Approved PEZA investment pledges nearly double

THE Philippine Economic Zone Authority (PEZA), which contributes about a third of the country’s total committed investments, registered what it called an “unprecedented performance” as new approvals in the seven months to July reached P132.66 billion, up 89.4% from P70.03 billion in 2016’s comparable period.

“As to number of projects, we have as of July… 363 new projects. This means new ecozones and new industry locators. So we grew by 17.86% compared to last year’s performance,” PEZA Director-General Charito B. Plaza said in a press briefing yesterday at the agency’s main office in Taguig City.

She attributed the improvement to aggressive marketing and promotion efforts, among others. She also cited investors’ sentiment about “a better and more credible government.”

Employment generation as of June, according to the latest available data, hit 1,357,684 new jobs within the economic zones, 6.4% more than the 1,275,842 recorded in the same period last year. The figures represent the comparative periods as of June.

“PEZA usually multiplies this (employment figure) by eight… because we also create indirect employment like drivers, janitors, construction workers, concessionaires… all that will be built to respond to the needs of the workers of the industries and the ecozones,” Ms. Plaza explained.

“So we have 8 million jobs directly and indirectly created.”

Also as of midyear, export revenues generated by the ecozones hit $22.05 billion, up 12.4% from a year ago. “PEZA registers 80% of the total export income of the country,” Ms. Plaza said.

In terms of industrial sectors, ecozone development took the lead with approved investments of P75.41 billion, an increase of 95.2% from P38.64 billion previously.

Manufacturing came next with P21.55 billion, up 26.9% from P16.998 billion a year ago. Of this, electronics and semiconductors accounted for nearly half at P10.97 billion, an increase of 29.6% from P8.46 billion in the same period last year.

In contrast, investments in information technology — largely made up of business process outsourcing (BPO) firms and contact centers — fell by 33.4% to P8.14 billion from P12.22 billion.

“Most of our BPOs and call center locator industries are American companies,” which Ms. Plaza said were awaiting for “a clearer policy” US President Donald Trump on his policy to keep jobs home.

“Nevertheless none of those existing BPOs and call centers pulled out. They stayed and some even took the risk of still expanding by putting up new branches in different parts of the country.”

In the same press conference, Ms. Plaza brought in representatives from a Chinese entity, which is reportedly behind the proposed First Pangasinan Industrial Corp. (FPIC), a 60% Philippine-owned and 40% Taiwanese and Singaporean entity. The company is said to be also urging foreign entities to set up offices in its proposed economic zone in Pangasinan.

“After lengthy deliberation, the PEZA board had resolved to grant a pre-qualification clearance to FPIC’s Philippine-Chinese industrial economic zone,” she said.

Another prospective locator — Chinese entity Xianglu Dragon Group (XDG) — courted controversy after the Taipei Economic Cultural Council issued statements to the Philippine government and to media alleging that its chairman, Chen YouHao, embezzled money from Taiwan and fled to Xiamen, China.

Leonelle M. Infante, the Philippine legal counsel of XDG, denied the allegation.

“To set the record straight, Chairman Chen YouHao’s roots are from Xiamen, China. He had long been a well-respected and successful businessman in China, more than a decade before the Taiwanese government even filed a case against him in the year 2000, instigated by imprisoned Taiwanese President Chen Sui Bien, a ranking member of the current ruling DPP party of Taiwan, who was convicted of corruption,” Ms. Infante said.

“At that time, Chairman Chen was already considered one of the biggest investors in China, when he was forced to flee Taiwan due to political persecution.”

She also denied claims that XDG failed to make tax payments in China, saying that companies under it are among the biggest taxpayers in Xiamen.

“It is not true that the company is losing money. This can be easily proven by the audited financial statements presented to our government agencies,” she said.

“Again, I have to emphasize the facts that the projects in Pangasinan will not borrow any funds from the local Philippine financial institutions,” she said. “All the investment capital will be funded overseas.”

Ms. Plaza said the applicant’s pre-qualification has not yet been submitted to the Office of the President, which will issue the proclamation declaring FPIC as an ecozone qualified to receive government perks. — Victor V. Saulon