By: Richmond Mercurio (The Philippine Star) – May 22, 2018
MANILA, Philippines — The Cagayan Economic Zone Authority (CEZA) has formalized deals with 15 offshore companies expected to lead to at least P1.7 billion investments in the next two years in line with its plan to transform the Cagayan Special Economic Zone as the region’s financial technology (fintech) solutions and blockchain hub.
Raul Lambino, CEZA administrator and chief executive officer, said the offshore companies include globally-acknowledged leaders in the burgeoning global “currency of the future.”
Lambino said the cryptocurrency companies would operate virtual currency exchanges, engage in crypto mining and blockchain production, and initial coin offerings, among others.
“Working with virtual currency companies allows the Philippines to gain momentum in providing an environment that encourages financial innovation and inclusion, while ensuring that the best interests of the country, the financial system, consumers and investors are adequately protected,” he said.
“This new development aims to drive the economy forward by creating employment opportunities and boosting job growth. The Philippines will be ready to provide cryptocurrency companies operating here with the manpower they need for their businesses,” Lambino added.
Among the companies that signed an agreement with CEZA is Korean conglomerate Hanwha Group, which has interests in chemicals and materials, aerospace and mechatronics, energy, construction and finance.
Its insurance arm, Hanwha Life, is the leader and the first life insurance company in South Korea with total assets amounting to nearly $115 billion as of end-2017.
The MOU signed between Hanwha Life and CEZA involves the company supporting the fintech and blockchain programs of the investment promotion agency.
CEZA also signed MOUs with Hong Kong-based Chinese firms Xin Peng Group, Changwei International Co. Ltd. and ST Union Capital Holdings.
CEZA said the companies are all interested to undertake the creation of an international crypto exchange platform and other related businesses.
Other entities part of the first batch of fintech corporations that entered into agreements with CEZA include Hachiman Technology Sdn BHD, MX Exchange Ventures, Coin Bundle, IPE Global PTE, Inc. Superieur Tech Pte. Ltd., CSM, Madison Blockchain Strategy Investment Co. Ltd., Asia Pacific Blockchain Association, PacificNet Strategic Investments Ltd., SuperAngels Ventures Ltd. and ANX International.
Based on their respective agreements, each company would get full tax perks. In return, each locator is required to invest $1 million in two years and pay yearly license fees.
The Cagayan Special Economic Zone and Freeport was designed as a transshipment port, agro-industrial hub, and tourism center catering to territories in the Asia Pacific rim.
After an extended campaign to eradicate illegal offshore gaming operators in 2017 and revoking the licenses of some 164 companies, CEZA made a pivot to becoming a “FinTech City” or the “Silicon Valley of Asia.”
To date, the ecozone and freeport only caters to locators with platforms operating overseas, therefore excluding local exchanges regulated by the Bangko Sentral ng Pilipinas.