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PEZA eyes 7% increase in investment pledges

New investment pledges are expected to be lower this year amid the pandemic. — REUTERS/ERIK DE CASTRO

By Jenina P. Ibañez, Reporter

THE PHILIPPINE Economic Zone Authority (PEZA) set a 7% investment growth target for this year as it anticipates more interest from foreign firms after the passage of the law cutting corporate income tax and reforming the tax incentives system.

PEZA Deputy Director General for Policy and Planning Tereso O. Panga at a press briefing on Tuesday said that the agency is targeting a 7% increase over last year.

The investment promotion agency last year registered P95.03 billion in pledges, down 19.15% from 2019 after lockdown restrictions declared to contain the coronavirus disease 2019 (COVID-19) pandemic dented investor confidence.

“We’re looking at an increment of about P6 billion, and we have a strong basis for this projection because of the increasing FDI (foreign direct investment),” he said.

“We’re confident that we can attract more investments, especially with the passage of CREATE.”

Implementing rules and regulations of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act released last week listed priority projects for government incentives, including projects that improve the country’s competitiveness as an investment destination and its ability to produce high-end products.

PEZA earlier this year said that it is aiming to approve over P100 billion in investment pledges for 2021.

So far, investment pledges approved by the agency increased by almost 54% to P25.382 billion in the first quarter after coming off a low base last year, when approved investments slumped after the board failed to meet during initial lockdown that began in mid-March 2020.

The bulk of approved investments for the first quarter this year will be in Luzon, and several of the projects are for export manufacturing and information technology.

Meanwhile, Mr. Panga added that PEZA will need to make clarifications with the Finance department and the Fiscal Incentives Review Board on allowing registrations from the information technology (IT ) sector in Metro Manila.

“While they are open to allowing IT locators in Metro Manila and as well as the continued arrangements on work from home and temporary IT centers, IT sites or pop-up sites, it seems that they’re no longer inclined in allowing more IT centers in Metro Manila,” he said.

“This will run counter to the clamor of some LGUs which currently are not hosting any IT centers at the moment, as well as the clamor of the IT developers who would want to put up more IT centers to be able to catch the increasing investments of the IT sector, and most of these are still centralized in Metro Manila.”

Trade Undersecretary Ceferino S. Rodolfo last week said that there are discussions on removing some location restrictions for outsourcing firms planning to register for incentives in the National Capital Region.

Although there cannot be new proclamations for information technology ecozones in the capital region, the government is considering allowing firms to register in areas vacated by Philippine offshore gaming operators, he said.