By Justine Irish D. Tabile, Reporter
THE PHILIPPINE Economic Zone Authority (PEZA) has so far approved P61.62 billion worth of investment pledges in the first eight months, representing only 30% of the agency’s target for the year.
PEZA Deputy Director-General for Operations Vivian S. Santos told reporters on Friday that the investment promotion agency (IPA) approved P6.9 billion worth of investment pledges during its board meeting on Aug. 27.
“[These comprise] 21 projects. Some are new registrations, while some are project expansions,” Ms. Santos said.
The investment pledges approved in August are composed of six manufacturing projects, six information technology enterprises projects, four economic zone (ecozone) developments, and one agro-industrial facilities enterprise project.
It also included an ecozone utilities project, an ecozone domestic enterprise project, and an ecozone logistics service enterprise project.
The PEZA approvals in August brought the total greenlighted projects to 165, which are worth a total of P61.62 billion in investments.
With already eight months in, the approvals only represent 30.81% of the agency’s P200-billion target investment approvals this year.
According to Ms. Santos, PEZA’s next board meeting is scheduled for Sept. 19, but this is expected to be moved to a later date.
Foundation for Economic Freedom, Inc. President Calixto V. Chikiamco said via Viber that PEZA’s slower investment approval performance could be attributed to the investors waiting on the amendments to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
He noted the geopolitical tensions over the South China Sea is also affecting investment decisions.
Last week, the Senate ratified a bicameral conference report on the CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill, which seeks to lower taxes on domestic and foreign companies to 20% from 25%.
In July, PEZA Director-General Tereso O. Panga said that he is still optimistic that the board could approve around P200 billion worth of investments this year if CREATE MORE takes effect.
Once signed into law, CREATE MORE will also return to IPAs the power to approve and deny tax incentives. Currently, the mandate to grant appropriate tax incentives to registered business enterprises is under the Fiscal Incentives Review Board.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that besides the developments on the CREATE MORE, investment approvals could also be slower due to the rising prices and elevated interest rates.
“Still relatively higher inflation and interest rates globally and locally still weigh on foreign direct investments worldwide due to higher borrowing costs,” Mr. Ricafort said in a Viber message.
He added that geopolitical risks in recent months, which include the tensions between China and the Philippines and conflict in the Middle East have prompted some investors to take a wait-and-see attitude.
“Some international investors assess if there would be a risk of conflict between China and the Philippines before investing billions of pesos or dollars into the country as a matter of prudence and as part of due diligence for investments globally,” he said.
