Crypto investments turn Philippine economic zone around

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The Cagayan Economic Zone Authority (CEZA) in the Philippines has reported a revenue of PHP521 million ($9.9 million) from January to September 2018, a 132% increase from the corresponding period last year.

Much of the improved performance, according to CEZA CEO Raul Lambino, has to do with the government-owned and -controlled corporation promoting the economic zone as a hub for cryptocurrency, blockchain, and other financial technology.

“The idea of setting up the first cryptocurrency and blockchain technology center in the country has paid off handsomely… Financial technology is proving to be the new high tech of the future,” Lambino said, according to local outlet Business Mirror.

For 2017, CEZA had reported a net loss of PHP65 million ($1.2 million), after reducing the presence of online gaming firms in the area as part of efforts to curb illegal operations. Further reforms saw the revocation of registration of 164 business process outsourcing (BPO) firms providing services to offshore gaming operators, last December.

In spite of such changes, CEZA has managed to keep investments coming, and even paid PHP83.3 million ($1.6 million) in taxes to the national government for the first three quarters of 2018. As of October, the government-owned firm has issued its Financial Technology Solutions and Offshore Virtual Currency (FTSOVC) and Offshore Virtual Currency (OVC) licenses to a total of 19 companies, out of a maximum of 25 licenses to be issued.

Even with such encouraging numbers, Lambino stated that he wasn’t going to rely solely on fintech to keep up revenues, also welcoming investments in the industrial and tourism sectors. “Growth in the economic zone will be investment-driven. CEZA will diversify,” he said.

CEZA announced last week a crackdown on cryptocurrency firms operating without licenses. Lambino acted on reports of illegal cockfighting going on, which go against the firm’s moves to curb illegal gambling. He has tapped the National Bureau of Investigation (NBI) and the Philippine National Police (PNP) to carry out the crackdown, according to The Manila Times.

Among CEZA’s plans for the economic zone is the putting up of a Blockchain University intended to create a highly skilled work force for the industry. CEZA has also partnered with the Shanghai Jucheng Supply Chain Management Group for construction of a $100-million seaside resort in the area. In addition, CEZA has procured the services of Eminova Asset Management Ltd. and Hunan Goke Maglev Technology Development Ltd. to create a facility for manufacturing magnetic levitation trains in the province.