052307: Finally, investment plan gets OK

AGRI, FISHERY AND SUPPORT SECTORS TOP PRIORITY LIST; MINING-ASSOCIATED CEMENT PROJECTS ARE IN

By Mia M. Gonzalez and Max de Leon

Reporters

BUSINESSMEN worried about the absence of a clear road map from the government on what sectors get first priority can rest easy: amid the dust kicked up by the midterm elections, the Palace has given its final imprimatur to the 2007 Investment Priorities Plan (IPP). Trade Secretary Peter Favila described the plan as an “enhancement” of last year’s IPP, but urgently awaited, nonetheless, by business groups. Favila told reporters at the Centennial Terminal lounge that President Arroyo and her Cabinet approved the 2007 IPP during the National Economic Development (Neda) Cabinet Group meeting that morning. Favila briefed reporters before joining the President’s official delegation to Japan that left Tuesday afternoon. This year’s IPP, which investors earlier feared would be sidelined by the administration’s preoccupation with the midterm elections, “is no different from the previous years because all the investors are looking for are clear guidelines on what sort of incentives they can enjoy under the IPP,” said Favila. He added, “That has been clearly spelled out.” The IPP, a final draft of which was endorsed by the Department of Trade and Industry to the Office of the President in end-March, contains changes in the procedure and listing of priority sectors. The document guides businessmen who are considering new and expanded investments with regard to the timing of their registration. Among others, this year’s IPP makes cement production eligible for incentives if the projects are integrated with mining. In a separate briefing, Trade Undersecretary Elmer Hernandez said Malacañang approved the draft of the 2007 IPP that they submitted last March, with only the provision on agriculture revised, as “the Cabinet wants to clearly spell out the agribusiness” in the draft. “From agriculture and fishery, they want it changed to agriculture/agribusiness and fishery. All the other entries were carried,” Hernandez, also Board of Investments managing head, said. Earlier, Favila admitted that several industries were already inquiring on the status of the 2007 IPP since Malacañang appeared to have not acted on it due to the election frenzy. “I explained to them (industries) the process, that we have to get the imprimatur of the President,” Favila said. The 2007 IPP details the list of sectors and projects that will be given incentives by the government as part of its investment promotion activities. Before the 2007 IPP is operationalized, the different government agencies will again have to work on the new implementing rules. Until the new guidelines come out, the 2006 IPP will remain in force, said Favila. Iron and steel production was reintroduced to the draft 2007 IPP after several years. Research and development projects also became new additions to the list of preferred activities that would be given government incentives. Telecommunications projects will qualify for incentives only if they involve the putting up of infrastructure that caters to “unserved” areas. Maintained in the list  of preferred sectors under the proposed 2007 IPP are agriculture, fishery and support services; healthcare 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. Production of jewelry and fashion garments for export, previously listed under preferred sectors, will still enjoy various fiscal and nonfiscal incentives because they will be lumped under “export activities,” one of the headings of the priority investment areas. Besides the preferred sectors and export activities, also included in the proposed 2007 IPP’s general headings of priority investment areas are the projects that would qualify 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.

 

http://www.businessmirror.com.ph/05232007/headlines01.html