February 4th, 2023
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) called on President Marcos to appoint a permanent Director-General for the Philippine Economic Zone Authority (PEZA), following the recent confirmation of Trade Secretary Alfredo Pascual, who also chairs the PEZA Board.
“Many congratulations to Secretary Fred Pascual. Now I hope a permanent PEZA head is next,” Salceda said.
Salceda adds that he hopes the Trade Secretary can make a strong recommendation to the President to appoint a PEZA Director General “without further delay.”
“The world is beginning to go back to pre-pandemic normalcy, as Secretary Pascual would know. So, some unique windows of opportunity to take advantage of COVID-19 worries of multinational firms are also closing. We need a PEZA DG who can shoot decisively in the hunt for big whales and big elephants of investors.”
“Only security of tenure can give that certainty. I’ve recommended a few names, but I think Secretary Pascual can make that case to the President best.”
“With PEZA now having a permanent Board chair, we need a permanent PEZA Director General, not an OIC. The PEZA DG can make longer-term commitments and make a stronger case for special incentives for special circumstances to the Fiscal Incentives Review Board. That’s crucial for attracting big whales,” Salceda said.
As for what he meant by “big whales,” Salceda said he hopes the country could begin preparing more long-term incentive packages for “big electronics companies such as TSMC, big defense manufacturers, and firms engaged in critically deficient areas, such as shipbuilding.”
“The services sector is straightforward, almost ministerial. But manufacturing, especially capital-intensive manufacturing, requires more tailor-fit incentives and various other forms of support. During PGMA’s time, we provided special electricity cost and access incentives to Texas Instruments through EO no. 666, s. 2007. That is a non-fiscal incentive that is perfectly allowed under CREATE.”
“A permanent PEZA Director General can negotiate such incentives with big investors, but we need someone who has some job security over the remaining 5 years of this administration. The current OIC arrangement doesn’t quite meet that standard.”
Salceda is particularly concerned that “we need to be very aggressive with our FDI. Our import cover is a bit less than pre-pandemic levels because the BSP appears to have been conducting open market operations to protect the peso. Aggressive FDI attraction will pad our GIR and protect us from currency-related shocks. You need a permanent PEZA DG for that.”