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Investment pledges approved by the Philippine Economic Zone Authority (PEZA) dropped by nearly a fifth last year after lockdown restrictions dented investor confidence.
In this episode of B-Side, PEZA Director General Charito B. Plaza tells BusinessWorld reporter Jenina P. Ibañez how the investment promotion agency is planning a comeback over the next few years.
TAKEAWAYS
Idle land should be converted into ecozones.
Ms. Plaza said the country should accelerate rural progress by creating economic zones in the countryside. The agency partnered with the Union of Local Authorities of the Philippines to identify areas they could convert into ecozones.
“We based it on the land potential and the resources of the plan. We don’t have to destroy land — if it’s an agricultural land, we call it agro-industrial economic zone. If it’s a fishing ground, we have the aquamarine economic zone,” she said.
Countries are using ecozones to compete for investors.
The passage of the Corporate Recovery and Tax Incentives for Enterprises (CERATE) Act that cuts corporate income tax and rationalizes tax incentives clarifies available incentives for interested investors, she said. But she also hopes that the FIRB (Fiscal Incentives Regulatory Board) will not create more red tape.
The law expanded FIRB’s oversight power granting tax incentives to government-owned and -controlled corporations and projects approved by investment promotion agencies. The agencies grant tax incentives for projects with capital of less that P1 billion, but the FIRB committee can raise the minimum capital threshold.
“Red tape will slow down the processing of investment application because it will defeat the purposes of PEZA as a one stop shop,” Ms. Plaza said.
Manufacturers are interested in PEZA’s defense economic zones.
PEZA has identified seven or eight military reservation areas to convert into defense industrial complexes for the manufacturing of military equipment.
With some manufacturers already showing interest, the agency is aiming for amendments on military reservation proclamations from the Office of the President before the end of the Duterte administration in mid-2022.
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