MANILA, Philippines – The Philippines is fighting to keep major foreign investors to stay, as the coronavirus pandemic prompts some businesses to leave due to unbearable losses.
"Please don't get out, don't transfer," appealed Philippine Economic Zone Authority Director General Charito Plaza in a virtual briefing on Tuesday, July 7.
Plaza did not go into detail, but said there are some small companies, mostly facility and service providers, that have started to close shop due to lack of raw materials and have lost their buyers.
She said PEZA is doing everything it can to prevent the exit of bigger players.
"With the world recession, there might be export companies that will consolidate their resources.... They have to stop or close other branches in the world and concentrate their resources in countries which are investor-friendly, where the cost of doing business is low," Plaza said.
She also noted the high cost of doing business in the country, red tape, and the proposed rationalization of tax incentives as major factors that have discouraged investors. (READ: 'Noisy naysayers' vs Citira bill proven wrong by numbers, says DOF)
"We must create an impression that investing in the Philippines will cost them less, will protect and respect their investments because the laws are stable and will not be changed every time we change administration," Plaza said.
She also noted that while the country has a young workforce, a quality needed by business process outsourcing companies, the Philippines' weak internet infrastructure and connectivity may hinder prospects.
As of January to May, PEZA investments plunged by almost 75% due to the virus crisis, from P117.5 billion to just P29.5 billion. (READ: PH economy to contract by up to 3.4%, higher debt seen in 2020)
There were only 113 approved investments during the period, much lower than the 540 during the same time last year.
Around 700 or 22% of PEZA locators have temporarily stopped operations due to the pandemic, primarily due to heavy transportation and accomodation costs. This has affected over 386,000 workers.
Despite the lower growth rates, PEZA approved 26 new projects this year worth P13.1 billion. These projects are expected to employ almost 20,000 workers.
President Rodrigo Duterte recently approved 12 new economic zones, mostly located in Luzon. – Rappler.com