Investing in the Philippines

A Quick look at
opportunities

Prepared by the Institute

for Comparative and
Advanced Studies
 Philippine Special Economic Zones

A Special Economic Zone (SEZ) is a geographical region

that has economic and other laws that are more free-
market-oriented than a country's typical or national laws.
"Nationwide" laws may be suspended inside a special
economic zone.
The category 'SEZ' covers a broad range of more specific
zone types, including Free Trade Zones  (FTZ), Export
Processing Zones (EPZ),Free Zones  (FZ), Industrial parks
 or Industrial Estates (IE), Free Ports , Urban Enterprise
Zones and others.
Usually the goal of a structure is to increase 
foreign direct investment  by foreign investors, typically an 
international business  or amultinational corporation
 (MNC).
 Philippine economic zones (ecozones) are
collections of industries, brought together
geographically for the purpose of promoting
economic development. These ecozones were
established through Republic Act No. 7916,
otherwise known as "The Special Economic
Zone Act of 1995" as amended by Republic Act
No. 8748.

Philippine Ecozones are generally administered
by the Philippine Economic Zone Authority
through a Board (PEZA Board), attached to the
Department of Trade and Industry.

The PEZA Board sets the general policies on
the establishment and operations of the
Ecozones, industrial estates, export processing
zones, free trade zones, and the like. They also
review proposals for the establishment of
Ecozones, which they subsequently endorse to
the President of the Republic of the Philippines.
 In addition, the PEZA Board regulates and
undertakes the establishment, operation and
maintenance of utilities, other services and
infrastructure in the Ecozone, such as heat,
light and power, water supply,
telecommunications, transport, toll roads and
bridges, port services, and the like.

Several incentives are granted to business
establishments operating within Philippine
Ecozones, particularly those found in the
Omnibus Investments Code of 1987.[11] These
incentives include income tax holidays; zero
percent (0%) duty on importation of capital
equipment, spare parts, and accessories;
exemption from wharfage dues and export tax,
impost or fees; and the simplification of customs
procedures, among others.[12] In addition,
  The Special Economic Zone Act of 1995
exempts business establishments operating
within Ecozones from all taxes. In lieu of paying
all other taxes, business establishments are
only required to pay five percent (5%) of their
gross income to the national government
 Activities Eligible for PEZA Registration and
Incentives include but are not limited to (1)
Export Manufacturing; (2) Information
Technology Service Export; (3) Tourism; (4)
Medical Tourism; (5) Agro-industrial Export
Manufacturing; (6) Agro-industrial Bio-Fuel
Manufacturing; and (7) Logistics and
Warehousing Service
 Although designed to operate separately from the
political and economic milieu of surrounding
communities, Philippine economic zones do in fact
interact with their neighbors.

As of 31 May 2010, there were more than 200
Ecozones in the Philippines. Of these more than 200
Ecozones, seven (7) are Agro-Industrial Economic
Zones, 134 are Information Technology Parks and
Centers, 65 are Manufacturing Ecozones, two (2) are
Medical Tourism Parks/Centers, and nine (9) are
Tourism Economic Zones. Of the 41 private economic
zones, the biggest exporter is Gateway Business Park
in General Trias, Cavite and the second biggest private
ecozone is Laguna Technopark Inc.
 The four governmentally owned are Cavite
Economic Zone, Bataan Economic Zone,
Mactan Economic Zone and Baguio City
Economic Zone. Some of the more well-known
Economic zones are the Clark Special
Economic Zone, and Subic Economic Zone,
former military bases of the United States of
America.
 Some of the over 200 SEZs in the Philippines
are as follows:
 Subic Bay Metropolitan Authority (76.59
hectares)
 Clark Special Economic Zone (29,365 hectares)
 Bataan Export Processing Zone (1,733.37
hectares)
 PHIVIDEC Industrial Authority
 Zamboanga City Special Economic Zone
Authority
 Cagayan Special Economic Zone

Aurora Pacific Economic Zone and Freeport
Authority (APECO)

Light Industry & Science Park I, II, & III (272.22
hectares)

Laguna Technopark (289.95 hectares)

Laguna International Industrial Park (34.88
hectares)

Hermosa Ecozone Industrial Park (142.04
hectares)

Keppel Philippines Marine Special Economic
Zone (22.92 hectares)

Filinvest Technology Park - Calamba (51.07
hectares
 Current Security Assessment

Special Economic Zones are well protected areas

and are at times considered as retirement
homes for foreigners,The only areas considered
to be of significant risk as the following areas:
1. ARMM (Lanao and Cotabato Areas)
2. Samar
3. Leyte
4. Marinduque