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PEZA seeks export threshold cut

The Philippine Economic Zone Authority has proposed to lower the export threshold to 50 percent for economic zone locators to help them survive as global demand remains low due to the coronavirus disease 2019 pandemic.

PEZA Director General Charito Plaza said in a joint bilateral chambers’ webinar that increasing domestic market sales allowance for ecozone locators will also help the local economy.

“By the increasing the LSA (local sales allowance) for foreign locator companies from 30 percent to 50 percent, this will benefit not just the export producers with their expanded sales and increased access to the domestic market but also the local economy through the ecozone’s enhanced forward and backward linkages, and local consumers’ access to quality export products,” Plaza said in her presentation.

She added that this is one of PEZA’s Covid-19 management measures to help locators afloat as well as the economy amid the global health crisis.

Lowering the export threshold from 70 percent to 50 percent, to also increase local sales allowance from 30 percent to 50 percent for foreign companies, is a key amendment to the PEZA law which the agency is proposing.

“In the CREATE bill, however, it favors the increase in export threshold from 70 percent to 90 percent to benefit the locators with 90 percent plus export sales by way of exemption from the VAT refund system,” the lady PEZA chief said.

She added that PEZA is looking into allowing locators to go beyond their annual local sales allowance threshold for three consecutive years.

In the last week of August, 85 percent or 2,633 locators within PEZA are operating and 76 percent or more than 1.17 million ecozone employees are still going to work.