AFP, PEZA to develop defense industrial ecozones

Published July 31, 2021, 8:30 AM

by Bernie Cahiles-Magkilat

The Philippine Economic Zone Authority (PEZA) and the Armed Forces of the Philippines (AFP) have signed a memorandum of agreement (MOA) to explore the utilization of a portion of military reservation areas as economic zones. 

AFP Chief of Staff LTGen. Cirilito Sobejana and PEZA Director General Charito B. Plaza signed the MOA Thursday, July 29.

The AFP, through its Real Estate Office under BGen. Augusto Gaite, has identified several underutilized lands by the Philippine Army, Philippine Air Force and Philippine Navy across the country for potential development into different types of ecozones such as military arsenal, export-processing, aircraft MRO and ship repair facility, agro-industrial, eco-tourism, infomation technology park, and/or green ecozone townships. 

“Creating a defense industrial complex will not just modernize the country and the defense forces, but will also create jobs and put to productive use the long idle military reservation areas. Given the country’s strategic location, the Philippines could serve as the manufacturing hub of defense and other industries in the region,” said Plaza. 

In her capacity as BGen. of the PAF RESCOM and chairman of the PA Multi-Sectoral Advisory Board,  Plaza proposed an agency-to-agency cooperation with the AFP to ensure its continuous ownership over the land assets (including all improvements) subject of ecozone development through a usufructuary and lease agreement with PEZA. 

Under the MOA, PEZA will help co-manage the defense industrial complex (DICs) with the AFP and promote investments into these ecozones through the grant of fiscal incentives to eligible developer and locator investors. 

On real estate management, PEZA currently owns and manages 4 public ecozones in Cavite, Mactan, Baguio and Pampanga. PEZA is also the operator of once idle public lands owned by Camp John Hay, Fil-Oil Properties and Mactan International Airport, which were annexed to the public ecozones (through a usufructuary agreement) to accommodate the new and expanding locator companies in the said areas. 

In terms of attracting defense-related industries, PEZA is in talks with prospective and existing investors into manufacturing of precision guided munitions, armored vehicles, naval vessels, military weapons and equipment, nanofiber for military uniforms, drone technology, and various RFID and software applications. 

Apart from the supply opportunities to AFP and PNP, it is hoped that the existing regulations can be relaxed to allow for foreign-owned defense-related industries to operate in the ecozones to cater to the export market. 

As both are national security experts and strong peace advocates, DG Plaza and COS Sobejana have likewise initiated the MOA as a means to engage in a new warfare–to eradicate poverty and terrorism particularly in conflict areas through the creation of ecozones in the countryside. It is believed that high poverty and unemployment rate  trigger participation in insurgencies and drive people to extremism, as the primary reasons behind domestic violence. The ecozones can provide the needed jobs and inclusive growth that will make the people become more productive, respectful of the authority, and responsible members of their communities. 

Towards this end, AFP will help PEZA in maintaining security, peace and order in the ecozones and in strengthening the capability of the ecozones in disaster preparedness to ensure business continuity.

While facilitating a healthy accumulation process, the cooperating parties with the support of host LGUs and industry stakeholders should give an equal focus on enhancing community relations and community involvement in ecozone development to achieve a regime of peace and harmony in the ecozones.