“Will these zones deliver the prosperity they promise, or do they hide challenges beneath their surface?”
THE Philippines is on the brink of a new economic era, with the creation of two new economic zones, but the road to prosperity is not without its challenges.
President Ferdinand Marcos Jr. claims to have steered the Philippine economy through turbulent times, with visionary leaders like Tereso Panga, Director General of the Philippine Economic Zone Authority, leading the charge.
Panga, a stalwart in driving industrial development, has pushed forward initiatives that will shape the country’s future.
But with the proclamation of two new economic zones, a bold question looms: will these zones deliver the prosperity they promise, or do they hide challenges beneath their surface?
On Aug. 27, 2024, Marcos Jr. signed Proclamation 668 and 670, marking the establishment of two major economic zones—The Grid in Iloilo and the expansion of the LIMA Technology Center in Batangas.
These zones are more than just geographical expansions; they symbolize the government’s commitment to spurring job creation and attracting foreign investment in critical sectors like information technology and manufacturing.
Economic Powerhouses
The Grid, a sleek IT hub in Iloilo, is a 2,000-square-meter center with an initial investment of P193 million.
It is expected to become a vibrant nexus for three IT and business process management companies, bringing with them P10 million in investments and creating 250 jobs.
Meanwhile, the expansion of the LIMA Technology Center in Batangas, worth P856 million, adds 31.35 hectares of land to a zone already bustling with 169 locators and over P100 billion in investments.
These businesses generate an astounding 65,000 direct jobs. With the expansion set to be completed by early 2025, more growth is anticipated.
The development of a technology center in Iloilo reflects the Philippines’ growing strength in IT and BPM services.
Iloilo stands to become a critical node in the national economy, connecting the country to the global digital marketplace.
LIMA, on the other hand, will further entrench Batangas as an industrial powerhouse, attracting both local and foreign investors.
Both ecozones enjoy tax incentives, which will make them magnets for new business ventures and foreign direct investments. Infrastructure improvements, reduced unemployment, and increased regional development are within reach.
Challenges
But as much as these ecozones signal prosperity, they also pose potential challenges. The most glaring concern is the integration of these zones with the local economies. Ecozones can sometimes operate like isolated islands of wealth, offering minimal spillover benefits to the communities surrounding them.
Without careful planning, The Grid and LIMA may generate enclaves of progress that exacerbate regional disparities. Jobs created within the zones might not filter down to the broader population, leaving locals behind.
Environmental sustainability also hangs in the balance.
As much as PEZA emphasizes sustainable development, large-scale industrial and technological projects like the ones in LIMA and The Grid could have unforeseen environmental impacts.
If green technologies and proper environmental assessments are not rigorously implemented, both ecozones could leave behind scars on the local ecosystems—pollution, deforestation, and disrupted wildlife habitats.
Moreover, the bureaucratic machinery that governs these ecozones could become a breeding ground for corruption.
Ecozone development, often laced with tax breaks and attractive incentives, has historically been vulnerable to inefficiency and graft, undermining the integrity of the project and diverting funds away from where they are needed most.
Recommendations
To fully capitalize on the opportunities presented by The Grid and LIMA, the Marcos administration must prioritize integration.
Regional and national policymakers need to collaborate with local governments to ensure that these ecozones uplift surrounding communities, not just the businesses that operate within their borders.
Special attention must be paid to the needs of local workers—training programs and employment pipelines that directly connect the ecozone’s job opportunities with the local population are essential.
Environmental considerations must be front and center.
PEZA should adopt and enforce rigorous environmental standards to mitigate the risks of deforestation, pollution, and biodiversity loss.
In an era where sustainability is no longer a luxury but a necessity, ecozones must live up to their name by incorporating renewable energy sources and green infrastructure.
Finally, the government must enact stricter anti-corruption measures in ecozone development.
Transparent regulatory frameworks and oversight committees could prevent inefficiency and ensure that the economic benefits of these zones flow to where they are most needed.
The future of The Grid and LIMA hangs in the balance.
They have the potential to usher in a new era of economic prosperity, but only if the challenges beneath their glossy surface are acknowledged and addressed.
These ecozones will either become pillars of national progress or symbols of missed opportunity.
Imagine a future where the Philippines is a beacon of economic growth, a model for sustainable development, and a leader in the global economy.
Or imagine a future where these ecozones become ghost towns, a testament to missed opportunities and a cautionary tale for future generations.
