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Malacañang directive stalls P34.2b worth of IT projects

Some P34.2 billion worth of business process outsourcing and information technology investments were stalled after Malacañang Palace issued Administrative Order No. 18 transferring new IT parks and centers outside Metro Manila.

The Philippine Economic Zone Authority said over the weekend about 22 IT facilities with combined investments of P34.2 billion were still pending at the Office of the President despite securing approval from the Peza board.

President Rodrigo Duterte issued AO 18 on June 17 to stop Peza from accepting, processing or evaluating applications for the creation of ecozones in Metro Manila.  The order aims to disperse progress in the countryside.

Aside from decongesting Metro Manila, the AO added new requirements that economic zone developers in Manila should deliver before their economic zones could be proclaimed by the president.

“After the addition of a set of requirements, the procedure lengthened. Some of the requirements were not easy to comply with due to the difficulty of, say, getting a copy of land title,” said Peza director-general Charito Plaza.

She said, however, that the moratorium on economic zone endorsement was temporary and there was still a chance for new applicants to locate in the metropolis.

“But for those affected, we ask the government to give a little more time for these companies to look for a relocation site in the countryside,” she said.

Malacanang is giving affected IT parks and centers three months to look for alternative sites outside Metro Manila.  Peza said it would appeal to the Office of the President to allow IT parks and centers at least six months to move to the outskirts.

Peza so far approved 131 applications for economic zones which have yet to be endorsed to the OP because of the lack of required documents. Of these 131 applications, 121 are for IT centers and 10 are for IT parks.

Peza met recently with the IT-Business Process Outsourcing Association of the Philippines and the Union of Local Authorities of the Philippines to draft a common position on AO 18. 

IT special ecozone developers in Metro Manila have not been receiving tax incentives from the government since 2008, but their locators are still entitled to such perks.

IT-BPM, the second largest dollar contributor to the economy, accounts for 30 percent to 35 percent of total office space in the real estate market.

Trade Secretary Ramon Lopez expressed support for the three-month leeway given to IT facilities to move outside Manila.

“I think three months is good enough. The policy is good and the talents were from outside Metro Manila. If we want a transition, three months will suffice. This is a policy of the President. We cannot object. We have to respect that,” he said.

Topics: Malacañang , business process outsourcing , information technology , IT projects , Philippine Economic Zone Authority , PEZA
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