PHL investment regime seen risky with PEZA row–solon
An economist-lawmaker urged President Ferdinand Marcos Jr. to appoint a Director General for the Philippine Economic Zone Authority (PEZA) as soon as possible, saying the leadership issue in the agency will make investors think “our investment regime is overly politicized and therefore risky.”
An economist-lawmaker urged President Ferdinand Marcos Jr. to appoint a Director General for the Philippine Economic Zone Authority (PEZA) as soon as possible, saying the leadership issue in the agency will make investors think “our investment regime is overly politicized and therefore risky.”
House Committee on Ways and Means Chairman Joey Sarte Salceda said President Marcos should nominate a Director General for PEZA “as soon as he can find a suitable appointee” to maintain investor confidence and fight smuggling.
“With a weak peso, the best thing we can do, economically, is to focus on exports and dollar-earning industries and services,” he said.
“That means, we are surely getting the bad parts of a weak currency, such as high import prices, but we are handicapped from taking advantage of the better parts, such as higher exports-to-peso value and more competitive export pricing,” he added.
Salceda said he is especially concerned that “if the dispute extends until budget hearings in Congress, the institution will suffer.”
“The PEZA Director General submits the agency’s budget to the Board, and without a Director General, we might not be clear about which budget to discuss in Congress,” he added.
The “dispute” Salceda refers to is the competing claims to the post of head of PEZA between Duterte-era Director-General Charito Plaza, and the Officer-in-Charge Deputy Director General Tereso Panga.
Trade Undersecretary Herminio C. Bagro III said in a statement on Thursday that the PEZA Director-General position was “legally deemed vacant as of June 30 noontime” following the issuance of Memorandum Circular (MC) No. 1 by Executive Secretary Victor D. Rodriguez.
Plaza, however, is disputing that, saying the PEZA is among those covered by a subsequent Palace circular that gave holdover posts—including hers, Plaza stressed— until December 31, 2022 to stay in office.
“Only PBBM can decisively end the confusion through an appointment. The PEZA law is very clear that the Director General is appointed by the President,” Salceda said.
Salceda added that he hopes PBBM’s appointment will be “someone deeply familiar with the letter and spirit of the CREATE Law, so that PEZA can actually take advantage of the tax regime, rather than keep pushing for its amendment so early in the implementation of the law.”
“I appeal to PBBM to appoint a steady pair of hands who can help the exports sector sail through the prospect of potential lockdowns here and elsewhere, volatility in global trade conditions, the trend towards protectionism among our trading partners, and higher probabilities of global conflict.”
Drama-free
According to Salceda, the exports sector needs a captain who can steer the ship “drama-free.”
“I have several names in my head, although I don’t know how many of them will be willing to take on the role,” he said.
Among these names, Salceda listed Former NEDA chiefs Karl Chua and Dante Canlas, Trade Undersecretaries Ceferino Rodolfo and Rafaelita Aldaba, Board Secretary Juvy Danofrata of the Fiscal Incentives Review Board (FIRB), and exports economist and UPSE Professor Florian Alburo.
“The nominee can also come from the business sector, preferably someone who understands the need for strong labor, infrastructure, and energy fundamentals for a strong export industry,” he said.
Fight vs smuggling
Salceda, meanwhile, said that appointing a PEZA director general is critical in the fight against smuggling.
“This is lesser known, but the PEZA head is also crucial in our fight against smuggling, including agricultural products. Freeports and ecozones, if too lax in enforcement and too probusiness, can be used as pass-throughs for smuggled goods,” he said.
“My point is, drama-free is key. I am optimistic about a PEZA that is a partner of the Committee on Ways and Means in getting our exports up and in fighting smuggling in ecozones. I hope PBBM can name a head soon,” he added.