Perks needed to develop new ecozones

MANILA, Philippines—The Philippine Chamber of Industrial Estates and Ecozones has urged the government to grant more incentives other than income tax holidays to prospective locators to help ease the cost of doing business in the Philippines, particularly in areas that can be potentially developed as new economic zones.

This move is expected to attract more companies to set up facilities outside Metro Manila and the more developed ecozone areas like Laguna and Batangas and, at the same time, boost investments in manufacturing and industrial development, according to PCIE president and chair Rodel Emmanuel C. Adiviso.

Adiviso said the incentives could include discounted or preferential lease rates for locations that could become new ecozones; co-financing between government agencies and the private sector for certain projects of national interests; incentives for the power sector to be able to lower electricity rates; discounts on interest rates for certain loans and borrowings; and, in some cases, especially for proposed projects in calamity ravaged areas, longer income tax holiday period.

He explained that it would be more meaningful to provide appropriate incentives for new ecozones to reduce the risks of putting a facility in a new area. Otherwise, these prospective projects would continue to be concentrated mostly in the already established growth corridors.

“As you go to an undeveloped area, proper incentives should be given so that companies will take the risk of going there. If it’s undeveloped, what will be my motivation of going outside if there would be equal incentives in Batangas and Cotabato alike,” Adiviso added.

He said that the government must also be able to prepare for potential investments in the manufacturing sector by ensuring the availability of adequate and proper infrastructure as well as the sites that could host these proposed facilities.

“Development outside Manila should be continued. The Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) was then developed but after that, what’s next? We should be able to push development outside, replicating the success of the Calabarzon where we were able to bring in investments. There should always be a continued push for manufacturing,” Adiviso stressed.

According to Adiviso, there used to be a study identifying certain growth areas or corridors, which could now be revived to serve as platforms for development. Attention should be given to other growth corridors like North Luzon to sustain the inflow of projects.

Ernesto M. Pernia of the UP School of Economics noted that increased investments by the private sector [for manufacturing facilities, among others] and the government [for infrastructure] could help push the economy’s growth past 7 percent.

As it is, the Philippines already has what it takes to maintain growth of more than 6 percent given the traditional drivers such as the BPO sector, real estate and construction, tourism, manufacturing and strong remittances from OFWs, Pernia said in his presentation at the PCIE Investors’ Summit on Monday.