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THE
government has changed its mind and decided to continue
granting full incentives to the mining and auto
industries, albeit on tough conditions, under the 2008
Investment Priorities Plan (IPP) that was approved by
Malacañang.
Mining
and auto assembly were late additions to the new IPP, as
they were originally not included by the Board of
Investments (BOI) in the initial list of sectors that
will qualify for income-tax holidays (ITH)—considered as
the most important perk of all.
Trade
Undersecretary and BOI managing head Elmer C. Hernandez
said in the case of the auto industry, vehicle
assemblers will only be able to avail themselves of ITH
if they will invest in the manufacturing of “major parts
and components.”
Those
that will be considered as major parts and components,
he said, include stamping products like doors and roofs,
transmission, engine and chassis.
“They
would need to invest in other companies that are
manufacturing them or do it themselves,” he told the
BusinessMirror. Hernandez said this is meant to increase
the local value-added of auto assembly and generate more
employment.
Also,
Hernandez said this will help the local auto-parts
makers grow and become a strong support industry for the
giant vehicle manufacturers.
He said
the industry should emulate Honda Philippines Inc.,
which initially planned to only assemble motorcycles
here but later went on to produce engines also.
For
mining, Hernandez said ITH will be given depending on
the type of product and technology to be used.
For
example, copper and gold extraction in deep-seated mines
will be given ITH as this will require new technology.
To be
given ITH also are those that are extracting minerals
with “deleterious” elements like arsenic in the case of
copper.
To
ensure that mineral wastage is kept at minimal levels,
Hernandez said ITH will not be given to firms that are
only getting the high-grade ores and then leaving behind
the low-grade ones.
“This is
now happening because some companies only have a
50-percent recovery when 85 percent is the ideal. Why
should we give incentives to those who are just wasting
our resources?” he said. Also to be deprived of ITH are
those that will just sell their yield immediately and
employ no value-adding through processing.
Through
processing, the minerals to be exported will gain higher
value while providing more employment opportunities for
the communities hosting them, Hernandez explained.
He said
the Chamber of Mines of the Philippines, which earlier
chastised the BOI for totally removing mining from the
list of sectors that will qualify for ITH, has agreed to
these proposals. |
