Investors still not keen to venture in rural areas

CEBU, Philippines – While major investments are mostly focused in the urban area, it remains a challenge to lure investors to consider projects in the countryside.

Philip Torres, officer-in-charge of Board of Investments in Cebu, said the newly approved 2014 Investment Priorities Plan wants to spur geographical considerations of projects in less developed areas.

The aim, he said, is to increase economic activities in rural areas and strengthen countryside growth.

But until now, several investors still see constraints in putting up their business in the countryside, he told The FREEMAN.

“This is still really a challenge,” the BOI official said of the dispersion of investments outside the key cities in the country like Cebu City. “Kung negosyante ka, mangita man gyud ka og lugar diin dako ka og kita.”

The lack of infrastructures, inaccessibility of transport modes, the condition of the rural investment climate and responsiveness of the local government are major concerns businessmen would consider before venturing in the countryside.

Incentives

What the government does in order to encourage rural-based enterprises, he said, is it gives both fiscal and non-fiscal incentives.

He explained the income tax holiday for businesses that are planning to invest in less urbanized places is extended to six years from the usual four years.

He added, under the local government code the business tax exemption period is equivalent to the years of tax holiday.

“This would also encourage investors to locate in the province. Kung resource-based ang activity especially if it’s under agribusiness or fishery, natural nga didto gyud ka mo-locate sa rural,” he said.

Among other priority sectors, high value agriculture production is one sector that shows long-term growth prospects.

He said the country needs more businessmen to get into agricultural production and processing which creates value added products. This ensures food supply in the countryside.

The potential farming productivity also calls for government spending for more agricultural infrastructures to support the economic activity.