Govt wants end to ecozones

The Aquino administration is not keen on creating new economic zones to reduce foregone revenues resulting from the granting of fiscal incentives that could have been used to fund infrastructure projects.

Finance Secretary Cesar Purisima said in Tuesday’s hearing with the ways and means committee of the House that the introduction of economic zones had sharply reduced the government’s revenue base.

“Instead of putting up new ones, those already in place should instead undergo structural improvement so as to attract investors,” Purisima said.

Finance Assistant Secretary Ma. Teresa Habitan said the government had estimated P3 billion in foregone revenues for every ecozone each year.

“Economic zones all over the country are plenty enough. At the very least, we don’t want to add anymore,” Habitan said.

She said locators in the various economic zones enjoyed preferential tariff rates on importations of capital equipment and raw materials.

She said these business enterprises were also paying the government reduced gross income tax of 5 percent, instead of the 30-percent corporate income tax shelled out by companies not operating inside the zones.

The Arroyo administration had proposed the creation of new ecozones across the Philippines to entice more investments and help in countryside development through job generation.

“Even if we put up additional economic zones, investors would not come in any way as there is no road for them or other means to meet their respective logistics requirements,” Habitan said.

The Philippine Economic Zone Authority has seven registered agro-industrial economic zones, 134 information and technology parks, 65 manufacturing economic zones, two medical tourism parks and nine tourism economic parks.

The government operates four economic zones that house larger-scale investors like Texas Instruments and has six free ports across the country.

The Peza Web site shows that about 64 information and technology, 26 manufacturing, eight tourism, and five agro-industrial economic zones are being developed as of May 31 this year.

Purisima, during the same hearing, presented the government plan to exploit reclamation as a source of revenues from privatization.

“We want to make sustainable revenues from privatization through reclamation,” said Purisima, who cited Hong Kong, whose government has been steadily making money from reclamation.

He said it was among the options being considered by the government to bolster revenues and ensure that development trickles to other areas in the country.

Rep. Tobias Reynald Tiangco of Navotas appealed to the Finance Department to consider Navotas’ 165 hectares of reclaimed property that already has a master plan and architect but has yet to attract investors. –Elaine R. Alanguilan, Manila Standard Today