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Wednesday, August 02, 2006
Cebu ecozone needs review by solons, DOF
Making the entire Cebu province an economic zone (ecozone) is possible, as the National Government has already granted five provinces, which comprise the Calabarzon, the same status.
Economist Cayetano Paderanga said companies qualified to avail themselves of incentives under the Philippine Economic Zone Authority and the Board of Investments are given tax incentives if they locate anywhere in the Calabarzon.
Calabarzon is composed of the provinces of Cavite, Laguna, Batangas, Rizal and Quezon.
The Cebu Chamber of Commerce and Industry (CCCI) has proposed to have the entire province declared an ecozone so qualified companies, regardless of their location in Cebu, can avail themselves of similar incentives. The proposal is seen as a strategy to attract more investors to Cebu.
Feasibility
CCCI president Francis Monera said the chamber has already organized a group that would look into the feasibility of the project. The group has yet to make a report.
In a separate interview, Lexmark Research and Development Corp. president and chief executive officer Stan Combs said there are a lot of information technology (IT) companies in Cebu that deserve incentives, but are not unable to avail of them because they are not located in ecozones.
These small and medium companies prefer to locate outside IT parks because they cannot afford the cost of locating in one.
Meanwhile, Cebu Federation of Rural Banks (CFRB) president Enrique Abellana looks forward to the designation of Cebu as an ecozone.
He said this would give rural areas a fair chance to compete as far as attracting investors with the urban areas.
Despite the possibility, Paderanga said in an economic briefing last week that CCCI’s proposal would require discussion with policy-makers as proclaiming an ecozone would mean lost income for the government.
“The Department of Finance will have to consider the income that would be lost in case Cebu will be declared an ecozone,” he said.
Earlier, Monera, in explaining the proposal, said that “whatever loss on taxes and revenues the government will incur in making Cebu an ecozone will be offset by a more vigorous economic activity.”
Incentives
Firms located in ecozones enjoy income tax holidays. They also have the option to pay a special five percent tax on gross income instead of national and local taxes. They are required to pay real estate taxes.
President Arroyo, in one of her visits to Cebu, encouraged the CCCI to pursue its plan and to work closely with the Cebu local governments.
“The President said that the Cebu LGUs themselves can help design the incentives,” Monera said.
He also said Cebu Gov. Gwendolyn Garcia has showed support to CCCI’s endeavor as this would encourage more investors to locate in the province, not only in ecozones such as the Asiatown I.T. park. (JBN)
For Bisaya stories from Cebu. Click here. (August 2, 2006 issue)
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