BAGUIO CITY – The Philippine Economic Zone Authority (PEZA) explained the decrease in the share of the city government from the operation of locators within the Loakan-based economic zone is primarily due to the reported significant reduction in the production and gross receipts of the existing locators.
Lawyer Rene Joey S. Mipa, PEZA Baguio Zone Administrator, said that while it is true that there had been a drop in the city’s share from the PEZA locators over the past three years, the employment by the locator remains stable that is why city residents continue to earn income from their employment with the existing locators.
Mipa reported that as of the end of 2016, the existing PEZA locators have a total workforce of over 14,000 aside from the jobs to be generated by the two new locators that signed contracts with the zone and other potential locators in the future.
Earlier, City Accountant Antonio L. Tabin reported there had been a consistent decrease in the city’s share from the PEZA locators over the past three years having received P224 million in 2014, P196 million in 2015 and P160 million last year.
Tabin expressed concern that with the continuous drop in the city’s PEZA share in the coming years, the city’s additional sources of revenues will be greatly affected, thus, its annual budget will also be affected in all probabilities.
Under the PEZA law, host local governments are entitled to 2 percent share from the annual gross receipts of the locators doing business within the zone and the same shall be directly remitted to the concerned local government.
Mipa added there is still a bright prospect for the PEZA in the city because of the increasing number of inquiries for possible businesses within the zone or in identified economic zones in the city in the future.
According to him, the city remains to be a favorite expansion area of information and communication technology companies and business process outsourcing firms that is why PEZA will remain as one of the city’s major economic drivers in the future.
He said that with the expected operation of additional locators in PEZA, the city’s share of the income of the zone will surely increase in the coming years but the local government will only realize the said increase after the fourth year of operation because of the 4-year tax holiday granted by PEZA to their locators.
Mipa pointed out PEZA remains in aggressively promoting the PEZA in the city so that more locators will be enticed to invest in the zone to help generate more jobs for residents and contribute to the overall growth of the city.
PEZA officials want local governments nationwide to actively participate in the identification of potential economic zones in their respective areas of jurisdiction so that PEZA will help aggressively promote such zones in both the local and international markets to attract more foreign investors in the country.
By Dexter A. See
