THE moratorium on new economic zones (ecozones) in the National Capital Region (NCR) needs to be lifted to better align policy with the provisions of the tax reform program, according to the Philippine Economic Zone Authority (PEZA).
PEZA Deputy Director General Tereso O. Panga said in a statement on Wednesday that Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act makes no distinction between economic zones established in the capital region or elsewhere.
“The CREATE Act… is a (more) recent law” which should take precedence, Mr. Panga said.
“CREATE… (stipulates) the criteria in setting up an information technology (IT) center in Metro Manila (and lists) IT services as an eligible activity (for incentives)… therefore, from our understanding and with our presentation to the Fiscal Incentives Review Board] (FIRB), we should already be allowing for the resumption of (registering) IT centers in Metro Manila,” Mr. Panga said.
“According to the (IT and Business Process Management Association of the Philippines), there will be an increase in uptake (for IT ecozones of) 450,000 to 650,000 seats. The more reason that we should be allowing this growth so that we can facilitate the spillover effects of the IT growth in the countryside,” he added.
Administrative Order (AO) No. 18 issued by Malacañang in June 2019 declared a moratorium on approving new ecozones in the NCR in order to distribute development more evenly to the countryside.
In March, the FIRB said it rejected a PEZA request to lift the moratorium, adding that AO No. 18 is a component of the government’s strategy for developing the countryside.
According to PEZA Director-General Charito B. Plaza, locators to the countryside must be supported by making services there more efficient.
“Our IT Parks are only located in five business districts in Metro Manila… Nine city mayors were complaining (saying) ‘Why are you putting a moratorium when we don’t even host… one IT Park?” Ms. Plaza added. — Revin Mikhael D. Ochave