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Friday, March 29, 2024

The PEZA miracle

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If foreign industrial companies inside in the country’s hundreds of export zones were to cease operations, nearly all the world’s cellular phones and a quarter of new cars would stop working or at least, probably perform erratically, like a robot gone berserk.

Most of the world’s Airbus and Boeing jets would stop flying or working.  The jumbo aircraft would be bereft of navigational aids and of amenities – things as basic as seats, oxygen masks, lavatories, toilets and cups of hot coffee or chilled juices, not to mention mood lighting, air outlets, and call attendant lights.

The Japanese would have to stop eating quality bananas. The world would miss its usual ration of chunks of delicious pineapples. Quite possibly, because the Philippines is now a global call center and business process outsourcing (BPO) hub, the world’s largest companies wouldn’t be able to service their customers nor process their payroll, payables and receivables, to name a few services.

As for the Philippines, close to P3 trillion worth of investments would go to naught, $44 billion worth of export earnings would be foregone yearly, 1.17 jobs would be lost directly, another 5 million gone indirectly—leading to loss of livelihood and future for a quarter of the country’s 25 million families. Invariably, given the mess, you would say there would be an upheaval, or something worse.

Such is the global and local impact of the work done by the state-run Philippine Economic Zone Authority (PEZA).

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In the last 20 years, the agency has created hundreds of pockets of paradise for foreign investors- what it calls economic zones. To-date, there are 316 economic zones nationwide.

They include 164 IT centers (housing call center and BPO offices), 43 IT parks (hosting chips and semiconductor factories, including makers of chips of 98 percent of cellular phones), 19 tourism ecozones (hotels and resorts), medical tourism parks (world-class hospitals like St. Luke’s), 20 agro-industrial parks (to produce and process pineapples, coffee and rice and other agro produce), and the most significant of them all, 68 manufacturing zones. An additional 123 have been proclaimed while 300 others are under development. Total in all, eventually – 739.

The 68 operating manufacturing zones are home to makers of a dizzying array of products, including auto wire circuits, capacitors that regulate power in nearly all gadgets, designer bags and garments, disk drives, printers, solar panels, electronic goods, to name a few.

The Iron Lady behind PEZA is lawyer Lilia de Lima, scion of a prominent and influential family in Bicol.

  Lilia joined PEZA in 1995, summoned by then-President Fidel V. Ramos to give heart and soul and direction to a previously soporific agency.

Before that, Lilia’s jobs included helping draft the Philippine Constitution, managing a trade and convention center, mediating meddlesome horse owners, and handing out amnesty papers to reformed rebels. PEZA is her seventh job and it is where he she has found her true calling and genuine service to the people and to the nation.

The whole notion of opening economic zones is creating jobs, industrializing the economy, revitalizing exports.   When that happens, there would be inclusive growth.  Lilia has achieved all three goals, marvelously.  This has made her a Miracle Woman”. 

So good is she that President Aquino in a recent speech, revealed, jokingly, that “our R and D teams are seriously studying how to clone Lilia de Lima!” 

Indeed, Lilia is one of a  kind, a sui generis, as a public servant and as a human being. 

She has received the highest decorations from foreign governments.  In Manila, she became the first woman Management Man of the Year awardee, by the Management Association of the Philippines, which counts more than 700 CEOs among its members.  BizNewsAsia calls her a National Treasure.

From 1995 to the end of this year, some P3 trillion in investments would have been registered, brought in by no less than 3,496 enterprises or locators.  Cumulative exports in 20 years is $563 billion.  Job creation is 1.17 million directly; another 5.5 million indirectly.

The investors were attracted by the Philippines’ advantages, natural and man-made: The country’s strategic location, at the center of Southeast Asia; an English-speaking hardworking work force; investor-friendly policies; and a matchless regime of tax deductions and other perks. There is, of course, the mantra of good governance.

Good governance has long been the clarion call at PEZA.  More than that, it is a habit; not just a slogan.

“We insist on absolute honesty and integrity and utmost service in dealing with our investors,” thunders Director General de Lima. 

That meant a lean but mean service team.  PEZA personnel were reduced from 1,006 to less than 500 today.  They were told to do the impossible – service locators and investors 24/7, nonstop, except on Good Friday.  “We have a one-stop shop and later, a non-stop shop.” No red tape, only red carpet treatment.

The PEZA chief explains: “Import permits of all export enterprises and export permits of semiconductor and electronic enterprises are processed electronically and continuously day and night even as we continue to aggressively pursue our automation agenda toward paperless transactions. We will be sad if any entity anywhere can beat our nonstop services. No red tape, only red-carpet treatment. Our investors are not just our customers; they are not just our clients. They are our partners and as partners we have a stake in their success. No corruption. If it rears its head, just let us know and we will throw the book at the erring PEZA official or employee.”

PEZA has also stopped being a developer.  “We left that job to the private sector.”  Private developers went on a frenzy – developing industrial lands and putting up factory buildings.   The lands were readily snapped.  The factory buildings are all used up. In places like Cavite, Batangas, and Laguna, “there is no more industrial land to buy or lease long term,” laments a Japanese company executive.

Lilia’s guarantee of no red tape, no corruption at PEZA helped improved the Philippines’ competitiveness rankings, globally, in ease of doing business and as a place to do business.

 

biznewsasia@gmail.com

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