The Philippine Economic Zone Authority said Wednesday investment pledges declined 28 percent in the first quarter to P16.5 billion from P20.9 billion in the same period last year amid the uncertainty in fiscal incentives and the current health crisis.
“PEZA’s investments continued to be challenged for the first quarter of 2020. On top of this issue is still the continuing uncertainty posed by the rationalization of incentives under the pending legislative measures that have created uncertainties. Added to this is the current pandemic caused by the COVID-19 virus which has caused a tremendous and immediate impact on PEZA’s export manufacturers and exporters of IT-enabled services [BPOs],” said PEZA director-general Charito Plaza.
She said the figures in February were carried over until the quarter’s end. The agency did not approve any investment in March as the government imposed an enhanced community quarantine in Luzon by the middle of the month.
“Before the declaration of the ECQ on March 16, 2020, PEZA’s total approved investments from January to February 2020 were already down by 5.85 percent compared to the same period last year. Due to the ECQ, the PEZA board was unable to meet last March, therefore, no new investment projects were approved and thereby resulting in no additional investments for PEZA for the said month,” Plaza said.
Data showed the number of projects approved in the first quarter declined 32 percent to 87 projects from 128 a year ago. Information technology posted the biggest drop of 22.55 percent to P2.32 billion from PP3 billion.
Exports by the IT sector, however, increased 15.5 percent to $1.15 billion from $990 million.
The effect of the ECQ on PEZA’s first-quarter employment and exports figures are still being completed. PEZA said that as of January, employment was up 6 percent to 1,675,598 from 1,486,091 a year earlier, while exports rose to $4.36 billion from $4 billion in the same period in 2019.
“Currently, PEZA has a lot of projects planned, pending applications that need to be reviewed, expansion plans, construction of new plants and new investors to partner with. However, because of the pandemic, ECQ measures are to be strictly followed to help flatten the curve of COVID-19 cases so that the lockdown can also be lifted and we can safely go back to work,” said Plaza.
Plaza called for a “unified and synchronized ECQ plan, rules, policies and enforcements by IATF, national agencies and LGUs that will address pandemic’s three main challenges that need to be addressed specifically health, economy, and public order.”