Cabinet approves ’07 IPP
Elaine Ruzul S. Ramos
Manila Standard
The Cabinet yesterday finally approved the proposed 2007 Investment Priorities Plan, a list of investment areas that are eligible for fiscal incentives.
Trade Undersecretary Elmer Hernandez said with the Cabinet’s approval, the 2007 IPP would now be forwarded to Malacañang for official endorsement of President Gloria Macapagal Arroyo.
President Arroyo left yesterday for a three-country swing beginning with Japan, followed by Australia and New Zealand up to the end of the month.
Hernandez said the Cabinet approved the IPP in its entirety, except for a revision in which the agriculture and fishery listing was amended to agriculture/agribusiness and fishery.
“All the others were carried including coverage,” said Hernandez.
The inclusion of agribusiness in the listing is expected to facilitate the granting of incentives to enterprises that integrate agriculture with processing for a higher-value product.
The approval of the proposed 2007 IPP had been delayed for over a month after government officials were sidetracked by the mid-term elections.
An inter-agency committee led by the Board of Investments submitted the proposed 2007 IPP to the Office of the President on March 30 after consulting various agencies and the private sector.
The approval of the IPP is crucial to BoI’s realization of its 12-percent target growth in investments this year. The listing serves as an investor’s guide on the areas that have been identified by the government for priority promotion and development and eligible for fiscal and non-fiscal incentives.
The 12 preferred areas included in the 2007 IPP are agriculture/agribusiness, fishery and support services; healthcare and wellness products and services; information and communications technology; electronics; motor vehicle products; energy; infrastructure; tourism; shipbuilding/shipping; iron and steel; R & D/training institutions; and machinery and equipment, raw materials and intermediate inputs in support of the activities listed in the IPP.
Cement products integrated with mining operations were also included in this year’s IPP.
The Department of Finance also endorsed the grant of incentives to new cement projects despite industry opposition.
Telecommunications projects in unserved areas are also entitled to incentives.
The mining sector has been removed from the 12 preferred priority sectors but is still entitled to government perks since Republic Act 7942, or the Mining Act, is listed in the mandatory inclusions of the IPP.
The proposed 2007 IPP retained the RED (Retention, Expansion and Diversification) program to cover the activities of existing investors either considered as global players or engaged in strategic industries.
The research and development listing covers in-house R & D activities of any manufacturing/producing firm and commercial R & D activities of private firms and research institutions.
The BoI has also included a provision requiring the endorsement of the respective government agencies on projects seeking incentives. The agency was earlier criticized for the loss of billions of pesos in government revenues because of the incentives granted to various enterprises.
Incentives registered with the BoI are granted income tax holiday of as long as eight years and preferential duty rate, among others.
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