ECOZONES IN-DEPTH: Bright Investment Prospects Under CREATE More; PEZA’s P200 Billion Year-End Target Within Reach

As you very well know, there has been a global slowdown of foreign investments due to geopolitical events during the past months. These were announced by UNCTAD in their World Investment Report release last June which also stated that “While the prospects for FDI remain challenging in 2024, the report says that “modest growth for the full year appears possible”, citing the easing of financial conditions and concerted efforts towards investment facilitation – a prominent feature of national policies and international agreements.” This slowdown is likewise exhibited in Vietnam, one of our closest neighbors and competitors in FDI acquisition.

Notwithstanding these headwinds and wait and see attitude of investors, I am quite optimistic that we will still meet the set target given the recent pledges from China as well as projects already in the pipeline but yet to be presented to the Board. This belief is further bolstered by the recent AMRO pronouncement just last September 10, 2024 which states: “The Philippine economy is expected to grow by 6.1 percent in 2024 and 6.3 percent in 2025, driven by higher government spending as well as an upturn in external demand, and strengthening domestic demand,” said Dr. Pongsaparn.

I believe that the ratification of CREATE MORE will open the flood gates of investments as it puts in parity our benefit packages with that of our competitors like Vietnam, Indonesia and Thailand.

The ASEAN outlook for 2024 remains positive and so with the Philippine economy with our declining inflation rate and consistent GDP growth forecast which makes the country one of the best performing economies in the region.

Under the banner of ASEAN, we are looking at creating a stronger value and supply chain among our locators in the respective countries. This will further strengthen the trade environment between ASEAN, making it a more vibrant FTA bloc and attractive region for foreign investments and exports.

There are still several outbound trips to be made in Taiwan, Japan and currently Singapore. I am quite sure that these will generate more foreign direct investments that will make us meet our targets.

The rebound of the electronics, semiconductor and EV sectors are good signs of their resiliency and we are banking on their investment expansions within the year. Our venture into new frontiers in ecozone development such as Pharma Ecozones, Aqua-Marine Parks, KIST Industry Excellence Centers and Integrated Steel Mills are expected to diversify our sources of investmenrs and mix of industries. The ecozone growth will be fuelled as well by the consistent robust performance of our IT-BPM sector and the growing tourism facility investments.

Looking at the numbers, I would see it as half full rather than half empty. The situation is quite similar to last year where the bulk of investments in PEZA were generated in the last 3 months of 2023.

With the impending passage of the CREATE More bill, we remain hopeful that more investors will register their projects with PEZA and other IPAs. This is in preparation for the expected upturn particularly in the global electronics industry including demand for electronics products (especially telephony and other consumer electronics) and EVs, and considering the country's growing middle-class and its changing lifestyle preferences. The government's strong push for increased R&D, clean and green production as well as inclusive and sustainable development will likewise prompt the entry of more science-technology-innovation and SDG-driven investments, smart and resilient infrastructure development.

As such, and with the country being touted as the next tiger economy in the region--- we in PEZA remain positive that our target forecast will be achieved for 2024.

photo credit to forefrontph.com