PEZA assures developers of uninterrupted approvals

CEBU, Philippines — The Philippine Economic Zone Authority (PEZA) has assured the outsourcing sector in Cebu of uninterrupted approval of building applications for incentives, amid the moratorium currently implemented in Metro Manila.

PEZA director general Charito Plaza was in Cebu early this week to meet with BPO players and some developers to guarantee’s Cebu’s safe plight in attracting outsourcing investments, downplaying impressions that the tight implementation AO (administrative order) in Metro Manila could also affect Cebu appeal to outsourcing investors.

Cebu IT BPM.Organization (Cib.O) managing director Wilfredo Sa-a said that the meeting with Plaza was a good gesture of assurance from the government after the situation in Manila caused worries among industry players in Cebu, specifically the building developers.

Meanwhile, in a separate interview with Contact Center Association of the Philippines (CCAP) chairman Benedict Hernandez, he said although the moratorium only confined to Metro Manila, its negative effects extend to other outsourcing destinations all over the country, as most multinational firms adopt the “Manila first” strategy, explaining that most global firms would open their first Philippine expansion in Manila first, then to other cities in the country.

According to Hernandez, perhaps the government has failed to factor in the preferences of the international outsourcing clients, particularly the Fortune 500 multinational firms.

With the tight competition, Hernandez feared that potential clients may opt to locate in other outsourcing destinations like in North America, among others.

Incentive is very important under the tight competition of attracting outsourcing clients and investors, as cost of doing business in the country is also increasing.

In an effort to boost countryside development, Administrative Order (AO) 18 slapped a moratorium on new ecozones in Metro Manila starting June 22, giving pending economic zone developers whose papers are in Malacañang about a month to iron out deficiencies in their submissions.

Although the AO only singled out the ban for Metro Manila, applications for PEZA proclamations from Cebu are also affected.

Real estate advisory and consultancy firm Colliers International Philippines earlier warned that Cebu’s outsourcing sector is under threat, if PEZA continues the slow the process of buildings’ applications for accreditation.

In its recent property briefing held in Cebu, Colliers officials led by managing director Richard Raymundo expressed apprehensions that the appeal of Cebu as the outsourcing investment hub in the country will be affected by the government’s decision to hold or slow down the approval of PEZA accreditation applications especially for buildings located in the urban districts.

Colliers reported that of the 400,000 square meters approved by PEZA in the recent months, not a single square-meter coming from Cebu.

The PEZA moratorium will not only hurt the BPO sector in Metro Manila, but also in Cebu, as applications by building developers here are also pending in a bid to spread the opportunity of investments to under-developed areas.