Cebu Island Economic Zone

As reported in the local papers, there is a proposal to turn the whole island of Cebu into an economic zone.

Proponents are currently doing a study to determine the positive and negative effects of the proposal, including reduced cost of doing business, better capabilities, loss of taxes by local government units because the declaration will entail a tax holiday for businesses and industries.

A special economic zone enjoys privileges under the law such as tax holidays and incentives for companies operating within it. The area ideally operates with minimum government interference and allows the employment of foreign nationals.

If this proposal is realized, Cebu will be the first province in the country to become an economic zone. So far, the president, governor of Cebu, some mayors and, of course, all businessmen are amenable to the idea.

I believe this plan will be beneficial to Cebu and can trigger further economic development in the province. Whatever loss the government would have in terms of taxes could be offset by more vigorous development and economic activities in Cebu. The island will become very attractive to investors because of the tax breaks and increased facility in doing business.

The idea to have the entire Cebu Province declared an economic zone will hopefully render the reasons behind the “Sugbuak” moot.

Frankly, I prefer this proposal over that of dividing Cebu island into three provinces (Sugbuak). Dividing the island will not only be counterproductive to business, it will also entail additional expenses for the national government (such as replicating all government agencies in the new provinces, hiring more government employees etc).

Moreover, the availability of additional shares from the Internal Revenue Allotment (IRA) for the towns of the three prospective provinces doesn't guarantee better delivery of basic services --- the same way that having more money doesn't ensure efficiency. Ask anyone who has ever been involved in any humongous project or better yet take a look at the people living in the larger islands surrounding Cebu which have been chopped into smaller provinces. Have their lives improved ?

It is too simplistic to say that the economy of a province will automatically perk up if given a bigger IRA which is the main basis for the bills. Fact is there are several factors to consider in economic development such as infrastructure, accessibility, bureaucratic red tape, peace and order, labor force, sound leadership, corruption, financial management etc.

I hope the residents of Cebu's 4th district, 2nd district and 3rd district have not been waylaid into thinking otherwise. I'll leave it to the Cebu Island Ecozone study group to elucidate further my point since they are better at this.

I’m happy to know that Cebu island ecozone project is nearing realization as the government of Germany, through the German Agency for Technical Cooperation (GTZ), has committed to fund a feasibility study on the proposal until its completion in November this year.

The Cebu Island Economic Zone proposal was conceptualized by the Cebu Chamber of Commerce and Industry. The chamber is also taking the lead in its realization.

The move is consistent with the goal of the business sector of making Cebu an investment hub and dispersing benefits of business development to other parts of the province.

Clavel Asas-Martinez (Cebu, 4th district), Simeon Kintanar (Cebu, 2nd district) and Antonio Yapha (Cebu, 3rd district) were the congressmen who filed separate bills proposing for the creation of three separate provinces out of Cebu Province. The bills are still pending in congress.