The Philippine Economic Zone Authority (PEZA), which administers tax incentives to export-oriented enterprises, said approved investment pledges in the January-October period this year declined by 13.66 percent although jobs and exports have remained robust.
In a report, PEZA Director General Charito B. Plaza said they approved a total of 215 projects in the first eight months of the year with combined investments of P62.722 billion, or 13.66 percent lower compared with the P72.644 billion registered investments in the same period in 2020.
Most of the investments came from ecozone development projects with P28.754 billion and the manufacturing sector with P24.127 billion. These approved investment pledges would be located in Regions IV, VII, and National Capital Region.
Plaza explained that the pandemic’s effect of slowing down global and local economies was felt more in 2021 compared to when quarantines actually began in 2020.
“The decline in investment pledges and projects in PEZA was felt more in 2021. This is because when the first quarantines began in Philippines in March 2020, there were pending applications for investments and projects that were approved. Thus, 2020 performance didn’t immediately decrease,” explained Plaza.
The Director General said that “Due to the strict lockdowns implemented last year, the approval of projects filed in early 2020 were delayed until mid to late last year. Business groups, entrepreneurs, and exporters were on a wait-and-see mode and had lower risk appetite in their investments during the pandemic. Hence, the impact of the pandemic was really felt this year.”
However, Plaza highlighted that PEZA continued to operate and attract investments during the pandemic. “We retained business confidence and trust in PEZA as we were quick to adjust in the new normal and establish business assistance and reprieves,” she said.
Despite the slowdown in investment inflow, Plaza highlighted that its actual employment at ecozones grew 11.12 percent to 1,687,938 in the January-August this year.
At the same time, exports jumped 17.35 percent amounting to $40.692 billion in the first eight months of the year.
Plaza also noted that PEZA continued to contribute 65 percent of export income on commodities and goods, and export service income of 85 percent from ITBPO and tourism-oriented companies registered with PEZA.
Confident for Philippines’ competitiveness amidst the challenges of pandemic, Plaza said “PEZA remained aggressive to attract both local and foreign investors even during the pandemic. We did not let this crisis to hostage us; rather, we create various opportunities to continue our mandate.”
With this, Plaza assured that “We will constantly perform our best to attract investors to the country. We still have two months left this year, and there’s still a lot to happen. Let’s continue to have a positive outlook as we unite in reviving our economy.”
“Indeed, PEZA continued to perform its mandate to the utmost of our abilities in almost two years since pandemic affected global economy. In fact, PEZA locators and companies continued operations during pandemic until present,” explained Plaza.
She also noted that based on ecozone reports as of September 2021, a total of 90 percent of its registered companies are operating nationwide under various work arrangements, 3 percent higher compared with 87 percent in the same period.
“This is not possible of course without the help of our locators who kept the economy afloat,” noted Plaza.
In response to this, PEZA implemented various ‘balancing acts’ to protect both the country’s economy and Filipino workers. “We ensured that our services are operating non-stop without compromising the health, safety, and the jobs our workforce,” said the PEZA Chief.
Such balancing acts include the inclusion of COVID-related expenses as deductibles for enterprises availing of the 5 percent GIE incentive, the inclusion of IT-BPO companies and economic frontline workers in the subgroup of the A4 vaccination priority list to fasten the attainment of herd immunity for the reopening of the economy; and the allowance of 90 percent WFH arrangements.
PEZA’s continuous implementation of its brand of excellence, which is recognized globally by the IFC World Bank, and these acts have allowed PEZA to receive recognitions from various organizations such as the US Department of State which stated in its official 2020 Investment Climate Statements that “the business environment is notably better within the special economic zones, particularly those available for export businesses operated by PEZA, known for its regulatory transparency, no red-tape policy, and one-stop shop services for investors.”
The Presidential Communications Operations Office also, during the 2020 FOI Awards, gave PEZA a Special Citation conferred to government agencies who have exemplified an untiring dedication and commitment to the FOI program during the COVID-19 pandemic by keeping its channels of information open and active to the public.