THE state-run Bases Conversion and Development Authority (BCDA) unveiled its economic incentives for locators in Clark Green City, the country’s first green city, with the goal of spurring local and foreign investments in the former US military base.
Arnel Paciano Casanova, president and chief executive officer of BCDA, said among the applicable five fiscal incentives are: 5 percent special tax on gross income and exemption from all national and local taxes; tax and duty-free importation of raw materials, capital equipment, machinery and spare parts; VAT zero-rating of local purchases subject to compliance with BIR and PEZA requirements ; exemption from payment of any and all local government imposts, fees, licenses or taxes; and exemption from the expanded withholding tax.
“These incentives aim to encourage local and international locators to invest in the project,” Casanova said.
“With the promise of an integrated Asean (Association of Southeast Asian Nations) community next year, it is important to give our partners an edge in a more globalized and competitive setting,” he added.
The Asean economic community or AEC envisions a region where there is free flow of goods, services, and investments, leading to the establishment of an economic powerhouse of 600 million people with a combined gross domestic product of nearly $2 trillion.
“With Asean on the horizon, Clark Green City can bolster the country’s competitiveness as it opens the region to global trade and investments with the help of economic incentives and world-class infrastructure already within reach. This will strengthen the Philippines’ investment portfolio,” Casanova continued. “The incoming economic change puts traction and relevance to the development of the 9,450-hectare property.”
Clark Green City is located in the Clark Special Economic Zone. Pursuant to Republic Act 9400, duly registered business enterprises that operate in the special economic zone shall be entitled to the same tax and duty incentives as provided for under Republic Act No. 7916.
In addition, locators will also be entitled to non-fiscal incentives.
Apart from enjoying simplified import-export procedures, non-resident foreign nationals may be employed in supervisory, technical or advisory positions, and special non-immigrant visa with multiple entry privileges will be granted to certain non-resident foreign nationals.
The BCDA official said Clark Green City is expected to attract a large contingent of globally renowned organizations to the country because it is located inside a special economic zone, is near the Clark International Airport, and is only 30 minutes away from the deep-sea port of the Subic Bay Freeport Zone via the Subic-Clark-Tarlac Expressway (SCTEX).
“The property opens doors for companies in the Asean (and the rest of the world) to invest in Philippine urban development. Not to mention, the economy is growing at 7 percent—making the city and the country more attractive to prospective locators,” Casanova said
The World Bank has already expressed interest in the project—particularly in support of Clark Green City’s environmental and disaster-prevention programs.
“The World Bank is just one of many global organizations we hope to work with,” remarked Casanova. “At this stage, we have set economic incentives and invited companies to undertake feasibility studies for utility components.”
Bidding opens in Q3
Of Clark Green City’s 9,450 hectares, 1,300 hectares comprising the first phase will be up for bidding by the third quarter of this year and the BCDA is now preparing terms of reference to begin the process, Casanova said.
Based on its Master Development Plan, Clark Green City will have five dedicated districts: the government district; the central business district; the academic district; the agri-forestry research and development district; and the wellness and eco-tourism district.
The BCDA recently signed a Memorandum of Understanding (MOU) with the University of the Philippines that would establish a global campus for the premier state university in Clark Green City and serve as the anchor for the city’s “Brain Capital.” Casanova said the UP global campus is envisioned to spur innovation, technology, research and development, and human capital.
The BCDA has also commenced building the country’s most modern food processing hub and cold storage facilities to ensure food security and access for Philippine agricultural products to the global food market.
Prior to Clark Green City, the BCDA, in partnership with the private sector, has already developed master-planned communities on former military lots, namely Bonifacio Global City and Newport City. To date, these properties have evolved into bustling business and commercial centers that have opened their doors to private sector partners, resulting in the creation of 60,000 jobs and with land values now soaring.
The next frontier
According to Casanova, the BCDA envisions Clark Green City as the Philippines’ first green, disaster-resilient and smart metropolis.
“It will revolutionize the way Filipinos live, the way they do business, and even the way they spend their leisure time,” he said.
At full development, Clark Green City is estimated to contribute P1.57 trillion per year to the Philippine economy and will create 925,000 jobs.
“More importantly, Clark Green City will become a portal to the world economy of the country’s next generation of global citizens,” Casanova said.