Cagayan Economic Zone Authority (CEZA) reported a record high revenue growth of 212 percent in the first nine months of the year on the back of robust collections from offshore virtual currency exchange (OVCE) and blockchain firms and their local business processing outsourcing (BPO) subsidiaries.
Administrator and Chief Executive Officer Sec. Raul L. Lambino said that compared to last year’s three quarters total tally of P166,339,889.03, CEZA registered P518,296,127.70 for the same period this yea , the bulk coming from 17 Fintech firms registered in the economic zone.
OVCE principal licensees paid application and license fees amounting to P371,949,735.32 at the end of September this year, Lambino said while painting a rosy outlook for the future.
“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.
The economic zone’s other sources of revenues in Sta. Ana, Cagayan for the third quaerter also showed hefty increases over the same period last year, Lambino said.
However, interactive gaming operations slowed down at P127,315,981.27 in licensing fees compared to P150,833,547.80 last year because of CEZA’s new thrust to limit the online gaming operations inside the zone.
On the other hand, seaport operations at Port Irene earned P5,786,957 compared to P1,068,116 in 2017, and garbage fees rose to P296,400 from P32,550, servicing some 95 business locators.
Cryptocurrency exchange is not done in the country but offshore firms have flocked to CEZA for their operation, seeing the economic zone “as a safe haven” even if existing laws do not allow the use of digital assets for payment, Lambino said.
Since the economic zone launched its “Crypto Valley in Asia” project in May, Lambino has incentivized the trading firms using a multi-tier system that also increased the government’s shares as the volume of transactions grew bigger.
Under the new policy, CEZA’s maximum monthly recurring fee is pegged at $10,000 for every average monthly volume of ten million US dollars.
But the shares jump higher from $10,000,001 to $100,000,000 bracket at $10,001 to $50,000 as CEZA’s fees, capping at $ 800,000 for the $89,000,000 to $999,999,999, 999 daily deals.
Already listed as CEZA OVCE Principal Licensees are 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 the primary revenue sources of OVCEs are 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.