President Benigno S. Aquino III has approved the 2012 Investment Priorities Plan (IPP), an annual list of preferred domestic industries eligible for juicy government incentives, which is expected to drive this year’s investments to surpass 2011’s investments haul of P360 billion.
Department of Trade and Industry Undersecretary for Industry Development and Trade Policy Adrian S. Cristobal Jr. said the President signed the 2012 IPP last week with no major revisions.
The Board of Investments (BOI), which he is the managing head, is drafting the specific implementing rules and regulations.
The BOI, the government’s premier investment generating agency, is hoping to exceed last year’s P360 billion worth of investments that it registered, or between P180 billion and P200 billion per semester.
Cristobal said the specific guidelines would be tightened to ensure value for incentives on projects that would enjoy tax breaks.
“We just want value for investments that when we evaluate the power project applications, we make sure there is no redundancy of incentives,” Cristobal said earlier.
He said that the only new addition is iron and steel as this would be necessary in the industrialization of the country.
“As we industrialize, there is strong interest from foreign steel producers so we see high growth for infrastructure, shipbuilding,” he said.
Projects identified under the IPP are entitled to a package of incentives, including income tax holiday and duty-free importation of capital equipment.
This year’s IPP comprises a total of 13 preferred economic activities, including agriculture/agribusiness and fishery, creative industries/knowledge-based services, shipbuilding, mass housing, iron and steel, energy, infrastructure and PPP, research and development, green projects, hospital and medical services projects, motor vehicles, strategic projects, and disaster prevention and recovery projects.
Hospital and medical services and iron and steel are the two new additions to the 2012 IPP. Inclusion of the new sectors in the IPP could signal strong investor interest in these particular sectors.
The IPP delisted tourism, which is placed under the Mandatory List since the Tourism Infrastructure Enterprise Zone Authority (TIEZA) law allows for the granting of ecozone tourism projects. The PPP, which used to be a separate listing in the 2011 IPP, has been tied up with infrastructure.
The BOI will also administer the incentives for projects under TIEZA.
The agriculture and fishery covers the commercial production and commercial processing of agricultural and fishery products, including their byproducts and wastes. This also covers agriculture and fishery-related activities such as irrigation, post-harvest, cold storage and blast freezing facilities.
The creative industries cover business process outsourcing (BPO), information technology (IT) and IT enabled services, and film and performing arts productions.
Shipbuilding covers the construction and repair of ships and shipbreaking.
Mass housing covers the development of low-cost mass housing.
Energy covers the exploration, development and/or utilization of indigenous energy sources and clean coal technology.
Infrastructure covers transport, water, logistics, waste management facilities, physical infrastructure like toll roads, highways, railways and roads, and pipeline projects for oil and gas.