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25-yr. investments in PEZA zones reach P3.9T

The Philippine Economic Zone Authority has approved a total of P3.9 trillion worth of investments for the past 25 years as of November.

During the PEZA‘s silver anniversary celebration and Investors’ Recognition Day, PEZA Director General Charito Plaza said these investments came from 4,605 companies operating in PEZA-registered economic zones nationwide.

The number of companies registered with PEZA has grown from only 331 firms 25 years ago, she added.

Plaza said PEZA ecozones continue to increase from 16 ecozones 25 years ago to 410 ecozones as of last month.

From manufacturing ecozones, PEZA now offers different types of ecozones for activities such as export of information technology-enabled services, agro-industrial, tourism, medical tourism, knowledge, science and technology hubs, and the proposed defense-industrial complex.

As incentives in PEZA are biased to firms exporting their products and services, Plaza said PEZA-registered firms have contributed $839 billion on export revenues since 1995.

From 2007 to 2019 alone, exports from PEZA ecozones constituted 67 percent of the country’s merchandise export.

In 2019, PEZA firms’ share of the gross domestic product reached 15.5 percent or $54.6 billion.

Jobs generated in PEZA zones reached more than 1.47 million as of June this year.

Despite the disruption in operations amid the Covid-19 pandemic, Plaza said operations in PEZA zones are gradually returning to full capacity.

Meanwhile, as the Senate approved on third reading the Corporate Recovery and Tax Incentives for Enterprises bill last week of November, Plaza said the best version of the new law would come out in the implementing rules and regulations.

“The best CREATE law will still come out once we have the IRR,” she said.

PEZA has been asking lawmakers to spare the investment-promotion agency from the new incentives regime, or bargaining to at least maintain the current incentives regime for existing PEZA locators.

From previous statements of the PEZA chief, the incentive that existing PEZA firms do not want to lose is the perpetual five-percent gross income earned in lieu of all national and local taxes.

When the CREATE is enacted into law, the government would give 10 years of five-percent special corporate income tax in lieu of all national and local taxes for 10 years.