The Cagayan Economic Zone Authority (CEZA) said its income in the first nine months of the 2018 grew by 212% higher than the same period last year.
CEZA administrator Raul L. Lambino attributed the increase from revenues collected from financial technology services and offshore virtual currency exchange (FTSOVCE) companies or cryptocurrency firms, which were mostly Chinese.
Compared to last year’s three quarters total tally of P166, 339, 889.03, CEZA registered P518, 296,127.70 for the same period, the bulk coming from 17 cryptocurrency firms registered in the economic zone.
A total of P371,949,735.32 was remitted to CEZA at the end of September this year from application and license fees of cryptocurrency firms.
However, collection from online gambling operations slowed down at P127,315,981.27 compared to P150, 833, 547.80 last year and could be attributed to CEZA’s new thrust to limit the online gambling operations inside the zone.
Lambino disclosed that more earnings from this industry is expected in the coming months once the companies start to trade cryptocurrencies or conduct primary placement of coins or exchange.
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, CEZA 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 $10 million.
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 the cryptocurrency firms are transactional fees earned from the volume traded on the cryptocurrency exchange where the average global total is pegged at 0.1% of each transaction.
Other sources of CEZA revenues also posted increases over the same period last year. Seaport operations now total to P5,786,957 compared to P1,068,116 in 2017. With 95 locators being served, garbage fees also rose to P296,400 from P32,550.