Question & AnswerQ&A (PEZA MEMORANDUM ORDER NO. 2001-01, APRIL 24, 2001)
It provides provisions on the rental fees on public economic zone industrial lots and standard factory buildings for locator enterprises within the public economic zones.
The public economic zones covered are Bataan, Cavite, Baguio City, and Mactan Economic Zones.
Locator enterprises are required to make a "good faith deposit" equivalent to three months' rentals before May 31, 2001, which will not apply to current monthly rentals but may be refunded or offset against any obligations upon lease termination.
Yes, locator enterprises must pay monthly rental fees regularly, and failure to do so shall be subject to appropriate penalties.
Locator enterprises establishing business operations post-issuance were required to pay rental fees for one year in advance. Existing locators could continue monthly payments or pay annual rentals discounted at 10% per annum.
Because many locator enterprises faced difficulties paying annual rentals in advance due to limited capitalization and cash flow issues during start-up; smaller firms compared to private zone locators also influenced this change.
Payment shall be on a monthly basis with one month deposit and two months advance rental, superseding the previous annual payment scheme.
Failure to pay monthly rentals shall be subject to appropriate penalties, although the exact penalties are not specified in the memorandum.
They could opt to continue monthly rental payments or pay the present value of monthly rentals annually, discounted at 10% per annum, subject to COA rules.