Free Trade Zones in the Philippines: List of the 6 Freeports, PEZA Zones and How They Differ

Three Kinds of "Free Trade Zone": Freeports, PEZA Ecozones and Other Special Zones

Direct answer: Philippine law has no single term "free trade zone"; what exists are freeports, economic zones and tourism enterprise zones, all of whose registered enterprises use the CREATE incentive menu but which differ in administering authority, physical form and rules on imports and domestic sales.

• Freeports: separate customs territories created by specific statutes, with fences or defined boundaries. Goods enter duty- and VAT-free and are taxed only when they leave for the domestic market. There are six: Subic Bay (SBMA), Clark (CDC), the Freeport Area of Bataan (AFAB), the Aurora Pacific Economic Zone and Freeport (APECO), the Zamboanga City Special Economic Zone and Freeport (ZFA) and the Cagayan Special Economic Zone and Freeport (CEZA). Poro Point Freeport and the John Hay Special Economic Zone under the BCDA hold similar status under RA 9400.
• PEZA ecozones: estates, factory buildings and office towers accredited by PEZA under the Special Economic Zone Act of 1995 (RA 7916). PEZA has reported more than 400 operating zones since 2023. A PEZA zone is not a district but an accreditation tied to a specific lot or floor — see the complete guide to PEZA economic zones.
• Other special zones: tourism enterprise zones designated by TIEZA under the Tourism Act (RA 9593, 2009), and a handful of zones created by local statutes.

Since the CREATE Act took effect on 11 April 2021 all of these bodies are investment promotion agencies (IPAs) sharing one incentive menu under the Fiscal Incentives Review Board (FIRB), amended again by CREATE MORE (RA 12066, November 2024). The question is no longer which zone gives more, but which fits your logistics, domestic-sales ratio and land needs.

The Six Philippine Freeports in One Table

Direct answer: ranked by investment activity, Subic and Clark in Central Luzon are the main arenas, Bataan is the low-cost manufacturing option, and Aurora, Zamboanga and Cagayan are small zones oriented to agri-fishery processing, ports and tourism. The table draws on each authority's website and founding statute; confirm industries against current announcements.

Two notes. Clark also carries the BCDA-led Clark Global City and New Clark City under different authorities, which matters before you book a site visit — see planning a site visit to Clark. Subic and Clark are linked by the SCTEX expressway in 45 to 60 minutes, so both can be inspected in a day.

Freeport vs PEZA Zone vs Bonded Warehouse: One Comparison Table

Direct answer: all three let imported goods sit without paying duty, but they differ on who administers them, whether the status is tied to an address, whether domestic sales are allowed and who gets income-tax incentives — a freeport is a whole customs territory, a PEZA zone is an address-bound accreditation, and a bonded warehouse is merely a customs-licensed storage facility with no income-tax incentive at all.

Bonded warehouse rules, storage limits and the trade-off against a freeport are in what a bonded warehouse is in the Philippines. A common error is treating a bonded warehouse near Manila port as a free trade zone — it never carries income-tax incentives.

What Is Actually Exempt: The CREATE and CREATE MORE Menu

Direct answer: once registered as a business enterprise (RBE) in any freeport or PEZA zone, the package is the same — an income tax holiday of 4 to 7 years, then a choice of the 5% Special Corporate Income Tax on gross income in lieu of all national and local taxes or an Enhanced Deductions Regime for 10 years, plus duty- and VAT-free importation of capital equipment and raw materials and VAT zero-rating on export sales and directly attributable local purchases. The years depend on the Tier I, II or III classification under the 2022 Strategic Investment Priority Plan and on location, and are fixed in your approval letter.

CREATE MORE (RA 12066, signed 11 November 2024) changed several things: registered enterprises may skip the holiday and elect SCIT or enhanced deductions immediately; the SCIT and enhanced-deduction periods are longer and the overall ceiling higher (per FIRB and IPA issuances); during the holiday or enhanced-deduction period local governments may levy a Registered Business Enterprise Local Tax of at most 2% of gross income in place of other local taxes; IT-BPM enterprises may have up to 50% of staff working from home without losing incentives; and projects up to ₱15 billion are approved by the IPA itself, with only larger ones going to the FIRB. The 5% SCIT is split 3% national and 2% local.

Legacy freeport enterprises already on the 5% gross income tax (RA 7227 Sec. 12) before CREATE keep it for a 10-year transition under CREATE Sec. 311, to around 2031. The full mechanics are in the CREATE Act incentives guide. Figures change with amendments; rely on current FIRB, BIR and IPA issuances.

Duration follows the SIPP tier and the location and is fixed in the approval letter; build a payback model on the 4-to-7-years quoted in a brochure and a lower tier in the approval pushes the whole cash-flow curve back. Have us place your project on the SIPP tier before you pick a zone →

Subic or Clark: Choosing Between the Two Central Luzon Freeports

Direct answer: choose Subic for a seaport and Clark for an airport; they sit about 50 km apart, 45 to 60 minutes on the SCTEX, and many companies keep warehousing in Subic and offices or air-freight operations in Clark.

Subic is the former US naval base, converted under RA 7227 in 1992. Its core asset is a natural deep-water harbour with a container terminal; shipbuilding and repair, heavy logistics, bonded distribution and tourism are the main lines, and registered enterprises deal with the SBMA rather than a city hall for permits. How to register with the SBMA, lease land or buildings and qualify for the 5% SCIT is in registering a company in the Subic Bay Freeport.

Clark is the former US air base, proclaimed a zone in 1993 and given full freeport status by RA 9400 in 2007. Its core asset is Clark International Airport (CRK); aviation MRO, BPO, electronics and automotive assembly dominate. Outside the fence, Angeles City, Mabalacat City and Pampanga's PEZA zones each run their own fees and incentives.

In both, mature lots are largely taken and newcomers mostly lease existing buildings or sub-lease from private developers, so ask about land inventory before incentives. The Region III minimum wage is set by its own regional board, not Metro Manila's.

Bataan, Aurora, Zamboanga and Cagayan: Who the Four Smaller Freeports Suit

Direct answer: Bataan suits cost-sensitive garment and electronics manufacturing, Zamboanga suits fishery and agri-processing, and Cagayan and Aurora are currently port, agri-fishery and tourism plays with infrastructure and supplier depth far below Central Luzon — best for projects whose inputs are local and which do not depend on a dense supply chain.

• Freeport Area of Bataan: successor to the Bataan Export Processing Zone of the 1970s, converted by RA 9728 in 2009, at Mariveles on the tip of the Bataan peninsula. Garment, electronics and manufacturing locators cluster here with labour and land below Subic prices; the drawback is 3 to 4 hours by road to Manila, with cargo mostly moving through Subic or Manila ports.
• Zamboanga City Special Economic Zone and Freeport: created by RA 7903 in 1995. Zamboanga is the country's sardine-canning centre, so fishery and agri-processing chains already exist, and the zone faces Mindanao and the BIMP-EAGA sub-region.
• Cagayan Special Economic Zone and Freeport: created by RA 7922 in 1995 at Santa Ana on the northern tip of Luzon, with Port Irene. The direction is port logistics, agri-fishery processing and tourism; it is more than 10 hours from Manila by road and the supplier base is thin.
• APECO: created by RA 9490 in 2007 and expanded by RA 10083 in 2010 at Casiguran on the Pacific coast, planned for agri-fishery processing, renewable energy and eco-tourism. Infrastructure is still under construction, so verify water, power and road access on site before committing.

All four have small administrations with direct investor desks, but financial, logistics and professional services must be sourced yourself; under the same CREATE menu the difference is only how easily goods move in and out.

The PEZA System: Not One Place but 400-plus Addresses

Direct answer: PEZA ecozones are not a city but more than 400 accredited estates, factory buildings and IT towers across the country, concentrated in five bands — Metro Manila for IT buildings, Cavite–Laguna–Batangas for manufacturing, Central Luzon, Cebu and Davao.

Three features distinguish PEZA from a freeport: the status is tied to the address, so moving means re-applying; export enterprises must ship 70% or more of output; and nearly every BPO and export manufacturer uses this route, so the choice of site is far wider than six freeports. Zone types, the five bands and six shortlisting factors are in the PEZA guide linked above; the application steps, documents and Board approval are in the PEZA registration process.

One route outside any zone deserves a mention: the Board of Investments (BOI) registers SIPP priority projects wherever the investor locates and allows domestic sales. One project registers with one IPA only, so BOI is the first route to examine for a mainly domestic project.

How to Choose a Zone: Logistics First, Then Domestic Ratio, Then Land

Direct answer: screen in four steps — where goods come in and go out, what share is sold domestically, how much land you need, and where the talent is — and six freeports plus 400-plus PEZA addresses quickly reduce to 2 or 3 candidates.

1. Logistics: heavy sea freight points to Subic or Bataan; air freight and high-value parts to Clark; Mindanao or eastern ASEAN markets to Zamboanga; pure IT-BPM needs no port, so look at PEZA towers in Metro Manila and Cebu.
2. Domestic ratio: above 30% domestic sales you are no longer an export enterprise and lose the export tier in both PEZA and the freeports; consider BOI or a domestic-market registration instead.
3. Land: for 5 hectares or more of contiguous land, ask the authority about inventory first; mature freeports mostly offer existing buildings and sub-leases.
4. Talent: manufacturing looks at the labour pool within a 30-minute commute, BPO at English-speaking graduates and university density.

Four misconceptions: that a free trade zone means no tax (the 5% SCIT, local levies and employee income tax still apply); that incentives arrive automatically on entry (you must register as an RBE and hold an approval letter); that a bonded warehouse is a free zone; and that one project can register with two IPAs. Once the shortlist is set, plan the entity, the site and the incentive application together — see Yixing zone location and tax incentive advisory.

Sources: the websites of SBMA, CDC, AFAB, APECO, ZFA, CEZA and PEZA, and RA 7227, 9400, 9728, 9490, 10083, 7903, 7922, 7916, 11534 and 12066. Zone lists, incentive periods and rates change with legislation and announcements; rely on current issuances of each authority and the FIRB. Consult a licensed lawyer or accountant for your case; this article is not a substitute for professional advice.