Former Director-General of the Philippine Economic Zone Authority (PEZA), Charito Plaza has called on the Marcos administration to prioritize special economic zones in its economic agenda.
Plaza said in a roundtable interview with the Manila Times on Friday that foreign investors doing business within the economic zones still consider the Philippines an attractive investment destination.
He said foreign investors, who make up 85 percent of businesses registered with PEZA, are attracted to the Philippines because of tax incentives, a young workforce, English-speaking population and people-friendly personalities as well as its geographical location. climate.
Plaza said the Philippines’ status in the GSP +, or Uniform System of Taxation, also means that goods manufactured, manufactured or imported from the country and exported to the United States and European countries do not enjoy any tariffs.
Another advantage is that PEZA is a “one-stop shop. It is already in our law that in order to attract investors, we must provide convenience to do business. One-stop shop because PEZA issues all permits “they do not have to go to LGU (local government entity) or other agencies.”
However, the detectives also took note of “efficiency factors” that the government has yet to work on, including the cost of utilities, raw material supply chains and the location of logistics and transportation hubs, for public works and information technology. Infrastructure is included. Establishment of credit facilities and good management.
“The biggest factor is the consistency of our laws or policies, especially in terms of incentives, because every time we change administrations, we change laws, even laws and policies,” Plaza said.
“It has been shown that wherever there are economic zones, they become the economic drivers of local unit development, which people develop as a result of the jobs and livelihoods they create.”
“So we are not only getting the development of our countries, but also the comprehensive development because of the multiplier effect that these investors are bringing to the country,” she said.
Plaza believes that all agencies should focus their projects and programs in SEZs when the government accepts the SEZ program as a comprehensive economic program.
For example, the Department of Public Works and Highways should focus on the infrastructure and roads needed for economic sectors.
Plaza said the ICT department should also work on improving the country’s information technology (IT) infrastructure, as IT business process outsourcing firms are one of the largest in the Philippines. The Department of Energy must also find a way to reduce utility tariffs within economic zones.
Plaza said it hopes “the new administration will accept the economic zone program as an economic umbrella, because we already have evidence and models that show that where there are economic zones, it’s not just about social progress, but about overall development. “
“So if it is repeated across the country, we will be able to empower and enrich not only local bodies but also people,” she said.
Plaza said there are 4,362 companies registered in the country’s 417 economic zones, which directly employ 1.7 million people. Three of them are involved in medical tourism, 13 agro-industrial zones, 77 factories, 297 IT complexes and centers, 17 are in the tourism related industry.
Eighty percent of the country’s export earnings from services come from the SEZ, and 64 percent of the revenue from the export of goods and merchandise comes from industries registered in the SEZ.
“So, we contribute 17 percent of the GDP (gross domestic product),” Plaza said.
PEZA transferred 5.61 billion pesos to the national government between 2016 and 2021, while the total corporate income tax collected from its locations in the same period was 2.88 billion pesos.
As of last year, the total recorded investment in PEZA was 4.03 trillion paisa, while exports were $ 933.83 billion, according to Plaza.
The National Economic and Development Authority said: “For every direct job, we create six indirect jobs. This means that we have created jobs for 10.2 million Filipinos in only 110 LGUs that house the economic zone. ”
Plaza said that since the Philippines has 1,700 local governments, each of which can accommodate a variety of economic sectors, business opportunities are bright.
Asked how she intends to persuade the new administration to make the economic sector one of its priorities, officials said she has begun evaluating the country’s land ownership and potential.
Plaza said: “What are the potential economic zones? What potential industries can we bring and create here? What are our strengths? What are our resources and the benefits of the Philippines so that we can attract all kinds of industries.”
It said it will map economic sectors so that investors can choose the sector that best suits their specific industry. Each type of industry must have a common economic zone.
Plaza also discussed the importance of tax incentives to attract investors, for example Dubai which is offered in the United Arab Emirates, where investors enjoy tax concessions on corporate income in exchange for creating many jobs and industries.
“So, that’s the multiplier effect. Who are the taxpayers? Job seekers, entrepreneurs, property owners. It will be they who pay the taxes. The trackers are tax-free, but with their large capital taxed, the overall development and social progress multiplier will have an effect. ”