Agro-industrial economic zones eyed in Davao City

DAVAO CITY – The city government of Davao is eyeing the establishment of agro-industrial economic zones in two areas to attract more investments here, an official of the Davao City Investment Promotions Center (DCIPC) said.

During the media forum Wednesday, June 29, at Habi at Kape at the Abreeza Corporate Center, Christian Cambaya, head of the Investor Assistance and Servicing Unit of the DCIPC, said that the areas initially identified for conversion into industrial economic zones include a 25-hectare property of the National Development Corp. (NDC) in Barangay Daliao, Toril and an 80-hectare privately owned property located in adjacent Barangays Bunawan and Tibungco.

He added that there is an ongoing negotiation for the acquisition by the city government of the property in Daliao from the NDC so that this city can proceed with its plan of establishing its own industrial economic zone.

Cambaya explained that the Philippine Economic Zone Authority (PEZA) requires an area of at least 25 hectares to qualify as an industrial park.

He said the city government acknowledged the need to establish industrial parks that could host foreign firms that choose to invest in the city and take advantage of the fiscal and non-fiscal incentives granted by the national government for locators in identified economic zones.

According to the PEZA, non-fiscal incentives include the granting of special non-immigrant visas with multiple entry privileges for non-resident foreign nationals in a PEZA-registered economic zone enterprise, particularly investors, officers, and employees in supervisory, technical, or advisory position, and their spouses and unmarried children under 21 years of age; employment of foreign nationals; and long-term land lease of up to 75 years.

It said fiscal incentives that firms can avail of are income tax holidays of four to seven years; a five percent Special Corporate Income Tax or enhanced deductions for 10 years upon the lapse of the period for income tax holidays; tax-and-duty-free importation of capital equipment, raw materials, spare parts, or accessories; Value-Added Tax (VAT) exemption on importation and VAT zero-rating on local purchases for goods and services directly or exclusively used in the registered project or activity of export enterprise for the period of registration of the said project or activity; domestic sales allowance of up to 30 percent of total sales; and exemption from payment of local government taxes and fees for the duration of the period of availment of special corporate income tax.

There are 22 agro-industrial economic zones in the country, according to PEZA.

Cambaya added that the local government would undertake a pre-feasibility study to give government officials “a bird’s eye view” of what kind of park and what other areas in the city have potential for conversion into economic zones.

He said the DCIPC hopes to open the competitive bidding for the pre-feasibility study next month, start with the preliminary assessment by September this year, and come out with the initial result by January next year.

Cambaya added that a full-blown study will be undertaken next year.

“We acknowledge the need for industrial parks in the city because these are eco zones that are actually needed by investors, especially foreign,” he said.