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Investing in the Philippines
A Quick look atopportunities
Prepared by the Institutefor Comparative andAdvanced Studies
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Philippine Special Economic Zones
A Special Economic Zone (SEZ) is a geographical regionthat 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 specificzone types, including Free Trade Zones (FTZ), Export
Processing Zones (EPZ),Free Zones (FZ), Industrial
parks or Industrial Estates (IE), Free Ports , UrbanEnterprise Zones and others.
Usually the goal of a structure is to increase foreign directinvestment by foreign investors, typically an international
business or amultinational corporation (MNC).
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Philippine economic zones (ecozones) arecollections of industries, brought together
geographically for the purpose of promotingeconomic development. These ecozones were
established through Republic Act No. 7916,otherwise known as "The Special Economic
Zone Act of 1995" as amended by Republic ActNo. 8748.
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Philippine Ecozones are generally administeredby the Philippine Economic Zone Authority
through a Board (PEZA Board), attached to theDepartment of Trade and Industry.
The PEZA Board sets the general policies onthe establishment and operations of the
Ecozones, industrial estates, export processingzones, free trade zones, and the like. They alsoreview proposals for the establishment ofEcozones, which they subsequently endorse to
the President of the Republic of the Philippines.
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In addition, the PEZA Board regulates andundertakes the establishment, operation andmaintenance of utilities, other services and
infrastructure in the Ecozone, such as heat,light and power, water supply,
telecommunications, transport, toll roads andbridges, port services, and the like.
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Several incentives are granted to businessestablishments operating within PhilippineEcozones, particularly those found in the
Omnibus Investments Code of 1987.[11] Theseincentives include income tax holidays; zeropercent (0%) duty on importation of capitalequipment, spare parts, and accessories;
exemption from wharfage dues and export tax,impost or fees; and the simplification of customsprocedures, among others.[12] In addition,
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The Special Economic Zone Act of 1995exempts business establishments operating
within Ecozones from all taxes. In lieu of payingall other taxes, business establishments are
only required to pay five percent (5%) of theirgross income to the national government
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Activities Eligible for PEZA Registration andIncentives include but are not limited to (1)
Export Manufacturing; (2) InformationTechnology Service Export; (3) Tourism; (4)
Medical Tourism; (5) Agro-industrial ExportManufacturing; (6) Agro-industrial Bio-Fuel
Manufacturing; and (7) Logistics andWarehousing Service
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Although designed to operate separately from thepolitical and economic milieu of surroundingcommunities, Philippine economic zones do in fact
interact with their neighbors.
As of31 May 2010, there were more than 200Ecozones in the Philippines. Of these more than 200Ecozones, seven (7) are Agro-Industrial EconomicZones, 134 are Information Technology Parks andCenters, 65 are Manufacturing Ecozones, two (2) areMedical Tourism Parks/Centers, and nine (9) areTourism Economic Zones. Of the 41 private economic
zones, the biggest exporter is Gateway Business Parkin General Trias, Cavite and the second biggestprivate ecozone is Laguna Technopark Inc.
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The four governmentally owned are CaviteEconomic Zone, Bataan Economic Zone,Mactan Economic Zone and Baguio City
Economic Zone. Some of the more well-known
Economic zones are the Clark SpecialEconomic Zone, and Subic Economic Zone,former military bases of the United States of
America.
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Some of the over 200 SEZs in the Philippinesare as follows:
Subic Bay Metropolitan Authority (76.59hectares)
Clark Special Economic Zone (29,365 hectares)
Bataan Export Processing Zone (1,733.37hectares)
PHIVIDEC Industrial Authority
Zamboanga City Special Economic Zone
Authority
Cagayan Special Economic Zone
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Aurora Pacific Economic Zone and FreeportAuthority (APECO)
Light Industry & Science Park I, II, & III (272.22hectares)
Laguna Technopark (289.95 hectares)
Laguna International Industrial Park (34.88hectares)
Hermosa Ecozone Industrial Park (142.04
hectares) Keppel Philippines Marine Special Economic
Zone (22.92 hectares)
Filinvest Technology Park - Calamba (51.07
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Current Security Assessment
Special Economic Zones are well protected areasand are at times considered as retirementhomes for foreigners,The only areas considered
to be of significant risk as the following areas:1. ARMM(Lanao and Cotabato Areas)
2. Samar
3. Leyte4. Marinduque
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