IT-BPM sector remains PEZA’s growth driver

IT-BPM sector remains PEZA’s growth driver | Daily Tribune

The Information Technology-Business Process Management sector remains the growth driver of the Philippine Economic Zone Authority, as the latter hits P14.951 billion in terms of approved investments from January to March of the current year.

“These investments are predominantly sourced from our electronics companies, IT-BPM [Information Technology-Business Process Management],” PEZA director general Tereso Panga said during a forum in Quezon City on Saturday.

To recall, the industry group Information Technology and Business Process Association of the Philippines has launched IT-BPM Industry Roadmap 2028 in 2022, aiming to hit $59 billion in revenues and a total of 2.5 million full-time employees in the next six years as it envisions the Philippines becoming the world’s leading experience hub for digitally enabled and customer-centric services.

First quarter investment approvals

PEZA’s first quarter investment approvals were 19.25 percent higher versus the P12.537 billion posted last January to March 2023.

Panga said that for March alone, approved investments hit a total of P2.854 billion, 21.8 percent higher compared to the previous year’s P2.343 billion.

Pharma ecozones

During the said forum, Panga and Food and Drug Administration director-general Dr. Samuel Zacate said they have begun taking action with the Office of the Special Assistant to the President for Investment and Economic Affairs toward improving the nation's drug and medical device manufacturing ecosystems through proposed pharmaceutical economic zones.

Zacate said their team already convened a meeting with SAPIEA Secretary Frederick Go’s team, as a follow-up to the President's sectoral meeting with the FDA on February 2024.

Accordingly, the President envisions these zones to streamline the drug application process, making it more accessible and efficient for stakeholders and encouraging more local producers to boost their R&D and manufacturing capabilities and lower drug costs for the general public.

The pharmaceutical economic zone is a two-pronged approach for the Philippines to have local production of drugs and make medicines readily available and affordable to Filipinos, targeting both manufacturing of pharmaceuticals and medical devices, and other related activities including research and development, clinical testing, and trials, among others.

PEZA and FDA also agreed to study the provision of a green lane for PEZA locators and update the PEZA-FDA Memorandum of Agreement, initially established in 2014, to improve licensing and registration for prospective and existing PEZA Registered Business Enterprises.

Update

This update is intended to institutionalize the reduction in the turnaround time through pre-assessment activities that may be transferred to PEZA.

Discussions also explored the structure of pharmaceutical economic zones within ASEAN countries, evaluating how similar models could be implemented or adapted in the Philippines. DG Panga proposed several potential locations for the inaugural zone, considering both the concentration of industry players and the FDA's prospective plans to establish laboratories.

Accordingly, the pharmaceutical industry is identified as a strategic industry in the Philippines, as under the CREATE Law, health, medical, and pharmaceutical-related activities fall under Tier II, meaning these will be able to enjoy five to seven years of income tax holiday and 10 years Special Corporate Income Tax (for export enterprises) or five years Enhanced Deduction (for domestic market-oriented enterprises).

As of December 2023, PEZA hosts 26 companies in the manufacturing of pharmaceutical products and medical equipment or devices, including Terumo, Arkray Industry, Royale Life Pharma, JMS Healthcare, and Philipcare Medical. These companies are generating some P25.489 billion of investments and over 19,000 direct jobs for the country.