Ecozone investments drop 27% from Jan to July

MANILA, Philippines — Investment pledges for projects approved by the Philippine Economic Zone Authority (PEZA) declined 27 percent in the January to July period from a year ago as the coronavirus pandemic stalled economic activities in the country.

In a statement, PEZA said it approved investments worth P52 billion in the seven- month period, lower than the P71.21 billion cleared during the same period last year.

The committed investments this year are for 164 new and expansion projects in economic zones.

While total investments approved in the January to July period decreased year-on-year, PEZA said investments from foreign sources went up 26 percent to P36.26 billion from the previous year’s P28.75 billion.

Meanwhile, local investments fell 63 percent to P15.75 billion as of end-July from P42.46 billion a year ago.

PEZA said both the manufacturing and information technology-business process management (IT-BPM) sectors registered higher investments in the January to July period from last year.

Investments in the manufacturing sector, in particular, climbed 24 percent to P23.34 billion from P18.77 billion the previous year.

For the IT-BPM sector, investments rose 37 percent to P11.40 billion from P8.32 billion a year ago.

Meanwhile, exports from the economic zones slid seven percent year-on-year to $24.81 billion in the first semester, while employment was reduced by three percent to 1.48 million as of end-June from last year.

Despite the drop in overall investments in the January to July period, PEZA director general Charito Plaza remains optimistic the country would recover from the effects of the pandemic.

She said the health crisis should be seen as a learning experience and an opportunity to entice investors to the country.

“Even with the difficulties brought about by the COVID-19 pandemic, PEZA continues to attract investors to the country and promote the creation of special economic zones, especially into the countryside, that will become economic drivers in every region,” she said.

Given the challenges posed by COVID-19, she said PEZA expects total investments approved by the agency this year to reach half of last year’s P117.54 billion.

“That’s our conservative estimate considering the world recession where export companies with branches in other countries might consolidate their resources and close other branches in preference to countries with low cost of doing business and are investor-friendly,” she said.

Prior to the pandemic, PEZA was aiming for a 10 percent growth in approved investments this year.