Investment approvals in Philippine economic zones drop amid COVID-19 pandemic
By Darlene Basingan
MANILA, NNA – Investment pledges in the Philippine economic zones have sharply fallen this year as quarantine measures disrupted business activities in the country.
Approved investment plunged 31.7 percent year-on-year to 29.5 billion pesos ($590 million) in the first five months of the year, with the property, utility and logistics sectors sharply dropping, the Philippine Economic Zone Authority (PEZA) said Tuesday.
PEZA, which promotes and oversees investments in economic zones, approved 113 projects in the January-May period, down from 196 over the same period last year.
With social and economic restrictions relaxed since mid-May, 75 percent or 2,401 companies in economic zones have resumed operations, while 816 firms with 445,052 employees remain closed, according to PEZA.
Charito Plaza, PEZA’s director general, said at an online press briefing Tuesday that companies which have yet to become operational are facing difficulties in procuring raw materials, almost half of which are sourced from China.
Non-operating companies are also struggling to comply with PEZA’s directive that they are required to provide shuttle services or lodgings for their workforce to commute to offices and factories.
Despite the global pandemic and a slowdown in investment in the Southeast Asian country, Plaza noted none of the country’s ecozone locators have expressed any intention to leave the country.
When asked about PEZA’s new investment targets, Plaza said, “We were outsmarted by the COVID-19 pandemic. With this crisis, we just have to do our best to keep our investors, to let our present investors expand. We are encouraging them to expand.”
PEZA is offering ecozone companies assistance in the form of allowing them to have up to 90 percent of their employees work from home and deferment of their rental fees, among other measures.
“What can stop them is if we continue to assist them in terms of incentives,” she said.
For the January-March of 2020, the country’s total approved foreign investments also declined by 36.1 percent to 29.4 billion pesos from a year earlier, 42 percent of which were approved by PEZA.
Early this month, President Rodrigo Duterte proclaimed 12 new economic zones. PEZA estimates the new ecozones would attract an estimated 6.4 billion pesos in investments.
To date, PEZA has registered and managed a total of 408 economic zones across the country, while 71 proposed economic zones are waiting for the president’s approval.
The investment promotions body has also proposed the creation of more public economic zones in the countryside with a budget of 100 billion pesos.
PEZA said building more public economic zones would help stoke growth and development of domestic firms in rural areas.
Plaza said the proposal is also in line with the Duterte administration’s program to develop the countryside to decongest the highly populous Metro Manila, which is currently the epicenter of the new coronavirus pandemic in the Philippines.