BPO projects affected by ban valued at P160B

Nearly P160 billion worth of IT-BPM office spaces might no longer become economic zones after Malacañang banned new ecozones in Metro Manila last month in an order that caught many by surprise.

Data from the Philippine Economic Zone Authority (Peza) showed that this was the total value of 131 economic zone proposals that failed to make the cut when the ban took effect on June 22.

Economic zones in Metro Manila are essentially buildings and office spaces that cater to IT-BPM firms that want to get tax perks such as years of income tax holiday.

In a letter to Malacañang dated July 1, Peza Director General Charito Plaza asked the Office of the President to give these proposals at least six months to complete their respective requirements.

A six-month transition period is longer than what is currently allowed under Administrative Order No. 18 (AO), which slapped the moratorium in Metro Manila in an effort to push for countryside development.

The AO gave a grace period of only one month for Metro Manila-based economic zone proposals that have already been endorsed to Malacañang. Peza said there were only 22 of these proposals worth a combined P34 billion.

“As the IT developers might find the transitory provision (i.e., 30-day period) in AO 18 to be arbitrary and given the longer processing time for ecozone proclamations, we respectfully request for at least six months transition period,” she said.

Plaza also asked Malacañang to exempt eight cities from the moratorium to give their respective local governments “the opportunity to host IT companies that will generate employment and improve their fiscal position.”

These are Manila, San Juan, Marikina, Las Piñas, Malabon, Caloocan, Pateros and Valenzuela. While around 60 percent of the 278 IT parks and centers in the country are in Metro Manila, these eight cities either had just one or no ecozone at all, according to Peza data.

But even if they are given an extended moratorium, Tereso Panga, Peza director general for policy and planning, said that less than half of the 131 projects might be able to complete their requirements.