s budgeting and procurement process.

As a result of this strategy, PEZA has significantly increased the number of operating ecozones that was inherited from EPZA in 1995 from the original 16 operating ecozones to 404 operating ecozones nationwide as of the end of 2019.
However, she said that in the number of house bills proposing the creation of new ecozone authorities, they specifically propose ₱2 billion from the national government just to create a special economic zone authority in any part of the country and to administer the same incentives under RA 7916.

Socio-Economic Planning Secretary Ernesto M. Pernia’s in a letter addressed to the Chair of the HOR Committee on Economic Affairs on 3 February 2020 said that NEDA supports private sector-led initiatives rather than the establishment of new publicly-owned ecozones and freeports.

Further, Pernia stated that “In general, we find the creation of additional development authorities contrary to the government’s continuing efforts to rationalize the bureaucracy. Specifically, the Philippine Development Plan 2017-2022 supports the full implementation of a national rightsizing program which requires agencies to rationalize their staffing pattern in consideration of other agencies’ mandates and functions to eliminate duplication.”

“It is basic in administrative law of the country that the creation of new administrative or executive bodies should achieve simplicity, economy and efficiency in government operations and minimize duplication and overlapping of activities,” said Plaza.