PEZA investments plunge 56% in 1H as TRAIN spooks businessmen
The Philippine Economic Zone Authority (PEZA) reported a 55.9 percent drop in project registrations in the first semester of 2018.
PEZA Promotions and Public Relations Group Manager Elmer San Pascual said in a briefing that investment pledges in January to June this year reached only posted P53.04 billion from P120.2 billion in the first half of 2017.
He said the number of projects that registered with PEZA declined by 14 percent to 258 projects in 2018 from 300 projects in 2017.
PEZA Director General Charito Plaza attributed the drop in investment pledges to the uncertainties created by the the Tax Reform for Acceleration and Inclusion (TRAIN) Package 2.
“Although the objective of TRAIN [Package] 2 is meaningful, but it sends different interpretations, especially when it touches about incentives,” Plaza told reporters.
“And then our investors are also worried because in their interpretation of TRAIN 2, seems like PEZA will be demolished, so with the other IPAs, in the sense that the present authorities that we have now is being removed in the TRAIN 2, like the incentives authority will be under the proposed FIRB (Fiscal Incentives Review Board),” she added.
Investment pledges in PEZA across industries declined in the first six months.
* Manufacturing activities decreased by 9.3 percent to P19.55 billion this year from P21.54 billion last year;
*Information technology (IT) investment pledges dropped by 13.7 percent to P6.98 billion from P8.07 billion;
*Planned investments for economic zone development also dropped 65.2 percent to P26.3 billion from P75.46 billion;
* Pledges in other sectors plunged by 98.4 percent to P234.5 million from P15.12 billion.
“Our industries are in the panic mode, particularly those who deferred their investments in 2017 because of the TRAIN [Package] 1, hoping that everything will be stabilized in 2018, only to be welcomed by TRAIN Package 2. And that has created a lot of uncertainties in them,” San Pascual stressed.
San Pascual noted that PEZA industries accounted for 70 percent of the country’s merchandise exports and 80 percent of the total services exports. (PNA)