Professional Documents
Culture Documents
PHILIPPINES
INDUSTRY DEVELOPMENT
FOR INCLUSIVE GROWTH
MISSION
We, the BOI family, are committed to generate local and foreign
invesments and develop globally competitive industries, thus, increasing
employment through the responsible use of the countrys resources,
guided by the principles of private initiative and government cooperation.
In pursuit of these commitments, we bind ourselves to render competent
and efficient service with utmost integrity and professionalism. Ours is a
challenging task, yet with discipline and the guidance of an enlightened
and strong leadership, we shall move forward.
SERVICES
To meet investors diverse requirements, BOI offers specialized services that include:
Supplying knowledge-based market information
Analyzing your business feasibility
Linking you to the services chain
Matching you with foreign and local businesses
Nurturing your expansion and diversification
Profiling industries
CONTENTS
Memorandum Order No. 74 dated 28 October 2014
Message of the President of the Philippines
Foreword: Message of DTI Secretary Gregory L. Domingo
3
4
5
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24
Appendices
1 Sectoral Analysis
2 ADBs Top 20 Nearby Products Based on
Sophistication Level and Labor Intensity
3 Output Multipliers, Income Multipliers, Employment
Multipliers, and Production Linkages
4 References
Memorandum Circular no. 2015- 01
General Policies and Specific Guidelines to Implement
the Investment Priorities Plan (ipp) 2014 - 2016
A. Prefatory Statement
B. General Policies
C. Definition of Terms
D. Specific Guidelines
Annex A - List of Less Developed Areas (Ldas)
ANNEX B - Indigenous Raw Material
ANNEX C-1 - Preferred Locations for General Hospitals
(levels 1, 2 and 3)
ANNEX C-2 - Preferred Locations for General Hospitals
Level 3
ANNEX D - Incentives for BOI-Registered Enterprises
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2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
B OA R D O F INV ES TMENTS
MALACAAN PALACE
Manila
BY THE PRESIDENT OF THE PHILIPPINES
Pursuant to Article 29 of the Omnibus Investment Code of 1987, as amended, the attached 2014 Investment
Priorities Plan (IPP) is hereby APPROVED.
Further to the provision of said Article, upon effectivity of the IPP, all government agencies and entities
are enjoined to issue the necessary regulations to ensure the implementation of this IPP in a synchronized and
integrated manner. No government body shall adopt any policy or take any course of action contrary to, or
inconsistent with, this plan.
The Chairman of the Board of Investments shall render an annual report to the President on the
accomplishments and implementation of this plan.
This Order shall take effect fifteen (15) days after its publication in a newspaper of general circulation as
required under Article 31 of the Omnibus Investment Code of 1987.
DONE, in the City of Manila, this 28th day of October, in the year of our Lord, Two Thousand and Fourteen.
By the President:
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
MALACAAN PALACE
Manila
The past four years have seen the Filipino people come closer to the
fulfilment of our great potential. After decades of being regarded as the Sick
Man of Asia, our country, by following the straight and righteous path, has
transformed itself into one of the fastest growing economies in the world,
expanding at an average rate of 6.3 percent annually from the period of
2010-2013. Achieving this dramatic turnaround, while overcoming a long list
of challenges and enduring a series of disasters and calamities, lends credence
to the resiliency and strength of our people.
This performance has prompted the three major credit ratings agencies, Fitch,
Moodys, and Standard & Poors, to grant the Philippines investment grade
status, a category that proves our capacity to meet our financial obligations,
and would allow us the wherewithal to further pursue our initiatives towards
inclusive growth. This year, Standard & Poors even gave us another ratings
upgrade, from BBB- to BBB with a stable outlook, believing that, in their
own words, ongoing reforms to address shortcomings in structural,
administrative, institutional, and governance areas will endure beyond the
current administration.
In the latest round of international surveys, the World Banks Doing Business
Survey reports that the Philippines jumped 30 places to 108th out of 189
economies. The World Economic Forum has also improved its outlook on the Philippines. Since 2010, we have moved up 26 notches
in the global competitiveness rankings, from 85th to 59th, which puts us squarely on the top third of economies around the globe. The
country has also improved considerably in the Heritage Foundations Index of Economic Freedom, jumping 20 places since 2010.
All these manifest the basic truth that now is the best time to invest in the Philippines. I invite everyone to join the many companies
who are now enjoying the dividends of their confidence in the country. My administration is bent on making the Philippines even more
attractive to investors, which is why we remain committed to fast-tracking reforms, initiatives, and legislation that will facilitate the entry
of new capital, improve business procedures, and enhance investor confidence in the country.
Beyond a mere guide for prospective investors, this Investment Priorities Plan (IPP) is an expression of our vision to create a more
dynamic and progressive Philippines. Centered on the theme Industry Development for Inclusive Growth, this IPP aims to raise
investments in infrastructure, agriculture, education, and health. It likewise aims to create jobs higher up the value chain, enhance the
competitiveness of local industries, and expand our industries capacity to generate opportunities. It also identifies supply gaps in our
economy and the geographical needs of the country to serve as the basis in granting incentives or other forms of support, so we may bring
about growth that is equitable, comprehensive, and inclusive.
This plan is crucial in sustaining the pace of our growth in the coming years, especially as we prepare our industries and our people for our
countrys impending integration into the ASEAN Economic Community by the year 2015. Through this IPP, we will usher in a policy of
participatory development towards the attainment of our shared goals and the collective aspirations of the Filipino people.
The impressive results that we see today are the results of our push towards good governance. Imagine the heights that we can rise to if,
together, we can give the Filipino people the means to maximize their abilities and demonstrate their limitless potential. Join us in reaping
the fruits of our resurgence in the coming years, as we continue our journey on the straight and righteous path towards the fulfilment of
our dreams and the realization of a truly just and prosperous society.
B OA R D O F INV ES TMENTS
MANILA
October 2014
FOREWORD
With its strategic shift of strategy towards industry development which it started in January 2012, the DTI-BOI has now taken a
proactive role in steering the countrys industrialization, and thus a revisit of the annually published Investment Priorities Plan (IPP)
became necessary.
This IPP effected major changes from previous IPPs as it takes off from Chapter 3 (Competitive and Innovative Industry and Services
Sectors) of the updated Philippine Development Plan (PDP) 2011-2016, wherein six (6) broad sectors, i.e., agro-industry, manufacturing,
IT-BPM, tourism, logistics and construction are prioritized. This will be a 3-year document that considers the end-of-plan targets of the
PDP subject to an annual review.
With the updated PDP as its foundation, the IPP espousing the new industrial policy now serves both as a developmental tool for
investment decisions of the private sector and a promotional tool for government to encourage first movers in new investment areas and
to provide appropriate responses to the most binding constraints that prevent the entry of investments or industries from moving up the
value chain. The new industrial policy aims to transform and upgrade the manufacturing industry with the long-term vision to develop
globally competitive industries supported by strong forward and backward linkages.
In developing the 2014 List, a decision framework for the prioritization of economic activities was adopted. The framework focused on the
potentials of the sectors to generate employment, move up the value chain, create spillovers and promote competitiveness in the market
as well as closing the supply or value chain gaps as indicated in the sectoral roadmaps and available studies. The most binding constraints
to the growth of the industries were identified and appropriate policy responses were recommended.
The IPP supports the thrust of the current Administration, thus, the theme Industry Development for Inclusive Growth, to emphasize
that the Philippines is focusing on industry resurgence to promote sustainable and comprehensive growth.
In this connection, the 2014 IPP contains the following priority investment areas:
1. Preferred Activities that include 4 broad sectors (manufacturing, agribusiness and fishery, services, and infrastructure and
logistics) and 4 specific activities (energy, housing, hospitals and PPP projects);
2. Export Activities that cover the production and manufacturing of export products, services exports and activities in support of
exporters;
3. Activities with Special Laws that provide for either the mandatory inclusion of the activity in the IPP and/or the grant of
incentives under E.O. 226; and
4. ARMM List, which encompasses priority investment areas that have been determined by the Regional Board of Investments
of the Autonomous Region in Muslim Mindanao (RBOI-ARMM) in accordance with E.O. 458.
This IPP was formulated through a participative, analytical and multi-sectoral process. Four regional consultations were held in Metro
Manila, Cebu, Davao and Baguio City, along with four sectoral (manufacturing, services, infrastructure and power, and agriculture
and fishery) consultations. There were also two inter-agency consultative meetings conducted, peer review sessions with the countrys
leading economists, and on-line consultation to encourage the widest participation possible nationwide.
GREGORY L. DOMINGO
B OA R D O F INV ES TMENTS
EXECUTIVE SUMMARY
2014 Investment Priorities Plan
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
E xecutive S ummary
B OA R D O F INV ES TMENTS
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B OA R D O F INV ES TMENTS
2014 Investment
Priorities Plan
Industry Development for
Inclusive Growth
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I.
INTRODUCTION
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II.
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B OA R D O F INV ES TMENTS
A N ew I ndustrial P olicy
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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2014-2017
Medium Term
2017-2021
Long Term
2021-2025
globally competitive
manufacturing industry with
strong forward & backward
linkages
maintain competitiveness of
comparative advantage
industries
strengthen emerging products
rebuild existing capacity of
industries
Short Term
OBJECTIVE : Industry Roadmap for Structural Transformation, Job Creation and Poverty Reduction
GOAL : A globally competitive manufacturing industry supported by a strong parts and components sector
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TARGETS: Manufacturing contribution of 30% of total value-added and 15% of total employment
B OA R D O F INV ES TMENTS
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H ORI ZON TA L
MEA SUR ES
V E R TICA L
ME A S UR E S
CO O R D INAT IO N
M EC H A NIS M
open trade regime, sustainable macro policies, sound tax policies &
administration, efficient bureaucracy, secure property rights
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B OA R D O F INV ES TMENTS
III.
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B OA R D O F INV ES TMENTS
Other Sectoral
Studies and
Researches
On-line Consultation
IPP Framework
and List of
Preferred
Activities
Board
Approval
Approval by
the President
Multi-Sectoral
Consultations*
*Regional multi-sectoral consultations in Metro Manila, Cebu, Davao and Baguio City; Sectoral/Cluster
consultations for manufacturing, agriculture/fishery, sevices, and infrastructure/energy.
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B OA R D O F INV ES TMENTS
A SUPPLY GAP?
UPSTREAM MIDSTREAM DOWNSTREAM GEOGRAPHIC
HIGH PRODUCTION
COST
Power
Logistics
Raw Materials
Lack of scale
HIGH RISKS
Huge capital
requirements
New technology
GOVERNMENT
REGULATIONS
Licenses
Smuggling
GOVERNMENT
POLICIES
Tax
Labor
Foreign Equity
Restriction
HOW TO MAINTAIN
COMPETITIVENESS
HUMAN CAPITAL
Skills gap
Labor mismatch
OTHERS
Financing
Competition
Standards, quality, etc.
POLICY RESPONSE
INCENTIVES +
OTHER POLICIES
(WITHOUT INCENTIVES)
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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IV.
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B OA R D O F INV ES TMENTS
d. Chemicals
Oleo-chemicals
Petrochemicals and derivatives
Chlor-Alkali Plants
e. Virgin paper pulp
f. Copper wires and copper wire rods
g. Basic iron and steel products, steel
grinding balls, long steel products
(billets and reinforcing steel bars), and
flat hot/cold-rolled products
h. Tool and Die
Simple, Compound and Progressive
Dies for metal stamping or metal
forging
Molds for die casting, for plastic
injection or blow molding, glass blow
molding, forging, encapsulation
molds
Jigs and fixtures for metal cutting
and metal forging
Subject to geographical supply considerations. In the case of poultry and livestock production, this is
limited to areas in ARMM, Mindoro and Palawan.
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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4.
Economic and Low-cost
(horizontal and vertical)5
5. Hospitals6
6. Energy
a. Exploration and development of
energy sources (including energy crops
or upstream biofuels)
b. Power generation plants7
c. Ancillary services
3. Services
a. Integrated Circuit Design
b. CreativeIndustries/Knowledge-Based
Services3:
Animation
Software development4
Game development
Health Information Management
Systems
c. Ship repair
d. Charging stations for e-vehicles
e. Maintenance, Repair and Overhaul
(MRO) of aircraft
f. Industrial waste treatment
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B OA R D O F INV ES TMENTS
Housing
8. PPP Projects
II. Export Activities
1. Production and manufacture of export
products
2. Services Exports
3. Activities in support of exporters
III. Special Laws
1. Industrial Tree Plantation (P.D. 705)
2. Mining (R.A. 7942) (limited to capital
equipment incentive)
3. Publication or Printing of Books/Textbooks
(R.A. 8047)
4.
Refining, Storage, Marketing and
Distribution of Petroleum Products (R.A.
8479)
5. Rehabilitation, Self-Development and
Self-Reliance of Persons with Disability
(R.A. 7277)
6. Renewable Energy (R.A. 9513)
7. Tourism (R.A. 9593)
IV. ARMM List
The ARMM List covers priority activities that
have been identified by the Regional Board of
Investments of the ARMM (RBOI-ARMM)
in accordance with E.O. No. 458. The RBOIARMM may also register and administer
incentives to activities in this IPP for project
locating in the ARMM.
A. EXPORT ACTIVITIES
1. Export Trader and Service Exporters
2. Support Activities for Exporters
B. AGRICULTURE, AGRIBUSINESS/
AQUACULTURE & FISHERY
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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C. BASIC INDUSTRIES
This
covers
the
production
of
pharmaceuticals such as antibiotics
and medical devices, textile and textile
products, inorganic and organic fertilizers
using solid waste materials, exploration and
development of natural gas and mineral
resources which includes small scale as
defined under P. D. 1899 (but to exclude
river beds in operations and processing
of minerals such as beneficiation and
other metallurgical methods) and cement
E. INFRASTRUCTURE AND SERVICES
B OA R D O F INV ES TMENTS
EAGA, namely, Brunei; Sabah and Sarawak in Malaysia; Malusu, Sulawesi, Kalimantan and Iringaya
in Indonesia; and Mindanao and Palawan in the Philippines, who shall invest and engage in economic
activity in the ARMM including SMEs.
J. TOURISM
This covers the establishment of tourism estate subject to guidelines developed jointly by RBOIARMM and the Department of Tourism ARMM, tourist accommodation facilities, tourist transport
facilities and development of retirement villages which shall include health and medical facilities
including amenities required by the Philippine Retirement Authority (PRA) and subject to the
guidelines to be approved by RBOI-ARMM in consultation with the PRA, the Department of Health
(DOH), the Regional Planning and Development Office (RPDO) and other concerned agencies.
The ARMM has the lowest indication in the country regarding health and education as reflected
in the Human Development Index. For this purpose, there is a need for incentives to be given to
investors in the health and educational sectors such as putting up of private hospitals, medical clinics,
wellness centers, primary education, secondary education, tertiary education (colleges, universities
and vocational - technical schools) and ancillary services including any and all health and education related investments.
L. HALAL INDUSTRY
The MTPDP 2004 2010 provided that ARMM shall be the production and processing center for
the Halal industry. ARMM being the only Muslim region in the country, has a comparative advantage
in the Halal industry. Any Halal related business enterprises shall be covered. Halal refers to the
permissible products and services under Islamic Law.
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B OA RBO
D OAFR D
INV
OF
ESINV
TMENTS
ES TMENTS
30
APPENDICES
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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1.
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B OA R D O F INV ES TMENTS
SECTORAL ANALYSIS
1. Manufacturing
The overall performance and contribution to
economy of the manufacturing industry has been
weak and declining for the past two decades of
the Philippines. With its GDP declining from 26.3
percent to 23.7 percent and share to value added
and employment performing the same from 28.2
percent to 23.7 percent and 11.3 percent to 9.1
percent, respectively, the manufacturing sector
has failed to influence growth, employment and
productivity of the country.
Based from an article of Mr. Bobby Batungbacal, Director, Federation of Philippine Industries, Inc., entitled,
The Strategic Importance of the Philippine Manufacturing Sector dated October 6, 2011.
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B OA R D O F INV ES TMENTS
Spillover Effects
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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Policy Response
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B OA R D O F INV ES TMENTS
b. Motorcycle
Employment
Spillover Effects
Policy Response
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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c. Electronics
The Philippine electronics industry began
in the mid-seventies when industrialized
nations relocated their production facilities to
third world countries in order to control the
escalating cost of production. The Philippines
was an ideal relocation site due to its cost
competitive, highly-educated and Englishspeaking labor. Other factors included
the countrys geographical location (being
at the crossroads of international trade),
and attractive government incentives. The
conditions that encouraged foreign electronics
companies to turn to the Philippines have
remained and have been further enhanced by
the countrys political transition to popular
democracy in 1986. Since then, the industry
has grown rapidly and overtook agriculture as
the leading export earning industry in 1996.
Spillover Effects
38
B OA R D O F INV ES TMENTS
Policy Response
d. Chemicals,
chemicals
Petrochemicals,
and
Spillover Effects
Oleo-
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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B OA R D O F INV ES TMENTS
Policy Response
Input-Output Analysis was prepared by the COMPETE Project and Center for Research and Communication (CRC) with funding from the United States Agency for International Cooperation (USAID)
41
42
Spillover Effects
f. Aerospace
Policy Response
B OA R D O F INV ES TMENTS
Spillover Effects
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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Policy Response
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B OA R D O F INV ES TMENTS
g. Copper Industry
Spillover Effects
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46
B OA R D O F INV ES TMENTS
Policy Response
Spillover Effects
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48
B OA R D O F INV ES TMENTS
Policy Response
Spillover Effects
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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Policy Response
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B OA R D O F INV ES TMENTS
j. Rubber Products
At present, there are 46 companies that
comprise the rubber products industry. Of
these, 26 are direct industry players while
the rest are suppliers (e.g. natural latex, and
crumb rubber, synthetic rubber, additives,
and polymers, carbon black, release agent,
tube valve, organic pigments, bead wire,
and tire cord) as well as sources of business
development services (e.g. agents, brokers and
cargo container lines).
Spillover Effects
Policy Response
51
k. Cement
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B OA R D O F INV ES TMENTS
Spillover Effects
Policy Response
l. Paper
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2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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Spillover Effects
B OA R D O F INV ES TMENTS
Policy Response
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Since 1996, the annual domestic casting production has been on a steady decline as shown in the table
below. The most recent survey available showed very significant drop in the production, with a lower than
10% volume in 2012 viz 2002 production.
Alloy
Gray Iron
Ductile Iron
Malleable Iron
Low Alloy Steel
High Alloy Steel
Bronze
Brass
Aluminum
TOTALS
1996
466,164
15,912
Nil
6,000
45,132
54,780
6,696
303,960
898,644
1997
408,204
11,544
Nil
23,700
42,720
34,980
6,294
306,000
833,412
1998
351,072
11,856
Nil
25,500
26,640
24,420
5,508
190,333
635,329
58
2000
301,392
12,168
Nil
25,500
36,240
33,000
12,420
161,160
581,880
2001
370,000
11,376
Nil
36,612
34,308
29,076
14,496
137,520
633,388
2002
242,340
10,644
Nil
52,572
32,472
25,608
16,920
117,348
497,904
2012
24,500
3,500
1,000
11,000
40,000
1999
342,792
9,984
Nil
32,400
23,520
31,680
3,240
212,160
655,329
B OA R D O F INV ES TMENTS
Spillover Effects
Policy Response
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materials. Pampanga is associated with handcarved wood, wicker and iron products whereas
Cebu, which used to be the heart of rattan
furniture making in the country is now known
for its fine wood furniture works.
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B OA R D O F INV ES TMENTS
ASEAN countries do not have strong intraregional furniture trade as the bulk of ASEAN
furniture imports come from China. The
Philippines, for example, exports most of
its products to the US and Europe. Filipino
furniture manufacturers are not actively
opening outlets in other ASEAN countries.
Spillover Effects
Policy Response
o. Ceramic Tiles
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Spillover Effects
Policy Response
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While the sectors has been included in the DTIBOIs IPP list since 1968, the performance of
the agriculture and fisheries sector remained
unimpressive. Poverty incidence in the sector
is prevalent. In 2009, the highest incidences of
poverty among the basic sectors were recorded for
fishers (43.6 percent) and farmers (42.4 percent).
a. Crops
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d. Natural Rubber
The world production of natural rubber is
projected to increase at three to five percent
per year up to 2020, i.e. from 17.4 million tons
in 2010 to 28.1 million in 2020. According to
the DA, however, the countrys rubber industry
accounted for only 1.05 percent of the world
consumption of rubber in 2004.
B OA R D O F INV ES TMENTS
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66
In 2011, based on the export data from DTIExport Management Bureau (EMB), the
Philippine natural and organic products have an
estimated total export value (FOB) of about
US$153 million. The major contributor of the
growth in the sector is the medicinal plants/
foods and the personal care category.
B OA R D O F INV ES TMENTS
Spillover Effects
Policy Response
3. Services
The Service Revolution, EjazGhanii, Paper presented at ILO Conference, Geneva, 2011
World Bank presentation, Role of Services in Economic Development; Geneva, July 2012 (Data source:
World Bank, 2010)
6
Asian Development Outlook 2014
4
5
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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a. Knowledge-Based Services
The Philippines is a mature location for ITBPM services. In 2010, the country emerged
as the number one voice BPM provider in the
world. Non-voice services and global in-house
centers (GICs) also gained traction, raising the
Philippines prominence as the number two
location worldwide.
B OA R D O F INV ES TMENTS
World Bank, July 2012, Nora Dihel, Africa Region - Poverty Reduction and Economic Management Unit
The Service Revolution, EjazGhanii, Paper presented at ILO Conference, Geneva, 2011
Ibid.
11
Information Technology and Business Process Association of the Philippines (IBPAP)
10
68
World Bank, July 2012, Nora Dihel, Africa Region - Poverty Reduction and Economic Management Unit
Policy Response
4. Housing
12
13
14
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A recent study16 shows that from the years 20012011, bulk of the housing backlog is composed
of the economic type of housing at almost
1.96 million units, followed by the deficit from
socialized and low cost housing at 663,282 units
and 462,160 units, respectively. Taking into
account the countrys future needs until 2028 for
these segments (socialized, economic, low cost),
the country is facing a total deficit of 3.2 million
of housing units for both economic and low cost
housing segments while socialized is expected to be
at a deficit of 1.6 million units. The limited space on
which housing can be provided in highly-populated
areas exacerbate the backlog situation. As such,
vertical housing needs to complement supply
where horizontal housing would not be feasible
anymore.
It is also seen that there is a need for competitively
priced inputs especially needed in building
socialized, economic and low cost housing units
The Housing Industry Roadmap of the Philippine 2012-2030 by SHDA and UA&P, page 3
The Housing Industry Roadmap of the Philippine 2012-2030 by SHDA and UA&P, page 58
15
16
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B OA R D O F INV ES TMENTS
Spillover Effects
Policy Response
5. Hospitals
Comparative 2010 figures on hospital bed-topopulation ratio among selected Asian countries
show that the Philippines (at 1:855) lags behind
Indonesia (at 1:667), Vietnam (at 1:610), Thailand
(at 1:467), China at (1:400), Singapore (at 1:381),
and Japan (at 1:71).
Employment
17
Alvin B. Marcelo, MD, Chief Information Officer, PhilHealth, The Philippine eHealth Development Plan,
Leveraging ICT for a More Efficient Health Sector, 2013
Philippines eHealth Strategic Framework and Plan 2013-2017
18
19
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Policy Response
Healthcare
Information
Communication
Techonology (ICT) systems implementation is
crucial to achieve the eHealth 2020 vision of the
DOH which ensures widespread access to health
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B OA R D O F INV ES TMENTS
20
investments and entails risks. Thus, investors in energy projects are looking for a sound and stable policy and
regulatory environment within which they will operate with an attractive business environment. Due to the
heavy capital requirements to erect a power plant, generating companies usually rely on lending institutions to
supply the needed cash. The lending institutions, on the other hand, look at all the financial support from the
government to mitigate the risk of exposure to the project.
The existing plant generating capacity and additional capacity needed on top of the committed capacity to
meet the demand and the required reserve margin per major grid is shown below:
Luzon
Visayas
Mindanao
Total
Total
3,800
900
400
5,100
Per the DOE, from 2014 to 2019, an additional 5,100 MW of power generating capacity is needed in all major
grids of the Philippines. Out of the 5,100 MW required additional capacity, only 45 power generating plants
equivalent to 3,382.75 MW (combined RE and conventionally fueled) are committed to go online in 2016.
Additional
Committed Additional Capacity
Capacity
Major Island Existing Capacity (MW)
(2014 to 2016)
Required (MW)
Grid
Total BOI
Capacity No of No. of BOI
Installed Dependable 2014 to 2019
Registered
(MW)
Plants Registered
Capacity
Luzon
12,528
11,349
3,800
1,724.65
19
12
973.6
Visayas
2,448
2,103
900
579.60
10
7
293
Mindanao
2,049
1,614
400
1,078.50
16
6
318.8
Total
17,025
15,066
5,100
3,382.75
45
25
1,585.4
Source: DOE
Still, the committed power plant that will go online in 2016 is not sufficient to address the projected power
requirement of the three (3) major grids in 2019. However, investors have provided an indicative additional
capacity from (2016 to 2019) of around 13,101.8 MW depending on the market requirements.
Energy security will not be substantially realized if only a small portion of the fuel requirements to run our
generating plants is sourced locally. The slow pace of exploration and development of indigenous and other
alternative energy sources therefore needs to be addressed. Analyzing the supply chain for geothermal energy,
we consider test-drilling during the exploration stage as one ancillary activity to be encouraged. Much of the
cost for the development of geothermal energy and also the risks occur during the exploration stage. Common
industry practice is that developers outsource the exploration and the test-drilling activities to professional
drillers who are better equipped and are more technically capable to do the job to lower their costs and the
risks involved.
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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Based on the DOE data, the geothermal installation targets are as follows:
Location
Luzon
Visayas
Mindanao
Total
74
2013-2015
20
20
40
Commissioning Year
2016-2020
2021-2025
760
20
150
65
250
70
1160
155
2026-2030
60
20
80
Policy Response
Employment
22
http://www.benefitsofaviation.aero/Documents/Benefits-of-Aviation-Philippines-2011.pdf
21
23
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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Spillover Effects
http://www.benefitsofaviation.aero/Documents/Benefits-of-Aviation-Philippines-2011.pdf
FR-PH Maritime Prospects Challenges, http://gpcci.org/home/wp-content/uploads/2013/05/FR-PHMaritime-Prospects-ChallengesGPCCI-5.23.pdf
24
25
76
B OA R D O F INV ES TMENTS
http://pascn.pids.gov.ph/DiscList/d00/s00-12.pdf
26
Policy Response
27
28
http://www.noodls.com/view4159DB5820A900F85A53079C63A55E53473786B2?904x
xx1401267289
Cabotage law RA 1937, also known as the Tariff and Customs Code of the Philippines contains
provisions that states that maritime transportation of goods and passengers within the country is reserved
for Philippine registered marine vessels.
31
http://www.pids.gov.ph/index2.php?pr=162
32
http://www.neda.gov.ph/wp-content/uploads/2013/09/CHAPTER-5.pdf
33
http://dirp4.pids.gov.ph/webportal/CDN/PUBLICATIONS/pidspn1316.pdf
29
30
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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Employment
35
78
B OA R D O F INV ES TMENTS
sources-are-tapped-expert-says
Philippine Water Supply Sector Roadmap 2nd Edition, 2010 National Economic Development Authority
Executive Summary, xvi, Philippine Water Supply Sector Roadmap 2nd Edition
40
http://www.investphilippines.info/arangkada/wp-content/uploads/2011/06/14.-Part-3-Seven-BigWinner-Sectors-Infrastructure-Water.pdf
41
Philippine Water Supply Sector Roadmap 2nd Edition, 2010 National Economic Development Authority
38
39
Spillover Effects
Policy Response
79
2.
A D B s T op 2 0 N earby P roducts
B ased on S ophistication L evel
and L abor I ntensity
80
B OA R D O F INV ES TMENTS
Commodities
Porcelain or china houseware
Pens, pencils, and fountain pens
Fabrics, woven, of continuous synthetic textile material
Sewing machines, furniture, needles, etc and parts
thereof
Domestic electromechanical appliances; and parts
thereof, n.e.s.
Electrical line telephonic and telegraphic apparatus
Calculating, accounting, cash registers, ticketing, etc
Television, radio-broadcasting; transmitters, etc
Microphones; loudspeakers; audio-frequency electric
amplifiers
Refined sugar, etc.
Clocks, clock movements and parts
Pianos, other string musical instruments
Precious jewelry, goldsmiths or silversmiths wares
Watches, watch movements and case
Fish, dried, salted or in brine; smoked fish
Photographic cameras, flashlight apparatus, parts,
accessories, n.e.s.
Fish fillets, frozen
Flours and meals, of meat, fish, etc
Portable radio receivers
Complete digital processing machines
PRODY
11,998
10,829
14,843
Strategic Value
10,039
9,795
9,480
11,250
9,035
10,866
8,559
14,713
13,485
16,537
8,346
8,199
8,103
13,583
7,997
12,595
15,040
11,293
12,091
25,310
13,841
7,539
7,273
6,961
6,952
6,014
5,650
17,702
5,488
13,286
11,284
13,995
28,109
5,413
4,220
3,808
3,403
Commodities
Synthetic or reconstructed precious or semi-precious stones
Pianos, other string musical instruments
Knitted, not elastic nor rubberized, of fibers other than
synthetic
Pens, pencils and fountain pens
Smallwares and toilet articles, n.e.s.; sieves; tailors dummies,
etc.
Fabrics, woven, of continuous synthetic textile materials
Clocks, clock movements and parts
Precious jewelry, goldsmiths or silversmiths wares
Watches, watch movements, and case
Porcelain or china houseware
Photographic camera, flashlight apparatus, parts, accessories,
n.e.s.
Fish, dried, salted or in brine; smoked fish
Fish fillets, frozen
Sewing machines, furniture, needles, etc and parts thereof,
n.e.s.
Complete digital data processing machines
Electrical line telephonic and telegraphic apparatus
Television, radio-broadcasting and telegraphic apparatus
Flours and meals, of meat, fish, etc.
Microphones, loudspeakers, audio-frequency electric amplifiers
Portable radio receivers
Labor
intensity
16.177
8.981
4.594
3.547
3.547
3.065
2.982
2.982
2.982
2.829
2.042
1.611
1.611
1.392
1.347
1.193
1.193
1.022
0.957
0.957
Notes:
1. Nearby products are products that can be developed with relative ease since they can intensively utilize existing capabilities embedded in the current export structure.
2. PRODY is an indication of a products level of sophistication, measured by the average of GDP per capita of exporting countries of the product.
Source (Table 1 and Table 2): Usui, Norio. 2012. Taking the Right Road to Inclusive Growth. Asian Development Bank. Manila, Philippines.
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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3.
Industry
Total
Total Domestic Total Domestic
Domestic
Income
Employment
Output
Multiplier1
Multiplier
1
Multiplier
(additional
Effect1
(additional
domestic
(additional
domestic
household
domestic jobs
output per
income per
per one billion
peso change
peso change in peso change in
in final
final demand)
final demand)
demand)
Backward Linkage2
Forward Linkage2
Strength
(relative
to other
industries)
Dispersion
(relative
to other
industries)
Strength
(relative
to other
industries)
Dispersion
(relative
to other
industries)
Manufacturing
Auto Manufacturing
2.34
0.24
1,134
weak
even
weak
uneven
Auto Parts
2.12
0.20
945
weak
uneven
weak
uneven
Motorcycle
2.37
0.27
1,276
weak
even
weak
uneven
Basic Chemicals
2.13
0.24
1.134
weak
uneven
strong
even
Bamboo
1.61
0.20
945
weak
uneven
strong
even
Biodiesel
1.32
0.08
378
weak
uneven
strong
even
Cement
2.29
0.25
1,181
weak
even
weak
even
Ceramic Tiles
2.59
0.40
1,890
strong
even
weak
uneven
1.98
0.16
756
weak
uneven
strong
even
Non-ferrous
foundries
2.24
0.24
1,134
weak
uneven
strong
even
Electrical machinery
1.75
0.17
803
weak
uneven
weak
uneven
Furniture
Wooden
2.55
0.30
1,418
strong
even
weak
uneven
Rattan
2.66
0.39
1,843
strong
even
weak
even
Other Furniture
2.77
0.36
1,701
strong
even
weak
even
2.16
0.21
992
strong
uneven
strong
even
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B OA R D O F INV ES TMENTS
2.14
0.17
803
weak
uneven
strong
even
2.38
0.21
992
weak
even
weak
uneven
Industry
Total Domestic
Total Domestic
Total Domestic
Output
1
Income
Multiplier
Employment
Multiplier1
(additional
Multiplier Effect1
(additional
domestic household (additional domestic
domestic
income per peso
jobs per one billion
output per
change in final
peso change in final
peso change in
demand)
demand)
final demand)
Backward Linkage2
Forward Linkage2
Strength
(relative
to other
industries)
Dispersion
(relative
to other
industries)
Strength
(relative
to other
industries)
Dispersion
(relative
to other
industries)
Metal Casting
2.07
0.18
851
strong
even
weak
even
Plastics
2.04
0.22
1,040
weak
uneven
strong
even
Paper
Pulp, paper,
Paperboard
Paper and
paperboard
containers
Articles of
paper
Semiconductor
devices
Shipbuilding
Air Cargo
Information
TechnologyBusiness
Process
Management
Private business
services
Private
recreational
services
Mass Housing
2.19
0.20
945
weak
uneven
strong
even
2.19
0.26
1,229
weak
uneven
weak
even
2.06
0.20
945
weak
uneven
weak
even
2.21
0.31
1,465
weak
uneven
weak
uneven
2.29
0.21
992
weak
even
weak
uneven
Services
2.42
0.24
1,134
strong
even
weak
even
2.78
0.52
2,457
strong
even
weak
uneven
2.39
0.36
1,701
strong
even
strong
even
2.21
0.33
1,559
strong
even
weak
uneven
2.69
0.43
2,032
strong
even
strong
even
Medical Travel
Private medical,
dental, other
health services
Other hospital
activities,
medical
and dental
practices, vet.
2.89
0.53
2,505
strong
even
weak
uneven
1.97
0.27
1,276
weak
uneven
weak
uneven
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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Industry
Total Domestic
Total Domestic
Total Domestic
Output
1
Income
Multiplier
Employment
Multiplier1
(additional
Multiplier Effect1
(additional
domestic household (additional domestic
domestic
income per peso
jobs per one billion
output per
change in final
peso change in final
peso change in
demand)
demand)
final demand)
Backward Linkage2
Strength
(relative
to other
industries)
Forward Linkage2
Dispersion
(relative
to other
industries)
Strength
(relative
to other
industries)
Dispersion
(relative
to other
industries)
3.23
0.41
1,937
strong
even
strong
even
3.45
0.37
1,748
strong
even
weak
even
Milk processing
2.47
0.23
1,087
strong
uneven
weak
even
Canning and
preserving of
fruits
2.57
0.31
1,465
strong
even
weak
even
Mining
Copper mining
2.16
0.26
1,229
weak
uneven
weak
uneven
Gold mining
2.07
0.24
1,134
weak
uneven
weak
even
Chromite
mining
2.12
0.29
1,370
weak
uneven
weak
uneven
Nickel mining
2.03
0.26
1,229
weak
uneven
weak
uneven
Other metallic
Mining
(silver, etc)
1.89
0.23
1,087
weak
uneven
weak
uneven
Notes:
1
The total domestic output, income, and employment multiplier effects incorporate the initial, direct, indirect, and induced effects. The total domestic output and income multipliers were derived from a semi-closed domestic inverse
matrix. The total employment multiplier effect is derived by dividing the total domestic income multiplier effect by the annual average compensation. The annual average compensation used in this study is 211,615 pesos. This was
based on the 2010 Annual Survey of Philippine Business and Industry. (Terosa, 2013, Sec. III).
The relative strength of the production linkages of an industry is considered strong if the corresponding linkage index is greater than 1. If the linkage index of the industry is less than 1, the relative strength of its production linkages
is considered weak. The relative dispersion of production linkages is deemed even if the coefficient of variation of the industry is less than the average coefficient of variation for all industries. Otherwise, the relative dispersion of
production linkages is considered uneven. (Terosa, 2013, Sec. IV).
Source: Terosa, C. L. (2013). Multiplier Effects and Production Linkages in 2000 of Selected Industries in the Philippines. Report submitted to the United States Agency for International Development Advancing Philippine
Competitiveness Project (USAID-COMPETE), for the Department of Trade and Industry.
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B OA R D O F INV ES TMENTS
4.
R eferences
Aldaba, Rafaelita. (forthcoming) Surviving Trade Liberalization in Philippine Manufacturing. ERIA Discussion Paper.
Economic Research Institute for ASEAN and East Asia.
Blomstrom, Magnus and Ari Koko. 2003. The Economics of Foreign Direct Investment Incentives in Herrmann, Heinz
and Robert Lipsey (eds.) Foreign direct investment in the real and financial sector of industrial countries. Heidelberg and
New York: Springer.
Botman, Dennis, Alexander Klemm, and Reza Baqir. 2008. Investment Incentives and Effective Tax Rates in the Philippines:
A Comparison With Neighboring Countries. IMF Working Paper 08/207. International Monetary Fund.
Klemm, Alexander and Stefan van Parys. 2009. Empirical Evidence on the Effects of Tax Incentives. IMF Working Paper
09/136. International Monetary Fund.
KPMG International. 2014. Corporate tax rate table. Retrieved from http://www.kpmg.com/global/en/services/tax/taxtools-and-resources/pages/corporate-tax-rates-table.aspx
Lin, Justin. 2011. New Structural Economics: A Framework for Rethinking Development. Policy Research Working Paper
Series 5197, The World Bank.
Lin, Justin and Ha-Joon Chang. 2009. Should Industrial Policy in Developing Countries Conform to Comparative
Advantage or Defy it? Development Policy Review, Overseas Development Institute, vol. 27(5), pages 483-502, 09.
Manasan, Rosario G., 2002, Explaining the Decline in Tax Effort, PIDS Policy Note No. 200214 (Makati City: Philippine
Institute for Development Studies).
Morisset, J. and N. Pirnia. 2001. How tax policy and incentives affect foreign direct investment: a review. In Wells, L. Jr.,
N. Allen, J. Morisset and N. Pirnia. 2001. Using tax incentives to compete for FDI: are they worth the costs? Foreign
Investment Advisory Service Occasional Paper No. 15. Washington, DC: World Bank.
Nakayama, Kiyoshi, Selcuk Caner and Peter Mullins. 2011. Road Map for a Pro-Growth and Equitable Tax System.
Washington, D.C.: International Monetary Fund.
National Economic and Development Authority. 2011. Philippine Development Plan: 2011-2016. Pasig: NEDA.
National Economic and Development Authority. 2014. Philippine Development Plan: 2011-2016 Midterm Update with
Revalidated Results Matrix. Pasig: NEDA.
Reside, R. 2006. Fiscal incentives and investments in the Philippines. Report for the Economic Policy Reform and Advocacy
Project of the USAID and Ateneo de Manila University.
Terosa, C. L. 2013. Multiplier Effects and Production Linkages in 2000 of Selected Industries in the Philippines, Report
submitted to the United States Agency for International Development Advancing Philippine Competitiveness Project
(USAID-COMPETE), for The Department of Trade and Industry.
Usui, Norio. 2012. Taking the right road to inclusive growth: Industrial upgrading and diversification in the Philippines.
Mandaluyong City, Philippines: Asian Development Bank.
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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PHOTO
Development
86
B
OA RBO
D OAFR D
INV
OF
ESINV
TMENTS
ES TMENTS
86
PHOTO
Development
MEMORANDUM
CIRCULAR NO. 2015- 01
GENERAL POLICIES AND SPECIFIC
GUIDELINES TO IMPLEMENT THE
INVESTMENT PRIORITIES
PLAN (IPP) 2014 - 2016
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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A.
PREFATORY STATEMENT
In line with the Administrations thrust of creating a more dynamic and progressive Philippines, the
President issued Memorandum Order No. 74 dated 28 October 2014 approving the 2014 Investment
Priorities Plan (IPP), which is centred on the theme Industry Development for Inclusive Growth. A
fundamental investment policy tool of the DTI-BOIs industry development strategy, the 2014 IPP is
a strategic plan to grow industries, not just or necessarily through incentives, but through other policy
interventions and initiatives. The IPP undertakes to address the most binding constraints to the entry of
new investments and moving up the value chain to enhance the local industries competitiveness while
creating a competitive market.
The 2014 IPP is a rolling three-year plan to ensure continuity, consistency and predictability factors
seriously considered by domestic and foreign investors. This new IPP will, however, be reviewed annually
over the three-year period.
Therefore, notice is hereby given that the Board approved the following General Policies and Specific
Guidelines to implement the 2014 IPP.
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B OA R D O F INV ES TMENTS
B.
GENERAL POLICIES
I.
The approval of application for registration and entitlement to incentives under this IPP is subject to Article
7, paragraph 3 of Executive Order (E.O.) No. 226.
The approval of applications for registration shall be based on the IPP listing. However, the extent of
entitlement to incentives shall be based on the projects net value-added, job generation, multiplier effect
and measured capacity.
The BOI, if national interest requires, may deny registration of projects engaged in the export of a product
including industry inputs that are in short supply domestically.
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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II.
EQUITY OWNERSHIP
V. GEOGRAPHICAL CONSIDERATION IN
INDUSTRY DEVELOPMENT POLICY
90
B OA R D O F INV ES TMENTS
IN
SHORT
A. General Rules
1. In the grant of incentives, the Board
shall give priority to projects with
substantial benefits to the economy. In
this regard, the extent of the projects
ITH entitlement shall be based on the
following parameters: (1) projects net
value added, (2) job generation, (3)
multiplier effect, and (4) measured
capacity.
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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Projects registered under the modernization program without increase in capacity may be entitled to
three (3) years ITH and other incentives without prejudice to compliance with other requirements. The
computation of ITH for projects without increase in capacity is as follows:
For single product/activity:
New Investment (in US$)
Rate of Exemption (ROE) = ---------------------------------------------------- x 100
Total Investments (replacement cost + new)
Relative to the Concerned Plant (in US$)
For multiple products/ activities or when ITH period of other products/ activities has lapsed:
Sales arising from the modernization project
% Sales Entitled to ITH = ------------------------------------------------------- x 100
Total Sales
New Investment (in US$)
ROE = ---------------------------------------------------- x 100
Total Investments (replacement cost + new)
Relative to the concerned plant (in US$)
Where:
ROE shall be fixed for the ITH entitlement period.
Exchange rate shall be the existing rate at the time of actual investment or time of availment of ITH
whichever will result in lower rate of ITH.
Replacement cost shall refer to the appraised value of its Fixed Assets relative to the concerned plant
in the first year of ITH availment duly assessed and certified by an Independent Appraiser accredited
by the Bangko Sentral ng Pilipinas. This shall thereon be used as a basis in succeeding ITH availments
until the end of the ITH entitlement period of the project.
% Sales Entitled to ITH shall be based on actual sales values for the year of availment.
New registered pioneer and non-pioneer enterprises and expansion enterprises granted pioneer incentives
under Art. 40(a) of E.O. 226 may be granted one (1) additional year of ITH incentive for each of the
following criterion:
1. Capital Equipment to Labor Ratio Criterion
a) Formula:
Derived $ cost of capital equipment
Average number of direct labor
US$10,000.00
b) The acquisition cost of the machinery and equipment pertaining to the registered activity covering
the taxable year immediately preceding the period applied for extension and not the depreciated
cost shall be used and, in converting the value of equipment from pesos to dollars, the average
foreign exchange rate at the time of acquisition shall be used.
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B OA R D O F INV ES TMENTS
c) The direct labor count shall represent an average of the month end labor count for the same
taxable year as represented in b.
d) On the year of the actual availment of the ITH bonus year, the firm must still comply with the
capital equipment to labor ratio criterion to be entitled to it.
2. Net Foreign Exchange Earnings/Savings Criterion
a) Foreign Exchange Earnings is the total foreign exchange proceeds from the export of the registered
product or services while Foreign Exchange Savings is the local sales of the registered product
(must be justified as an import substitute) equivalent to the foreign exchange costs of the said
product had these been imported.
b) The export sales/local sales of import substitutes or the derived average foreign exchange earnings/
savings less the foreign exchange costs/expenses for the first three years of commercial operation
should at least be US$500,000.00.
c) Foreign exchange costs/expenses include imported raw materials, imported supplies/spare parts,
depreciation of imported machinery/equipment, among others.
3. Indigenous Raw Material Cost Criterion
a) Formula:
Cost of Indigenous Raw Materials
Total Cost of Raw Materials
x 100% 50%
b. Indigenous Raw Materials and/or intermediate indigenous products must be used as inputs in the
manufacturing or processing of the registered product. The derived ratio should not be lower than
fifty percent (50%) for each taxable year beginning the start of commercial operation up to when
the extension using this criterion was applied for.
c. Lists of indigenous raw materials and Intermediate indigenous products are provided in Annex B.
d. On the year of the actual availment of the ITH bonus year, the firm must still comply with the
indigenous raw material cost criterion to be entitled to it.
Projects with government guarantee/subsidy are not entitled to ITH except in cases where ITH has been
considered in the rates/tariffs approved by the regulatory agency concerned.
The ITH is deemed to have been imputed in the grant of the government guarantee/subsidy if the ITH was
incorporated in the bid documents of the project proponent/contract with government on the project,
or the ITH was included in the financial model by the regulatory agency in approving the projects tariffs/
rates. The latter case is particularly applicable to power projects and thus, subject to a certification by the
Energy Regulatory Commission (ERC).
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IX.
X.
94
B OA R D O F INV ES TMENTS
XII.
SUPPORT TO ENVIRONMENTAL
PROTECTION AND CONSERVATION
XIV. EQUIPMENT
Registered enterprises shall use brand new
equipment except for projects utilizing
consigned equipment, projects involving
transfer of facilities, when specified in the
Specific Guidelines, and apply production
processes that meet environmental standards.
Application for availment of capital equipment
incentive shall be filed prior to the ordering of
equipment.
XV.
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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C.
DEFINITION OF TERMS
a) Alternative Fuel Vehicles refer to vehicles that run on electric batteries, flexible fuels, hybrid systems.
b) Book - a printed non-periodical publication of at least forty-eight (48) pages, exclusive of cover pages,
published in the country and made available to the public.
c) Content Development of Books consists of the following:
(1.) Development of new technologies directly related to book printing or publishing, such as but not limited
to digitization, electronic books (E-books), internet-based archiving and retrieval systems, electronic
content creation and development systems, educational and/or how-to audio-visual presentations
with or without interactive segments, and the like.
(2.) Research and development activities directly related to book printing or publishing, such as but not
limited to translation, editing, analysis and/or interpretation of text and materials into local dialects or
adaptation/application to the domestic setting.
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B OA R D O F INV ES TMENTS
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
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n) General Hospital Level 3- refers to a hospital that has, as minimum, all of Level 2 capacity including the
following:
Teaching and/or training hospital with accredited residency training program for physicians in the four
(4) major specialties namely: Medicine, Pediatrics, Obstetrics and Gynecology, and Surgery;
Provision for physical medicine and rehabilitation unit;
Provision for ambulatory surgical clinic;
Provision for dialysis facility;
Provisions for blood bank;
DOH licensed tertiary clinical laboratory with standard equipment/reagents/supplies necessary for
the performance of histopathology examinations;
DOH licensed level 3 imaging facility with interventional radiology.
o) Government Guarantee refers to the rate of return granted by the regulating agency to include profit and
the recovery of capital expenditure (guaranteed rate of return), assured payment whether or not services/
product were produced/delivered (take or pay provision), and assurance to lender by a government agency
that a financial obligation will be honored even if the borrower is unable to repay the debt.
p) Government Subsidy - refers to the financial contribution by the national government or any of its
agencies to defray, pay for or shoulder a portion of the project cost or the expenses and costs in operating
or maintaining the project.
q) Inclusive Business are those profitable core business activities that deliberately target the low-income
segment (below US$3/day) as part of their value proposition. IB creates or expands access to goods,
services, and livelihood opportunities for the poor and vulnerable in commercially viable and scalable way.
r) Integrated Circuit refers to a semiconductor device that holds a number of electronic components that
are internally connected to form a larger electronics circuit which can operate either using analog or digital
technology.
s) Logistics Efficiency Index refers to the measure of cost efficiency of the logistics involved in the supply
of motor vehicle parts and components for the enrolled Model. It is computed as follows:
LEI = Nf - Na Where: Na =
Nf Nt
Nf =
Nt =
t) Job Generation - refers to the number of jobs directly generated by the project regardless of the length
of employment.
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New Facility refers to new complete line used in the production of the registered product/service separate
from existing line
100
B OA R D O F INV ES TMENTS
jj)
Trial Operation refers to the initial precommercial phase based on 10% of the
annualized sales vis--vis the first year of the
projects projected revenues. This shall not
apply to energy projects.
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D.
SPECIFIC GUIDELINES
I. PREFERRED ACTIVITIES
1. Manufacturing
a. Motor vehicle (excluding motorcycles, e-bikes and golfcarts) and motor vehicle parts and components
This covers the assembly of motor vehicles, manufacture of parts and components, research &
development, research/testing laboratories, and technical vocational education and training institutions.
(1) Motor Vehicle (excluding motorcycles, e-bikes and golf carts)
102
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including
parts
and
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d. Chemicals
This covers the production of the
Oleochemicals,
Petrochemicals
and
derivatives, and Chlor-Alkali Plants
products, research & development, and
research/testing laboratories.
(1) Oleochemical Products
Oleochemical products include the
manufacture of fatty acid and fatty
alcohol.
(2)
Petrochemical
Derivatives
Products
and
its
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B OA R D O F INV ES TMENTS
Subject to geographical supply considerations. In the case of poultry and livestock production, this is limited
to areas in ARMM, Mindoro and Palawan.
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3. Services
Knowledge-Based
c. Ship repair
Ship repair facilities must have a drydocking facility with a minimum capacity
of 1,500 DWT.
4
5
106
B OA R D O F INV ES TMENTS
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108
B OA R D O F INV ES TMENTS
5. Hospitals7
6. Energy
a. Exploration and development of energy
sources (including energy crops or
upstream biofuels)
8
of
Development
Subject to capacity installation gap based on DOEs five-year supply-demand forecast or up to 2019, i.e., if
forecast is 6000MW, then the first 6000MW capacity receives the incentives, and said installation gap will
be divided among areas in Luzon, Visayas and Mindanao.
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
109
Luzon
(in MW)
Visayas
(in MW)
Mindanao
(in MW)
2015
2016
2017
2018
2019
1,300
500
500
500
50
150
50
50
50
100
50
50
50
100
100
110
B OA R D O F INV ES TMENTS
for
Geothermal
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112
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8. PPP Projects
2. Services Exports
This covers service activities rendered to
clients abroad and paid for in foreign currency
with export requirement of at least 50% of its
revenue, if Filipino-owned or at least 70%, if
foreign-owned.
113
114
Industrial Tree Plantation (ITP) is also known as Industrial Forest Plantation (IFP) based on DENR AO 1999-53
B OA R D O F INV ES TMENTS
6. Renewable Energy
This covers developers of renewable energy
facilities, including hybrid systems. This also
covers manufacturers, fabricators and suppliers
of locally-produced renewable energy (RE)
equipment and components.
Application for registration must be
accompanied by a copy of the DOE Certificate
of Registration, Certificate of Accreditation or
DOE endorsement, whichever is applicable.
Applicant enterprises shall elect to be governed
by the provisions of E.O. No. 226 or R.A.
No. 9513 at the time of their application for
registration.
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115
7. Tourism
This covers tourism enterprises that are outside
the tourism enterprise zones (TEZs) and are
engaged in the following:
B OA R D O F INV ES TMENTS
For
modernization
projects,
replacement of carpets, pillows,
mattresses and other similar items shall
be excluded from the computation of
the ITH rate of exemption.
Accommodation establishments
locating in the following areas shall
not be entitled to ITH:
-
-
-
-
Metro Manila;
Cebu City;
Mactan Island; and
Boracay Island.
ADRIAN S. CRISTOBAL
Undersecretary and BOI Managing Head
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ANNEX A
LIST OF LESS DEVELOPED AREAS (LDAs)
Province
Province
ABRA
BATANES
Batangas
Benguet
Biliran
Municipality/City
Boliney
Bucay
Bucloc
Danglas
Daguioman
Dolores
Lacub
Lagangilang
Lagayan
Langiden
La Paz
Licuan-baay (Licuan)
Luba
Malibcong
Manabo
Pearrubia
Pidigan
Pilar
Sallapadan
San Isidro
San Juan
San Quintin
Tayum
Villaviciosa
Remedios T. Romualdez
Buruanga
Lezo
Tangalan
Belison
Libertad
Itbayat
Basco
Sabtang
Ivana
Mahatao
Uyugan
Balete
San Nicolas
Santa Teresita
Tingloy
Sablan
Tublay
Almeria
Biliran
Cabucgayan
Caibiran
Culaba
Kawayan
Maripipi
Bohol
Cagayan
Camarines Norte
Camarines Sur
Camiguin
Catanduanes
Cavite
Cebu
Eastern Samar
Guimaras
118
B OA R D O F INV ES TMENTS
Municipality/City
Alburquerque
Anda
Batuan
Clarin
Corella
Cortes
Dagohoy
Lila
Loay
San Isidro
Sevilla
Sikatuna
Rizal
Santa Praxedes
San Vicente
Bombon
Cabusao
Gainza
Camaligan
Catarman
Guinsiliban
Mahinog
Sagay
Bagamanoc
Baras
Bato
Gigmoto
Panganiban (Payo)
San Miguel
General Emilio Aguinaldo
Alcantara
Alcoy
Boljoon
Ginatilan
Malabuyoc
Pilar
Ronda
Samboan
Tudela
San Isidro
Dinagat
Libjo (Albor)
Tubajon
Balangkayan
General Macarthur
Giporlos
Hernani
Jipapad
Lawaan
Maslog
Mercedes
Quinapondan
Salcedo
San Julian
San Policarpo
San Lorenzo
Province
Ifugao
Ilocos Norte
Ilocos Sur
IloIlo
Isabela
Kalinga
Laguna
La Union
Leyte
Municipality/City
Hingyon
Asipulo
Adams
Gregorio del Pilar
(Concepcion)
Lidlidda
Nagbukel
San Esteban
San Ildefonso
San Vicente
Santa Catalina
Sigay
Sugpon
Mina
Batad
Bingawan
San Rafael
San Isidro
Luna
Pasil
Famy
Mabitac
Pakil
Rizal
Kauswagan
Linamon
Magsaysay
Matungao
Pantar
Salvador
Sapad
Tagoloan
Tangcal
Bayang
Butig
Calanogas
Lumbatan
Masiu
Pagayawan (Tatarikan)
Pualas
Sultan Dumalondong
Tamparan
Tugaya
Bagulin
Burgos
Pugo
Hindang
Julita
La Paz
Macarthur
Mayorga
Merida
Pastrana
Santa Fe
Tabontabon
Tolosa
Tunga
Province
Maguindanao
Masbate
Misamis Occidental
Misamis Oriental
Mountain Province
Negros Oriental
Northern Samar
Nueva Ecija
Nueva Vizcaya
Occidental Mindoro
Pangasinan
Palawan
Quezon
Quirino
Municipality/City
Datu Unsay
Kabuntalan (Tumbao)
Mamasapano
Northern Kabuntalan
Sultan Mastura
Batuan
Esperanza
San Fernando
Baliangao
Concepcion
Panaon
Sapang Dalaga
Sinacaban
Balingoan
Binuangan
Gitagum
Kinoguitan
Lagonglong
Libertad
Sugbongcogon
Barlig
Besao
Sabangan
Sadanga
Sagada
San Jose
Allen
Biri
Capul
Lapinig
Mapanas
Rosario
San Antonio
San Jose
San Vicente
Victoria
Nampicuan
Palayan City
Ambaguio
Villaverde
Looc
Santo Tomas
Agutaya
Cagayancillo
Linapacan
Magsaysay
Agdangan
Alabat
Jomalig
Patnanungan
Perez
Plaridel
Quezon
Sampaloc
Saguday
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Province
Romblon
Siquijor
Sorsogon
Southern Leyte
120
B OA R D O F INV ES TMENTS
Municipality/City
Alcantara
Banton
Calatrava
Concepcion
Corcuera
Ferrol
Magdiwang
San Andres
San Jose
Santa Fe
Santa Maria (Imelda)
Almagro
Jiabong
Marabut
Matuguinao
Pagsanghan
San Sebastian
Santo Nio
Tagapul-an
Talalora
Zumarraga
Enrique Villanueva
Larena
Maria
San Juan
Barcelona
Prieto Diaz
Santa Magdalena
Anahawan
Hinundayan
Libagon
Limasawa
Padre Burgos
Pintuyan
San Francisco
San Juan (Cabalian)
San Ricardo
Tomas Oppus
Province
Sulu
Municipality/City
Hadji Panglima Tahil
(Marunggas)
Kalingalan Caluang
Lugus
Maimbung
Panglima Estino (New
Panamao)
Pata
Tapul
Alegria
Bacuag
Burgos
Del Carmen
General Luna
Malimono
Pilar
San Benito
San Francisco (Anao-aon)
San Isidro
Santa Monica (Sapao)
Sison
Tagana-an
Tubod
Bayabas
Carmen
Anao
Ramos
San Clemente
Turtle Islands
Mutia
Rizal
Sibutad
Josefina
Sominot (Don Mariano
Marcos)
Tigbao
Vincenzo A. Sagun
Talusan
ANNEX B
I ndi g enous R aw M aterials
NOTES
(a)
(b)
(c)
(d)
(e)
(f)
Covers all scrap and waste, including scrap and waste resulting
from manufacturing or processing operations or consumption
in the Philippines, scrap machinery, discarded packaging and
household rubbish and all products that can no longer perform
the purpose for which they were produced, and are fit only
for discarding of for the recovery of raw materials. Such
manufacturing or processing operations include all types of
processing, not only industrial or chemical but also mining,
agricultural, construction, refining, incineration and sewage
treatment operations.
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
121
122
Abaca
Chromite Ore
Clay
Beneficiated Clay
Coal
Beneficiated Coal
Coconut
Copper Ore
Crude Petroleum
Dolomite
Beneficiated Dolomite
Industrial Stones
Aggregates
Iron Ore
Limestone
Clinker
Marble
Marble Blocks
Nickle Ore
Blocks
Palm Oil
Bullion
Rubber
Scrap Metal
Seaweeds
Carrageenan
Seed Cotton
Silica Sand
Sugar Cane
Raw Sugar
B OA R D O F INV ES TMENTS
ANNEX C-1
Preferred Locations for General Hospitals (levels 1, 2 and 3)
List of Sub-Regions and Provinces Which Did Not Meet the
DOH Standard Hospital Bed-to-Population Ratio of 1: 1,000
(DOH-HFSRB data as of December 2013)
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123
124
B OA R D O F INV ES TMENTS
2 0 1 4 I N VEST M EN T P R IO R IT IE S P L A N
125
ANNEX C-2
P referred L ocations for General
H ospitals L evel 3
1.
Boracay Island
2.
Cebu City
3.
Lapu-Lapu City
4.
5.
Baguio City
6. Albay
7. Batangas
8.
9.
Davao City
10. Bohol
126
B OA R D O F INV ES TMENTS
ANNEX D
INCENTIVES FOR BOI-REGISTERED ENTERPRISES
Entitlement and availment of incentives shall be subject to the terms and conditions set forth under the relevant law
and the projects Certificate of Registration as well as the rules and regulations of the implementing/administering
agency.
A. Omnibus Investments Code of 1987 (E.O. No. 226)
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Note: The 2014 IPP GP & SG were published in the 6 April 2015 issue of the Philippine Star with effectivity
immediately upon publication.
***********************NOTHING FOLLOWS**********************
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B OA R D O F INV ES TMENTS
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