Eco-zones lure multinationals
JOB-GENERATION AND POVERTY ERADICATION ARE THE TWIN TARGETS OF PEZA, THE AUTHORITY TASKED WITH ATTRACTING COMPANIES TO THE PHILIPPINE COUNTRYSIDE

Bringing economic prosperity to the Philippine countryside has been an ongoing objective of several administrations and figures high on the agenda of President Arroyo’s plan to eradicate poverty over the next ten years. Since 1995, the Philippine Economic Zone Authority (PEZA) has taken the leading role in providing the private sector with the right business environment and economic advantages to attract world-class companies to areas that would otherwise remain in the quagmire of poverty and high unemployment.
“In the early years of the Ramos administration there were more than 200 economic reform bills, one of which was the Special Economic Zone Act of 1995,” recalls PEZA general director Lilia de Lima. “The thrust of the law is employment generation, particularly in the countryside, and the promotion of exports with the development of viable, world-class and environment-friendly economic zones that provide those who set up there with a long list of attractive incentives.”

PEZA encourages the private sector to handle the development of the economic zones. “This means to build, develop, run and operate. The role of PEZA is simply to run the incentives side of these economic zones.”
The four public and 12 private eco-zones that were operating in the country under PEZA’s predecessor, the Export Processing Zone Authority, have grown to 137 since Ms. de Lima came on board, including such big names as Intel, Gateway, Isuzu, Samsung, Hitachi and Fujitsu.
The Philippines’ biggest competitor for attracting multinationals, especially in the IT sector is India, according to a recent survey by a respected political and economic risk consultancy firm out of Hong Kong. “The Philippines is always competing with India because it also has an English-speaking workforce, but I think our advantage is that our culture is American and our English is American English,” Ms. De Lima points out. “As a matter of fact, a recent poll of expats living in Asia showed that the Philippines is rated the best in terms of quality of life for expats, outclassing Singapore and Malaysia. Last year the Philippines was third after Australia and the United States. This confirms that expats prefer living here,” says Ms. De Lima.

Among the reasons listed were the high availability of quality education, housing meeting Western standards with reasonable rates, attractive investment incentives, health care services, and sporting and recreational facilities. In Cavite alone, the site of the largest of PEZA eco-zones, there are 16 golf courses. “We realize that our Asian neighbors are our nearest competitors, and that they are increasing their incentives. So we have to be just as competitive,” Ms. De Lima says. “For example, there is a move to increase incentives here from an eight-year income tax holiday to 12 years.”