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Philippine Economic Zone Authority is optimistic foreign direct investment (FDI) inflows will recover in the fourth quarter
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This is despite a 14.5% year-on-year drop in FDI inflows for August
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October 2024 investment approvals jumped 20.7% to P91.8 billion from the same period last year
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Ecozone FDI now makes up 74% of PEZA’s total investment pledges from January to October, up 54% year-on-year
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The Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy or CREATE MORE Act is expected to bolster FDI growth further, says PEZA
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Under Republic Act No. 12066, or the CREATE MORE Act, registered business enterprises may choose between the special corporate income tax of 5% or the enhanced deductions regime right from the start of their commercial operations
The Philippine Economic Zone Authority (PEZA) is optimistic foreign direct investment (FDI) inflows will recover in the fourth quarter.
This is despite a 14.5% drop in FDIs for August year-on-year.
PEZA in a statement said FDI inflows are on an upward trajectory with projects backed by foreign equity. As of October 2024, PEZA has approved a total of P91.8 billion in foreign equity from ecozone locator and developer projects, a 20.7% increase compared to P76 billion in the same period last year. Ecozone FDI now represents 74% of PEZA’s total investment pledges for January to October 2024, up from 54% in 2023.
With ecozone manufacturing facilities known for their relatively fast setup, several of these projects are anticipated to commence construction and initial production within the year. This will potentially boost the country’s balance of payments through export activities and related financial transactions, PEZA said.
The agency attributes part of this investment uptrend to the recently signed Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy or CREATE MORE Act.
Under Republic Act No. 12066, or the CREATE MORE Act, registered business enterprises may choose between the special corporate income tax of 5% or the enhanced deductions regime right from the start of their commercial operations.
READ: Marcos signs CREATE MORE Act into law
“Given the Philippines’ status as one of the region’s best-performing economies and the strong macroeconomic fundamentals established by the current Administration, PEZA is confident that we will surpass our P200 billion investment target for 2024, driving sustained economic growth and opportunity across the country,” the agency said in a statement.
PEZA believes that the Philippines is well-positioned to secure its place as a premier FDI hub in Asia, stating, “(We) are entering a new era of investment-driven growth that will solidify the Philippines as a prime destination for FDI in Asia,” adding that it remains committed to promoting economic zones that not only create jobs but also uplift communities nationwide.
“As we continue to strengthen our investment climate, we look forward to working with our partners to turn these pledges into tangible economic progress. Together, we are building a Bagong Pilipinas that stands as a global hub for innovation, resilience, and prosperity,” PEZA said.
