ITBPO firms giving PEZA a 2nd look

October 23, 2018

The information technology and business process outsourcing (ITBPO) sector is showing renewed interest in the Philippine Economic Zone Authority (PEZA) as evidenced by a rebound in investment pledges since August, its director general Charito Plaza said Monday.

In a media briefing, she reported that PEZA approved PHP12.39 billion worth of investments in the ITBPO industry from January to September this year. This constitutes a growth of 8.82 percent from PHP11.39 billion investment approvals in the same period in 2017.

PEZA registered declines in investment approvals from ITBPO companies for several months, which Plaza explained, was due to uncertainties created by US President Donald Trump's protectionist statements early in his term, and the jitters brought about by the Philippine tax reform program.

Plaza said despite the challenges in both in domestic and external markets, ITBPO firms continued to boost their operations here with the increasing demand from their clients.

The bulk of registered projects in the first nine months of the year from the sector were from existing locators. Only a few new "logos" (ITBPO companies) came in during the said period, Plaza noted. “It’s because of our location… And because of our manpower,” she said.

“[It’s] market driven. They are forced to expand because of the demand of their existing clients are increasing,” she added.

Despite the improvement in investment commitments from ITBPO industry, this has not pulled the overall growth of PEZA’s performance in January to September 2018.

Investment approvals for the first nine months of the year in PEZA declined by 55.28 percent to PHP87.85 billion from PHP196.46 billion worth of pledges in the same period in 2017. Project registrations from manufacturing companies decreased by 46.17 percent to PHP24.27 billion this year from PHP45.09 billion last year.

Economic zone development likewise dropped 65.31 percent to PHP42.91 billion in 2018 from PHP123.72 billion in 2017. Pledges from other industries declined by 49.13 percent to PHP8.27 billion this year from PHP16.26 billion in the previous year.

A total of 362 project were registered with PEZA from January to September this year, declining by 17.69 percent from a total of 438 projects registered with the agency last year.

As of August 2018, jobs created inside PEZA economic zones reached more than 1.46 million, an increase of 6.79 percent from last year’s 1.36 million jobs.

Export revenues from PEZA industries went up by 6.43 percent to USD35.79 billion this year from USD33.63 billion in 2017.