Why Do Manufacturing Companies Prefer to do Business in Bataan?


Bataan is well-known for its rich history during World War II; the location is memorable for Filipinos since it is where the notorious “death march” began and ended in the province of Capas in Tarlac. Despite a place where memories of violence and death remains, it has evolved to a place as a top choice of trade for multi-national manufacturing companies. These manufacturing companies in Bataan are one of the beneficiaries of loads of benefits from the province’s location to the government’s handful of benefits.

Read Also: Historical Places to Visit in Bataan

A Brief History of Bataan’s Ascension to the Progress of Industrial Center

Mariveles, a tiny fishing town in Bataan, became the Philippines’ first legal economic zone in 1972, through the Republic Act 5490 of 1969. The industrial center was designated “Bataan Export Processing Zone (BEPZ)” in order to boost the local economy by marketing the area to multi-national investors in order to create jobs and training opportunities for skilled workers while also transferring technologies and livelihood opportunities to Bataan residents.

After ten years of operation, it was regarded as one of Luzon’s “most progressive” communities. Unfortunately, the BEPZ experienced a stagnant and declining economy as a result of relatively low wages imposed on workers and a rapid increase in population, resulting in an economic crisis, one of the reasons that prompted the people to rise up against President Ferdinand Marcos in the EDSA Revolution, which also contributed to its unproductivity and decline in output.

Special Economic Zone, What are They?

In an effort to spur economic recovery, Congress approved legislation establishing the Philippine Economic Zone Authority (PEZA) in 1995. Furthermore, President Fidel V. Ramos passed legislation transforming BEPZ into a PEZA-designated Special Economic Zone (SEZ). It has been renamed Bataan Economic Zone (BEZ) from BEPZ in order to improve the economy through export-oriented enterprises. Conversely, despite the economic growth brought about by the development of Clark and Subic, the local government claimed that the economy was still stagnant and declining.

October 2009 Congress passed into law the Republic Act 9728 creating the Freeport Area of Bataan (FAB) converting the created BEZ, this time it also has a governing authority known as the Authority Freeport Area of Bataan (AFAB).  

The Future’s Answer to Business

This is the tagline of AFAB, embodying Bataan as it is presently one of Asia’s major investment hubs. As a result, FAB was able to accomplish the biggest rise in job creation with the highest growth rate, recording 45.64 billion pesos of investments for the year 2014.

So, why do manufacturing companies invests in Bataan? Here are some reasons why:

1. Strategic Location for Trade

As a manufacturing company in Bataan, location would not be a major concern both locally and internationally, because with gas prices continuing to rise, logistics might be a major issue. The FAB is located in the middle of Manila Bay, which is renowned as the commerce center of the Philippines. It is also near the West Philippine Sea (WPS) which known for residentials and tourism. The site is only a two-and-a-half-hour drive away, a half-hour boat trip away, or a half-hour fly away from Manila. Also, the FAB harbor, with a depth of 11-13 meters, is perfect for national and international port operations since it can handle large cargo boats.

In addition, it is a strategic transit point in Southeast Asia (SEA) as it is: 11,000 Kms away from HongKong; 1,200 Kms away from Taiwan; 1,300 Kms away from Brunei; 2,500 Kms away from Singapore; and 2,600 Kms away from Japan.

Knowing Bataan’s strategic location, you may want to consider it as a place of residence for you and your family while doing business. Fortunately, Bria Homes offers affordable house and lot in Mariveles, Bataan in which you can check this link: Affordable House and Lot for Sale in Mariveles

Read Also: 5 Reasons to Live in Bataan

2. Loads of Government Incentives

What is one strategy for luring investors to do business in the country? That is the provision of government incentives that might reduce the company’s expenses while increasing profit. If you own a manufacturing company in Bataan, you will benefit from the following incentives:

  • Tax-Exemption on the following:
    • Duty and tax exemption on imported capital equipment, replacement parts, other supplies, and raw materials.
    • Exemption from wharfage dues, export taxes, imposts, and fees.
    • Tax-free importation of personal equipment for use within the Freeport
  • Income Tax Holidays (ITH) for four years, which can be extended to eight years. After the tax holiday period, only a 5% tax on gross income earned will be levied in both national and municipal taxes.
  • Foreign investors and their immediate family members can get permanent residence status.
  • Allowance for domestic sales of up to 30% of total sales.
  • Lastly, The FAB is the Philippines’ only freeport that may sell real estate.

Read Also: Expansion of Multinational Firms in Bataan Seen to Boost Residential Demand in the Area

3. Superb Facilities

As a manufacturing firm, a single error in the production line can generate a chain reaction of disaster, resulting in financial loss. Fortunately, if you own a manufacturing company in Bataan, unanticipated incidents that may affect operations are kept to a minimum. Worry less about power failures since The FAB has its own power source and, as a result, one of the lowest electricity costs in the Philippines. GN Power, which operates a 600MW clean coal-fired power plant, provides power to the FAB. For water interruptions, The FAB features a dam with a capacity of 2.4 billion gallons, as well as a water treatment facility capable of providing 14 million gallons of water per day. The dam is supplied by a wooded and well-protected watershed of 1,500 hectares. Lastly, for flooding concerns, The FAB is equipped with a fully operational sewage treatment system that can handle 15,000 cubic meters of garbage per day.

4. Skilled Human Capital

Education in Bataan is more than capable of meeting the demands of manufacturing companies; in fact, Bataan is home to the country’s biggest Technical Education and Skills Development Authority (TESDA). In addition, the province is home to more than 20 TESDA-accredited schools and training institutes. TESDA trainings are renowned to improve the competency of Filipino skilled workers by providing them with the required skills to become productive and responsible members of the community.

5. AFAB’s Business Facilitation System

Nothing attracts more investors than the government’s well-designed facilitation mechanism. One of AFAB’s priorities has been to simplify corporate needs and processes. Here are some of the systems to go through if your company is interested.

  • The Immigration One-Stop Shop (IOSS) – Located in the foyer of the AFAB Building, this office serves expatriate locators and their dependents with quick and efficient immigration services.
  • The E-Konek – Through the E-Konek, allowing the electronic, paperless transaction of Customs import/export permits.
  • The Labor Center – The Labor Center is in charge of resolving professional and labor relations issues, interpreting rules and regulations, negotiating employee contracts, and monitoring FAB’s work, cleanliness, and safety standards.

The FAB is not limited to manufacturing companies in Bataan but is home to a wide range of businesses, including logistics, energy, electronics, infrastructure, business process outsourcing (BPO), shipbuilding, and tourism. If you’re interested, you may get step-by-step investment advice from the AFAB website by clicking here: Investment Guide.

Written By Hanna Bacani