Investments in the first quarter of 2022 suffered a 68 percent drop because of the current Ukraine war, lingering pandemic and the uncertainty of the May 9 elections.
From P25.382 billion in the first quarter of 2021, total approved investments in the same period this year dropped to P8.141 billion, or by 68 percent, according to the Philippine Economic Zone Authority, which cited the Ukraine war as the primary reason, hurting not just the Philippines but globally.
“These (investments) came from 29 new and expansion projects with projected annual export sales of $232.454 million and expected job generation of 3,168 direct employment,” according to BGen Charito “Ching” B Plaza.
She attributed the decline in approved investments to the Russia-Ukraine war, the ongoing pandemic and uncertainty ahead of the May 9 polls.
“Usually during election period, the investors would wait what is going to be the result of the election because they already anticipated that there will surely be new policies, laws, and rules that will be adopted by the new administration,” Plaza told Philippine Star.
The PEZA chief said several new investments are expected to come in after the May 9 polls.
Bounce back after polls
“We expect that after the election, these investments will bounce back,” Plaza said.
In April, PEZA raised its investment approvals target for 2022 to 7-8 percent growth, from its original 6 percent goal.
Plaza urged the next administration to immediately address the issue surrounding the work-from-home arrangement (WFH) for locators within PEZA’s economic zones, especially for registered information technology business process outsourcing (IT-BPO) firms and registered business enterprises (RBEs).
“We hope that the new administration will address this (WFH issue) immediately, so we can put a stop to the worries (and) the frustrations. Let us not make it a big issue because this is the appeal of the workers, not only the locators. In addition, the government is still earning despite the WFH arrangement,” Plaza said.
“Actually, the RBEs are frustrated with the Philippine government due to being unstable. We are not yet off the pandemic, (and) the effects of the Ukraine war. So let us be sensitive. Let us ask the new administration to address this immediately,” she added.
Currently, PEZA is allowing registered firms to conduct a 70 percent on-site and 30 percent WFH arrangement.
Plaza said that PEZA has currently issued 444 letters of authority (LOA) to registered IT-BPOs and RBEs that cannot immediately return to the office on April 1.
Under Fiscal Incentives Review Board (FIRB) Resolution 19-21, registered IT-BPM companies can implement a WFH arrangement for up to 90% of their workforce while still enjoying tax incentives because of the pandemic. The resolution expired on April 1, and employees were directed to return to the office.
FIRB also previously denied PEZA’s request to extend the WFH arrangement, citing the country’s improving vaccination rate.
Plaza said, the suggestion of the Department of Trade and Industry (DTI) that IT-BPO firms instead register with the Board of Investments (BoI) is “unfair” to PEZA.
“Asking the IT-BPOs to transfer to BoI, I think that is unfair because under Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act, we now have similar incentives,” she said.
Tags: #PEZA, #investments, #Ukrainewar, #pandemicandelections, #economy