By Bernie Cahiles-Magkilat
Investment pledges approved by the Philippine Economic Zone Authority (PEZA) in the first quarter this year steeply declined by 27.98 percent amid the imposition of the Enhanced Community Quarantine in Luzon.
PEZA Director-General Charito B. Plaza
PEZA Director General Charito “Ching” Plaza blamed the steep decline in the agency’s first quarter performance to the continuing uncertainty posed by the rationalization of incentives under the pending legislative measures and the impact of the COVID-19 pandemic.
According to Plaza, there were only 30 projects they approved in the first quarter of 25 percent lower than the 40 projects in the same period last year. These projects have committed investments of ₱2.326 billion only or 42.02 percent lower than the ₱4.012 billion in the first quarter 2019.
But employment grew 12.04 percent to 825,133 from 736,405 in the first quarter of 2019. Exports figure, which has a normal 2-month lag, also grew 15.48 percent in the first month of the year to $1.149 billion from $0.995 million in January 2019.
Plaza explained that even before the declaration of the ECQ on March 16, 2020, PEZA’s total approved investments from January to February 2020 were already down by 5.85 percent compared to the same period last year due to the uncertainty caused by the pending CITIRA Bill, which seeks to remove the current PEZA incentive packages and replace it with lower corporate income tax and other perks.
PEZA’s performance was further pulled down in March as the PEZA Board was unable to meet to tackle new investment projects resulting in no new additional investments for the said month.
“This resulted in the carry-over of the total PEZA investment figures as of February 2020 for March 2020 resulting in a bigger negative growth of 27.98% in the total PEZA investments for the entire first quarter compared to the same period last year,” said Plaza.
The effect of the ECQ on PEZA’s first-quarter employment and exports figures are still being completed as the deadlines set for these submissions coincided within the ECQ period. She said the effects of this global pandemic took a toll on PEZA’s performance as everybody is at a halt.
“Currently, PEZA has a lot of projects planned, pending applications that need to be reviewed, expansion plans, construction of new plants and new investors to partner with. However, because of the pandemic, ECQ measures are to be strictly followed to help flatten the curve of COVID-19 cases so that the lockdown can also be lifted and we can safely go back to work,” said Plaza.
Plaza has called for a “unified and synchronized ECQ plan, rules, policies, and enforcements by IATF, national agencies & LGUs that will address pandemic’s three main challenges that need to be addressed specifically health, economy, and public order.”
Last April 1, 2020, the Department of Trade and Industry (DTI) and the Department of Finance (DOF) have issued a Joint Memorandum Circular (JMC) No. 20-02, series of 2020 that allows export companies 80 percent of the domestic sale of their products of in demand PPEs, medical supplies, etc. during this period. Also, export incentives are going to be continuously honored or applied for exporting companies who will comply with the said joint memorandum.
Plaza emphasized that “Cooperation is key for government agencies to facilitate and balance our focus on public health and the continued production especially of essential products during this pandemic. We are grateful for the support and leadership of IATF during this time in making sure that the needs of our PEZA-registered enterprises are being met as they in turn aid our country’s frontliners during this crisis.”
Plaza, however, said that all is not lost stating there are forthcoming opportunities after the pandemic to make the country attractive to more investments that may be transferring from China.
“The pandemic shows how important it is to make our economy self-reliant, self-sustaining and resource-generating,” said Plaza.
“There is a silver lining as export companies are looking to expand to other ASEAN nations, and not just simply invest in one country, to ensure business continuity in the event of another global crisis. We are hopeful that this will mean more business opportunities for the country and more job opportunities for the Filipino people” said Plaza.
“The Philippines has a great advantage of having a strategic location in the globe, the endowment of fertile soil, and only two types of weather which means that we can plant the whole year. Additionally, our workforce is young and fluent in the English language. With more investors showing interest in our country, we must rebuild our economy after the crisis,” she concluded.