The Philippine Economic Zone Authority (PEZA) said it will “definitely” set a new record for investment approvals this year, as more investors relocate their operations into the country's ecozones. The agency administers the country's special economic zones, where registered businesses receive fiscal and non-fiscal incentives to operate and expand.

“We have some more months to go, definitely, we will exceed (the record),” PEZA Director-General Tereso O. Panga told reporters on the sidelines of the 15th Arangkada Philippines Forum on Friday.

Investment approvals stood at P297.14 billion at the end of September, bringing the agency close to its P300-billion full-year target. PEZA's all-time high was recorded in 2012, when approvals reached P311 billion.

Mr. Panga said at least P10 billion worth of investments are lined up for approval at the PEZA board meeting next week.

“We now see the trend that many of these companies are shifting production out of China,” he said. Such relocations, part of a wider supply-chain diversification often called a “China-plus-one” strategy, have made Southeast Asian economies, the Philippines among them, competing destinations for new manufacturing capacity.

In New Clark City, a master-planned development rising in Central Luzon, PEZA expects to sign three big-ticket projects covering semiconductors and hyperscale technologies. “Three more big-ticket projects will be applied within the year, with each locator investing a minimum of P50 billion,” Mr. Panga told the forum.

Separately, a Japanese electronics investor is considering a $1-billion expansion at the Laguna Technopark, a long-running industrial estate south of Metro Manila. “They paid a courtesy visit to Finance Secretary Frederick D. Go, and we accompanied them. It is a big Japanese investor,” Mr. Panga said.

He also noted that several IT ecozone applications in Metro Manila await presidential proclamation, the step that formally establishes an area as an ecozone. In July, President Ferdinand R. Marcos, Jr. issued Administrative Order (AO) No. 45, which directs the PEZA Board to accept, process and evaluate all applications for IT centers and parks in the capital region.

“As a result of that, we expect more GCCs (global capability centers) coming to the Philippines,” he said. GCCs are offshore hubs where multinational companies base functions such as software development, finance and customer support.

Mr. Panga added that current IT park applications for ecozone status serve industries such as tourism, food and beverage, and gaming software development.

For next year, PEZA expects investment approvals to come from electric vehicle transport and electronics. “We are now diversifying. This is not your usual assembly, testing and packaging. We're going into high-tech,” he said. Electronics anchor the country's export economy, where operations have long been concentrated in the assembly, testing and packaging stages of the semiconductor supply chain.

— Beatriz Marie D. Cruz, BusinessWorld

Source: BusinessWorld