Palace okays revised 2005 Investment Priorities Plan

Malacañang has approved the revised 2005 Investment Priorities Plan (IPP) with 11 identified preferred activities.

The 11 identified preferred activities are agribusiness, healthcare and wellness products and services, information and communications technology, electronics, motor vehicle products, energy, infrastructure, tourism, shipbuilding and shipping, jewelry and fashion garments.

According to Board of Investment (BOI) managing head Elmer Hernandez, the 2005 IPP presents a list of priority investment areas with a more focused scope and coverage based on the Medium-term Philippine Development Plan for 2004-2010.

Investments in the preferred activities would be entitled to fiscal incentives such as income tax holiday and duty-free importation of capital equipment.

The 2005 IPP also list other preferred activities as export activities, industry cluster and modernization activities.

It was explained that the industry cluster would serve to enhance industrial competitiveness, promote investments in the countryside, develop small and medium enterprises (SMEs), and support the One Town, One Product Program (OTOP) as these apply to the activities listed in the IPP.

Mandatory inclusions covers all areas/activities where the inclusion in the IPP and/or grant of incentives under Executive Order 226 or the Omnibus Investment Act is mandated by law.

For this year, the mandatory inclusion covers those granted under the Clean Water Act or Republic Act 9275 and the Rehabilitation, Self-Development and Self-Reliance of Disabled Persons or RA 7277.

There is also an ARMM (Autonomous Region of Muslim Mindanao) list which covers priority areas that have been independently determined by the Regional Board of Investments (RBOI) of the ARMM in accordance with EO 458.

The BOI-ARMM can administer incentives granted to activities listed in the ARMM subject to general and specific guidelines.

Economic activities listed in the ARMM would be entitled to incentives only when said activities are undertaken within the ARMM region.

However, economic activities listed in the mandatory inclusions, priority areas and other activities may also be undertaken within the ARMM.

It was further clarified that of the 11 preferred activities, the coverage would be specified as the following: agribusiness-covers commercial production and commercial processing of agricultural and fishery products including their by-products and wastes; healthcare and wellness products and services – covers hospital services, medical and dental services, other human health and wellness services (including services in the field of nursing care, rehabilitation and recuperation, spas) retirement villages and related services located either in identified medical zones or outside Metro Manila when catering mainly to foreigners and non-residents. This also covers the manufacture of drugs and medicines in accordance with the Philippine Drug Formulary of the Department of Health, supplements limited to Vitamin A, iron and iodine for use in the Food Fortification Law and herbal medicines; information and communication technology- covers IT and IT-related services and ICT support services located either outside Metro Manila or identified IT hubs; electronics – covers all segments within the value-chain structure of the industry such as original design manufacturing (ODM), electronics manufacturing services (EMS), the manufacture of electronic products (except home appliances), IC design, the manufacture of parts and components of electronic products including the inputs for the manufacture of such components and the manufacture of production supplies used by the electronics industry. This also covers the establishment and operation of Centers of Excellence, test and other service facilities catering to the electronic industry; motor vehicle products – covers the production and/or manufacture of motor vehicle parts and components and the manufacture or assembly of motor vehicles provided that the activity includes a program for the development of motor vehicle parts and components.

This covers the establishment and operation of Centers for Excellence that support the development of the motor vehicle industry; energy – covers the exploration, development, and/or utilization of energy sources. This also covers activities using energy technologies leading to energy efficiency and conservation in accordance with the program of the Department of Energy; infrastructure – covers the establishment of infrastructures such as business parks, mass housing, mass transport involving rail system, physical infrastructure such as roads and bridges, telecommunications involving at least third generation cellular mobile telephone system (CMTS) and rural telephony system located in less developed areas (LDA), and logistics; tourism – covers the establishment of tourism economic zones, tourist accommodation facilities, tourist estates, and eco-agri tourism facilities. This also covers historic-cultural heritage projects and services provided by tourist operators as endorsed by the Department of Tourism (DOT); shipbuilding and shipping – covers shipbuilding, ship repair, shipyard operations (excluding ship breaking) and overseas, domestic and RORO shipping and terminal operations; jewelry – covers the manufacture of fine jewelry and costume jewelry; fashion garments – covers the production of fashion garments as endorsed by the Department of Trade and Industry. Fashion garments essentially refer to wearing apparel for a specific season with a distinct style and color based on international trends.