Members — particularly those in such business enterprises as manufacturing — of the Rotary Club of Manila, Asia's oldest and biggest Rotary organization, were personally enticed by Philippine Economic Zone Authority director-general Tereso Panga of the benefits, particularly tax perks if they expand operations in the country or poured in investments in the ecozone.

Panga, who served as guest speaker at RC Manila's 14th General Membership Meeting at the Manila Polo Club, Makati City, on 5 October 2023, relayed to the prospective ecozone investors the various fiscal and non-fiscal Incentives offered by PEZA.

He said the investment promotion agency offers income tax holidays or ITH of four to seven years depending on the industry tier and location, once onboard PEZA-run ecozones.

For the National Capital Region, locators are entitled to four years of ITH for those that are in Tier 1; five years of ITH for Tier 2, and six years for those belonging to Tier 3.

For locators in Metropolitan areas or areas contiguous and adjacent to NCR, a five-year ITH is given to Tier 1; six years for Tier 2, and seven years for Tier 3.

"A five percent Special Corporate Income Tax holiday is also provided for 10 years for export-oriented projects, while enhanced deductions for five years are given to locators involved in domestic-oriented project activities," Panga said.

Other notable benefits awaiting interested PEZA locators include Customs duty exemption on importation of capital equipment, raw materials, spare parts, or accessories directly and exclusively used in the registered project/activity for a maximum period of 17 years unless otherwise extended under the Strategic Investment Priority Plan of the Philippine government; domestic sales allowance of up to 30 percent of total sales for export-oriented companies; value-added tax exemption on importation and VAT-zero rating on local purchases of goods and services directly and exclusively used in the registered project or activity for a maximum period of 17 years, unless otherwise extended under the SIPP; and exemption from payment of national and local government taxes and fees for the period of availment of the 5 percent special corporate income tax incentive

Also, PEZA locators are entitled to employ foreign nationals; can enjoy long-term land leases of up to 75 years, and are entitled to the PEZA 2-year special non-immigrant visa issued to expatriates and their dependents as well as foreign workers.

PEZA performance

Panga earlier reported that the investment promotion agency had reaped an overwhelming 114 percent increase in investments in the second quarter of the year, following the approval of 61 new and expansion projects for the period of April to June 2022.

PEZA records showed that total investments are expected to bring in a total of P14.347 billion, 114.93 percent higher than the P6.675 billion approved investments for the second quarter of 2022.

Of the 61 approved new and expansion projects, 16 are for the Information Technology industry,  15 for export/manufacturing, 13 for facilities, 13 for ecozone development, and two for IT Facilities and Logistics.

Meanwhile, expected jobs to be created by those projects total 11,186, which is 29.06 percent higher  compared to the 8,667 projected jobs in the 2nd quarter of 2022.

For the January to June period of 2023, a total of 90 new and expansion projects have been approved and are expected to bring in P22.488 billion in investments, $747.093 million in exports, and 14,354 jobs.

Japan remains PEZA's top country investor in the first half with P8.007 billion in investments followed by Singapore with P2.169 billion.

Also, Panga said that Japan topped the countries with the highest approved foreign investments at 27.34 percent, followed by Filipino companies at 23.19 percent, and American companies in the third spot at 14.82 percent.

"PEZA accounted for 60.5 percent of the total foreign investment commitments in Q2 2023 with P35.75 billion," he told the Rotary Club of Manila members.

From 1995 to 2022, PEZA's total dividends turned in to the National Treasury was a total of P26,889,567,738.07.

Ecozones on the rise

To date, Panga said PEZA hosts 422 ecozones and 4,352 locator companies/projects throughout the country.

Of said number of ecozones, 299 are dedicated to IT Parks and Centers, 79 to manufacturing firms, 24 to agro-industrial parks, 17 are to tourism and three are to medical tourism ventures.

Based on the Philippine Development Plan 2023-2028, President Ferdinand Marcos Jr. has projected that "the creation of ecozones will…maximize investments and promote industrial dispersion, especially outside metropolitan areas. Further, the ecozones will be integrated into the local economy by relaxing the requirements, facilitating the free flow of parts, components, and other inputs, and increasing open trade between zone locators and firms outside the zones."

In the coming years, various ecozones will be sprouting, while the ecozones that have already been officially proclaimed by the Office of the President include Robinsons Cyberpark Bacolod, Lima Technology Center (Expansion), Hermosa Ecozone Industrial Park (Expansion), Philtai Central Luzon Industrial Park, Felcris Centrale IT Park, ECCO 4 Building, Lopue's Mandalagan IT Center, Marina Town Dumaguete, Naga City Industrial Park and Kamanga Agro-Industrial Economic Zone (Expansion), altogether with investments totaling P3.418 billion.

Ecozones pending approval are MetroCas Industrial Estates-Special Economic Zone, Suyo Economic Zone and the expansions of Kamanga Agro-Industrial Economic Zone and Lima Technology Center, with a total investment amount of P773.962 million.

As of September 2023, the governing board of PEZA has approved big-ticket investments with a total committed investment of P193.200 billion, and these are the First Pangasinan Property Development Corp., Raedang International Builders and Development Corp., Green Energy with Torrefaction Technology Inc., Dyson Electronics PTE, Ltd. Philippine Branch, Sunpower Philippines Manufacturing Ltd., Isla Import Terminals Inc., MJ Landtrade Development Corp., YCO Cloud Malvar Inc., Savya Land Development Corporation, RLGB Land Corporation, Robinsons Land Corporation, TDK Philippines, P. Imes Corp., Best-one Ever Luck Realty Corp., Knowles Electronics (Phil) Corporation, WIPRO Phils. Inc., Glensworth Development Inc., ACI Inc., Megaworld Corporation and Kyungshin Pampanga Philippines Inc.

Currently, Panga said PEZA is focused on seven priority sectors, that is,  advanced manufacturing, extractives (green ores processing), agriculture and blue industries, IT services and frontier technologies, eco-industrial park development (renewable energy and alternative energy, clean water and wastewater treatment, circular economy, sustainable development goals, green buildings, smart systems integration), Science, Technology and Innovation and the integration of small and medium enterprises into the ecozone value chain.

Cannot be done alone by PEZA

Panga, in conclusion during his speech at the Rotary Club of Manila meeting remarked that attracting foreign direct investments cannot be done by PEZA alone or by any other investment promotion agency left to its own devices.

He emphasized that what is needed to make things work is a whole government, industry and society approach to lessen the cost and improve ease of doing business in the country.

"Through our collaborations and strategic alliances, PEZA, together with the Rotary Club of Manila, other ecozone industries, and stakeholders, will strive for success in attaining our country's goals and objectives, and continue to push for eco-zoning the Philippines towards inclusive and sustainable development," Panga said.