Investment projects approved by the Philippine Economic Zone Authority plummeted 41 percent in 2018 to P140.24 billion from P237.57 billion in 2017.
Data culled from Peza showed that the number of investment projects declined 4.5 percent last year to 529 from 554 projects in 2017.
“The drop is for new investments caused by the uncertainties of change of policies [and] incentives. Investments dropped also because of the forthcoming elections where the next Congress might change again the policies,” said Peza director-general Charito Plaza.
Plaza said despite the drop in investments, economic zones’ exports and employment increased last year.
Exports receipts climbed 6.58 percent to $45.18 billion as of October 2018 from $42.38 billion a year ago, while employment expanded 7.33 percent to 1,499,577 from 1,397,040.
Plaza said the increase was due to efforts to maximize production before the expected enactment of the Tax Reform for Attracting Better and High-Quality Opportunities or Trabaho bill which would reform investment incentives in the country.
Data showed that despite the general lackluster performance of the ecozones last year, the information technology sector posted a 32-percent increase in investments to P20.56 billion from P15.56 billion in 2017. Employment in the sector also increased 8 percent to 733,479 from 678,799 while exports rose 9.33 percent to $9.8 billion from $8.97 billion.
Plaza said the IT sector had been continuously expanding ahead of the implementation of new laws and change of policies. “IT [companies] also can easily pull out and transfer if they’re unhappy of the new policies,” she said.
She said Peza continued to encourage industries to expand and “not to fear change of policies.” She said the agency was “doing its best to retain the benefits/incentives that are working and even enhance the existing set of perks.”
Plaza said with the current set of incentives, the Philippines became very competitive with other countries in attracting investors.
“Peza industries are exporters and are efficiency-seekers so they weigh the advantages and disadvantages of the [host-countries’] incentives and other factors of production, given the huge capital investments they’ll invest in the country of their choice,” she said.