MANILA -- Philippine Economic Zone Authority (PEZA) Director General Charito Plaza said there is a need to amend the PEZA law, so the investment promotions agency (IPA) will be protected from uncertainties brought about by the second package of Tax Reform for Acceleration and Inclusion (TRAIN).
Plaza told reporters that the IPA wants to be identified as a government-owned and controlled corporation (GOCC) under the Office of President, instead of being a mere attached agency of the Department of Trade and Industry (DTI).
“We are proposing an amendment to the PEZA law because it is now 23 years old. There are so many weaknesses and lacking. We want PEZA to be directly under the Office of the President already as a GOCC, because right now we are attached to the DTI and we don't know our personality,” the PEZA chief said.
Furthermore, she said that PEZA should be given a free hand to introduce enhanced incentives to its locators.
“We want to enhance incentives to basic industries such as steel. Add and enhance incentives to industries that will locate in the countryside and the war-torn and disaster prone areas like the Marawi. So we will be adding more incentives for these industries,” she said.
The amendments being sought should also allow the extension of PEZA tax perks to the information technology and business process outsourcing (IT-BPM) sector, Plaza added. Moreover, the IPA should be able to give subsidies -- in power or land -- to multi-billion dollar projects, but only upon the approval of the President.
The director general expressed confidence that these proposed amendments will gain sufficient support in Congress.
“These are some forms of big subsidies that can attract basic, major and strategic industries in the world. [It’s being done in] China [and] Vietnam that’s why they get the big investors, they provide subsidy,” the official noted.
PEZA earlier reported that investment pledges have dropped 56 percent to PHP53 billion in the first half of the year.
Plaza attributed this declining registration of investment projects to the “uncertainties brought by the TRAIN Package 2”, as investors fear to lose their incentives under the next part of the tax reform bill.
“PEZA has been proven to perform well. Incentives are proven to be good and attract investors. They are happy,” she said.
PEZA data showed that in the past 23 years, it has brought in PHP3.6 trillion worth of investments, created nearly 1.4 million local jobs and contributed USD706 billion to the total export revenues of the country.
“PEZA is gearing up to providing more and better package of incentives that will attract more investors. So we will ask Congress to allow PEZA to continue and even enhance what it has been doing,” Plaza stressed. (PNA)
