THE Philippine Economic Zone Authority (PEZA) said it is on pace to exceed the lower end of its 2023 investment approvals target range, judging from the strong results posted in the first seven months of the year.
It also said the P300 billion high end of the target range for 2023 is doable if all current investment leads pan out.
“Our conservative target (this year) is P160 billion but if all (investment) leads are realized within the year, there is a strong chance that we can still hit our (stretch) target of about P300 billion,” PEZA Director General Tereso O. Panga said in a television appearance on Monday.
In a statement on Monday, PEZA said it logged P97.16 billion worth of approved investments in the first seven months, up 332.05% from a year earlier.
The approved investments cover 117 new and expansion projects, which are expected to generate $2.21 billion worth of exports and lead to the creation of 18,407 jobs.
In July, the PEZA Board approved P16.578 billion worth of investments from 15 new and expansion projects, which are expected to generate $419.5 million exports and create 2,983 jobs.
“I would say that we are on track with our target. Right now, the latest investment approvals (are) (over 330%) larger than what we approved last year. I think with the five months to go, we are confident that we will be able to exceed our set targets for 2023,” Mr. Panga said during his TV appearance.
PEZA also said in its statement that the Office of the President (OP) issued Proclamation Nos. 299, 300, and 303 on July 25 which approved the creation of three economic zones in Naga City, Camarines Sur; Bacolod City; and Dumaguete City.
Proclamation No. 299 covers the Naga City Industrial Park in Barangay Carolina, while Proclamations 300 and 303 cover Lopue’s Mandalangan IT Center in Barangay Mandalangan, Bacolod City and Marina Town Dumaguete IT Center in Barangay Piapi, Dumaguete City, respectively.
The three ecozones are projected to generate P750.38 million worth of investments.
In April, the OP also proclaimed two new ecozones in Batangas province and Bacolod City, which are expected to bring in P1.64 billion worth of investments.
Currently, six PEZA ecozones are awaiting proclamation. These ecozones are located in Parañaque City (two IT Centers), Pasig City (IT Center), Tanza, Cavite (manufacturing site), Ilocos Sur (manufacturing site), and Sarangani Province (agro-industrial site).
“We remain on track with our goal of establishing at least thirty ecozones every year that create centers of economic progress outside the National Capital Region to spur countryside development,” Mr. Panga said.
During the TV interview, Mr. Panga said PEZA is also seeking to attract power companies interested in embedding their facilities in ecozones.
“Because of our franchising authority, what we are doing is promoting a distributed energy system (by) attracting power generating companies to… make power cheaper (by eliminating) transmission charges,” Mr. Panga said.
He added that embedded power will ultimately make Philippine exports more competitive.
Mr. Panga said PEZA supports the Marcos administration’s plan to amend the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
“I think it is about time to look into that because our locators are saying that they should be able to enjoy the incentives as promised to them in the CREATE and contained in the registration agreement with PEZA,” Mr. Panga said.
He added that the amendments to the CREATE could be done “through administrative proceedings and amending the implementing rules and regulations (IRR).”
“We agree with the time-bound incentives. But if you look at the 10-year sunset period and even the maximum 17 years of (enjoying) the incentives… our locators will graduate to regular corporate income tax (CIT). And we’re up against ASEAN economies offering a much lower CIT rate,” Mr. Panga said.
“I think this will need revisiting by government so in the end, we will be able to keep our gains and keep our locators expanding in the Philippines rather than losing them to other competitors in the region,” he added.
Last month, Presidential Communications Office Secretary Cheloy Velicaria-Garafil said that some of the issues raised by companies include the 12% value-added tax (VAT) on indirect exporters supplying goods and services to export-oriented enterprises; non-refunds on VAT for local purchases by domestic market enterprises, and ease of doing business issues.
The concerns were raised by companies during a meeting with President Ferdinand R. Marcos, Jr. on the sidelines of the third Asia-Pacific Economic Cooperation Business Advisory Council meeting in Cebu City.
Some of the proposed amendments to the CREATE include allowing domestic market enterprises covered by the 5% gross income tax regime to register as VAT taxpayers, which will allow them to charge domestic customers output VAT, or obtain refunds from the Bureau of Internal Revenue. — Revin Mikhael D. Ochave