BOI Incentives for Mass Housing

27th SHDA National Developers Convention“Roadmap to BALAI 2028”

Mass Housing

OIC-Director Mary Ann E. RaganitBoard of Investments

14 September 2018, Xavier Sports and Country Club, Cagayan de Oro

Presentation OutlinePresentation Outline

• Background

• What we have done

• What we are doing

The Board of InvestmentsThe Board of Investments

We are at the forefront of the development and promotion of industries.

Advisory-Information-Promotion-Incentives-Policy Advocacy

I. Preferred Activities

1. MANUFACTURING

2. AGRICULTURE, FISHERY AND FORESTRY

3. STRATEGIC SERVICES

4. HEALTHCARE SERVICES

II. Export Activities

Production & manufacturing of export products

Services exports

20172017--2019 Investment Priorities Plan2019 Investment Priorities Plan“Scaling Up and Dispersing Opportunities”“Scaling Up and Dispersing Opportunities”

III. Special Laws

5. MASS HOUSING

6. INFRASTRUCTURE AND LOGISTICS

7. INNOVATION DRIVERS

8. INCLUSIVE BUSINESS MODELS

9. ENVIRONMENT OR CLIMATE CHANGE-RELATED PROJECTS

10.ENERGY

4

Mass Housing

• Filipino-owned or at least 60%-40% ownership

• Selling Price: Above PhP450K to PhP2.0M

• Minimum: 20 livable dwelling units in a single site orbuilding

• Location: Outside Metro Manila

Qualifications for Registration (EO 226)Qualifications for Registration (EO 226)

• Location: Outside Metro Manila

• For condominium projects, at least 51% of the totalgross floor area must be devoted to housing

• Development Permit, HLURB Registration andLicense-to-Sell

• Compliance with the Socialized HousingRequirement

Qualifications for Registration (EO 226)Qualifications for Registration (EO 226)

In-City Housing for Lease covers newlyconstructed, low to medium-rise anddormitory-type housing projects includingthose located in Metro Manila.

Housing Components covers theHousing Components covers themanufacture of modular housingcomponents, e.g., roof/framing systems,wall/partition systems, flooring systems,door/window systems, finishing/ceilingsystems, etc.

Registration Process Flow

PERD issues Acceptance Slip → Accounting Division forthe Order of Payment → Cashier for payment of filing fee→ Records Division to officially file the application

Client presents application documents to ProjectEvaluation and Registration Division (PERD) forchecklisting.

Documents are in order?

Client completes/ corrects the documents (as per deficiency letter).

Yes

No

Client waits for the release of theCertificate of Registration.

→ Records Division to officially file the applicationtogether with the photocopy of Official Receipt → PERDwill issue the Notice of Filing of Application which shall bepublished in a newspaper of general circulation.(Within the day)

Preparation of final evaluation report forpresentation/approval by MANCOM andratification by the Board. Client waits forthe result of application. (Within 20 WDs )

Client receives Notice of Approval

Client submits pre-registration requirements to PERD within60 days with 30 days allowable extension, pays theregistration fee to the Cashier and provides photocopy ofOfficial Receipt to PERD. (Within the day)

Note: A site visit/ ocular inspection may be conducted if needed.

1. 4 Years Income Tax Holiday (ITH)2. Duty-free importation of capital equipment (EO

57)3. Additional deduction for labor expense

(after 5th year ITH)4. Additional deduction from taxable income of the

cost of major infrastructure works of projects

BOI Incentives (EO 226)BOI Incentives (EO 226)

cost of major infrastructure works of projectslocated in less developed areas (LDA)

5. Employment of foreign nationalsOtherOther::

• Exemption BOI-registered projects to LocalBusiness Tax (Section 133 of RA 9160 or the LocalGovernment Code of 1991)

Socialized Housing Requirement (SHR)Socialized Housing Requirement (SHR)

All economic/low cost housing projects mustcomply with the 20% SHR by building SH unitsequivalent to:a. 20% of the total registered area or project

cost for subdivision projects;cost for subdivision projects;b. 20% of the total floor area of qualified

saleable housing units; or,c. 30% of (20% of building construction cost) or

40% of the entitled ITH for condominiumprojects who will opt to comply through thedirect participation scheme

Socialized Housing RequirementSocialized Housing Requirement

SHR compliance may be any or acombination (i.e. cost recoverable and non-recoverable modes) of any of the followingmodes:

1. Development of a new settlement1. Development of a new settlement2. Development of a new settlement through

joint venture with SHFC, LGU orDeveloper/NGO accredited by HLURB

In the case of joint venture projects, the BOI registered entity shall berequired to provide proof of funds transferred or assessed value of the land,where applicable, to the implementing entity

Socialized Housing RequirementSocialized Housing Requirement

3. Development of a new settlement through donationof land with basic infrastructure facilities and/orconstruction materials (preferably locallyproduced) in partnership with relevant LGU, keyshelter agency, or with BOI/HLURB-accreditedNGO in any of the following:NGO in any of the following:

a. Comprehensive rural community housing development (w/ social services + livelihood)

b. To benefit families in calamity-stricken or armed conflict areas

BOI-Registered MH Projects

BOI-Registered Housing Projects (Economic and Low Cost)

Total as of August 2018

No. of Projects 1,308Horizontal 950

Vertical 358Registered Capacity (units) 613,270Registered Capacity (units) 613,270

Horizontal 374,656Vertical 238,614

Total Project Cost P513.9 billionJob Generation 331,370

1. HLURB Revocation of the Issuance of Temporary License to Sell (TLTS)

– Effective July 1, 2017 HLURB through its BoardResolution No. R-948 stopped the issuance of TLTSto condominium developers.

– TLTS (in lieu of LTS) is among BOI’s pre-registrationrequirements for condominium projects prior to

Updates on Housing Industry Issues

requirements for condominium projects prior tothe issuance of Resolution No. R-948

– BOI is awaiting for submission of letter from SHDAdiscussing HLURB-related regulatory issues forappropriate action of our Investment AssistanceService

2. BIR Rulings for BOI-Registered Housing Projects

– BIR still requires a BIR Ruling prior to thedeveloper’s availment of the CreditableWithholding Tax (CWT) exemption

– Slow processing time of BIR Ruling which

Updates on Housing Industry Issues

– Slow processing time of BIR Ruling whichtake years

– Draft MOA between BOI and BIR forfacilitation of issues, concerns and queriesof BOI clients

3. Proposed Amendments for 2017 IPP in Mass Housing (Special Registration)

MASS HOUSING (ECONOMIC and LOW COST)

Type of Development

Location of

Main Project

CoverageSHR Compliance

ComputationHLURB Compliance

under RA 10884Mode of Compliance

For Condominium:20% of the BuildingConstruction Cost of Qualified Saleable Units

5% of Project Cost

Must be through direct participation/ partnership with Social Housing Finance Corporation (SHFC) socialized housing projects for Informal Settler Families (ISFs) as jointly

Residential Condominiu

m and Subdivision

Projects

Outside or

Within NCR

Projects with housing units above P2 M

up to P3 Million

Qualified Saleable Units

For Subdivision:20% of Total Project Cost(BOI Registered)

Note: but not to exceed50% of the total ITH of the project

15% of Project Cost

Settler Families (ISFs) as jointly identified by HUDCC, BOI andindustry associations.

The BOI will select from SHFC list of on-going projects including their target beneficiaries the first 2 projects to be prioritized forcompletion through the compliance./contribution (non-recoverable) of registered housing developers.

BOI will closely monitor the progress of these housing projects to speed up and ensure the resettlement of the concerned ISFs.

Trade and Industry Development (TID) Talks

You are invited!

06 November 2018 (Tuesday)Venue: TBA

Mass Housing, Construction, Cement, Ceramics

BOI Investment Facilitation ServicesBOI Investment Facilitation Services

Aftercare Service

• Strategic Investor’s Aftercare Program (SIAP)

• Issues and Concerns Facilitation

• The Investment Promotion Unit Network (IPUNET)

• Strengthening the Collaborative Governance thru Memorandum of Agreements (MOAs) with Specific Government AgenciesSpecific Government Agencies

• Coordination with Investment Ombudsman (IO)

• BOI ASSIST (Awareness Seminar to Strengthen Investors and Stakeholders)

• BOI One Window Network

• Public Assistance and Complaints

BOI Investment Facilitation ServicesBOI Investment Facilitation Services

Due diligence assistance

• Information support

• Visit program development & investment briefing

• Business matching• Business matching

Business registration facilitation

• Fast tracking of applications for registration

• Assistance with Local Government Unit (LGU) requirements

Thank you!

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