PEZA investments continue to drop

The slump in new investments in the country’s economic zones persisted as of end-April as uncertainties from the government’s second tax reform package continued to spook investors.

A source who doesn’t want to be named told The STAR that investment approvals by the Philippine Economic Zone Authority (PEZA) remained dismal in the first four months, plunging by another double digit for the January to April period.

The four-month performance comes on the heels of another lackluster April outcome, a third straight month of decline for PEZA in terms of investment approvals.

The last time PEZA-registered growth in approved investments was in January, in which pledges jumped 27.20 percent year-on-year.

In the first quarter, PEZA-registered pledges nosedived by more than 40 percent to P30.72 billion from P51.34 billion in the same period in 2017.

Sought for comments, PEZA director general Charito Plaza said the slowdown in new information technology (IT) and manufacturing investments persisted as of end-April – a trend that has plagued the agency since last year when discussions on the first package of the tax reform law started.

PEZA manager for promotion and public relations Elmer San Pascual in earlier interviews said a number of foreign companies have shelved new investments and expansion plans due to uncertainties brought about by TRAIN 1.

In 2017, PEZA recorded its worst year for new IT and manufacturing investments.

Despite ending the year with an 8.89 percent growth in total investment approvals, total IT investments of P15.56 billion and manufacturing investments of P48.36 billion in 2017 were the lowest for both sectors in PEZA’s history.

“Manufacturing firms don’t want to invest if there is uncertainty because in manufacturing, it requires huge investment in equipment and machine. TRAIN is the number one cause of uncertainty and you cannot get investors if there is uncertainty,” San Pascual said in an interview last February.