Investments registered with the Philippine Economic Zone Authority (PEZA) are seen growing 5 to 10 percent after a two-year slump, a conservative target due to the lingering uncertainties brought about by tax reform.
Charito Plaza, PEZA director-general, said the target would be higher if an investor-friendly (Corporate Income Tax and Incentive Rationalization Act) is passed.
Plaza said the agency has approved two big ticket projects – that of Panhua Group’s $3.5-billion integrated steel project and Canada’s North Star Valley Food Co. for an agricultural ecozone project for cacao, avocado and mango plantation and processing.
She added there are pending applications for new and expansion investments but the proponents are waiting for the passage of the CITIRA.
“Uncertainties (linger) on the fate of CITIRA. Existing industries are holding off expansion… including prospective investors because laws and policies affect their decision-making,” said Plaza.
The PEZA-private sector technical working group (TWG) in a position paper submitted to the Senate bats for the “grandfather rule” where the new law would be prospective and not retroactive in consideration of the contracts signed by PEZA with the investors.
The TWG also pushes for a 10- to 15-year transition period to shifting to the corporate income tax.
“Given the Iran-US tension which might escalate, the US-China trade war, the domestic events such as disasters as well as efficiency factors that are still lacking, we pray that the senators consider the vulnerability of exporters because they are affected by international events,” Plaza said.
PEZA also continues to promote investments, conducting both inbound and outbound missions.
A 60- man delegation from American companies will visit PEZA in February to explore investments to our agro-industrial zones.
PEZA registered investments of P117.54 billion in 2019, down 16 percent from P140.24 billion in 2018, the lowest in six years.
PEZA investments in 2019 were fuelled by local investors with P68 billion, but this is down 5 percent from P71 billion in 2018. Foreign investments plunged 28 percent to P49 billion from P68 billion.
Real estate led all sectors, indicative of continued development of ecozones, to P68 billion, down 15 percent from P78 billion in 2018.
Manufacturing followed with P30 billion worth of registered projects at P30 billion led by electronics, P12 billion. – I. Isip
