Investors jittery over TRAIN 2 — PEZA

MANILA, Philippines — The Philippine Economic Zone Authority (PEZA) said the government’s second tax reform package is causing jitters to investors as it warned of the possibility of existing locators pulling out if the current incentives are scrapped.

PEZA director general Charito Plaza said yesterday while the agency is thankful that its incentives were retained under TRAIN 1, the second tax reform package “is still sending worries to investors.”

“That is why we are lobbying to the Secretary of Finance to give us a period to prepare these new incentives because we will see to it to retain incentives to the existing investors so that they will not leave and then for the new investors, we will give more incentives to the basic industries, to the industries that will create huge number of jobs, to industries that will manufacture or produce the basic crops,” Plaza said.

According to the PEZA chief, foreign investors may pull out of the country should the current set of incentives they are enjoying in economic zones be removed by the government.

“Now once we remove or put a stop to these incentives, what will happen? They will pull out. Those who are already here will start preparing to close and look for other areas. Most, if not all, countries now are building ecozones and are coming up with incentives packages that will attract investors to locate to their countries,” she said.

With PEZA’s immense contribution to the Philippine economy, Plaza said it is wrong to say that the government is losing revenues and foregoing so many taxes because the agency is giving so much incentives.

“Let us not be conscious of the taxes collected, the cash collected by the government, but let us look at the total development brought by ecozone and industries,” Plaza said.

Since its beginning in 1995 to 2017, PEZA has attracted investments worth P3.614 trillion and generated 1.42 million direct employment and seven million more indirect employment. Its export income has likewise reached $706.29 billion.

“Another contribution is the upliftment of the once 5th, 4th class municipalities which are now cities because of ecozones and industries which create multiplier effect once we give their people jobs and created more businesses. There is also social progress brought by the ecozones and industries, with insurgency being gone, crime index went down, and poverty incidence went down,” Plaza said.

“That is why we have to continue giving incentives to industries because they input huge capital and big number of jobs,” she added.