By Jenina P. Ibañez, Reporter
THE Philippine Economic Zone Authority (PEZA) expects new investment pledges to slump this year, as the coronavirus pandemic weighs heavily on the global economy.
At the same time, many export companies are struggling to maintain operations and employment even as lockdown restrictions ease due to the limits on public transportation.
In a mobile message, PEZA Director General Charito B. Plaza said she is expecting “a total 50% of last year’s investments plus 10%-15% growth.”
PEZA’s approved investment pledges for 2019 stood at P117.5 billion, a 16% decline from the year earlier.
Ms. Plaza said the investment promotion agency is currently holding virtual investor forums and is trying to create more economic zones in the countryside.
PEZA approved P22.5 billion worth of investment projects in its July 10 board meeting, majority of which are new activities from existing locator companies.
The agency in the first five months of 2020 approved P29.5 billion in investments, or 32% less than the same period last year.
Prior to the pandemic, PEZA said it was targeting 5-10% investment growth this year. The agency has yet to release updated investment targets.
EXPORT FIRMS STRUGGLE
Many exporters are now struggling as the pandemic disrupts production, supply chains and the availability of workers.
Philippine Exporters Confederation, Inc. (PhilExport) President Sergio R. Ortiz-Luis, Jr. said in a phone interview on Friday that many employees of export companies are still unable to come to work given limitations with public transport.
Export companies have manufacturing facilities that require in-person work.
“Unfortunately, ang isang perennial problem di pa naso-solve mabuti: maraming pwede na magtaas ng employment… pero hindi pa rin dahil sa problema ng sasakyan (Unfortunately a perennial problem that hasn’t been solved is that the many companies that can increase employment are not able to because of transportation problems),” he said.
Mr. Ortiz-Luis said many companies also fear that employees would get infected with the coronavirus disease 2019 (COVID-19) as they seek alternative transportation.
The government has urged companies to provide shuttle transportation for their employees. Export-oriented companies have been allowed to maintain at least partial operations since the lockdown started in March.
The Department of Transportation allowed the gradual resumption of public transportation in phases, with limited capacities.
Mr. Ortiz-Luis said many small companies have been seeing lower operations.
“‘Yun naman medyo malaki (company), nagre-retrench sila dahil hindi naman na-solve ’yung public transportation crisis plus the fact na napakagastos nitong transportation (The bigger companies are undergoing retrenchment while the public transportation crisis hasn’t been solved and providing transportation is expensive),” he said.
The Philexport official said rehiring will not happen within six months, especially as companies look to expand their facilities to comply with physical distancing measures.
“Ang mangyayari diyan, bawas lang nang bawas muna ng tao (They will just keep reducing employment),” he said.
Merchandise exports declined by 35.6% to $3.99 billion in May compared to a year earlier after it had declined 49.9% to $2.83 billion in April, the Philippine Statistics Authority reported. Year-to-date exports in May fell by a fifth to $22.56 billion.
“Nag-iimprove pero nag-iimprove lang na lumiliit ’yung negative. (Exports are improving in the sense that the decline is shrinking),” Mr. Ortiz-Luis said.
The Philippine unemployment rate surged to 17.7% in April from a year earlier, the highest since the government adopted new definitions for the Labor Force Survey in 2005. This translates to 7.25 million unemployed Filipinos, or more than three times the 2.27 million unemployed a year earlier.