Investment pledges approved by the Philippine Economic Zone Authority (PEZA) continued to increase in the first nine months despite a slowdown prior to the elections and growing foreign investor concerns in the country’s political landscape. File photo
MANILA, Philippines – Investment pledges approved by the Philippine Economic Zone Authority (PEZA) continued to increase in the first nine months despite a slowdown prior to the elections and growing foreign investor concerns in the country’s political landscape.
Citing preliminary data, PEZA deputy director general Justo Porfirio Yusingco said investment commitments approved by the agency grew between three and five percent to about P78 billion from January to September.
PEZA promotion and public relations group manager Elmer San Pascual, however, said these figures are still lower than the actual numbers. He said final figures would be released this week.
“What supported the investments growth is the expansion and new projects that are being approved. There is also a slight increase in the number of locators because of new companies coming in but the substantial amount of investments still come from expansion projects of the existing companies,” Yusingco said.
“As of July we have already created about 75,000 this year for additional jobs,” the PEZA official added.
Yusingco said sustained investment commitments received and approved by the agency as of end September puts PEZA on track to hitting a five percent growth by year-end.
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He said there was a slight slowdown in investments prior to the national elections but this has already recovered.
“Because there’s a turnover so a lot of companies were on a wait and see with their expansion because of uncertainty of who will win and what will happen. Now that the elections are over it started to come. I don’t see any slowing down except for the time prior to elections, but that’s over,” Yusingco said.
“Traditionally, in the last quarter that’s when investments pour in. So we’re expecting the same for this year. In terms of locator companies, it is still manufacturing companies that bring in bulk of the investments,” he added.
Yusingco, however, said PEZA has been receiving various concerns among foreign investors about the current administration’s war on illegal drugs and contractualization.
“They are asking of course what we see as far as these developments are concerned. They are asking about peace and order, extrajudicial killings, especially that a lot of our incentives abroad are connected to human rights. That is what they are keeping a close watch on,” he said.
The country’s beneficiary status under the EU-Generalized Scheme of Preferences Plus, for example, necessitates the implementation of the 27 international treaties and conventions on human rights, labor rights, environment and governance.
The Philippines was granted beneficiary country status under the EU-GSP+ in December 2014, allowing the country to export 6,274 eligible products duty-free to the EU market.
“We make it a point to assure them (investors), but it’s a concern. You cannot put a blind eye to it. But we continue to assure them. What we tell them is these are just birth pains and after a while it will go away,” Yusingco said.
However, another emerging concern among PEZA locators is the government’s ongoing fight against contractualization.
“We want the Department of Labor and Employment to describe to us exactly what is endo. Because there is a need to look at the particular characteristics of PEZA locators because they are not ordinary companies. PEZA competes internationally.
Local companies are not their competition so when you look at the companies in PEZA, you have to look at what is the situation of the competition of this company in Malaysia, Vietnam, and Thailand,” Yusingco said.