THE Philippine Economic Zone Authority (PEZA) said it expects to register more ore processing plants operating in special economic zones, after President Rodrigo R. Duterte encouraged the industry to do more processing domestically.
PEZA promotions group manager Elmer H. San Pascual told BusinessWorld that currently only two processors focused on exports are registered for PEZA incentives.
“[We met] with [Environment and Natural Resources] Secretary [Roy A.] Cimatu [and we told him] there are a lot of parties inquiring [about processing plants] but there should be some harmony in the policies of the Philippines on this,” he added.
Mr. San Pascual said PEZA can register export enterprises engaged in manufacturing, processing, and assembly, but has no authority to register mineral extraction operations, whose incentives are covered by a separate law.
At present, there are 378 economic zones nationwide, but only four are run by PEZA while the rest are owned by the private sector.
“We are encouraging [more to register for accreditation] but those will have to be shouldered by the private sector. If they think they would like to put up a special economic zone in the country and if they think that they can profit from it then we will support that,” Mr. San Pascual said.
Mr. San Pascual said PEZA has been in talks with the Chamber of Mines of the Philippines (CoMP), which expressed concerns over importing processing equipment.
“The one that we have in Taganito [Taganito HPAL Nickel Corp.] in Surigao Del Norte, the investment there is very big but the nickel that they process is only at the medium level (quality), not the high end. They will need more expensive machines so they can really process high-grade minerals,” he added.
Aside from Taganito, the other PEZA-registered processor is Coral Bay Nickel Corp. in Palawan.
Mr. San Pascual added that both Taganito and Coral Bay generated government revenue of P395.7 million and P611 million, respectively, in 2014.
Mines and Geosciences Bureau Acting Director Wilfredo G. Moncano told BusinessWorld earlier that the agency held talks with PEZA beginning four months ago on encouraging more domestic processing.
“Our cost of power is very expensive so there are necessities given to those who will invest and locate in the special economic zone so that way they can, of course, lower the cost of their operations due to incentives. There are sites mentioned but I am not sure [if those are final],” he added.
CoMP President Gerard H. Brimo said that PEZA’s offer to help put up more economic zones is secondary to the industry’s concern about higher excise taxes in the new tax reform package.
“It’s the reality and we accept it. It’s actually pretty expensive already because there are a number of mines that are operating in mineral reservations; they’ll be paying 11% on their gross revenues whether they make money or not,” he added.
“We’ve done some computations comparing what the new tax structure looks like compared to other countries, and we are a bit on the expensive side now. But so be it, we accept it now. Let’s just hope that prices remain firm so we can easily absorb it.”