PEZA sets conservative 10% investments growth for 2018

Expects rebound in IT-BPO

After sorely missing its 200 percent investments growth target in 2017, the Philippine Economic Zone Authority (PEZA) has gone back to its very conservative goal setting for 2018, which is anchored on possible rebound in the IT-BPO sector and a marketing coup that the agency will be launching next year.

PEZA Director-General Charito B. Plaza said the agency has set a very conservative 10 percent investments growth target for 2018 over 2017.

Growth in investments will be buoyed by the certainty in the implementation of the government’s tax reform measure although Plaza also noted of possible concerns in the second package, which may include tax incentives, of the comprehensive tax reform program to be implemented next year.

PEZA said their investors are also exempted from the vetoed tax provisions in the newly enacted TRAIN Law saying their tax rates are on a status quo.

Plaza was also optimistic that the launch of the Philippine Ecozone Map and the holding of the Global Ecozone Convergence in early 2018 will put the Philippines in the world map as these events will gather more foreign investors in the country.

In addition, PEZA has not lost hope on the IT-BPO sector.

“In 2018, we’re looking for a rebound in the IT-BPO sector,” Plaza said. This sector posed as a major drag in PEZA’s 2017 performance.

Investment pledges registered by PEZA in 2017 grew 8.89 percent versus 2016, significantly missing an overly ambitious 200 percent growth target or P500 billion in new investments.

Plaza reported that total registered investments in 2017 reached only R237.57 billion from R218.176 billion in 2016. PEZA said that 67 percent of the approved investments involved ecozone development projects. There were also fewer 554 projects registered as against 572 in 2016.

Investments from the IT-BPO sector also dried up last year, largely cutting down growth to a simple single digit. Investments from the IT-BPO sector was cut by almost half to only R15.556 billion or 48 percent lower than the R30.44 billion sectoral investments in 2016.

Plaza stressed that although there was no IT BPO company that left the country or reduced an operation, there was not just much inflow this year. Expansion programs of existing projects were also very minimal.

Plaza blamed the tax reform bill which could have hampered decisionmaking of investors. She also cited President Trump’s unclear policy on bringing back outsourced jobs to the US shores.

Also contributing to its 2017 performance is the continuing delays in the proclamation of special economic zones by Malacanang.

Aside from investments, Plaza also reported that exports of their registered enterprises as of October, 2017 reached $42.387 billion or 8.91 percent higher compared to $38.918 billion in the same period in 2016.

Employment at various ecozones as of October, 2017 also hit more than 1.397 million or a flat growth of 5.79 percent from more than 1.32 million registered in 2016.

PEZA was also looking at 5 percent growth in employment and 8 percent for exports next year.