Bureau of Investments - Investment Priority Plan 2012

7/28/2019 Bureau of Investments - Investment Priority Plan 2012

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2012INVESTMENT PRIORITIES PLAN

BOARD OF INVESTMENTS

A NEW DAY FOR INVESTMENTS:

Coherent,

Consistent &

Creative


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2012 INVESTMENT PRIORITIES PLAN

CONTENTS

Memorandum Order No. 40 3

Message of te President of te Pilippines 4

Foreword:

Message of DTI Secretary Gregory L. Domingo 5

2012 Investment PrIorItIes Plan

I. Preferred Activities 8

II. Mandatory List 10III. Eport Activities 12

IV. ARMM LIST 12

Part I: DeFInItIon oF terms 16

Part II: General PolICIes

I. Approval of Application and Entitlement to Incentives 20

II. Equity Ownersip 20

III. Equity Requirement 20

IV. Locational Policy 21

V. Eport of Products in Sort Domestic Supply 22

VI. ITh Availment 22

VII. Multi-pase Projects 24

VIII. Corporate Social Responsibility (CSR) 24Ix. Good Corporate Governance 24

x. Support to Environmental Protection and Conservation 24

xI. International Standards Certication 25

xII. Equipment 25

xIII. Projects in te Autonomous Region in Muslim

Mindanao (ARMM) 25

xIV. Projects wit Revenues Derived from Carbon

Credits Pursuant to te Kyoto Protocol 25

xV. Outsourcing of Production Process or Services 26

xVI. Public Welfare Consideration 26


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Part III: sPeCIFIC GUIDelInes

I. Preferred Activities

1. Agriculture/Agribusiness and Fisery 28

2. Creative Industries/Knowledge-Based Services 29

3. Sipbuilding 30

4. Mass housing 31

5. Iron and Steel 33

6. Energy 33

7. Infrastructure 348. Researc and Development 41

9. Green Projects 42

10. Manufacture of Motor Veicles 42

11. Strategic Projects 44

12. hospital/Medical Services 44

13. Disaster Prevention, Mitigation and Recovery Projects 45

II. Mandatory List1. Industrial Tree Plantation 46

2. Eploration, Mining, Quarrying and

Processing of Minerals 46

3. Publication or Printing of Books/ Tetbooks 46

4. Rening, Storage, Marketing and Distribution

of Petroleum Products 47

5. Ecological Solid Waste Management 47

6. Clean Water Projects 487. Reabilitation, Self-Development and

Self-Reliance of Persons wit Disability 48

8. Renewable Energy 49

9. Tourism 49

III. Eport Activities

A. Production and Manufacture of Eport Products 53

B. Services Eports 54C. Activities in Support of Eporters 54


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malaCaan PalaCemanIla

by the PresIDent oF the PhIlIPPInes

MEMORANDUM ORDER NO. 40

APPROVING THE 0 INVESTMENT PRIORITIES PLAN

Pursuant to Article 29 of te Omnibus Investment Code of 1987, as amended,te attaced 2012 Investment Priorities Plan (IPP) is ereby APPROVED. Furterto te provision of said Article, upon te eectivity of te IPP, all governmentagencies and entities are enjoined not to adopt any policy or take any course ofaction contrary to or inconsistent wit te IPP.

Te Memorandum Order sall take eect fteen (15) days after its publication ina newspaper of general circulation as required under Article 31 of te OmnibusInvestment Code of 1987.

DONE, in te City of Manila, tis 13t

of June, in te year of our Lord, TwoTousand and Twelve.

By te President:

PAQUITO N. OCHOA, JR.Eecutive Secretary

Note: Memorandum Order No. 40 approving te 2012 Investment Priorities Plan, was publised on 26 June 2012 inManila Bulletin wit eectivity fteen (15) days tereafter, i.e. 11 July 2012.


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4

Te Pilippine economy continues toepand at a dynamic pace despite todaysglobal uncertainties, registering a signicantincrease in credit ratings and condence

levels in te leading development indices.

Simultaneous wit tese ratings upgrade,our Board of Investments postedunprecedented investment approvals ofover Pp368 billion just last year.

Tese promising reports give mecondence tat our policy interventionsand structural reforms are taking root, and

my administration remains committed

to sustaining tis momentum of progress and moving towards becoming a model ofstability and prosperity in te region.

For tis purpose, we ave strategically calibrated te 2012 Investment Priorities Plan (IPP)to furter strengten last years investment generation agenda, ensuring tat our newinitiatives will address present economic callenges and eectively establis sustainablegains. Tis years IPP as been crafted to focus on four critical areas: job generation,enanced delivery of social services, international competitiveness, and climate cangemitigation and adaptation.

Ancored on te teme, A New Day for Investments: Coerent, Consistent and Creative

te 2012 IPP Plan is a commitment to te business community tat my Administrationis steadfast in sustaining a predictable, reliable and ecient Pilippine investmentlandscape.

Wit te 2012 IPP, togeter wit our instituted governance and business environmentreforms, we look forward to stronger investor partnersips, in accordance wit our goal ofstability and equitable progress.

Benigno S. Aquino III

MANILAJune 2012

malaCaan PalaCemanIla

MESSAGE


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FOREWORD

Consistent wit te trust to foster predictability in te economic policy of

te Pilippines aimed at making te country a more attractive investmentdestination and improving furter te countrys international competitivenessranking, te government as deemed it appropriate to ne-tune te 2011Investment Priorities Plan (IPP) in crafting te 2012 IPP, wic still marks A NewDay for Investments: Coherent, Consistent and Creative.

Bearing in mind President Aquinos dedication to steer te government in a cleardirection, and is vision of a country were opportunity is available, tis IPP wasspecially formulated to support is commitment to pursue economic growtwile ensuring tat te poor and te marginalized will enjoy te benets of

development as contained in is Social Contract wit te Filipino People. Asidefrom boosting te countrys international competitiveness, tis IPP continuesto support activities tat will create conditions conducive to te growt andcompetitiveness of private businesses, big, medium and small, tat will, in turn,generate more jobs; enance te delivery of basic social services; and addresste callenges of climate cange.

Still a key feature of tis IPP is te inclusion of public-private partnersip(PPP) projects to tap te private sector in te improvement of te countrysinfrastructure system.

To ensure tat te investments generated will indeed contribute to tedevelopment goals of te country, entitlement to incentives will still bedependent on net value-added, job generation, multiplier eect and measuredcapacity.

Te 2012 IPP contains te following priority investment areas:

Te Regular List, wic now as tirteen (13) priority investment areas tat

were identied to support te current priority programs of te government.

Te Export Activities, wic covers manufacture of eport products, serviceseports and activities in support of eporters.

Te Mandatory List contains areas/activities were te inclusion in te IPP and/or te grant of incentives under Eecutive Order (EO) No. 226 is mandated bylaw.

Te ARMM List, wic encompasses priority investment areas tat ave been

determined by te Regional Board of Investments of te Autonomous Regionof Muslim Mindanao (RBOI-ARMM) in accordance wit EO 458.


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Tis IPP was formulated troug te concerted eorts of te IPP Inter-AgencyWorking Group speareaded by te Board of Investments (BOI), in coordinationwit te Regional BOI Autonomous Region in Muslim Mindanao (RBOI-ARMM), te Oce of te President Presidential Management Sta (PMS),

National Economic and Development Autority (NEDA), and te Departmentsof Agriculture (DA), Budget and Management (DBM), Finance (DOF), Energy(DOE), Environment and Natural Resources (DENR), healt (DOh), Public Worksand higways (DPWh), Science and Tecnology (DOST), Tourism (DOT), andTransportation and Communications (DOTC).

Oter participating agencies were te DTI - Bureau of Micro, Small and MediumEnterprise Development (BMSMED), Bureau of Treasury, Civil Aeronautics Board(CAB), Civil Service Commission (CSC), Commission on higer Education RegionVII (ChED VII), DTI - Construction Industry Autority of te Pilippines (CIAP),

Department of Labor and Employment Region VII (DOLE VII), EnvironmentalManagement Bureau (EMB), Film Development Council of te Pilippines(FDCP), DENR Forest Management Bureau (FMB), house Committee on Tradeand Industry, housing and Land Use Regulatory Board (hLURB), IntellectualProperty Oce (IPO), Local Water Utilities Administration (LWUA), MaritimeIndustry Autority (MARINA), DENR - Mines and Geosciences Bureau (MGB),National Commission on Culture and Arts (NCCA), NEDA VII, National PowerCorporation (NPC), DOST National Researc Council of te Pilippines(NRCP), Pilippine Economic Zone Autority (PEZA), Pilippine Ports Autority(PPA), Power Sector Assets and Liabilities Management (PSALM) Corporation,

Public-Private Partnersip (PPP) Center, DTI - Small Business Corporation (SBCorp.), Tecnical Education and Skills Development Autority (TESDA), TESDAVII, DTI- Regional Operations and Development Group (RODG) and te LocalGovernment Units (LGUs).

Private sector inputs were likewise obtained troug well-attended simultaneouspublic earings in Manila, Cebu and Davao on 16 February 2012.

GREGORY L. DOMINGOCairman, Board of InvestmentsSecretary, Department of Tradeand Industry


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0INVESTMENT PRIORITIES PLAN

Te coverage, description and entitlement to incentives of te following listedactivities sall be dened and claried in te General Policies and SpecicGuidelines to be issued by te Board of Investments (BOI).

Te etent of entitlement to incentives sall be based on te projects net valueadded, job generation, multiplier eect and measured capacity1.

I. PREFERRED ACTIVITIES

1. Agriculture/Agribusiness and Fishery

Tis covers commercial production and commercial processing ofagricultural, erbal and sery products (including teir by-productsand wastes).

Tis also covers agriculture- and sery-related activities suc asirrigation, post arvest, cold storage, blast freezing, and te production

of fertilizers and pesticides.2. Creative Industries/Knowledge-Based Services

Tis covers business process outsourcing (BPO) activities, and IT andIT-enabled services tat involve original content.

3. Shipbuilding

Tis covers te construction and repair of sips. Tis also covers

sipbreaking/siprecycling.

4. Mass Housing

Tis covers te development of low-cost mass ousing. Tis alsocovers te manufacture of modular ousing components preferablyusing indigenous materials.

Section 20 of EO 226 denes measured capacity as the estimated additional volume of production or service which theBoard determines to be considerable in each preferred area of investment in order to supply the needs of the economyat reasonable prices, taking into account the export potential of the product including economies of scale which wouldrender such product competitive in the world market. Measured capacity shall not be less than the amount by which themeasurable domestic and countrys potential export market demand exceeds the existing productive capacity in saidpreferred areas. For export market industries, when warranted, the Board shall base measured capacity on the availabilityof domestic raw materials after deducting the needs of the domestic market therefor.


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5. Iron and Steel

Tis covers basic iron and steel products, long steel products (billetsand reinforcing steel bars), and at ot-/cold-rolled products.

6. Energy

Tis covers te eploration, development, and/or utilization of energysources adopting environmentally-friendly tecnologies.

7. Infrastructure

Tis covers transport, water, logistics, waste management facilities,pysical infrastructure (tollways, railways and telecommunication

facilities), and PPP projects.

8. Research and Development

Tis covers R&D activities and te establisment of researc/ testinglaboratories, Centers of Ecellence (COE) and tecnical vocationaleducation and training institutions.

9. Green Projects

Tis covers te manufacture/assembly of goods and te establismentof energy eciency-related facilities (suc district cooling systems),were eiter utilization of wic would signicantly lead to eiter teecient use of energy, natural resources or raw materials; minimize/prevent pollution; or reduce greenouse gas emissions.

10. Motor Vehicles

Tis covers te manufacture/assembly of motor veicles, includingalternative fuel veicles (AFVs) and electric veicles (EVs) but ecluding

2-stroke motorcycles, and manufacture of motor veicles parts andcomponents.

11. Strategic Projects2

Tis covers projects tat eibit very ig social economic returns tatwill signicantly contribute to te countrys economic development.

12. Hospital/Medical Services

Tis covers te establisment and operation of primary and secondaryospitals.

Projects under these activities will be approved upon determination by the Board in consultation with the DOF, NEDAand other appropriate government agencies.


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13. Disaster Prevention, Mitigation and Recovery Projects

Tis covers projects tat will prevent or mitigate adverse impacts ofcalamities and disasters (e.g., installation of ood control systems,

installation of early warning systems for typoons, eartquakeoccurrences, tsunami, volcanic eruptions, dikes, etc.).

Tis also covers projects to reabilitate areas aected by calamitiesand disasters (e.g., rebuilding of roads and bridges after eartquakes/oodings, volcanic eruptions, oil spill clean-up, etc.).

Tis furter covers training for disaster preparedness, mitigation orrecovery/reabilitation/reconstruction.

II. MANDATORY LIST

Tis covers activities tat require teir inclusion in te IPP as provided forunder eisting laws.

1. Industrial Tree Plantation3

Tis covers etensive plantation of forest land of tree crops (eceptfruit trees) for commercial and industrial purposes.

2. Exploration, Mining, Quarrying and Processing of Minerals4

Tis covers te eploration and development of mineral resources,mining/quarrying and processing of metallic and non-metallicminerals.

3. Publication or Printing of Books/ Textbooks5

Tis covers printing, re-printing, publication and content development

of books or tetbooks.

4. Rening, Storage, Marketing and Distribution of Petroleum Products6

Tis covers rening, storage, distribution, and marketing of petroleumproducts.

5. Ecological Solid Waste Management7

Tis covers te establisment of waste recycling facilities.

P.D. No. 705 (Revised Forestry Code of the Philippines)4R.A. No. 7942 (Philippine Mining Act of 1995)R.A. No. 8047(Book Publishing Industry Development Act)R.A. No. 8479 (Downstream Oil Industry Deregulation Act of 1998)R.A. No. 9003 (Ecological Solid Waste Management Act of 2001)


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6. Clean Water Projects8

Tis covers te establisment of wastewater treatment facilities, andsewage collection integrated wit treatment facilities and te adoption

of water pollution control tecnology, cleaner production and wasteminimization.

7. Rehabilitation, Self-Development and Self-Reliance of Persons withDisability9

Tis covers te manufacture of tecnical aids and appliances for te useand/or reabilitation of persons wit disability, and te establismentof special scools, omes, residential communities or retirementvillages solely to suit te needs and requirements of persons wit

disability.

8. Renewable Energy10

Tis covers developers of renewable energy facilities, including ybridsystems.

Tis also covers manufacturers, fabricators and suppliers of locally-produced renewable energy (RE) equipment and components.

9. Tourism11

Tis covers tourism enterprises tat are outside te tourism enterprisezones (TEZs) and are engaged in te following:

1. Tourist transport services weter for land, sea and air transportfor tourist use;

2. Establisment and operation of: Accommodation establisments suc as but not limited to

otels, resorts, apartment otels, tourist inns, motels, pension

ouses, private omes for omestay, ecolodges, condotels,serviced apartments, and bed and breakfast facilities;

Convention and eibition facilities or meetings, incentives,conventions and eibition (MICE) facilities;

Amusement parks; Adventure and ecotourism facilities; Sports facilities and recreational centers; Teme parks; healt and wellness facilities suc as but not limited to spas,

tertiary ospitals, and ambulatory clinics; Agri-tourism farms and facilities; and Tourism training centers and institutes.

R.A. No. 9275 (Philippine Clean Water Act of 2004)R.A. No. 7277 (Magna Carta for Persons with Disability)0R.A. No. 9513 (Renewable Energy Act of 2008)R.A. No. 9593 (Tourism Act of 2009)


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3. Development of retirement villages.4. Restoration/ preservation and operation of istorical srines,

landmarks and structures.

III. EXPORT ACTIVITIES

Tis covers te manufacture of eport products, services eports andactivities in support of eporters.

IV. ARMM LIST

Te ARMM List covers priority activities tat ave been identied by teRegional Board of Investments of te ARMM (RBOI-ARMM) in accordancewit E.O. No. 458. Te RBOI-ARMM may also register and administer

incentives to activities in tis IPP for projects locating in te ARMM.

A. Export Activities

1. Eport Trader and Service Eporters2. Support Activities for Eporters

B. Agriculture, Agribusiness/Aquaculture & Fishery

Tis covers te production and processing of agricultural and sery

products (production of halal meat and foods), vegetable oils, foodcrops, integrated coconut processing and plantation, activated carbon,production of beverage crops and plantation, seaweeds productionand processing, fruit processing, aquaculture (s production andprocessing), young/sweet corn production, potato and sweet potatoplantation/processing, cutower production/processing, abacaplantation/processing, oil palm plantation/processing/rening andgerminated oil palm seeds, feeds production, jatropa plantation/processing, sugarcane plantation/processing and reneries, qualityseed and seedlings of fruit trees and oter planting materials

propagated aseually or by tissue culture, pearl culture/processing,production of livestock and poultry tat includes processing, crocodilefarming and processing, sericulture, feeds production and productionof plantation crops and oter parmaceuticals, medical erbs/essentialoil plants, biomass, rubber, carrageenan, mangosteen and moringa.

C. Basic Industries

Tis covers te production of parmaceuticals suc as antibioticsand medical devices, tetile and tetile products, inorganic andorganic fertilizers using solid wastes materials, mining eploration anddevelopment of mineral resources (mining and quarrying of metallicand non-metallic minerals wic includes small scale as dened under


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P. D. 1899 but to eclude river beds in operations and processing ofminerals suc as beneciation and oter metallurgical metods)and cement production of at least 1.0 million MTPY capacity (clinkerbased).

D. Consumer Manufactures

Tis covers processing of rubber products to be integrated witplantation and leater products.

E. Infrastructure and Services

Tis covers public utilities wit developmental route of te veprovinces and one city of ARMM and oter adjacent cities and

provinces suc as common carriers, electric transmission/distribution,water supply facilities/waterways and sewerage systems, buses/cargotrucks, oter specialized mass transport systems, power generation likeydro power, geotermal and natural gas, and telecommunicationswit international gateways.

F. Industrial Service Facilities

Tis covers testing and quality control laboratories, training anddemonstration centers, tool sops and similar facilities, metal casting,

metal working, furniture, ceramics and food processing, petrocemicalcomple and industrial gases.

G. Engineering Industries

Tis covers engineering products, electronics and telecommunicationproducts, fabrication of construction materials and ydropower plant.

H. Logistics

Tis covers te transportation of cargoes and/or passengers (air, seaand/or land) and freigt/cargo forwarding.

I. BIMP EAGA Trade and Investment Enterprises

Tis covers enterprises located or ave teir base of operation in teBIMP EAGA, namely, Brunei; Saba and Sarawak in Malaysia; Maluku,Sulawesi, Kalimantan and Iringaya in Indonesia; and Mindanao andPalawan in te Pilippines, wo sall invest and engage in economicactivity in te ARMM including te age old Traditional Barter TradingSystem in te BIMP EAGA.


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J. Tourism

Tis covers te establisment of tourism estate subject to guidelinesdeveloped jointly by RBOI-ARMM and te Department of Tourism

ARMM, tourist accommodation facilities, tourist transport facilitiesand development of retirement villages wic sall include ealtand medical facilities including amenities required by te PilippineRetirement Autority (PRA) and subject to te guidelines to be approvedby RBOI-ARMM in consultation wit te PRA, te Department of healt(DOh), te Regional Planning and Development Oce (RPDO) andoter concerned agencies.

K. Health and Education Services and Facilities

Tis covers te establisment of private ospitals, medical clinics,wellness centers, primary education, secondary education, tertiaryeducation (colleges, universities and vocational tecnical scools)and ancillary services including any and all ealt and educationrelated investment.

L. Halal Industry

Tis covers services and te production and processing of productsunder muslim or islamic law.


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Part I

DEFINITION OF TERMS

a) Book- a printed non-periodical publication of at least forty-eigt (48) pages,eclusive of cover pages, publised in te country and made available tote public.

b) Content Development of Books consists of te following:

1. Development of new tecnologies directly related to book printingor publising, suc as but not limited to digitization, electronic books(E-books), internet-based arciving and retrieval systems, electroniccontent creation and development systems, educational and/or ow-to audio-visual presentations wit or witout interactive segments,and te like.

2. Researc and development activities directly related to book printingor publising, suc as but not limited to translation, editing, analysisand/or interpretation of tet and materials into local dialects oradaptation/application to te domestic setting.

c) Distribution - refers to bunkering and fuels sipping and transport. Fuels

sipping and transport cover sipping and transport troug land suc astank trucks, lorries and pipeline and tankers, and barges for te fuels to getto te points or areas were tey are needed. Bunkering covers te activityof selling fuel for direct use by a vessel, usually for water and air transport,troug a smaller transport vessel. Distribution projects are limited to toseutilizing brand new equipment and double-ulled vessels.

d) Existing Project refers to a project of an eisting enterprise tat as startedcommercial operation at te time of application wit te Board.

e) Expansion Project refers to a project of an eisting enterprise tat wouldinvolve te installation of additional facilities/equipment tat will result inincrease in capacity of te same/similar activity witin te same eistingplant/facilities of te enterprise. Projects tat do not qualify as new sall beconsidered as epansion.

f) Fulllment house/center refers to a facility tat oers to store, receive teorders, package, and ten sip te ordered item to te end consumer, onbealf of te product owner.

g) Government Guarantee refers to te rate of return granted by teregulating agency to include prot and te recovery of capital ependiture(guaranteed rate of return), assured payment weter or not services/product were produced/delivered (take or pay provision), and assurance tolender by a government agency tat a nancial obligation will be onoredeven if te borrower is unable to repay te debt.


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) Government Subsidy - refers to te nancial contribution by te nationalgovernment or any of its agencies to defray, pay for or soulder a portion ofte project cost or te epenses and costs in operating or maintaining teproject.

i) Job Generation - refers to te number of jobs directly generated by teproject.

j) Marketing of Petroleum Products/Natural Gas covers te following:

a. Retailing or selling in retail generally directed to te end users, trougdispensing pumps in stations or in packaged containers suc as drumsfor te liquid fuels or metal cylinders tat are compliant wit PNS.Tis includes te establisment and operation of gasoline/natural gas

stations and retailing.

b. Fuels bulk marketing or selling in wolesale troug tank trucks,lorries, double-ulled vessels/tankers, barges or pipelines, wic maybe sourced from ones own storage facilities. Investment sall includeunderground tanks and oter equipment intended for fuels retailingtroug outlets suc as gasoline/natural gas stations and LPG/LNGoutlets.

c. A combination of storage, distribution, and marketing activities.

k) Measured Capacity - te estimated additional volume of production/service wic te Board determines to be desirable in eac preferred areaof investment taking into account te eport potential of te product. Formass ousing projects, te estimated ousing backlog in te country sallbe te basis of measured capacity.

l) Modernization Project refers to a project of an eisting enterprise tatwould involve improvements in systems, processes, equipment, and/orfacilities tat must result in any of te following:

1. at least 25% substantial reduction of production cost/cost of provisionof te service; or

2. upgrading of product/service quality or classication of te facility(e.g., ospitals, otels, resorts) to a iger class in accordance witaccreditation standards applicable to te industry concerned.

m) Multiplier Eect - refers to te increase in economic activity andinterrelationsips generated and stimulated by te investment.

n) New Plantation Area - refers to new ectarage of plantation or lands tatave been idle for at least one year or tose involving cange of crops/variety to acieve iger yield or sifts in te production system suc asorganic farming.


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o) New Project - refers to a project/activity listed in te IPP tat as not startedcommercial operation undertaken by:

1. A newly organized/formed enterprise tat:

i. as no common stockolders in any eisting enterprise, orii. as common stockolders in te eisting enterprise butown not more tan fty percent (50%) of equity in te newenterprise, or

iii. as common stockolders but will engage in an entirely distinctand separate activity, or

iv. as common stockolders (regardless of percentage ofcommon ownersip) and will engage in te same activityas tat of te eisting enterprise but will locate in a dierentmunicipality, province, or region.

2. An eisting enterprise tat sall engage in :i. An entirely distinct and dierent activity from its eisting

business operations; orii. Te same activity provided it sall establis a new facility12 in an

area not contiguous to te premises of its eisting project andwit new investments.

3. An enterprise involving te manufacture of products utilizing local R&D.Applications for registration utilizing local R&D must be endorsed by

te Department of Science and Tecnology (DOST) stating tat tis wasundertaken in te Pilippines and as not yet been commercialized.

4. For industrial tree plantations, an enterprise involved in tedevelopment of any public or private land to plantation of timber andnon-timber species to supply te raw material requirements of forest-based industries. It also includes plantation wit eisting tree crops,wic ave not yet reaced commercial arvest.

p) Net Value-added - refers to te value of nal product/service less te value

of inputs. Te projects net value added sould be at least 25% ecept forprojects dependent on imported raw materials/ supplies.

q) Storage - refers to te business of receiving/discarging and storingpetroleum crudes and/or products of oters for compensation or prot.

r) Textbook refers to an eposition of generally accepted principles in onesubject, intended primarily as a basis of instruction in a classroom or pupil-book-teacer situation.

s) Upgrading - refers to te improvement of te facility/infrastructure byadding or replacing components. Tis may be treated as an epansion/modernization project.

New facility refers to new complete line used in the production of the registered product/service separate fromexisting line.


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Part II

GENERAL POLICIES

I. APPROVAL OF APPLICATION AND ENTITLEMENT TO INCENTIVES

Te approval of application for registration and entitlement to incentivesunder tis IPP is subject to Article 7, paragrap 3 of Eecutive Order (E.O.)No. 226.

Te approval of applications for registration sall be based on te IPPlisting. however, te etent of entitlement to incentives sall be basedon te projects net value-added, job generation, multiplier eect andmeasured capacity.

Te BOI, if national interest requires, may deny registration of projectsengaged in te eport of a product including industry inputs tat are insort supply domestically.

II. EQUITY OWNERSHIP

Ecept as provided for under te Constitution and te Foreign InvestmentAct (Republic Act No. 7042, as amended), tere are no restrictions onforeign ownersip of eport-oriented and/or pioneer enterprise tat willengage in te activities listed in te IPP.

III. EQUITY REQUIREMENT

Te equity of te project applied for registration is 25% of te project costunless eempted under any of te following:

1. Projects of applicant wit good track record in implementingregistered project;

2. Projects of publicly-listed companies; or

3. Projects not entitled to ITh.

For large projects wit a gestation period of more tan one (1) year, te25% equity requirement sall be based on te annual capital requirement

of te project; Provided tat te total equity requirement of 25% iscomplied wit on te rst year of ITh availment.


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IV. LOCATIONAL POLICY

A. Regional Dispersal of Industries

Te dispersal of economic activities to te countryside isencouraged.

Projects in any of te identied less developed areas (LDAs) listedin Anne A sall be entitled to pioneer incentives and additionaldeduction from taable income equivalent to 100% of epensesincurred in te development of necessary and major infrastructurefacilities unless oterwise specied in te Specic Guidelines.

B. Locational Restriction in NCR

Te BOI sall limit incentives to rms tat locate in congested urbancenters. Te locational restriction applies to te National CapitalRegion (NCR) werein projects are not entitled to ITh. Eemptionfrom te above locational restriction, owever, may be given to tefollowing:

1. Projects in government industrial estates2 declared by nationallaw or presidential proclamation prior to 01 January 1989 (unlesssubsequently privatized)

2. Projects tat will engage in service type activities

3. Epansion of eport-oriented projects

a. Epansion sall be eected witin te rms eistingpremises.

b. Te enterprise as a good track record of eports andas no record of violation of te terms and conditionsgoverning its eisting registration(s), specically, te earlier

project eceeded its projected eport commitment in tepast tree (3) years.

4. Modernization projects

5. Strategic Activities as dened under tis IPP (see Part III, I.11Strategic Activities)

Government Industrial Estatesa) Dagat-Dagatan (P.D. No. 569 dated 30 October 1974)b) Vitas Industrial Estate, Tondo (E.O. No. 1086 dated 31 January 1986, as amended/expanded through Presidential

Proclamation No. 39 dated 09 September 1992 and Proclamation No. 465 dated 01 August 1994) (Vitas IndustrialEstate/Smokey Mountain)

c) Bagong Silang Industrial Estate, Caloocan City (Presidential Proclamation No. 843 dated 26 July 1971)d) Food Terminal Inc., Taguig (LOI No. 900 dated 25 July 1979)e) Navotas Fishing Port Complex (E.O. No. 772 dated 08 February 1982)


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V. EXPORT OF PRODUCTS IN SHORT DOMESTIC SUPPLY

Te eport commitment of a registered enterprise may be suspended tosatisfy national interest or in an emergency situation.

VI. ITH AVAILMENT

A. General Rules

1. In te grant of incentives, te Board sall give priority to projectswit substantial benets to te economy. In tis regard, teetent of te projects ITh entitlement sall be based on tefollowing parameters: (1) projects net value added, (2) jobgeneration, (3) multiplier eect, and (4) measured capacity.

In te event tat te registered enterprise fails to implementte project as represented in its project application, te Boardmay opt to reduce te projects ITh availment proportionateto te actual performance (e.g. investments, employmentgeneration, production and sales, timetable) of te enterprise.

2. Te income qualied for ITh sall be limited to te incomedirectly attributable to te revenue generated from teregistered project.

3. Net income qualied for ITh availment sall not be a result ofgross revenues eceeding 10% of te projected gross revenuerepresented by te rm in its application.

In cases were te projects actual revenues eceed teprojections in its application due to, e.g., new markets/orders,additional employment/sifts, additional investments, teBoard may increase te projects ITh availment proportionately.Request/s for adjustments of projected revenue must be led

before te ling of application for ITh.

4. In case of projects intended for own use, ITh sall only beapplicable to revenues on sales generated or services renderedto oter enterprises.

5. Only net income from operation of registered activity ascertied under oat by CEO or CFO sall be entitled to ITh.

6. Enterprises wit multiple registrations wit te Board and/orseveral activities (weter BOI-registered or not) sall submita list of cost items tat are common wit te qualied projectand teir cost allocation metodology for te said cost items,to ensure proper, fair and equitable allocation of common costsuc as overead and administrative costs.


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B. Base Figure and Rate of Exemption

In general, ITh of epansion projects are subject to a base-gureequivalent to te enterprises igest sales volume in case of

omogenous products or sales value in case of eterogeneousproducts, in te last tree (3) years, prior to te ling of te applicationfor registration of te project.

Projects registered under te modernization program witoutincrease in capacity may be entitled to tree (3) years ITh and oterincentives witout prejudice to compliance wit oter requirements.Te computation of ITh for projects witout increase in capacity isas follows:

For single product/activity:

New Investment (in US$)Rate of Eemption (ROE) = --------------------------------- 100

Total Investments(replacement cost + new)Relative to te concerned plant(in US$)

For multiple products/activities or wen ITh entitlement of oter

products/ activities as lapsed:

Sales of te Product subject ofretooling

% Sales Entitled to ITh = --------------------------------------- 100Total Sales

New Investment (in US$)ROE = -------------------------------------------------------------- 100

Total Investments (replacement cost + new)Relative to te concerned plant (in US$)

Were: ROE sall be ed for te ITh entitlement period. Ecange rate sall be te eisting rate at te time of actual

investment or time of availment of ITh wicever will resultin lower rate of ITh.

Replacement cost sall refer to te appraised value of itsFied Assets relative to te concerned plant in te rstyear of ITh availment duly assessed and certied by anIndependent Appraiser. Tis sall tereon be used as abasis in succeeding ITh availments until te end of te IThentitlement period of te project.

% Sales Entitled to ITh sall be based on actual sales valuesfor te year of availment.


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C. Projects with Government Guarantee

Projects wit government guarantee/subsidy are not entitled to IThecept in cases were ITh as been considered in te grant of rates

approved by te regulatory agency concerned.Te ITh is deemed to ave been imputed in te grant of tegovernment guarantee/subsidy if te ITh was incorporated in tebid documents of te project proponent/contract wit governmenton te project, or te ITh was included in te nancial model by teregulatory agency in approving te projects taris/rates. In te lattercase, te availment of ITh sall be subject to a certication by teconcerned regulatory agency.

VII. MULTI-PHASE PROJECTS

Projects of an enterprise wit multiple pases/locations may be registeredon a per pase/location.

VIII. CORPORATE SOCIAL RESPONSIBILITY (CSR)

BOI registered entities, recognizing te benets derived from te scalincentives granted by te government, sould endeavour to undertakemeaningful and sustainable CSR projects in te locality were te projects

are implemented.

Enterprises engaged in ousing projects, wen undertaking CSR activities,must establis facilities (e.g., community centers, cild care centers, etc.)for te benet of te omeowners witin te ousing project.

IX. GOOD CORPORATE GOVERNANCE

BOI registered enterprises must be committed to te tenets of GoodCorporate Governance. Boards must function properly in decision making

processes tat aect teir stakeolders.

X. SUPPORT TO ENVIRONMENTAL PROTECTION AND CONSERVATION

Registered enterprises sall adopt measures intended to reduce climatecange risks in support of te National Framework Strategy on ClimateCange.

New and epansion projects sall be required to secure an EnvironmentalCompliance Certicate pursuant to P.D. No. 1586 (PilippineEnvironmental Impact Statement System) and oter clearances underrelevant environmental laws.


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A Certicate of Non-Coverage (CNC) issued by te EnvironmentalManagement Bureau (EMB) sall be submitted for projects tat are notcritical to te environment.

Registered projects are encouraged to participate in te Pilippines Eco-labeling Program (ELP), wen applicable.

Registered enterprises are encouraged to secure environmentalcertications based on internationally-recognized standards.

XI. INTERNATIONAL STANDARDS CERTIFICATION

Registered projects sall obtain applicable certications based oninternationally-recognized standards suc as a hazard Analysis and

Critical Control Points (hACCP), ISO certication, quality standards (e.g.ICC, CE) or oter similar certications.

XII. EQUIPMENT

Registered enterprises sall use brand new equipment ecept for projectsutilizing consigned equipment, projects involving transfer of facilities, andwen specied in te Specic Guidelines, and apply production processestat meet environmental standards. Application for availment of capitalequipment incentive sall be led prior to te ordering of equipment.

XIII. PROJECTS IN THE AUTONOMOUS REGION IN MUSLIM MINDANAO (ARMM)

Te ARMM List covers priority activities tat ave been identied by teRegional Board of Investments of te ARMM (RBOI-ARMM) in accordancewit E.O. No. 458. Te RBOI-ARMM may also register and administerincentives to activities in tis IPP for projects locating in te ARMM.

Projects in te ARMM sould register wit te RBOI-ARMM.

XIV. PROJECTS WITH REVENUES DERIVED FROM CARBON CREDITSPURSUANT TO THE KYOTO PROTOCOL

Revenues from te sale of carbon credits troug certied emissionreduction (CER) units generated from registered activity may beconsidered as part of te income entitled to ITh, provided tat teenterprise made representation at te time of application for registrationtat suc projects would earn CER units.

Projects wit foreign ecange earnings generated from CER unitsof more tan 50% of teir total revenues may be registered as eport-oriented projects.


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XV. OUTSOURCING OF PRODUCTION PROCESS OR SERVICES

Portion/s of te production process or services of te registered activitymay be outsourced provided tat te core activity or te integrated

nature of operation is undertaken by te registered enterprise.

XVI. PUBLIC WELFARE CONSIDERATION

Te BOI may deny applications for registration and/or grant ofincentives for reasons of public ealt or morals or for environmentalconsiderations.


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Part III

SPECIFIC GUIDELINES

I. PREFERRED ACTIVITIES

1. Agriculture/Agribusiness and Fishery

Tis covers commercial production and commercial processing ofagricultural, erbal and sery products (including teir by-productsand wastes).

Tis also covers agriculture- and sery-related activities sucas irrigation, post arvest, cold storage, blast freezing, and teproduction of fertilizers and pesticides.

a. Commercial production

Tis covers te production of agricultural (crops, poultry andlivestock) and sery products.

In general, crop production sould involve new plantation areasto qualify for registration.

Tis also covers intercropping of ig value crops as identiedby te Department of Agriculture (DA).

b. Commercial processing

Tis covers te conversion of agricultural and sery products,

teir by-products and wastes, to a form ready for furterprocessing or nal consumption.

Tis also covers te etraction of iger value substancesfrom agricultural and forest-based raw materials trougbioprocessing as endorsed by te concerned governmentagency.

Tis also covers te production of animal and aqua feedsecluding tose for game animals, fowls and oter species for

pet/leisure purposes.

Processing of agricultural products sould involve domesticallyproduced raw or semi-processed agricultural products, unlesste raw or semi-processed raw materials are not locally produced(NLP) or not in sucient quantity (NISQ).


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If using imported raw or semi-processed agricultural productstat are locally produced (LP) or in sucient quantity (ISQ), teproject may qualify for registration, provided tat te nised/nal product is for eport, or te project qualies for pioneer

status.

c. Services in Support of Agriculture / Agribusiness and Fishery

Irrigation

Tis covers irrigation system primarily intended to renderservice to agricultural farms.

Irrigation system sall include water source, distribution

lines and control mecanism. Te system may also includeprime mover, pump, generator and transformer. Systemcapacity is epressed in terms of cubic meters of irrigationwater per year.

Only revenues generated from services rendered to oteragricultural farms may be entitled to ITh.

Harvesting Services

Tis covers mecanized arvesting services.

Post Harvest Facilities

Tis covers te establisment and operation of cold storage,freezing, bulk andling, packing ouse, storage facilitiesand trading centers.

Tis covers ice plants tat will locate in LDAs.

Only revenues generated from services rendered to oteragricultural enterprises may be entitled to ITh.

Projects tat cost at least te Pilippine Peso equivalent of US$200,000may be granted pioneer status. Applications for registration must beendorsed by te concerned agency, wen applicable.

2. Creative Industries/Knowledge-Based Services

Tis covers business/knowledge processing.

Tis also covers non-voice business processing operations, creativeand knowledge-based services. Non-voice business processoperations include te undertaking of outsourced services sucas administrative and business services, transcription services,engineering and arcitectural services.


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Creative industries/knowledge-based services wit original contentsuc as but not limited to software development, animation,engineering and arcitectural design, product design, game andapplications development and software development; may be

granted pioneer status provided tat te project cost is at least tePilippine Peso equivalent of US$200,000 (ecluding cost of landand building) to be put up during te rst year of operations.

All ICT projects sall install internal security system compliant witBS 7799 or its equivalent.

3. Shipbuilding

Tis covers te construction and repair of sips/boats, sipbreaking

and sip recycling.

Te following are te qualications for registration:

General Requirements: Registered enterprises must ave te minimum required paid-up

capital, capital equipment and tecnical and skilled manpoweras specied by Maritime Industry Autority (MARINA).

Registered enterprises must comply wit DOLE DepartmentCircular No. 1 series of 2009 on te Guidelines on Occupational

Safety and healt in Sipbuilding, Sip Repair and SipbreakingIndustry and secure a copy of Department of Environment andNatural Resources (DENR) issued Environmental ComplianceCerticate (ECC).

Requirement for Sip/Boatbuilding: Sips/boats to be built must be at least 500 GT

Requirements for Sipbreaking/Sip recycling: Must ave a drydocking or dismantling slip wit a minimum

capacity of 1,500 DWT Must comply wit te requirements of te hong Kong

International Convention for te Safe and EnvironmentallySound Recycling of Sips including te preparation of a SipRecycling Facility Plan and te Tecnical Guidelines for teEnvironmentally Sound Management of te Full and PartialDismantling of Sips.

Any of te following may qualify for pioneer status: Sipbuilding or sip repair facilities wit a minimum lifting

capacity of 20,000 DWT Sipbuilding or sip repair facilities wit a minimum berting

capacity of 7,500 DWT Projects tat cost at least te Pilippine Peso equivalent of

US$100 million may be granted pioneer status.


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Registered enterprises may be required to submit a copy of itsLicense/Autorization or its equivalent from te MARINA or oterconcerned agency prior to start of commercial operation.

4. Mass Housing

Tis covers te development of low-cost mass ousing. Tis alsocovers te manufacture of modular ousing components preferablyusing indigenous materials.

Te following are te qualications for registration:

General requirements: Te selling price of eac ousing unit sall be more tan

PP400,000 but not eceeding PP 3.0 million. Must be new or epanding low-cost mass ousing project Minimum of twenty (20) livable dwelling units in a single site or

building Project sall conform wit te design standards set fort in te

Rules and Regulations to Implement B.P. No. 220/P.D. No. 957and oter related laws.

All low-cost mass ousing projects must comply wit tesocialized ousing requirement by developing an area forsocialized ousing equivalent to at least 20% of te total

subdivision area or total subdivision project cost for orizontalousing and 20% of te total oor area of qualied saleable lowcost ousing units for vertical ousing projects.

Tis may be done troug any of te following modes:

Development of a new settlement directly undertaken byte registered entity;

Development of a new settlement troug joint venture

arrangements wit eiter: a Local Government Unit, aNon-Government Organization accredited by te BOI,te National housing Autority, a subsidiary of te BOI-registered entity, or a developer accredited by te hLURB.

In te case of joint venture projects, te BOI registered entitysall be required to provide proof of funds transferred tote implementing entity.

Slum upgrading or renewal of areas troug zonalimprovement programs or projects tat will directlyaddress te problem of informal settlers along te mainriver systems.


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Compliance wit te socialized ousing requirement mustbe completed witin te ITh availment period and sould beproportionate to te number of low-cost ousing units beingapplied for ITh for te taable year.

Requirement for orizontal ousing projects: Mass ousing projects must be located in areas zoned and

classied for residential use/purposes in conformity wit teapproved Compreensive Land Use Plan and Zoning of teconcerned LGU.

Requirement for vertical ousing projects: At least 51% of te total oor area, ecluding common facilities

and parking areas, must be devoted to ousing units

In lieu of te modes for compliance wit te socialized ousingrequirement mentioned above, donation may be allowed. Teoption to donate is allowed provided: (1) te donation is madeto BOI accredited NGO and (2) te amount to be donated sallbe equivalent to 30% of (20% of te building construction costbased on te actual number or equivalent total oor area ofqualied saleable low cost ousing units) or not less tan 40%of te estimated ITh. Equivalent total oor area refers to te sumtotal of te oor area of all te registered low-cost mass ousingunits.

Any of te following may be considered as an epansion project: Unnised projects, te construction of wic ad stopped

for at least one (1) year. Only te unsold units may qualify forregistration

Conversion to low-cost or socialized ousing project of abuilding originally intended for commercial, oce spaces, oreclusive condominiums

Construction of additional oors or annees intended for massousing units

A project sall be considered as an epansion if it will locate adjacentor contiguous to an eisting mass ousing project owned by tesame entity and sall sare common facilities wit te eistingproject.

Projects tat ave already been completed and ave incurred sales(booked sales) of ousing packages sall, in general, not qualify forregistration.

In general, eligible projects in NCR, Metro Cebu and Metro Davaosall be entitled to tree (3) years ITh.

In cases of un-incorporated joint venture and similar arrangementsbetween land owner and developer werein te saring sceme is


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in terms of te number of lots or units built, only te sare of tedeveloper may qualify for registration.

Interest income arising from in-ouse nancing sall not be entitled

to ITh.

Modular housing components

Tis covers te manufacture of modular ousing componentspreferably using indigenous materials. Tese include roof/framingsystems, wall/partition systems, ooring systems, door/windowsystems, and nising/ceiling systems.

Te rm sall sell at least 50% of total annual production to mass

ousing projects.

5. Iron and Steel

Tis covers basic iron and steel products, long steel products (billetsand reinforcing steel bars), and at ot-/cold-rolled products.

Basic iron products include rened iron ore and primary steelproducts.

Tis also covers te manufacture of at products, long products andfabrication of macinery, equipment and implements.

All iron and steel products must be compliant wit te applicablePilippine National Standards (PNS) or international standards.

Projects tat cost at least te Pilippine Peso equivalent of US$500million may be granted pioneer status.

6. Energy

Tis covers te eploration, development, and/or utilization ofenergy sources adopting environmentally-friendly tecnologies.

Only power plants utilizing environmentally-friendly energy sourcesand tecnologies may qualify for ITh.

Projects tat would utilize raw materials or semi-processed rawmaterials tat are not locally produced (NLP) or not in sucientquantity (NISQ) are eempt from NVA requirement.

Only projects tat ave acieved nancial closing for te project arequalied to apply for registration.


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Any of te following may qualify for pioneer status: Power supply projects located in missionary areas or o-grid

areas tat are not receiving subsidies from PSALM; Projects tat cost at least te Pilippine Peso equivalent of

US$1.5 million per megawatt; Projects wit NVA of at least 30%

For power generation projects, only revenues from power generatedand sold to te grid, oter entities and/or communities may beentitled to ITh.

Power projects tat are built contiguous to eisting generatingfacilities sall be considered as epansion projects. however, if teeisting base load plant as consistently dispatced at least 80%

of teir registered capacity for te past 3 years, te project to beregistered may be considered new.

Te amount of ITh to be granted sall not eceed 10% of te totalrevenue of generated power.

Applications for registration must be endorsed by te Departmentof Energy (DOE).

7. Infrastructure

Tis covers transport, water, logistics, waste management facilities,pysical infrastructure (tollways, railways and telecommunicationfacilities) and PPP projects.

a. Transport

Tis covers air, water and mass rail transport.

(1) Air Transport

Air transport operation includes passenger and/or cargooperation for commercial purposes.

Lease wit option to purcase an aircraft may be allowed.Pure lease may be allowed provided tat te lease contractis for a minimum of ve (5) years.

Acquisition of additional aircraft/s may be registered asnew.

Aircraft/s must not be more tan 14 years old from date ofproduction to te date of ling te application.


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Any of te following may qualify for pioneer status: Projects serving te missionary/ developmental routes,

as indicated in te Certicate of Public Convenienceand Necessity (CPCN) may qualify for pioneer status.

Projects involving purcase/lease purcase ofbrand new aircraft. For lease purcase, te option topurcase sould be eercised before te end of te4t year of ITh availment.

All applications for registration must be endorsed by teCivil Aeronautics Board (CAB), wen applicable. Sucendorsement must contain information on te routes tobe served.

Prior to start of commercial operation of eac aircraft,te registered enterprise must submit a Certicate ofAirwortiness issued by Civil Aviation Autority of tePilippines (CAAP).

(2) Water Transport

Tis covers domestic and overseas sipping.

(a) Domestic/inter-island shipping

Tis covers pure cargo, passenger, and passenger-cargo vessel operations including RORO TerminalSystem operations.

Te following are te qualications for registration: Must be a Pilippine sipping enterprise

accredited wit te MARINA Vessel must be registered and operated under

te Pilippine Flag

Must comply wit following age requirements:

Type of Vessel Maximum Age fromOriginal Date of

LaunchingTankers 10 yearshig-speed Craft 5 yearsPassenger/Cargo 15 years

Te age of te vessel sall be reckoned from te

sips date of launcing based on te BuildersCerticate of Vessel Registry and must becomplied wit at te time of application.


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Tankers, hig-speed Craft, RORO Vessels servingprimary routes and Passenger/Cargo vesselsmust ave gross weigt of 150 GT and above.

Tankers must be double-ulled.

RORO operator/enterprise serving missionary routes, asindicated in te Certicate of Public Convenience (CPC)issued by MARINA, may qualify for pioneer status.

(b) Overseas shipping

Te following are te qualications for registration: Must be a Pilippine sipping enterprise

accredited wit te MARINA

Vessel must be registered and operated underte Pilippine Flag Vessels must be at least 1,000 GT and must not be

more tan fteen (15) years old

Acquisition of brand new vessels may qualify for pioneerstatus.

Acquisition of additional vessel/s may be registered asnew project.

Lease or carter of foreign-owned vessel wit optionto purcase may be allowed. Pure lease or bareboatcarter may be allowed provided te lease contract isfor a minimum of one (1) year; Provided furter, tat anyreplacement of vessels sall be covered by te enterpriseseisting registration involving te leased vessel, wicsall be valid for at least one (1) year.

All vessels must be seaworty and must obtain valid Class

and Statutory Certicates as required by MARINA.

Modernization of sips may be allowed wit entitlementto ITh limited to investments in safety and navigationdevices and equipment.

All applications for registration must be endorsed by teMARINA.

b. Water Supply and/or Distribution

Tis covers bulk supply projects and new or upgrading of waterdistribution systems.


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Applications covering bot supply and distribution projectssall be unbundled sowing te revenue and cost structure ofeac.

In cases of upgrading of eisting projects, only revenues tat arederived from incremental volume sall be eligible for ITh.

Supply of water sall be limited to treated water and sould bein accordance wit te Pilippine National Standard for DrinkingWater.

Distribution activity sould include etraction of water, treatmentand installation of distribution lines and ow metering systems.

A copy of te Water Permit and/or Certicate of PublicConvenience (CPC) must be submitted.

Projects involving any of te foregoing areas of water operationsdedicated to a particular industrial estate, industrial community,or subdivision are not qualied for registration under tislisting.

c. Logistics

Tis covers ports, terminals (passenger/intermodal terminals,cargo terminals/container yards, LNG/CNG storage terminals,natural gas refueling stations and carging stations for electricveicles), wareouses and relocation of oil terminals.

(1) Ports

Tis covers te development and operation of airports andseaports.

All applications for registration must be endorsed by teCAAP or te Pilippine Ports Autority (PPA), wicever isapplicable.

(2) Terminals

(a) Passenger/Intermodal terminals

Te following are te qualications for registration: Must cater to sipping lines or airlines and/or

dierent land transportation systems (rail system,buses, tais, etc.);

Must ave new facilities wit parking, comfortrooms, ticketing and reservation oce, air-conditioned waiting area and provide suttleservices; and


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Must ave a system of ingress and egress to preventtrac buildup/obstruction of torougfares on a24-our basis as certied by DOTC, MetropolitanManila Development Autority (MMDA) and/or

oter concerned agency.

Bus terminals tat will integrate all bus lines operatingwitin a particular municipality or city sall be eligiblefor registration. Te facilities sall ave ample parkingspaces, comfort rooms and waiting areas. Projects oftis nature undertaken in igly urbanized cities sallbe granted pioneer status.

(b) Cargo terminals/Container yards

Te following are te qualications for registration: Must ave new facilities; and Must ave a system of ingress and egress to prevent

trac buildup/obstruction of torougfares on a24-our basis as certied by DOTC, MMDA and/oroter concerned agency.

(c) LNG/CNG storage, distribution and marketing

Tis covers te establisment and operation ofstorage, distribution and marketing facilities for tebulk andling/sale of natural gas in accordance witrelevant Pilippine National Standards (PNS).

Tis also covers te establisment and operation ofnatural gas refueling station and related infrastructuresand facilities in accordance wit relevant PilippineNational Standard (PNS). Foreign-owned stations mustcomply wit te Retail Trade Law (R.A. No. 8762)

For marketing, distribution and refueling stations, teregistered enterprise must submit a copy of its Permitto Operate and Supply Natural Gas issued by te DOEprior to start of commercial operations.

For storage, te registered enterprise must submit acopy of its Permit to Operate issued by te DOE priorto start of commercial operation.

Te following are te qualications for registration forstorage, marketing and distribution: Must ave new facilities; Must cater to power plants, industrial plants,

sipping vessels, commercial establisments orland transport; and


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Must cater to at least one (1) clientele, oter tante proponents own business.

Projects tat cost at least PP1 billion may be granted

pioneer status.

(d) Charging stations for electric vehicles

Tis covers te establisment of carging stations forelectric veicles. Te carging stations could refer to aservice station designed to simultaneously fast cargemultiple veicles similar to gasoline/diesel stations or anetwork of at least 5 carging stands.

All applications for registration must be endorsed byconcerned agency.

(3) Warehouses

Tis covers te establisment of automated wareousingfacilities wit automated retrieval systems, conveyors,cranes and oter cargo andling equipment.

Distribution or Fulllment Centers wit at least 50% of its

revenues derived from serving oter countries sall begranted Pioneer status.

Only revenues generated from services rendered to oterenterprises may be entitled to ITh.

(4) Relocation and putting up of a new oil terminal

Projects tat cost at least PP1 billion may be grantedpioneer status.

All applications for registration must include a DOEendorsement and proof of te projects compliance witappropriate land use/zone plans including safety andsecurity measures prescribed by te local government unit(LGU)/agency tat approved te same.

d. Waste Management Facilities

Tis covers te establisment of toic and azardous waste(ThW) treatment facilities.

Te following are te qualications for registration: Must involve treatment, storage and disposal (TSD) Must be capable of andling ThW Must andle only locally-generated wastes.


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Prior to start of commercial operation, te registered enterprisemust submit a copy of its TSD Registration Certicate issued byte Environmental Management Bureau (EMB) of te DENR. Ifandling radioactive wastes, te registered enterprise must

submit a License to Operate a Radioactive Waste ManagementFacility from te Pilippine Nuclear Researc Institute (PNRI) ofte Department of Science and Tecnology (DOST) in additionto te TSD Registration Certicate.

e. Physical Infrastructure

Tis covers tollways, railways and telecommunication facilities.

(1) Tollways and railways

Tis covers te development, including reabilitation,upgrading, and/or epansion, and/or operation of tollwaysand railways.

Upgrading of eisting pysical infrastructure may beregistered as a new project provided tat te cost ofupgrading already approimates at least 90% of teprevailing cost of constructing a new pysical infrastructure,as certied by te concerned agency.

If te cost of upgrading of te pysical infrastructure isless tan 90% of te prevailing cost of constructing a newpysical infrastructure, te project may be registered as amodernization activity but not entitled to ITh.

For projects tat will involve te development and operationof pysical infrastructure to be undertaken by separateentities, bot te developer and operator may qualify forregistration. however, te developer may be entitled only

to incentive on capital equipment directly needed for teoperation of te pysical infrastructure.

(2) Telecommunication infrastructure

Tis covers te establisment of new telecommunicationsinfrastructure in te provinces particularly in te rural areas asendorsed by te National Telecommunications Commission(NTC) and utilizing at least ber optic tecnology.

Projects tat cost at least te Pilippine Peso equivalent ofUS$100 million may be granted pioneer status.


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f. PPP Projects

Tis covers projects under te Public-Private Partnersip (PPP)Program of te government.

Applications must be endorsed by te PPP Center or oterconcerned government agency/unit.

8. Research and Development

Tis covers R&D activities and te establisment of researc/testinglaboratories, Centers of Ecellence (COE) and tecnical vocationaleducation and training institutions.

a. Research and Development

Tis covers all R & D activities including te establismentof researc/testing laboratories (e.g., for parmaceuticals,electronics, construction, etc.).

Tis also covers te establisment and operation of facilities forte conduct of clinical trials (e.g. Clinical Researc Organizationor CRO). Te registered CRO must submit a copy of Permit forClinical Investigational Use (PCIU) issued by Food and Drugs

Administration (FDA) before te conduct of eac clinical trial.

Applications for registration must be endorsed by te DOST oroter concerned agency, as may be deemed necessary.

b. Center of Excellence (COE)

Tis covers te establisment of entrepreneurial, tecnology,business incubation centers, common service facilities, andmanufacturing, service and agribusiness entities including

tose locating in te premises of state universities and colleges(SUCs) outside Metro Manila and wit a special arrangementwit te SUC to develop competencies in entrepreneursip,and researc and development.

c. Training/Learning Institutions

Tis covers te establisment of institutions specializing in tetecnical vocational education and training (e.g., engineering,culinary arts, etc.) in support of te activities listed in tis IPP.

Te following are te requirements for registration: Te curriculum must be approved by eiter te Tecnical

Education and Skills Development Autority (TESDA) fortraining courses or te Commission on higer Education


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(ChED) for degree courses or oter concerned governmentagencies/autority and endorsed by te appropriateindustry association.

Te registered education/training/learning institutions

must provide training laboratories and equipment, ifapplicable.

Projects tat cost at least te Pilippine Peso equivalent of US$2 million may be granted pioneer status.

9. Green Projects

Tis covers te manufacture/assembly of goods and teestablisment of energy eciency-related facilities (suc as district

cooling systems), were eiter utilization of wic would signicantlylead to eiter te ecient use of energy, natural resources or rawmaterials; minimize/prevent pollution; or reduce greenouse gasemissions.

To qualify for registration, assembly operations must be integratedwit te manufacture of at least one part/component for use in teassembly.

Green Projects covers only projects oter tan tose already listed

in tis IPP.

10. Manufacture of Motor Vehicles

a. Manufacture/assembly of motor vehicles

Te project sall involve te manufacture/assembly of brandnew motor veicle units (ecluding 2-stroke motorcycles)tat are compliant wit te prevailing national standards andregulations on te registration, use and operation of motor

veicles.

Any of te following may qualify as new:1. Projects tat will involve te establisment of a factory

complete wit production macinery/equipment andfacilities suc as welding section, assembly section, metaltreatment section, painting section, testing facility for roadwortiness and emission standard compliance, and pre-delivery inspection section.

2. Projects of an eisting motor veicle manufacturer/assembler tat involves te production of a new model or afull model cange sall be considered new project, providedtere is new investments of at least PP100 million for four-weel veicles and manufacture of parts and components,oterwise te project will be considered epansion.


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Any of te following may qualify for pioneer status: Projects covered under paragrap a.1 above for manufacture/

assembly of passenger cars and/or commercial veicleswit investments of at least US$50 million and for te

manufacture/assembly of motorcycle wit investments ofat least US$4 million. Investments may include te cost ofte acquisition of an eisting assets or facilities.

Projects covered under paragrap a.2 above witinvestments of at least US$20 million for passenger cars and/or commercial veicles, US$1.5 million for motorcycles

Projects on te manufacture/assembly of alternative fuelveicle and electric veicles. Alternative fuel veiclesinclude te following: hybrid veicles are veicles tat run on electric

batteries and gasoline/diesel/oter fuels. Electric veicles are veicles tat run solely on electricpower.

Fleible-fuel veicles are veicles tat run on gasoline/diesel in combination wit alternative fuel suc as butnot limited to: Bioetanol veicles tat run on gasoline and a

minimum etanol content/blend of at least 20% Biodiesel veicles tat run on diesel and a

minimum biodiesel blend/content of at least 5%

Compressed Natural Gas Veicles are veicles tatrun on Compressed Natural Gas (CNG)

Oter veicles powered by LPG, fuel cell and oteralternative fuels.

Manufacture/assembly of brand new tree or four-weel Pilippine utility veicles for cargos and/orpassengers

b. Manufacture of parts and components

Tis covers te manufacture of motor veicle parts andcomponents eiter as original equipment manufacturer (OEM)or after-market products.

Any of te following may qualify for pioneer status: Manufacture of engines and transmissions Manufacture of tool & die to produce cassis and engine Establisment of common facility for eat treatment,

forging, stamping of motor veicle parts and components Production of electric motors, batteries oter tan lead

acid batteries, controller assembly and battery carger forelectric veicles


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11. Strategic Projects

Tis covers projects tat eibit very ig social economic returnstat will signicantly contribute to te countrys economic

development.

Te social economic returns of te proposed project sall bemeasured in terms of te following:

Consumer-based benets (e.g., price, availability, quality) Forward and backward linkages wit eisting industries in te

country Generation of at least 500 direct employment or use of igly-

specialized or advanced tecnology

Generation of at least US$1 million in foreign ecange savings,wen applicable Stature of te proponent as a global player, wen applicable

Notwitstanding te preceding paragraps, manufacture ofpackaging products tat will involve product or process innovationwic sall lead to signicant improvements in quality and value ofte packaged products sall also be deemed as Strategic Project.Likewise, te manufacture of essential drugs and medicines as listedin te Pilippine National Drug Formulary (PNDF) sall be deemed

as Strategic Project.

Projects tat cost at least te Pilippine Peso equivalent of US$500million may be granted pioneer status.

Projects under tese activities will be approved upon determinationby te Board in consultation wit te Department of Finance (DOF),National Economic Development Autority (NEDA) and oterappropriate government agencies.

12. Hospital/Medical Services

Tis covers te establisment and operation of medical facilitiesincluding primary, secondary, tertiary ospitals and ambulatoryfacilities.

Only revenues from te provision of medical and diagnostic servicessall be entitled to ITh. Revenues from operating a parmacy, foodservices and any oter non-treatment related services will not beeligible for ITh.

Secondary care ospitals wit a minimum capacity of 50 beds and aninvestment cost of at least te Pilippine Peso equivalent of US$2.5million may qualify for pioneer status


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Only facilities outside of Metro Manila may qualify for registration.

Prior to availment of ITh, registered projects must submit copies oflicense to operate issued by te DOh and Pilealt Accreditation.

13. Disaster Prevention, Mitigation and Recovery Projects

a. Tis covers projects tat will prevent or mitigate adverse impactsof calamities and disasters, wic may include installation ofood control systems; installation of early warning systemsfor typoons, eartquake occurrences, tsunami and volcaniceruptions; manufacture or assembly of goods critical to disastermanagement; construction of dikes; and salvaging operations.

Tese include te manufacture and assembly of equipment andgoods tat will be used for disasters, calamities and emergencies,te provision of rescue and retrieval services, te provisionof information services related to disaster management, teprovision of specialized equipment and services needed torestore vital public services in a fast and ecient manner, teprovision of training services for rst responders and any oteractivity tat will contribute to te goals of mitigating risks topublic safety caused by disasters, calamities and emergencies.

Salvaging pertains to te rescue of a seriously damaged/incapacitated sip tat may include reoating and towing of tesip to a safe place. It also pertains to te removal of a sunken orwrecked sip, derelict or azards including cargoes tereof.

Only income from salvaging operations (ecluding income fromartifacts/treasure recovered from sunken vessels/sips) may beentitled to ITh.

b. Tis also covers projects to reabilitate areas aected by

calamities and disasters, wic may include rebuilding of roadsand bridges after eartquakes/ooding, volcanic eruptions, andoil spill clean-up.

For projects tat will involve te development and operationof pysical infrastructure to be undertaken by separate entities,bot te developer and operator may qualify for registration.however, te developer may be entitled only to incentive oncapital equipment directly needed for te operation of tepysical infrastructure.

c. Tis furter covers training for disaster preparedness, mitigationor recovery/reabilitation/reconstruction.


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All applications for registration must be endorsed by concernedagency.

Projects tat cost at least te Pilippine Peso equivalent of US$

100,000 may be granted pioneer status.

Disaster Prevention, Mitigation and Recovery Projects cover onlyprojects oter tan tose already listed in tis IPP.

II. MANDATORY LIST

1. Industrial Tree Plantation

Tis covers etensive plantation of forest land of tree crops (eceptfruit trees) for commercial and industrial purposes.

Tree crops include timber and non-timber species suc as rubber,bamboo, rattan, etc. (ecluding fruit trees) for commercial andindustrial purposes.

Eac Industrial Tree Plantation (ITP) project must ave an approvedand issued forest management/development agreement suc as: Socialized Industrial Forest Management Agreement (SIFMA)

Industrial Forest Management Agreement (IFMA) Private Forest Development Agreement (PFDA) Community-based Forest Management Agreement (CBFMA)

In cases of tree plantations tat are joint venture agreements witoter private entities, community organizations or governmententities, only te sare of te registered enterprise may be entitledto ITh.

2. Exploration, Mining, Quarrying and Processing of Minerals

Tis covers te eploration and development of mineral resources,mining/quarrying and processing of metallic and non-metallicminerals.

Eploration of mineral resources including tose covered by validand eisting eploration permits or mineral agreements may qualifyfor pioneer status.

Mining and mineral processing projects are not entitled to ITh.

3. Publication or Printing of Books/ Textbooks

Tis covers printing, re-printing, publication and contentdevelopment of books or tetbooks.


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Application for registration sall be on a per book or title basisand must be endorsed by te National Book Development Board(NBDB).

4. Rening, Storage, Marketing and Distribution of PetroleumProducts

Tis covers rening, storage, distribution, and marketing of petroleumproducts.

For gasoline retailing stations, ecept tose locating in LDAs listed intis IPP, te applicant sall be required to invest a minimum capitalof PP10 million per station, ecluding land, or suc amount as maybe determined jointly by BOI and DOE for augmentation purposes,

as te need arises; Provided, tat foreign retailers sall comply witte requirements provided under R.A. No. 8762, oterwise known aste Retail Trade Liberalization Law, and its implementing rules andregulations.

For storage, marketing and distribution, only investments of newindustry participants may be entitled to incentives. Te applicantsall submit an endorsement from te DOE certifying tat teapplicant is a new industry participant wit new investments.

For storage, marketing and distribution, petroleum productsecluding liqueed petroleum gas (LPG), sall be sourced from tenew industry participants as dened under R.A. No. 8479, ecept incases of emergency supply situation.

For projects tat involve more tan one activity, i.e., storage,marketing and distribution, eac must be unbundled sowing terevenue streams and costs for eac activity.

Blending of petroleum products alone may only be entitled to capital

equipment and oter non-scal incentives.

Applicant enterprises sall elect to be governed by te provisionsof E.O. No. 226 or R.A. No. 8479 at te time of teir application forregistration, provided tat suc election once made sall be nal.

5. Ecological Solid Waste Management

Tis covers te establisment of waste recycling facilities weteror not integrated wit manufacturing facility, using as inputs 100%locally generated solid waste materials or scraps from te recyclingfacility to produce semi-nised or nised product.


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Tis also covers te establisment of an integrated solid wastemanagement facility tat includes te following: 1) materialsrecovery facility wit a processing center tat sall be used tomanufacture goods from recyclable wastes (biodegradable, non-

biodegradable, recyclable and residual) as te raw materials; and 2)categorized sanitary landll tat sall accommodate only residualwastes tat were not recycled due to te absence of appropriatetecnology for recycling.

Waste recycling projects witout a manufacturing/processing facilityare not entitled to ITh.

Registered projects may avail of capital equipment incentive.

All applications for registration must be endorsed by teEnvironmental Management Bureau of DENR.

6. Clean Water Projects

Tis covers te establisment of wastewater treatment facilitiesand sewage collection integrated wit treatment facilities and teadoption of water pollution control tecnology, cleaner productionand waste minimization undertaken troug BOT or non-BOTscemes.

Activities suc as 5S and Good housekeeping are not qualied forregistration.

Wastewater treatment facilities and sewage collection integratedwit treatment facilities may be entitled to ITh.

Projects adopting water pollution control tecnology, cleanerproduction and waste minimization are only entitled to capitalequipment incentive.

All applications for registration must be endorsed by te DENR, teLaguna Lake Development Autority (LLDA) or oter concernedagency.

Projects tat will employ new or proprietary tecnologies sallsubmit an Environmental Tecnology Verication (ETV) issued byte DOST.

7. Rehabilitation, Self-Development and Self-Reliance of Persons withDisability

Tis covers te manufacture of tecnical aids and appliances forte use and/or reabilitation of persons wit disability, and teestablisment of special scools, day care centers, omes, residential


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communities or retirement villages solely to suit te needs andrequirements of persons wit disability.

Manufacturing of tecnical aids and appliances used by persons

wit disability includes but is not limited to te following: Walk-in bats designed for persons wit disabilities Commode cairs Braille books hoists and lifting cairs designed for incapacitated people,

including stair lifts Weelcairs, scooters and automobiles using special controls or

assistive tecnology designed for persons wit disabilities hearing-aids Articial limbs, ortotics, prostetics and ortopedic braces

Automatic/mecanical lifts to be attaced to motor veicle

All applications for registration must be endorsed by te Departmentof Social Welfare and Development (DSWD).

8. Renewable Energy

Tis covers developers of renewable energy facilities, includingybrid systems.

Tis also covers manufacturers, fabricators and suppliers of locally-produced renewable energy (RE) equipment and components.

Sales of power generation projects wit feed-in-taris (FIT) sall notbe entitled to ITh unless te ITh was included in te nancial modelby ERC in approving te projects power (FIT) rate.

Applications for registration must submit DOE Certicate ofRegistration, Certicate of Accreditation or DOE endorsement,wicever is applicable.

Applicant enterprises sall elect to be governed by te provisionsof E.O. No. 226 or R.A. No. 9513 at te time of teir application forregistration. Under E.O. No. 226, RE projects may qualify for pioneerstatus.

9. Tourism

Tis covers tourism enterprises tat are outside te tourism enterprisezones (TEZs) and are engaged in te following:

1. Tourist transport services weter for land, sea and air transportfor tourist use;


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2. Establisment and operation of: Accommodation establisments suc as but not limited

to otels, resorts, apartment otels, tourist inns, motels,pension ouses, private omes for omestay, ecolodges,

condotels, serviced apartments, and bed and breakfastfacilities; Convention and eibition facilities or meetings,

incentives, conventions and eibition (MICE) facilities; Amusement parks; Adventure and ecotourism facilities; Sports facilities and recreational centers; Teme parks; healt and wellness facilities suc as but not limited to

spas, tertiary ospitals, and ambulatory clinics;

Agri-tourism farms and facilities; and Tourism training centers and institutes.3. Development of retirement villages.4. Restoration/ preservation and operation of istorical srines,

landmarks and structures.

1. Tourist transport

Tis covers transport services weter for land, water and airtransport for tourist use.

Land transport covers te operation of

Documents

Bureau of Investments - Investment Priority Plan 2012