Peza locators seek to be placated as Duterte continues to spook
More investors are raising concerns about what they perceive as a growing instability under the Duterte administration, which they believe may erode the country’s attractiveness as an investment destination and derail the gains achieved over the past several years.
J. Porfirio Ll. Yusingco, deputy director general of the Philippine Economic Zone Authority (Peza), admitted many locators have been asking about recent developments concerning the rising number of alleged extra judicial killings and the tough-talking President’s remarks against strategic economic partners such as the United States and the European Union (EU).
“As far as these developments are concerned, we assured them that these are just birth pains. There were concerns specifically about the peace and order situation and the [alleged] extra judicial killings because a lot of our incentives (or the preferential trade deals) are connected to human rights protection,” he said.
Still, these were concerns that needed answering, he said. “You can’t [turn] a blind eye to these developments but we continue to assure them that it’s business as usual,” Yusingco added.
Yusingco cited for example the EU generalized scheme of preferences (GSP+), which mandates a beneficiary country to comply with certain conventions that covers, among others, human and labor rights. Serious violations of these conventions may result in a temporary withdrawal from the EU GSP+, a preferential trade agreement that allows over 6,200 products manufactured locally to be exported to the EU at zero tariff. A temporarily withdrawal, in case a beneficiary country fails to meet its obligations, should be seen as an “exceptional measure.”
Another concern raised by Peza locators was the two-year moratorium being imposed by the Department of Agrarian Reform on land conversion projects, including economic zone developments.
Yusingco said Peza would be asking for exemptions for ecozone projects to ensure that prospective investors would have adequate areas where they can set up their respective production facilities.
“We’re [threshing] this out closely through the Department of Trade and Industry … There should be some sort of consideration because if we don’t have new ecozones, we will have a problem as to where to bring investors whom we will be inviting,” Yusingco said.
He said Peza barely has enough land these days. He said there was a already a need to increase the number of economic zones to maximize the country’s growth momentum.
He said Peza did not see the moratorium coming, but expressed optimism this would be resolved so that ecozone developers will be allowed to proceed with their respective projects. During Peza’s recent board meeting, the agency approved proposed investments for at least four new ecozones, one of which would be put up by the SM Group.
Yusingco said the locators also questioned the supposed “win-win” solution the government suggested earlier to fight the abusive type of labor contractualization and end-of-contract (endo) scheme.
Trade Secretary Ramon Lopez earlier pointed out legitimate contractualization was different from the illegal endo schemes wherein workers were hired temporarily for five months and transferred again to another entity for another five-month contract. He said there were legitimate contractualization schemes accepted globally.
Under the proposal, workers would be hired on a regular and permanent status by a third party service provider. The latter would be mandated to provide these workers benefits befitting regular employees, including retirement and separation packages.
The proposal also provides that workers being deployed should not be co-terminus with the agency’s contract with the principal company. This would then assure workers of security of tenure.
Yusingco said Peza would seek to clarify the details of this plan, which has created confusion among locators.
