The Philippine Economic Zone Authority (PEZA) will formally ask President Marcos to lift the seven-year moratorium on the establishment of ecozones in Metro Manila, a move expected to encourage more investments in the information technology and business process management (IT-BPM) sector.

PEZA Director General Tereso Panga said the board of the investment promotion agency (IPA) has finalized a resolution recommending the lifting of Administrative Order (AO) No. 18.

He said both Trade Secretary Cristina Roque and Finance Secretary Frederick Go have given him the go-ahead to submit the proposed policy to the Office of the President (OP), which will decide on the matter.

“The President will have to issue an administrative order to supersede the previous issuance, guided already by these new directions and policy directives,” Panga said in an interview last week.

Enacted in June 2019 under the previous Duterte administration, AO 18 suspended the processing and evaluation of new ecozones in Metro Manila in a bid to spur investments in the provinces.

These ecozones, which may take the form of IT parks and centers, allow registered enterprises to qualify for fiscal and non-fiscal incentives provided by PEZA.

While IT-BPM firms are still expanding in National Capital Region (NCR), Panga said the current moratorium has forced these companies to operate only in existing PEZA-accredited spaces.

Property consultancy Colliers said in a report last month that while fiscal incentives are crucial, especially for firms entering the Philippines for the first time, location and accessibility often carry just as much weight.

It noted that there are still around 1.46 million square meters (sqm) of available PEZA space in Metro Manila. However, only about 478,000 sqm, or nearly 33 percent of total, is located in preferred central business districts (CBDs).

Around 70 percent of IT-BPM transactions were recorded in Metro Manila during the first quarter, with the remaining 30 percent taking place in the provinces, according to Colliers.

By lifting the suspension, Panga said this would widen the options for companies seeking to locate in key CBDs in the capital region, such as Makati City, Ortigas Center, and Fort Bonifacio in Taguig City.

While the government issued AO 11 in 2023 to allow the processing of certain Metro Manila ecozone applications that had already secured prequalification before the moratorium, many prospective ecozones were still unable to secure government approval.

Panga said those already in the pipeline to apply for ecozone status include Ayala Land Inc.’s (ALI) Arca South in Taguig and Robinsons Land Corp.’s (RLC) Bridgetowne in Ortigas.

Under PEZA’s proposed policy directive, these developers will no longer enjoy their own set of incentives, especially since these developments are already operating.

Still, Panga said this should not discourage these companies from registering their properties as ecozones, as it would be more “difficult” for them to attract new locators without such status.

The PEZA chief said the IPA is already conducting what he described as a “test case” for the new policy through the ecozone application of a Yuchengco Group of Companies (YGC) property.

“So, once the test case is approved, this will now pave the way for the other applications to follow,” he said.