December 12, 2017 | MANILA, PHILIPPINES

Board of Investments releases draft rules for Investment Priorities Plan

THE BOARD of Investments (BoI) has released the draft guidelines for implementing the 2017 Investments Priorities Plan (IPP) which serves as the blueprint for activities entitled to incentives from the government.

The BoI said in a statement that it completed the proposed general policies and specific guidelines to implement the 2017 IPP this year anchored on the government’s 10-point socioeconomic agenda as well as on the AmbisyonNatin 2040, which essentially point to two sets of goals that the government plans to take on to achieve inclusive growth.

President Rodrigo R. Duterte signed the plan on Feb. 28 under Memorandum Order No. 12 which directed all agencies to issue the necessary regulations to ensure the IPP’s implementation in a “synchronized and integrated manner.” The BoI opened the IPP draft for comment from stakeholders until April 21.

Under the draft guidelines the 2017 IPP is a rolling three-year plan to ensure policy continuity and consistency for both domestic and foreign investors.

While the IPP would be valid for three years, according to the BoI, it will be reviewed annually.

The proposed general policies and specific guidelines for implementing the 2017 IPP list the following as preferred activities:

• all qualified manufacturing activities including agri-processing;

• agriculture, fishery, and forestry;

• strategic services;

• telecommunications;

• health care services including drug rehabilitation centers;

• mass housing;

• infrastructure and logistics including local government unit public-private partnerships;

• innovation drivers;

• inclusive business models;

• environment or climate change-related projects; and

• energy.

Also deemed priorities are:

• export activities including production and manufacture of export products; services exports; and activities in support of exporters;

• activities based on special laws that grant incentives like industrial tree plantations under the Industrial Forest Plantation (IFP) based on DENR Administrative Order No. 1999-53; exploration, mining, quarrying and processing of minerals under Republic Act (RA) No. 7942 or the Philippine Mining Act of 1995; publication or printing of books/textbooks (RA 8047); refining, storage, marketing, and distribution of petroleum products (RA 8479); RA 9513 or the Renewable Energy Act of 2008 and RA 9593 or the Tourism Act of 2009, among others.

The final guidelines will be submitted for consideration and approval by the BoI Board of Governors on April 26.

In the IPP 2014-2016 guidelines, the preferred businesses were manufacturing, agribusiness and fishery, services, economic and low-cost housing, hospitals, energy, public infrastructure and logistics, and public-private partnership projects.

The draft rules reduce the price ceiling for BoI-registered mass housing units to P2 million from P3 million previously. And -- except for in-city low-cost housing for lease -- only projects located outside Metro Manila may qualify for investment perks.

“Based on the theme “Scaling Up and Dispersing Opportunities,” this IPP will serve as a blueprint in guiding Filipino and foreign investors in matching their entrepreneurial and financial capacities with the opportunities identified herewith to steer the country’s economic growth to a broader and sustainable path,” the prefatory statement of the draft read.

BoI noted that the 2017 IPP brings forth ‘significant additions and changes,’ following the President’s thrust on zero+10-point Socioeconomic Agenda, the aspirations embodied in AmBisyonNatin 2040, and the Philippine Development Plan (PDP) 2017-2022.

“Broadly, these changes include further emphasis on innovation-driven and job-generating businesses; inclusive business for agribusiness and tourism; broadened coverage of manufacturing; information technology (IT) and IT-enabled services for the domestic market and telecommunications services for new market players; environment and climate change-related projects; LGU-initiated PPP projects; drug rehabilitation centers; state-of-the-art engineering, procurement and construction (EPC) services; and the lifting of geographical restrictions for most agriculture and tourist accommodation facilities,” it said.

It added that the IPP was also “formulated through a participative, analytical, and multi-sector process,” that is “expected to generate more investments to strengthen manufacturing resurgence and create more jobs as targeted in the PDP 2017-2022.”

BoI said manufacturing projects that will qualify for perks covers the manufacture of industrial goods and processing of agricultural and fishery products, including Halal and Kosher food, into (a) semi-finished/intermediate goods for use as inputs in the production of other goods, or (b) finished products or consumer goods for final consumption.

It also covers the manufacture of modular housing components and machinery and equipment including parts and components. Cement projects that will qualify for registration must at least start from “clinker production,” it said.

Except for modernization projects, BoI said only projects located outside Metro Manila may qualify for registration.

“Modernization projects of sugar mills and/or refineries must have a resulting Overall Recovery Rate (ORR) performance of at least 85% and 94%, respectively. Application for registration must be accompanied by a certification from the Sugar Regulatory Authority of the applicant’s ORR performance for the last five (5) years,” it added.

All projects for the manufacture of industrial goods and processing of agricultural and fishery products must also utilize up-to-date and market-appropriate technology, and must comply with the Philippine National Standards, as applicable.

Meanwhile, in the grant of incentives -- income tax holidays -- BoI said it shall give priority to projects with “substantial” benefits to the economy.