Exploring Strategic Business Locations in the Philippines: Philippine Economic Zones
In the Philippines, while many new foreign entrants may be unaware, there is what is called the Philippine Economic Zone Authority. The Philippine Economic Zone Authority is a government agency that is connected to the Department of Trade and Industry. It is in charge of several things regarding businesses that wish to enter the Philippine Economic Zones. The scope of the responsibilities of the Philippine Economic Zone Authority (or PEZA for short) include promoting investments, extending assistance and registering businesses interested in entering the zone, granting incentives and facilitating the business operations of investors especially when it comes to businesses related to manufacturing for export and service facilities.
Special economic zones, particularly in the Philippine context, are where businesses from different industries being brought together in one area and thus being in geographic proximity, spurs and encourages economic growth and development. For an area to become a PEZA Special Economic Zone, the President of the Philippines has the right to declare this zone as such. These zones were established through the Republic Act No. 7916, specifically known as “The Special Economic Zone Act of 1995.”
As one would assume, conducting your business in a Special Economic Zone comes with set of attractive perks. There are competitive incentives for locating your business there. Just-in-time deliveries of raw materials are made available and businesses usually experience a fast turnaround time. These areas also tend to be one-stop shops that may operate on a non-stop basis due to the convenient proximity of other businesses that may be supportive in nature. If you locate your business near other complimentary businesses to yours, chances are your processes will definitely be more streamlined and efficient as one eliminates the time required for travel. Instances of graft and corruption are also significantly decreased in the area as there is no red tape and the companies basically run amongst themselves. The areas wherein these economic zones are located are also more secure and there is consistent power and water supply for all businesses located therein. Within these areas, there are also waste water treatment facilities and conveniently located amenities such as banks, firefighting facilities, and sport facilities for the safety, health, and enjoyment of those working within the zone.
While some would go for a commercial space for lease in Makati, another strategic option for businesses is to explore investing in real estate (Makati) as there are currently a number of PEZA buildings (Makati) currently located therein. There are also many ready-to-occupy standard factory buildings that allow businesses to just simply move in and start conducting business almost immediately.
