At the 4th PhilMarine PEZA SEEKS INVESTORS

The Philippines is strategic in the heart of Asia and the Pacific, we are an ideal business hub.

This is the core of the roadshow of Director General Charito Plaza in batting for investors at the Philippine Economic Authority Zone (PEZA). Hers was one of the best-received presentations at the 4th PhilMarine Exhibition and Oil and Gas Phils held July 12-14 at the SMX Convention Center, Pasay City, organized by Phil Maritime League (PML).

PML was joined in by Fireworks Trade and Exhibitions and Conference Philippines, organizing hundreds of exhibitors from different countries, in turn visited by thousands of executives, maritime staffers, educators and seafarers.

B/Gen Plaza took office last September 2016, a former member of the Lower House for Butuan City and one of the authors of the law that created PEZA. She also chaired the committees on tourism and public information, vice-chair of the national defense committee. Plaza was consultant to the Dept of Interior and Local Government, on police and military concerns 

PEZA is attached to the Dept of Trade and Industry, tasked to promote investments, extend assistance, register, grant incentives to and facilitate the business operations of investors in export-oriented manufacturing and service facilities proclaimed by The President as PEZA Special Economic Zones.

It oversees and administers incentives to developers/operators of and locators in world-class, ready-to-occupy, environment-friendly, secured and competitively priced Special Zones.

Ecozones.

Plaza embarks as a soldier bent on revolutionizing PEZA, “by building green economic zones towards building into industrial and smart cities nationwide.”

To align, her programs include building more economic zones in every province and city under Phil Economic Zone Map for Mindanao, Visayas and Luzon. This is handy, investors pick their interest on the map; say, agricultural economic zones will show different areas of the agro industrial economic zone.

So much is necessary as the country has presently just two public economic zones in every region; just four public economic zones administered and owned by PEZA built yet by President Marcos and under the Export Processing Authority. With these four, PEZA has 368 private economic zones, the types PEZA wants to build nationwide.

Investment mix.

PEZA operations from 1995-2016:

10.97% Information Technology Services

8.81% Metals/Fabricated Metal Products

7.96% Tourism

5.84% Transport (Shipbuilding, Aerospace, Car Parts, Equipment)

4.71% Electrical Machinery and Apparatus

2.15% Medical, Precision and Optical Instruments

1.68% Rubber and Plastic Products

1.21% Medical Tourism

19.51% Other Manufacturers

Independent.

Awaiting Presidential imprimatur is the PEZA-endorsed defense industrial complex, some 300 hectares of public land. The Government Arsenal operations in Limay, Bataan has been praised by NATO and other military experts for efficiency to supply ordnance to the Armed Forces despite limited and aging equipment.

On top of savings, the Arsenal secures the supply of bullets of various calibers for the military and police. This takes more significance given President Duterte’s independent foreign policy. We are shifting mindset by opening doors even for States not friendly with the USA, Philippine traditional military partner for decades.

It is reported presidential visits to the Middle East secured $1-billion investment pledges, not necessarily just from Christians nor Caucasians but from a free mix of businessmen.

Two priorities are aching for the complex: that of milling and that of enhancing prototypes of inventions by the various commands (developed independent of or with the private sector). Milling is the recycling of outdated ordnance like missiles. Caraballo Island by Corregidor was once considered but dropped due to residents, population and tourism centers.

Plaza is not coy on her home-spun logic: We invite everyone to invest here, be it Japan, Russia, China, Israel, USA. Should they be all operating in our economic zones, we can be saved from wars as the protagonists are all here.

Minerals.

Also on the table is a mineral economic zone, processing here ores mined nationwide. As the

15th mineralized country in the world, there is so much local inventory. This may also rationalize protection of the environment, jobs generation and full value on our patrimony as these raw materials are given added value even if exported semi-finished.

Islands cities.

The Government’s Build, Build, Build mantra should improve the infra for logistics: road and bridges, seaports and airports on world standard; warehouses, food storage, container yards preparatory to the world market.

Powered by renewable energy, PEZA dreams of Island Cities — a Tokyo replicated by the Japanese, a Beijing by the Chinese and so forth. They build the landmarks of their capital cities, the best hotels and tourism facilities. Definitely the Philippines becomes an international tourism destination.

Supply chain.

Plaza says we are among import dependent nations of the world. Hence, she would invite

manufacturers of industrial machineries, for example, to complementary industries to complete the supply chain, particularly in basic industries as steel, mineral, bio fuel and basic crafts industries of rice, sugar, coffee, cacao, abaca, coconut, rubber, vegetables.

We cannot even manufacture our own nails, spending $50-billion annually to import steel as our archipelago hides the abundance of nickel, chromite, iron ore.

PEZA wishes our power, water, telecommunications services be stable and of low cost. DoE did an investment–friendly move by charging P2.50 per kw/h for those operating in economic zones in Mindanao.

Incentives.

Those registered with PEZA may qualify on these:

  • Income tax holiday (ITH), 6-8 years for pioneer projects, 4-6 years for others
  • After ITH, 5% tax on gross income exempted from all national and local taxes
  • Tax & duty free import of capital equipment, spare parts, supplies, raw materials.
  • Foreign investors are allowed up to 30% local of their total sales. 100% may be exported with some locators exceeding 30% on local sales due to high demand.
  • Zero value added tax (VAT) on all local purchases including telecommunications, power and water bills.
  • Exempt from payment of local taxes and fees
  • Allow the employment of foreigners at 5% of the total labor of a firm; give special visa (multiple entry) including immediate family and their workers.
  • One-stop shop for permits on building and occupancy, on import and export, online import and export procedures and e-payment scheme. A simplified registration process, electronic application from PEZA website, forms are downloadable, 24/7.

There is no red tape in PEZA; instead, red carpet treatment. It is ISO certified for all processes at all levels in all offices. The IFC World Bank exclusively cited PEZA for its best practice among economic zones worldwide.

The Constitution prohibits foreigners from owning Philippine land. In PEZA, foreigners may lease for 75 years; or own land in a joint venture with Filipinos holding 60% of shares.

Workforce.

The local labor force is competitive: young, educated, available. Our OFWs and Seafarers have shown this to the world — dedicated, skilled, multi-culturally prepared, verbally proficient in American English, both written and spoken.

On top, the PEZA Institute will provide the needed skills training and vocational courses with TESDA. Local universities and colleges per region partner also with the PEZA institute as the latter accredit manpower needs, training centers, manpower agencies, legal services and allied formalities to ensure the growth and sustainability of investors in the country.

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