Creating more ecozones does not always guarantee development —NEDA exec

The government should be circumspect in creating new economic zones in the Philippines as establishing such would not always guarantee development, an official of the National Economic and Development Authority (NEDA) said Monday.

During a hearing of the Senate committee on economic affairs, NEDA assistant director Cynthia Villena reiterated the position of the administration's economic team.

"The creation of more tax-free zones does not always guarantee economic success and that communities may even lose out if the cost of giving up revenues will exceed the benefit of having the zones because of the lost opportunities," Villena said.

Thorough cost-benefit analyses are crucial and a master plan should be in place, considering the fiscal implications of creating new economic zones, she added.

Citing a study, Villena said that in 2018 alone, the Philippine government granted P518 billion or 2.8% of the gross domestic product in incentives to the firms in the economic zones.

Another P541 billion was also foregone the following year, she added.

The NEDA official, however, did not present data on the revenues generated from the existing tax-free zones.

Senator Imee Marcos, chair of the committee, requested that all cost-benefit studies of NEDA regarding this shall be submitted.

The Senate panel is currently deliberating the proposal to create the Mega Cebu Development Authority,  Leyte Ecological Industrial Zone, and  Bulacan Airport City Special Economic Zone and Freeport.—AOL, GMA News