The Philippine Economic Zone Authority (PEZA) has called on lawmakers to amend its 30-year-old charter to grant the agency more powers, thereby strengthening the country’s appeal among foreign investors amid growing competition in Southeast Asia.

Jenny June Romero, group manager of PEZA’s legal affairs group, said this year is the most “opportune time” to amend the Special Economic Zone Act of 1995, which embodies the agency’s charter—after all, there are ongoing trade tensions that could hamper investor confidence.

Speaking on behalf of PEZA Director General Tereso Panga, Romero said that updating the law to reflect the current economic climate would empower the agency to formulate policies that enhance the promotion and facilitation of investments.

“We need to keep it true to the times because we're up against other economies promoting their own respective economic zones in attracting more FDI (foreign direct investments) into their countries,” Romero told members of the House Committee on Economic Affairs.

“It is not unknown to us that the Philippines is lagging behind compared to our ASEAN neighbors when it comes to attracting foreign investments,” she added.

According to a report by the United Nations Conference on Trade and Development (UNCTAD), the Philippines experienced a 38.5 percent surge in FDI net inflows to $8.94 billion in 2024, from $6.45 billion in the previous year.

Despite this, the Philippines remained the sixth highest among members of the Association of Southeast Asian Nations (ASEAN) in terms of value of net FDI inflows.

UNCTAD data showed that Singapore took the top spot last year, with $143.35 billion in foreign investments, followed by Indonesia ($24.21 billion), Vietnam ($20.17 billion), Malaysia ($11.26 billion), and Thailand ($10.58 billion).

This year, UNCTAD is estimating a potential sharp decline in foreign investments, given uncertainties in global trade, including the United States' (US) tariff policy.

To heighten interest in the country’s economic zones (ecozones), which are among the largest drivers of investment, PEZA believes that an amendment will strengthen its efforts.

Romero said one of the powers the agency is seeking is the authority to designate areas and industry-specific developments as ecozones, through the PEZA Board, chaired by the Trade Secretary.

She said this mandate is already harnessed by other investment promotion agencies such as the Authority of the Freeport Area of Bataan (AFAB) and the Tourism Infrastructure and Enterprise Zone Authority (TIEZA).

Under the law, ecozones and the benefits granted by the PEZA are only established once proclaimed by the president.

PEZA is also looking to amend provisions of the fire safety code, environmental compliance certificate, and occupational safety and standards to prevent overlapping functions with other agencies.

Romero said that reinforcing these powers under the PEZA would prevent contradictory interpretations of the law, thereby facilitating ease of doing business for prospective investors.

The agency is likewise proposing an update to its power to issue visas for foreign nationals working in ecozones.

It is requesting to extend the validity period for visas from two to three years, as well as streamline the requirements by removing the previously required alien employment permit.

Further, the PEZA seeks to redefine the scope of special economic zones to include the so-called new frontier ecozones.

Romero said this would include aquamarine, aviation, aerospace, aerotropolis, biotech centers, logistics hubs, creative industries, and pharmaceutical economic zones.

She added that these proposed amendments would complete provisions under the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy Act or CREATE MORE.

“We hope that the Congress will support our move to have our archaic PEZA law be amended and approved during this 20th Congress,” Romero told lawmakers.

From January to August, the PEZA has approved investments worth ₱105.83 billion, a 72 percent increase from ₱61.69 billion during the same period last year.

These pledges, which will eventually materialize into actual investments, cover 179 new and expansion projects.

The agency estimates that these projects will create over 40,000 jobs and generate $3.38 billion in export revenues.

With 429 ecozones nationwide, the PEZA has given the green light to ₱4.57 trillion in investments, creating 1.7 million direct jobs and $1.12 trillion in export revenues from 1995 to 2024.

For the 29-year period, Japan contributed the highest value in terms of foreign investments, equivalent to 26.43 percent of the total, followed by the US (13.25 percent), the Netherlands (11.06 percent), the United Kingdom (6.89 percent), and South Korea (4.67 percent).

PEZA said 34.22 percent of these investments went to the electronics manufacturing services and semiconductor manufacturing services sector, followed by information technology business process outsourcing (12.08 percent), tourism (6.72 percent), basic metal (5.43 percent), and transport (5.39 percent).