By Bernadette D. Nicolas, July 16 2019; Business Mirror

Image Credit to Business Mirror

THE national government has decided to let go of P159 billion worth of project proposals to develop 131 information- technology (IT) centers and parks in Metro Manila even if these were already approved by Philippine Economic Zone Authority (Peza) board but have yet to be endorsed to the Office of the President.

Executive Secretary Salvador C. Medialdea told the BusinessMirror that they will go by the Administrative Order (AO) 18, which imposed the moratorium on economic zone development in the nation’s capital despite Peza’s appeal to exempt those applications approved by the Peza board and are already for endorsement to the OP.

“We will abide by the AO and the intent behind it which is to spur growth in the countryside. Thus, applications for Metro Manila which had not been submitted to OP as of the date of the AO will no longer be entertained, even those already approved at the level of Peza,” Medialdea said in a text message.

“The only Metro Manila applications that we will continue to process are those which Peza already submitted to the OP before [the] AO took effect.”

Peza Deputy Director General Tereso O. Panga said these 22 applications to put up IT centers and parks in Metro Manila that are pending with OP but just lack certain documents amount to P34.23 billion.

Under AO 18 signed last June 17, the President ordered Peza to “no longer accept, process or evaluate applications for the establishments in Metro Manila immediately upon the effectivity of this Order and until such memorandum is lifted.”

Medialdea also said they “will not grant a six-month extension across the board” as requested by Peza, although they already discussed the proposal with the Department of Trade and Industry given its impact on investments.

In a letter dated July 1, Peza Director General Charito B. Plaza appealed to Medialdea to give developers at least six months to complete their requirements, which are apparently time-consuming to secure.

Nonetheless, the Executive Secretary said they will grant Peza 30 days to complete the lacking requirements as stated in the AO, but he added they may consider accepting supporting documents beyond 30 days “on a case-by-case basis” and “depending on the reasons for inability to complete the requirements and how close Peza is to completing those requirements.”

In any case, he said, “the extension will only be up to a reasonable period to complete the requirements.”

The Palace official added: “We considered, among others, the fact that the concerned agencies were well-aware of this impending moratorium since it was first raised for consideration, and much time had already lapsed since then for adjustments to be made. We also took note that the establishment of ecozones is a grant of a privilege rather than the enforcement of a right, thus giving us less reason to be lenient with extensions.”

Asked until when will the moratorium be imposed, Medialdea said there is still no discussion on that.

“We will have to see first how this moratorium will actually impact the development of the regions before we begin to discuss when it should be lifted,” he said.

DTI retreat

Trade Secretary Ramon M. Lopez earlier said he has abandoned his plan to seek the extension of transitory period to 90 days, saying the objective of the order must be realized the soonest and this can be done by allowing the provisions to take effect as is.

Industry leaders have already expressed concern that the moratorium will put IT and business-process management firms, which are mostly operating in Metro Manila, in an office space crunch.

Plaza also said in the same letter to Medialdea that there is a tight supply in available IT building spaces under Peza given the forecast IT office space take-up of 450,000 square meters this year vis-à-vis the available 214,000 square meters in Metro Manila, which is less than half the industry’s demand for office spaces.

As of June, Metro Manila hosts nearly two thirds of IT centers and parks in the Philippines. Of the 278 operating IT economic zones nationwide, 167 are located in the nation’s capital with approved investments of P286.35 billion, according to data from the Peza.

Most of the IT centers and parks in Metro Manila are situated in the central business districts of Makati, Quezon City, Pasig, Taguig, Mandaluyong and Muntinlupa.