PEZA: Stable policies, good incentives needed

THE Philippines must have stable policies and globally competitive incentives to attract manufacturing companies relocating from China, the Philippine Economic Zone Authority (PEZA) said on Thursday.

“It’s unfortunate that we’re not being considered by [ foreign] governments and their companies, because our investment and economic policies are unstable,” PEZA Director General Charito Plaza told

“We keep on changing our rules, even those that are working, [even those that were] tried, tested and globally competitive, like PEZA’s incentives package, which compensates [for] the high cost of doing business in the Philippines,” she added.

Her remarks came after the CNBC Indonesia news website reported that US President Donald Trump decided to relocate about 27 American factories from China to Indonesia, and that some European and Japanese firms are following suit and cutting supply chains with Beijing.

The move was made, it added, because of Indonesia’s manpower productivity, competitive set of incentives and good infrastructure.

“Investors are scared [and] not assured of the protection of their huge investments. [The] Philippines has a high cost of doing business, because we have the second highest power rate in Asia. We lack public infrastructures [and] have few logistics and transportation hubs, making the cost of global transportation costly, thus [depriving] the countryside [of] investors,” Plaza explained.

According to her, the Philippines also has poor information technology (IT) infrastructure.

“The IT-BPO (business process outsourcing) [sector] is attracted to the Philippines because of [its] English-speaking workers, but [the country’s] IT infrastructure [ is] lacking,” Plaza said.

The PEZA chief, however, said the country was blessed with human and natural resources, which the “government should focus on” enhancing.

“Filipinos need to become [more knowledgeable], multiskilled [and] world-class workers. Focus on skills training and matching manpower needs to the skills training programs, and professional and technical degree programs must be reviewed,” she added.

Plaza said the government should focus on making sure that the economy is export- and -production driven and not “importation and consumption dependent.”

She also said the Corporate Recovery and Tax Incentives for Enterprises Act (Create) should also be applied to local businesses.

“Create must focus on domestic enterprises to complete the supply chain, eradicate importation,

provide rationalized incentives to enable domestic enterprises, farmers to increase their production, manufacturing and export capability, making the country self- reliant, self- sustaining and resource generating,” she added.

has reached out to The Department of Trade and Industry and the Board of Investments for comment, but they are yet to respond as of press time.