THE Lapu-Lapu City government will appeal to the lawmakers and the Mactan Economic Zone (MEZ) locators to find a common ground in the deliberation of the Corporate Recovery and Tax Incentives for Enterprises (Create) bill.
The Create bill would take away the powers of the Philippine Economic Zone Authority (Peza) to grant tax incentives to locators.
“We will appeal to them. It can’t be denied that Peza industrial companies contribute greatly to our local economy in Lapu-Lapu City. We will strive hard to appeal to locators not to leave,” said Lapu-Lapu City Mayor Junard Chan at the launching of the Balik Turismo Travel Fair, Monday, Oct. 12.
In a position paper submitted to the Senate, the Mactan Export Processing Zone Chamber of Exporters and Manufacturers (Mepzcem) said locators threatened to pull out of the country if Peza will not retain its powers to grant incentives to its registered export-oriented enterprises.
Mepzcem said the Create Bill would clip the powers of Peza, which has administered the economic zones so well over the years.
“This would break the trust and confidence of our investors and could trigger an exodus of companies to other countries that are currently offering much better and consistent long-term incentives. To quote the executive of one of the major manufacturing firms in Mactan Economic Zone (MEZ), ‘We are waiting to hear the outcome of Create bill in the Senate. If it is passed, we will plan our exit to another country,’” the position paper stated.
Two big electronics companies are shutting down operations because of uncompetitive business environment, according to the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi).
Seipi president Dan Lachica, in a report, said these are two German multinational corporations that employ around 1,000 Filipinos at their factories in Laguna and FTI in Taguig. The first company had already shut down operations while the other is set to exit the Philippines next year.
Big blow
Aside from five-star hotels and resorts, Lapu-Lapu City is also home to one of the country’s biggest economic zones, which Chan said, currently employs 90,000 workers in full operation.
Chan said it would be a big blow to Mactan’s economy if both its tourism and industrial sectors remained heavily challenged by the uncertainties in the global economy and internal pressures, such as the passing of the Create bill.
Recently, around 4,400 garment workers were retrenched as the Covid-19 pandemic slowed down the demand for the garments in the global market. He said the local government had provided assistance to the affected workers in MEZ.
Five companies—Global Wear Manufacturing, Metro Wear Inc., Feeder Apparel Corp., Vertex One Apparel Philippines Inc. and Mactan Apparels Inc.—had reduced the number of their employees due to the economic slowdown caused by the coronavirus pandemic.
In their report to the Department of Labor and Employment, the companies said “there is a significant reduction of orders from abroad,” which affected the production quota and led to the retrenchment of thousands of employees.
Garments companies in MEZ serve international markets like the United States and Europe, among others. (JOB)