MANILA -- The Philippine Economic Zone Authority (PEZA) revealed that ecozones' contribution to employment and exports remain positive despite a decline in project registrations.
As of May this year, direct employment in PEZA-registered firms increased 3.5 percent to 1.39 million jobs from 1.35 million in 2017. Their contribution to the overall export revenues of the country in the same period also grew 5.3 percent to USD21.81 billion this year from USD20.72 billion last year.
Meantime, PEZA reported on Monday that investment approvals in the agency dropped by 55.9 percent in the first semester of 2018 compared to the same period last year.
PEZA Promotions and Public Relations Group Manager Elmer San Pascual said in a briefing that investment pledges in January to June this year only posted PHP53.04 billion from PHP120.2 billion in the first half of 2017.
He said the number of projects that registered with PEZA declined by 14 percent to 258 projects in H1 2018 from 300 projects in H1 2017.
PEZA Director General Charito Plaza attributed the drop in investment pledges to the uncertainties created by the the Tax Reform for Acceleration and Inclusion (TRAIN) Package 2. Plaza said the uncertainties are causing delays in business decision-making such as whether or not to set up or expand in the Philippines.
"[It’s] because of the uncertainties brought by the TRAIN 2. Although the objective of TRAIN [Package] 2 is meaningful, but it sends different interpretations, especially when it touches about incentives,” Plaza told reporters.
“And then our investors are also worried because in their interpretation of TRAIN 2, seems like PEZA will be demolished, so with the other IPAs, in the sense that the present authorities that we have now is being removed in the TRAIN 2, like the incentives authority will be under the proposed FIRB (Fiscal Incentives Review Board),” she added.
Investment pledges in PEZA across industries declined in H1 2018. Project registration for manufacturing activities decreased by 9.3 percent to PHP19.55 billion this year from PHP21.54 billion last year; information technology (IT) investment pledges likewise declined by 13.7 percent to PHP6.98 billion from PHP8.07 billion; planned investments for economic zone development also dropped 65.2 percent to PHP26.3 billion from PHP75.46 billion; and pledges in other sectors plunged by 98.4 percent to PHP234.5 million from PHP15.12 billion.
“Our industries are in the panic mode, particularly those who deferred their investments in 2017 because of the TRAIN [Package] 1, hoping that everything will be stabilized in 2018, only to be welcomed by TRAIN Package 2. And that has created a lot of uncertainties in them,” San Pascual stressed.
San Pascual noted that PEZA industries accounted for 70 percent of the country’s merchandise exports and 80 percent of the total services exports. (PNA)
