Over 70% of PEZA firms enjoying tax perks back to business

by Ian Nicolas Cigaral (Philstar.com), 2 Jul 2020

MANILA, Philippines — Majority of companies enjoying tax perks at the country’s largest economic zone operator are now operational as of mid-June, as the government slowly rolls back tough lockdown measures that shut the economy down for nearly three months.

In a statement on Thursday, Charito Plaza, Philippine Economic Zone Authority (PEZA) director-general, reported that 2,517 companies, or 78% of total firms located in PEZA ecozones, were open for business from June 11 to 15.

By industry, 78% of PEZA-registered business process outsourcing firms and 88% of manufacturing companies are now back to work since the government eased lockdown restrictions in June 1.

That said, BPOs and some manufacturers have been exempted from strict quarantine controls, allowing some of them to go to work at the time. The current figure from PEZA, however, shows an increase in activity for these firms.

Last July 1, President Rodrigo Duterte relaxed more movement restrictions in the archipelago, and kept Metro Manila under a general community quarantine, under which up to 50% of workforce may report for duty.

Broken down, 80% of PEZA-accredited firms in Luzon were operational while 70% and 90% of companies were open in Visayas and Mindanao, respectively, figures showed.

In terms of workers, the easing of prohibitions allowed 1.18 million ecozone employees to continue working under skeleton work force or work-from-home arrangements, Plaza said.

“Since the start of this crisis, PEZA has done its best to implement effective balancing acts to protect the health and welfare of its workers and in assisting the continuous operations of its ecozones and export companies,” Plaza said.

“PEZA implemented economic stimulus and adjustments to its existing policies to assist and support the rehabilitation and business continuity plans of the export enterprises as well as enhance the efficiency factors to put back a more vibrant economy,” she added.

In a desperate bid to break the coronavirus contagion, the Duterte government placed Luzon under enhanced community quarantine in March 17.

The government only started easing the lockdown measures in June. Metro Manila, the country’s center of business and commerce, has been under the more relaxed general community quarantine (GCQ) since June 1 and will remain under this regime at least until July 15.

To mitigate any disruptions, PEZA required registered enterprises to provide accommodation and shuttle services for their employees. But despite these steps, Plaza said the lockdowns were so stringent that about 700 companies in PEZA ecozones, or 22% of total, are yet to resume operations, putting 386,587 workers in limbo.

That said, the PEZA boss said her group supports Finance Secretary Carlos Dominguez III’s proposal to “quickly” put Metro Manila and Calabarzon regions under the most relaxed modified GCQ to help the economy bounce back from a 0.2% year-on-year contraction in the first quarter.

“We cannot anymore afford to place these areas under GCQ because it will further impact the economy and in effect, grievously affect our countrymen,” Plaza said.