The Philippine Economic Zone Authority (PEZA) seeks to recover from a decline as the agency is targeting to expand its registered investments from 5 to 10% during 2020. The agency recorded a drop in investment approvals for two years in a row to only PPH 117.5 billion (USD 2.3 billion) in 2019, down by 16% from PHP 140.24 billion (USD 2.8 billion) in 2018.
Among the big-ticket projects that the agency is looking at approvals is China’s Panhua Integrated Steel Group which will invest US D3.5 billion in building a steel mill plant in Misamis Oriental in Mindanao with an annual production capacity of 10 million metric tons for the domestic supply of steel slabs, galvanized steel, and other required steel to support the government’s Infrastructure program. Also, Canada’s NorthStar Foods Inc is in search of locations for cacao, avocado, mango, strawberry, and raspberry plantations but not much detail has been disclosed yet.
The drop in investments is attributed to the prolonged enactment of the Corporate Income Tax and Incentives Rationalization Act (CITIRA) Bill, pending for Senate deliberations, that has created uncertainty consequently stalled location and expansion prospects on the investors’ side. The CITIRA Bill, once passed, will reduce Corporate Income Tax (CIT) to 20% from 30% over 10 years and rationalize redundant incentives granted to locators in economic zones. The Department of Finance (DOF) hopes that CITIRA will be passed in March 2020.
PEZA – attached to the Department of Trade and Industry – is the Philippine government agency tasked to promote investments, extend assistance, register, grant incentives to and facilitate the business operations of investors in export-oriented Manufacturing and service facilities inside selected areas throughout the country proclaimed by the President of the Philippines as PEZA Special Economic Zones.
(Sources: Business Mirror; Philippine Daily Inquirer; Philippine News Agency)