The Philippine Economic Zone Authority (Peza) has asked President Duterte to lift the ban on new economic zones in Metro Manila that had discouraged call center companies from either setting up shop or expanding in the capital.
Peza Director General Charito Plaza told Pres. Duterte in a May 3 letter that it was time to lift Administrative Order No. 18 issued in June 2019 as the Corporate Recovery and Tax Incentives for Enterprises (Create) had already been passed.
High vacancy rate
The recently enacted Create law cut corporate taxes across the board while rationalizing tax breaks, giving them only to strategic investments that meet certain performance-based standards. Plaza noted that the law also provides for incentives located in Metro Manila and other metro cities.
“As you pointed out in your veto of some items of the Create, provision of laws cannot be hardcoded and must adapt to the changing of times. In the same vein, this applies also to administrative orders,” Plaza said in the letter.
“Lifting the moratorium on the establishment of IT building[s] in NCR (National Capital Region) is an opportune time in this time of pandemic and will provide job generation and relief to SMEs (small and medium-sized enterprises) in Metro Manila,” she said.
Plaza added that with the exit of online gambling firms and the shift to work-from-home arrangements, the office space vacancy rate in Metro Manila is at its worst since the global financial crisis. Thus, allowing IT-BPO firms to enjoy perks in NCR should provide some relief.
“The multiplier effects of allowing establishments of IT building[s] in Metro Manila provides [a] recovery measure for developers and support industries still reeling from the effects of COVID-19,” she said.
Benedict Hernandez, chair of Contact Center Association of the Philippines, previously stressed the importance of first setting shop in Metro Manila before anywhere else, especially for Fortune 1000 companies that want to offshore their operations.
“Typically, if they want to invest in the Philippines for the first time, they will first think about going to Manila,” he said.
“There is rarely any new investor who jumps to the province. Their first safety comfort is to see how this works [when they establish] Metro Manila as a location,” he added. INQ
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