MANILA, Philippines — The Cagayan Economic Zone Authority (CEZA) generated record high revenues of P518.30 million in the nine months to September this year amid robust collections from overseas virtual currency exchanges (OVCEs) and blockchain firms.
In a statement yesterday, CEZA administrator and chief executive officer Raul Lambino said revenues as of end-September surged 212 percent from P166.34 million in the same period last year.
Bulk of revenues came from the 17 financial technology (fintech) firms registered in the Cagayan Special Economic Zone.
OVCE principal licensees, in particular, paid application and license fees amounting to P371.95 million during the period.
“We expect to earn more in the coming months once these OVCEs start to trade cryptocurrencies or conduct primary placement of coins or exchange,” Lambino said.
To date, CEZA has granted principal licenses to OVCEs such as Golden Millennial Quickpay, Liannet Technology, Ultra Precise, Rare Earth, Tanzer Holdings, Formosa Financial, Asia Premier, Dragon Empire, Galaxy Plus, Orient Express, White Ranch, Sino-Phil, HK Yuen, Tiger Wheel, Digifin Technologies, CR8TIV and IPE Global.
Lambino said OVCEs generate revenues from transactional fees earned from the volume traded on the cryptocurrency exchange where the average global total is pegged at 0.1 percent of each transaction.
While OVCE firms which register at the CEZA do not engage in cryptocurrency exchange in the country, he said they opt to set up operations as the economic zone is seen “as a safe haven” even if existing laws do not allow the use of digital assets for payment.
Earlier, CEZA said it is committed to grant principal licenses to an initial 25 fintech firms this year.
It expects to earn P3.6 billion from the 25 fintech firms.
In addition to serving as a new source of revenues for CEZA, the fintech firms are expected to create high-paying and highly-skilled information technology jobs, as well as technical and managerial positions.
CEZA is positioning the special economic zone as a “Fintech City” or the “Silicon Valley of Asia.”
The move follows a campaign against illegal offshore gaming operators implemented last year.