PASAY CITY -- The Philippine Economic Zone Authority (PEZA) participated in the recent outbound mission and bilateral meeting led by the Board of Investments (BOI) for the Philippine-Switzerland 5th Joint Economic Commission (JEC) held in Bern, Switzerland in January 12, 2023 and pitched the country’s different types of economic zones as well as the agency’s pioneering role for promoting “sustainability actions and reporting” in its 4,357 locator companies.
According to PEZA OIC Director General Tereso O. Panga, “Supporting the active promotion of the Philippines as ‘driver of growth and a gateway to the Asia-Pacific region’ by President Bongbong Marcos Jr. in his foreign travels, we in PEZA are glad to come earlier to Switzerland before the World Economic Forum (WEF) held in Davos and contribute to harnessing good relations between Philippines and Switzerland through the Joint Economic Commission (JEC).”
Panga is elated to share after the JEC meeting and business-to-business meetings that “Having keen interest in Philippine economic zones because of its one-stop-shop and ease of doing business, there are Swiss companies interested to invest in the Philippines and those already operating are expressing to expand their investments.”
“Of the 60 Swiss companies operating in the Philippines, 28 are registered with PEZA as export-oriented in IT and manufacturing enterprises. These Swiss locators have by far generated PhP 19.618 billion in cumulative investments and 8,547 direct jobs,” OIC Panga added.
BOI Managing Head Undersecretary Ceferino ‘Perry’ Rodolfo led the Philippine delegation in the JEC bilateral talks with the Swiss government on trade and investments. The Swiss government was represented by: The Head of Bilateral Economic Relations and State Secretariate for Economic Affairs (SECO); Federal Department of Economic Affairs, Education and Research Ambassador Erwin Bollinger; and Head of the Division Free Trade Agreements (FTAs) of SECO Minister Karin Buechel.
Key areas of investments for CH in PH
Both BOI and PEZA made their investment pitches in the JEC forum, which was attended by Swiss business chambers as well as prospective and existing Swiss investors in the Philippines.
The key areas of existing and new investments are in the sectors of financial technology, blockchain, high-tech machinery like turbo-charging equipment used in power generation, transport and manufacturing, tobacco processing, and soil erosion technology
Among the specific topics discussed between the two (2) countries are the exchange of views on domestic economic situation, Philippines-EFTA Free Trade Agreement, bilateral relations and economic cooperation, and concerns from the private sector which included protection of intellectual property rights and combating smuggling.
SDGs for effective governance
Aside from pitching the Philippine economic zones, PEZA OIC Chief Panga spoke in the JEC meeting to share about the initiatives and milestone of the agency for sustainability action and reporting for its more than 4,300 export-oriented industries.
OIC Chief Panga highlighted PEZA’s Memorandum of Understanding (MOU) with Global Reporting Initiative (GRI) forged since March 2022 for sustainability reporting. Affiliated with the United Nations Environment Programme, GRI is an international independent standards organization that helps businesses, governments and other organizations understand and communicate their impacts on issues such as climate change, human rights and corruption.
He said, “This MOU aims to contribute to the acceleration and achievement of the Sustainable Development Goals (SDGs) and the advancement of sustainability reporting in the Philippines especially within the ecosystem of export-oriented locators in PEZA.”
The OIC Chief also shared, “This partnership is delivered within the framework of the GRI's Sustainability Reporting for Responsible Business program and is funded by the Switzerland State Secretariat for Economic Affairs (SECO). The signed MOU aims the following objectives: (1) Raise awareness of sustainability and sustainability reporting among the export-oriented industry; (2) Develop industry-specific sustainability reporting guidelines for the export-oriented industry; and (3) Build capacity of the export-oriented industry on how to communicate their impacts to the economy, environment, and society.”
PEZA’s role as a regulator of ecozones and an investment promotion agency (IPA) for export and domestic industries is strategic in including sustainability goals in its regulatory powers over registered enterprises and ecozones (RBEs).
During the JEC meeting, Panga said, “We in PEZA ensure the strict observance of the protection of labor rights and the environment in the creation and regulation of ecozones. That is why we remain committed in supporting partnerships and attracting projects which promote the goal of environment-friendly industrialization.”
Updates on PEZA-GRI MOU Signing
Among the updates from signed MOU with GRI are the following:
1. On the plans of issuing a PEZA Memorandum Circular (MC) regarding sustainable trade and investments guidelines for the compliance of locators and RBEs, a roundtable discussion (RTD) will be conducted which will be in later part of 1st quarter of 2023. In the RTD, it shall consider different concerns and recommendations on the content of the MC as to how sustainable reporting will be integrated in the reporting requirements for RBEs. It shall also take into account legal and operational aspects.
2. PEZA and GRI will establish a Technical Working Group (TWG) composed of various locators and industries that encourages the observance of sustainability actions and reports. As for the prospective TWG members that will be formed for the sustainability reporting, GRI has already provided PEZA a proposed list of chosen industry locators and partners. PEZA and GRI are also inviting the Department Trade and Industry (DTI) and the PhilExport to be one of our potential TWG members.
3. Launching of the Sustainability Reporting in PEZA in 2023 as benchmark and pioneering agency for this initiative with GRI to integrate sustainable reporting in trades and investments. The goal is to make sustainable actions and reporting also integrated in more public and private sectors.
OIC Chief Panga mentioned, “Voluntary compliance to the GRI’S Sustainability Action and Reporting and the UN SDGs can be a source of competitiveness for the country in attracting more FDIs and in enhancing regulatory compliance. Many advance and developing economies subscribe to these principles to be able to measure the impact of FDIs on the host countries toward inclusive, resilient and sustainable development.”
On the sustainable reporting with DTI and Philexport
PEZA is the first to sign up for the SECO-GRI program in the Philippines, together with Security and Exchange Commission (SEC) which handles Sustainability Reporting for publicly listed companies. Likewise, GRI, together with PEZA, will bring on board the DTI- Export Marketing Bureau (EMB) and Philippine Exporters Confederation, Inc. (PHILEXPORT) in formulating sustainable reporting guidelines for export-oriented industries.
During the time of Lilia de Lima as head of PEZA, Panga stated, “PEZA likewise led the government's participation in the European-funded initiatives such as the GTZ Eco-Industrial Development project, ECCP Energy Efficiency and Savings Program, and ECCP Integrity Pledge. All these are aligned with PEZA's core objectives such as effective governance, ethical business practices, protection of the environment and workers' rights/welfare, and eco-industrial development strategy.”
More B2B meetings with Swiss firms
Aside from the JEC Forum, PEZA and BOI also conducted separate business to business (B2B) meetings.
BOI and PEZA assisted the following companies with their specific operational concerns and investment entry/expansion requirements. These companies include: Glencore (copper cathodes), Sateco (automotive sensors for controls and switches), OVD Kinegram (fintech and blockchain), NaturLoop (design and production of coco fiber boards from waste coconut husks), and Impact Acoustic (design and production of acoustic lighting, ceiling and wall panel boards from recycled PET bottle fibers).
OIC Chief Panga met the founders of Impact Acoustic, a PEZA-registered export enterprise located in Laguna Technopark since 2022 which is engaged in the processing and assembly of acoustic solutions in the form of insulating materials such as panels for walls and ceilings including accessories.
The OIC Head also met with NaturLoop, a prospective Swiss investor in the Philippines that are into design and production of coco fiber boards for export. They use coconut husks (agri-waste) for their raw materials to produce quality, durable, and termite-free furniture.
According to him, “In the case of NaturLoop and Impact Acoustic, they both respectively employ pioneering technologies utilizing local materials that will benefit our farmers and MSMEs engaged in collection and processing of waste materials. As an alternative to heavily imported wood and composite materials for various applications, their products can be utilized for instance for furniture, wall and ceiling panels.”
“The same can be used for our public school and housing projects as they are cheaper, termite-free and more durable. These ecozone activities will surely contribute to the DTI's science-technology-innovation driven industrialization strategy and PBBM administration's bid to push for more investments that support SDGs, inclusive growth and circular economy,” Panga added.
More FDIs from Switzerland and Europe
Having exceeded the 6 to 7% target growth in 2022 of PEZA as the agency achieved 103.03% increase as compared to same period in 2021, OIC Chief Panga is hopeful in 2023 that “PEZA can attract more foreign direct investments (FDIs) from Switzerland and European countries especially with PBBM's ongoing participation in the World Economic Forum in Davos, Switzerland.
Switzerland has one of the highest levels of per capita GDP in the world given its strong economic performance that are largely driven by the services sector. Switzerland is also one of the world’s major financial centers. Its economy is based largely on international trade and banking, as well as light and heavy industries. Manufactures include watches, precision instruments, machinery, and chemicals. (PEZA)