PEZA expects UMIC status to help PHL climb value ladder in manufacturing, AI investments

THE Philippine Economic Zone Authority (PEZA) said achieving upper-middle income country (UMIC) status is expected to create opportunities to attract higher-value investments to its economic zones (ecozones).

In a statement, PEZA said UMIC can help improve investor perceptions, thereby attracting “more high-value, technology-driven, and innovation-intensive investments in sectors such as advanced manufacturing, semiconductors, electronics, green industries, logistics, AI-enabled services, and other strategic industries.”

The World Bank elevated the Philippines to UMIC status after it posted a per-capita gross national income of $4,850.

PEZA added that rising incomes and stronger purchasing power can support a more robust domestic market.

“This creates an opportunity to promote import substitution by encouraging manufacturers to locate production facilities to the Philippines, serve growing local demand, and eventually use the country as a platform for regional exports,” it said.

However, UMIC status raises the bar for the Philippines’ business climate, PEZA said.

“They (investors) will expect faster government services, more reliable infrastructure, clearer regulations, stronger digital systems, better logistics, a deeper talent pool, and a more predictable business environment,” it noted.

PEZA is looking to strengthen its ecozones as a platform for high-quality investment, exports, and jobs.

It cited the need to improve ease of doing business and speed up inter-agency processes. It added that power, water, transport, telecommunications, and logistics services in its ecozones should be reliable to be attractive to locators.

PEZA averaged 22.9% in investment approval growth between 2022 and 2025.

“In barely 4.6 years, PEZA approved a total of P932.17 billion in ecozone investments, already surpassing the P877.8 billion approved during the previous administration,” it added.

In the first half, the PEZA Board approved 157 new and expansion projects worth P140.7 billion, up 94.42% from a year earlier. — Beatriz Marie D. Cruz