BOI mulls more incentives for five priority areas

The Board of Investments (BOI) is crafting measures to improve its incentives package for investors in five priority sectors: infrastructure, information technology, automotive, electronics and mining.

Trade and Industry Undersecretary and concurrent BOI managing head Elmer Hernandez said the BOI is focusing on these sectors after determining it is in these areas where the growth potentials are higher and where the country can develop a competitive edge.

"We need to beef up the incentive package under Omnibus Investments Code or Executive Order 226 if we are serious in wooing long-term investors," Hernandez said.

Hernandez said the BOI will push for more attractive incentives for the infrastructure sector because of the need to establish linkages between production areas and their markets. These include roads, power and telecommunications systems and port facilities.

"Logistics is being given special attention, especially in the countryside or in remote areas where these kind of infrastructure support are required to encourage investors to come into the country," Hernandez pointed out.

The BOI also wants to improve the incentive package for the ailing

mining sector which has been struggling to stay afloat because of unfavorable policies, including the recent ruling of the Supreme Court that voided criticial provisions of the Philippine Mining Act of 1995 such as foreign-ownership of mining concessions.

Foreign investors have been wanting to bankroll mining projects but are awaiting the decision of the SC on the Department of Environment and Natural Resources’ motion to reconsider the Court’s earlier ruling. A similar motion was submitted by the Chamber of Mines of the Philippines.

On IT, the country is aspiring to become a major global player and wants to develop the country into a major e-services hub.

Earlier, the BOI said it is targetting to capture half of the call center operation in the world in five years, while the country’s contract center sector is expected to reach 80,000 seat operations next year, double this year’s projected capacity of 40,000 seats.

In the last four years, the contact center industry was been making great leaps from zero seat to about 20,000 seats today or a 20 percent share.

On the other hand, investments in the IT industry grew 23 percent to P6.42 billion in 2003, and of which 69 percent or P4.46 billion were revenues from call center operations.

There are now 60 call centers in Metro Manila, Clark and Cebu.

Another priority sector is the automotive industry. Hernandez said the country has the potential of still luring in foreign carmakers and establish production hubs for specific models for domestic and local markets.

Hernandez noted that the BOI is also closely watching the turnout of the Japan-RP Economic Partnership Agreement (JPEPA).

Moreover, members of the Japan Automotive Manufacturers Association are evaluating the policy direction of five ASEAN member-countries regarding the proposed FTAs (free trade agreements) with Japan, China and India.

Japan, which prefers FTA arrangements is most likely to favor countries that will move toward early FTA deals. An ASEAN-Japan FTA is expected to start in 2012.