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THE
government is looking at setting the Investment
Priorities Plan (IPP) to three-year periods instead of
its current annual publication to allow better planning
for the industries.
A
ranking trade official said the Board of Investments
will probably include this in its recommendation to
Congress for input in the Fiscal Incentives
Rationalization Bill.
“A
three-year IPP will help industries plan better because
it gives continuity to it,” the official said.
The BOI,
under the present setup, prepares a list of sectors and
types of projects that will be eligible for government
incentives yearly.
In the
2007 IPP, listed as the priority sectors are steel and
iron, agriculture, fishery and support services; health
care and wellness products and services; information and
communications technology; electronics; motor vehicle;
energy; infrastructure; tourism; shipbuilding/shipping;
machinery and equipment, raw materials and intermediate
inputs in support of the activities listed in the IPP;
and research and development.
IPP’s
general headings of priority investment areas are export
activities, the projects qualifying under the
government’s retention, expansion and diversification
program; mandatory inclusions (activities that would get
automatic incentives as stated in various Philippine
laws like the Mining Act and Clean Water Act); and the
ARMM List (activities endorsed by the BOI-ARMM).
Among
the perks being granted by the government are up to
eight years of income-tax holiday, duty-free importation
of capital equipment and raw materials, and a host of
nonfiscal incentives, like the hiring of foreign
nationals as executives.
The
official said even foreign investors want a longer IPP
period because it takes time for them to decide on
investments from the instance they make their visit here
to the conduct of the feasibility studies and planning.
“Some
investors come back a year after only to find out that
their proposed projects are no longer qualified under
the new IPP,” the source said.
The
official also defended the continuous grant of fiscal
incentives to domestic-oriented firms even if it
depletes the revenues of the government.
The
grant of incentives, the official said, ensures that the
Philippines will continue to be a competitive investment
destination and will not be left out by other countries
that also give lofty perks.
“For us
in investment promotions, it would be harder for us to
convince investors to come here without these incentives
because we have to contend with other countries,” the
official said. |
