Ecozones in-depth: Getting our acts together for better governance — key to investor confidence

Over the past 30 years, PEZA has evolved significantly as an investment promotion agency. Since 1995, we have put in place some key reforms and strategies that further strengthened our investment promotion and facilitation capabilities. More than our success in promoting the Philippines to foreign investors, it is how we facilitate investments that enables us to sustain our existing and new locators in the ecozones. 

Our ease of doing business measures — anchored on our long-standing mantra, i.e.,  “no red tape, only red carpet treatment for investors” — have earned consistent citations from both international and local institutions such as IFC- World Bank, ASEAN-UNCTAD, Bloomberg, US Department of State, ARTA and FIRB. We have endeavoured as well to reduce the cost of doing business, and to enhance digitalization and sustainability efforts — thereby making the ecozones more efficient and attractive to investors. 

While much has been achieved, more remains to be done. The need for continuous improvement is a mission that we take seriously pursuant to our Citizen’s Charter and ISO-QMS (quality management) certification, which we have maintained for 18 consecutive years. We believe that consistency in better governance is a basic and effective investment promotion tool because it creates a predictable, transparent and stable environment. According to the OECD, good governance builds investor confidence, lowers risk, and ensures fair competition. It is often more crucial for attracting foreign direct investments than specific tax incentives.

Together we are stronger

Investment promotion is not the sole responsibility of DTI, BoI, or investment promotion agencies. It requires a whole-of-government approach. For PEZA to effectively expand the ecozone network and accelerate socio-economic development nationwide, we must rely on the full cooperation of partner agencies such as local government units, BoC, BIR, DENR, DoLE, BI, BFP, and others.

However, there are many challenges. Locators and applicants encounter policy inconsistencies, regulatory overlaps, unclear implementation, and other bureaucratic inefficiencies, sometimes even harassment and corruption. While many agencies have initiated governance reforms, few have done so with a clear investment facilitation lens. From the perspective of industries, the government at times appears fragmented in delivering the “red carpet” experience — despite strong directives from the President on green lane facilitation and landmark policies enabled by ARTA and the CREATE MORE Act.

If our shared objective is to grow investments, we must act in concert. When we move and act in unison, we become a stronger and more credible investment destination.

Our strongest promotion tool: A satisfied investor

From our experience in PEZA, the most powerful promoter is a satisfied locator. Investors value not only fiscal incentives but also quick permit processing, streamlined operations within the ecozone, compliance with world-class standards, and, most importantly, our readiness to take up the cudgels on their behalf when they encounter harassment or red tape from other government agencies. 

This is why ease of doing business must be embraced as a national strategy. A unified front in promoting and facilitating investments will lead to happier and more productive investors — and ultimately, enhance our international competitiveness.

Recent appointments made by the President — including Executive Secretary Ralph Recto, DoF Secretary Frederick Go, BIR Commissioner Charlito Mendoza and BoC Commissioner Ariel Nepomuceno — are widely welcomed by the investment community. Known for their ethical leadership and investor-centric approach, we view their appointment as an opportunity to fully realize a whole-of-government strategy for attracting investments and elevating governance standards.

Investors welcome these appointments, knowing that it augurs well for their businesses and investments in the Philippines. I am quite sure that they are spreading this now through the grapevine… and their supply chains. Word of mouth remains our edge in attracting more investments!

The key is good governance

It is so reassuring, therefore, to hear our partners in BIR, BoC and LGUs make an open declaration and firm resolve in pushing for good governance to build public trust, attract investment, and enhance the effectiveness of public services. BIR Commissioner Mendoza reminded the men and women of the BIR to conduct their duties with integrity and transparency in order to foster trust and compliance in the tax system. He said, “When people walk into our offices and experience clarity, courtesy and consistency, their trust in us grows. And when trust grows, compliance follows naturally. This is how we change the narrative, not through slogans, but through service.”

Meanwhile, in his keynote message during his assumption into office, Commissioner Nepomuceno laid out his vision for the BoC: to end the perennial problem of corruption, to ensure the collection of rightful duties and taxes for the government, and to pursue the principles of good governance.

Likewise, Union of Local Authorities of the Philippines (ULAP) president and Quirino Governor Dax Cua underscored the need for local government units to practice consistency, uniformity and predictability in implementing rules so as not to drive away potential investors. 

Towards a National Investment Summit

With the realignment of the various agencies’ good governance goal as a top priority, we at PEZA are encouraged to lead and convene a national summit by early next year among BIR, BoC, DILG-ULAP (including the League of Cities and Municipalities and the Bureau of Local Government Finance), and PEZA (together with the other IPAs) to highlight the critical role of governance in boosting investments and providing actionable insights for policymakers aiming to enhance FDI attraction. 

In keeping with the investment promotion pitch of the President, saying that the Philippines is open for business and that we are ready to roll out the red carpet for the investors, the summit will provide a refreshing narrative that we can walk the talk in government and make it happen.

By getting our acts together and consistently practicing good governance, investment promotion agencies and partner institutions can collectively drive investments into the country. When PCCI Chairman George Barcelon speaks of regulatory consistency and ease of doing business, he should be able to cite good governance as a key reason why investors choose to locate in the Philippines — not just in PEZA.

With close government collaboration and the support of our industry partners and investors, we can serve as genuine enablers of investments, jobs, business expansion, and broader economic opportunities. I am confident that through this National Investment Summit, we will emerge with one voice, one strategy, and one commitment to welcoming investors to the Philippines — and keeping them here for the long term.