Investment pledges under the Philippine Economic Zone Authority (Peza) dropped nearly a quarter in the first four months of the year as the agency could not assure potential investors the certainty of tax perks.
Companies committed P29.49 billion worth of investments as of April, a 24.54-percent drop from P39.09 billion in the same four-month period a year ago, Peza data showed.
The issue still stemmed from the second tax reform package of the Duterte administration that created uncertainty over the tax incentives to be given to companies in economic zones. The Tax Reform for Attracting Better and High-quality Opportunities (Trabaho) bill failed to pass in the 17th Congress, but not without causing harm to some industries.
The lack of predictability in the business environment for those located in economic zones led to Peza’s 40.97-percent drop in investment pledges last year, its worst full-year decline in new projects since the year that followed the 9/11 bombing in the United States.
Elmer San Pascual, manager of Peza’s promotion and public relations, said last week that they still could not convince firms to expand as earlier planned, including investors in information technology and business process management (IT-BPM).