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1 REPUBLIC OF THE PHILIPPINES A. BOARD OF INVESTMENTS Industry and Investments Building 385 Sen. Gil J. Puyat Ave., Makati City NOTICE Notice is hereby given that the Board, in its meeting of 02 June 2010, approved the following General Policies and Specific Guidelines to implement the 2010 Investment Priorities Plan (IPP). Part II GENERAL POLICIES I. APPROVAL OF APPLICATION AND ENTITLEMENT TO INCENTIVES The approval of application for registration and entitlement to incentives under this IPP is subject to Article 7, paragraph 3 of Executive Order No. (E.O.) 226, to wit: “ART. 7 Powers and Duties of the Board. xxx (3) Process and approve applications for registration with the Board, imposing such terms and conditions as it may deem necessary to promote the objectives of this Code, including refund of incentives when appropriate, restricting availment of certain incentives not needed by the project in the determination of the Board x x x” II. EQUITY OWNERSHIP Except as provided for under the Constitution and the Foreign Investment Act (Republic Act No. 7042, as amended), there are no restrictions on the extent of foreign ownership of export- oriented and/or pioneer enterprise that will engage in the activities listed in the IPP. III. EQUITY REQUIREMENT In general, the equity of the project applied for registration is 25% of the project cost. IV. LOCATIONAL RESTRICTION POLICY A. Regional Dispersal of Industries The dispersal of economic activities in the countryside is encouraged. 1. Projects in LDAs shall be entitled to pioneer incentives and additional deduction from taxable income equivalent to 100% of expenses incurred in the development of necessary and major infrastructure facilities. 2. Projects in the thirty (30) poorest provinces shall be entitled to pioneer or non-pioneer incentives, as may be applicable. 3. The BOI may, on a case to case basis, consider areas within any province as a less developed area.

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Page 1: REPUBLIC OF THE PHILIPPINES A. BOARD OF INVESTMENTS Industry and Investments Building ipp... · 2010-07-15 · 1 . REPUBLIC OF THE PHILIPPINES . A. BOARD OF INVESTMENTS . Industry

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REPUBLIC OF THE PHILIPPINES

A. BOARD OF INVESTMENTS

Industry and Investments Building 385 Sen. Gil J. Puyat Ave., Makati City

NOTICE

Notice is hereby given that the Board, in its meeting of 02 June 2010, approved the following General Policies and Specific Guidelines to implement the 2010 Investment Priorities Plan (IPP).

Part II GENERAL POLICIES

I. APPROVAL OF APPLICATION AND ENTITLEMENT TO INCENTIVES

The approval of application for registration and entitlement to incentives under this IPP is subject to Article 7, paragraph 3 of Executive Order No. (E.O.) 226, to wit:

“ART. 7 Powers and Duties of the Board. xxx

(3) Process and approve applications for registration with the Board, imposing such terms and conditions as it may deem necessary to promote the objectives of this Code, including refund of incentives when appropriate, restricting availment of certain incentives not needed by the project in the determination of the Board x x x”

II. EQUITY OWNERSHIP

Except as provided for under the Constitution and the Foreign Investment Act (Republic Act No. 7042, as amended), there are no restrictions on the extent of foreign ownership of export-oriented and/or pioneer enterprise that will engage in the activities listed in the IPP.

III. EQUITY REQUIREMENT In general, the equity of the project applied for registration is 25% of the project cost.

IV. LOCATIONAL RESTRICTION POLICY

A. Regional Dispersal of Industries

The dispersal of economic activities in the countryside is encouraged. 1. Projects in LDAs shall be entitled to pioneer incentives and additional deduction from

taxable income equivalent to 100% of expenses incurred in the development of necessary and major infrastructure facilities.

2. Projects in the thirty (30) poorest provinces shall be entitled to pioneer or non-pioneer

incentives, as may be applicable. 3. The BOI may, on a case to case basis, consider areas within any province as a less

developed area.

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B. Exemption from the Locational Restriction

Complementary to the provision of the law granting pioneer incentives to projects in LDAs, the BOI limits incentives to firms that locate in congested urban centers. The locational restriction applies to the National Capital Region (NCR) wherein projects are not entitled to ITH. Exemption from the above locational restriction, however, may be given to the following: 1. Projects in government industrial estates declared by national law or presidential

proclamation prior to 01 January 1989 (unless subsequently privatized), as follows:

a) 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 Industrial Estate/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)

Once the foregoing government industrial estates are privatized, existing locators thereat shall continue to enjoy incentives for the period provided for under their BOI registration.

2. Projects that will engage in service type activities

3. Export-oriented projects

Revenues generated from services rendered to foreign tourists may be considered as export sales.

1 Less Developed Areas (LDAs)

REGION PROVINCE REGION PROVINCE CAR Abra1 VIII Biliran1

Apayao1 Eastern Samar1 Ifugao1 Southern Leyte1 Kalinga1 Northern Samar Mt. Province1 IX Zamboanga del Norte II Quirino1 Nueva Vizcaya1 X Lanao del Norte Lanao del Sur

IV Aurora1 Misamis Occidental Marinduque1 Occidental Mindoro XI Davao Oriental Oriental Mindoro Palawan XII Saranggani Romblon Sultan Kudarat

V Masbate1 CARAGA Agusan del Sur Camarines Sur Surigao del Norte Sorsogon Surigao del Sur

VI Guimaras1 ARMM Basilan1 Antique Maguindanao1 Aklan Sulu1 Tawi-Tawi1

VII Siquijor1 Negros Oriental

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4. Modernization projects

5. Projects of micro and small enterprises (MSEs)

6. Strategic Activities as defined under this IPP (see Part I, I.B.6 “Strategic Activities”)

7. Projects under the Contingency List

8. Relocation of oil terminals V. EXPORT OF MANUFACTURED / PROCESSED GOODS

Except for agricultural products, goods should undergo manufacturing or processing. Mineral products are covered by the Specific Guidelines (see Part III, II.B Philippine Mining Act of 1995 (R.A. No. 7942)). Production of goods involving simple processing covering any or a combination of activities such as but not limited to cleaning, sorting, cutting, shredding, pulverizing, grinding, crushing, compacting, dissolving and filtration are not qualified for registration.

VI. EXPORT OF PRODUCTS IN SHORT DOMESTIC SUPPLY The application for registration of projects engaged in the export of products in short domestic supply may be suspended if national interest so requires. The export commitment of a registered enterprise may be suspended to satisfy national interest or in an emergency situation.

VII. MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) In line with the Medium Term Philippine Development Plan (MTPDP), the BOI promotes the development of MSMEs on account of their contribution to employment generation, countryside development, and the cultivation of the Filipino entrepreneurial spirit.

In this regard, the BOI extends the following: • Preparation of simplified project application for BOI registration • Identification of MSME support companies • Sourcing of financing support In addition, the following assistance are provided to micro and small enterprises: • Exemption from application and registration fees for micro enterprises • Seventy five percent (75%) reduction in application and registration fees for small

enterprises • Reduced application fees for incentives as follows: • One-day processing of application for registration • Exemption from the twenty five percent (25%) equity requirement • Posting of the Notice of Filing of Application in provincial, city, municipal or barangay hall,

in lieu of publication in a newspaper of general circulation • Simplified reportorial requirements • Simplified application for incentives

Type of Fee Micro Enterprises Small Enterprises Filing Fee PhP 500.00 PhP 1000.00 Issuance Fee ½ of 1% of amount of

incentive granted but not more than PhP 500.00

½ of 1% of amount of incentive granted but not more than PhP 1,000.00

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VIII. PROJECT TYPE AND STATUS A. New Projects

The following are considered new projects: 1. Projects undertaken by a newly formed or organized entity that has no common

stockholders in any existing enterprise or, if with common stockholders, will engage in an entirely distinct and separate activity.

2. Project of a new enterprise whose stockholders are also stockholders of an existing

enterprise engaged in the same activity provided that the common stockholders in the existing enterprise do not own more than seventy percent (70%) of the equity in the new enterprise.

3. Project of an existing enterprise that is entirely distinct and different from its existing

business operation in terms of either final product or service, production process, equipment or raw materials.

4. Products manufactured from locally designed and developed Research and

Development (R & D). All applications for registration must be endorsed by the Department of Science and Technology (DOST) stating that the R&D was undertaken in the Philippines and has not yet been commercialized.

5. Project of an enterprise that meets all of the following:

a. The project will establish a new complete line. “New Complete Line” refers to new facilities used in the production of the registered product/service separate from existing line. “New Facility” refers to the space or area, physical structure and equipment provided for a particular purpose or segment of the production process/service activity.

b. The project will locate in an area not contiguous to the premises of the existing

project of the existing enterprise, with which the enterprise has common stockholders of more than 70% of equity.

c. There is new investment in fixed assets and working capital.

6. Projects acquired from PMO/GFIs/GOCCs

This covers projects involving assets purchased/leased from the Privatization and Management Office (PMO), government financial institutions (GFIs) and government owned or controlled corporations (GOCCs), or entities wherein the government has ownership or interest. The ITH shall be subject to the limitations set forth under Part II, I. “Approval of Application and Entitlement to Incentives”. Pioneer status may be granted to either of the following unless the Specific Guidelines provides for other qualifications for pioneer status:

• Projects with a new investment of at least the Philippine Peso equivalent of

US$100 million covering purchase cost, pre-operating cost, rehabilitation cost, if any, and working capital; or

• Projects utilizing leased assets with new investment of at least the Philippine Peso equivalent of US$25 million covering upfront lease payment equivalent to 1 year upon signing of contract, pre-operating cost, rehabilitation cost and working capital.

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7. Projects of Micro and Small Enterprises operating for less than one (1) year

These are projects of micro and small enterprises with total project cost of not more than PhP15 million, excluding cost of land, that have been in commercial operation for less than one year.

B . Expansion Projects

These are activities involving the same products of or services rendered by an existing enterprise, as follows: 1. Projects involving the installation of additional capacity-determinant equipment within

the same existing plant or facility of the enterprise 2. Projects involving the modernization and rehabilitation of an existing facility of

activities listed in the IPP that will result in increase in existing capacity 3. ICT projects located in the same building and using the same basic common facilities

such as servers, backup generators, internet connections, etc., shall be considered as expansion

4. Other projects/activities that do not meet the qualification requirements for new

projects under Part II, VIII.A.

In general, ITH of expansion projects, except those under the Contingency List, are subject to a base-figure equivalent to the enterprise’s highest sales volume in case of homogenous products or sales value in case of heterogeneous products, in the last three (3) years, prior to the filing of the application for registration of the project.

C . Modernization Projects 1. For purposes of this IPP, rehabilitation is considered a form of modernization. 2. The modernization program should identify the phases / stages of production sought

to be modernized. In general, the program should be completed within two (2) years from date of registration.

3. To be eligible for pioneer status, the project must comply with Article 17 of E.O. 226

unless other conditions are provided in the Specific Guidelines covering the activity. 4. In general, modernization of manufacturing activities must result in any of the

following:

a) substantial reduction of production cost; or b) significant increase in productive efficiency including debottlenecking; or c) meaningful upgrading of product quality; or d) keeping abreast with the state of the art in the production of registered product.

For rehabilitation, the minimum requirement shall be the restoration of the plant rated capacity.

5. Projects registered under the modernization program without increase in capacity

may be entitled to three (3) years ITH and other incentives. 6. The general policy on brand new equipment also applies to modernization program. 7. The computation of ITH for projects without increase in capacity is as follows:

a. For single product/activity

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

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

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b. For multiple products/activities or when ITH entitlement of other products/ activities has lapsed:

Sales of the Product subject of retooling % Share to Total Sales = --------------------------------------------------------------- x 100

Total Sales

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

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

Where: (1) The ROE shall be fixed for the ITH entitlement period. (2) The exchange rate shall be the existing rate at the time of actual investment or

time of availment of ITH whichever will result in lower rate of ITH. (3) The % share in Total Sales shall be based on actual sales values for the year of

availment.

D. Existing Export Projects Existing export producers must export at least 50% of their production, if Filipino-owned, or at least 70%, if foreign-owned, to qualify for registration.

IX. PIONEER STATUS AND INCENTIVES In general, pioneer status with pioneer incentives shall be governed by Article 17 of E.O. No. 226. Pioneer status with pioneer incentives may be granted to projects that meet the minimum investment requirement and other qualifications as provided in the Specific Guidelines.

X. PROJECTS WITH SOVEREIGN GUARANTEE OR GUARANTEED RATE OF RETURN In general, projects with sovereign guarantee or guaranteed rate of return are not entitled to ITH. Projects with take or pay provisions are not entitled to ITH. Projects with sovereign guarantee for risks other than commercial risk may be granted ITH subject to certification as such by the agency/institution providing the guarantee. Pioneer status with non-pioneer incentives may be granted to projects that meet the minimum investment requirement as provided in the Specific Guidelines.

XI. UNSOLICITED BOT PROJECTS In general, unsolicited BOT projects are not entitled to ITH.

XII. MULTI-PHASED PROJECTS WITH MULTIPLE LOCATIONS In general, projects of an enterprise with multiple phases/location may be registered on a per phase or revenue stream basis.

XIII. CORPORATE SOCIAL RESPONSIBILITY PURSUANT TO SOCIAL OBJECTIVES OF E.O. NO. 226 Registered enterprises with non-pioneer incentives are encouraged to undertake Corporate Social Responsibility (CSR) activities, to the extent possible, in accordance with the development plans of the community where the registered project is located. Enterprises engaged in housing projects, when undertaking CSR activities, must establish facilities (e.g., community centers, child care centers, etc.) for the benefit of the homeowners within the housing project.

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Registered enterprises with pioneer incentives must undertake CSR activities, to the extent possible, in accordance with the development plans of the community where the registered project is located. The grant of the last two years of their ITH shall be subject to submission of proof thereof not later than the end of the 4th year of ITH entitlement.

XIV. GOOD CORPORATE GOVERNANCE All medium and large BOI-registered enterprises must abide by the principles of Good Corporate Governance. All registered enterprises must likewise accomplish the self-rating Governance Scorecard to be provided by BOI every year as a requirement for ITH availment.

XV. SUPPORT TO THE NATIONAL FRAMEWORK STRATEGY ON CLIMATE CHANGE In pursuit of the National Framework Strategy on Climate Change, projects seeking BOI registration are encouraged to contribute to any of the following in their respective activities: • Intensification of the development and utilization of renewable and environment-friendly

alternative energy resources/technologies. • Promotion of models to improve the transport sector’s efficiency and modal shifts. • Conversion of public utility vehicles to LPG and renewable energy sources, and the

expansion of/shift to more efficient mass transport systems. • Promotion of green infrastructure practices through climate-smart technologies, climate-

proofing processes and construction of energy-efficient buildings. • Installation of energy-efficiency and climate-proofing mechanisms for public infrastructure,

cultural facilities, and socio-economic infrastructure (including telecommunications facilities) through appropriate standards and inventory mechanisms.

• Development of energy-efficient and climate-resilient human settlements through government and private sector housing programs, and public awareness campaigns.

• Promotion of a watershed approach towards Reduction of Emissions from Deforestation and Forest Degradation (REDD+) planning, implementation and enforcement, pursuing options to improve the protection and sustainable management of forests, and the enhancement of forest carbon stocks and biodiversity.

• Rehabilitation and development of watershed resources through resource use improvement and governance improvement.

• Enhancement of ecosystem services to control droughts, floods and landslides. • Prioritization of protection/ management of mangroves, estuaries, sea grasses, coral

reefs and beaches as a management unit to derive maximum benefits from synergistic interactions of these five (5) ecosystems that result in enhanced marine productivity.

• Management and expansion of the sink potential of marine ecosystems such as coral reefs and mangroves.

• Reduction of climate change risks and vulnerability of natural ecosytems and biodiversity through ecosystem-based management approaches, conservation efforts, and sustainable environment and natural resource (ENR)-based economic endeavors such as ecotourism.

• Increase of the resilience of agriculture communities through the development of climate change-sensitive technologies, establishment of climate-proof agricultural infrastructure and climate-responsive food production systems, and provision of support services to the most vulnerable communities.

• Improvement of climate change resilience of fisheries through the restoration of fishing grounds, stocks and habitats and investment in sustainable and climate change-responsive fishing technologies and products.

• Establishment of mechanisms to identify, monitor and control diseases brought about by climate change; and improvement of surveillance and emergency response to communicable diseases, especially climate-sensitive water-borne and vector diseases.

• Enhancement of institutional and technical capacity to facilitate the paradigm shift from disaster response to disaster preparedness and mitigation.

• Enhancement of national monitoring, forecasting and hazard warning systems; and improve effectiveness of early warning systems available to communities.

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XVI. PROJECTS CRITICAL TO THE ENVIRONMENT New and expansion projects shall be required to secure an Environmental Compliance Certificate pursuant to P.D. No. 1586 (Philippine Environmental Impact Statement System) and other clearances under relevant environmental laws. A Certificate of Non-Coverage (CNC) issued by the Environmental Management Bureau (EMB) shall be submitted for projects that are not critical to the environment. Registered projects are encouraged to participate in the Philippines’ Eco-labeling Program (ELP), when applicable.

XVII. FOOD PROCESSING PROJECTS All registered food processing projects shall submit an international quality standard certification from relevant certifying institutions.

XVIII. INTERNATIONAL CERTIFICATION All enterprises that will register under this IPP are encouraged to acquire international certification such as ISO 9000 certification, Quality Standards (QS) or other similar certifications to improve efficiency and global competitiveness.

XIX. EQUIPMENT In general, registered enterprises will use brand new equipment and apply production processes that meet environmental standards.

XX. PROJECTS IN THE AUTONOMOUS REGION IN MUSLIM MINDANAO The ARMM List covers priority activities that have been identified by the Regional Board of Investments of the ARMM (RBOI-ARMM) in accordance with E.O. No. 458. Projects in the Autonomous Region in Muslim Mindanao (ARMM) should register with the BOI-ARMM.

XXI. PROJECTS WITH REVENUES DERIVED FROM CARBON CREDITS PURSUANT TO THE KYOTO PROTOCOL Revenues from the sale of carbon credits through certified emission reduction (CER) units generated from registered activity may be considered as part of the income entitled to ITH, provided that the enterprise made representation at the time of application for registration that such projects would earn CER units. Projects with foreign exchange earnings generated from CER units of at least more than 50% of their total revenues may be registered as export-oriented projects.

XXII. OUTSOURCING OF PRODUCTION PROCESS OR SERVICES Portion/s of the production process or services of the registered activity may be outsourced provided that the core activity or the integrated nature of operation is undertaken by the registered enterprise.

XXIII. PUBLIC WELFARE CONSIDERATION The BOI may deny applications for registration for reasons of public health or morals.

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Part III SPECIFIC GUIDELINES

I. PREFFERED ACTIVITIES

A. CONTINGENCY LIST

Job Saving/Creation Projects 1. This covers existing projects and/or activities affected by the global economic crisis that

will at least retain investments and either maintain current number of workers, reinstate laid-off workers to equal their pre-crisis number, or increase current number of workers. Enterprises maintaining their workers applying retention schemes such as assignment of workers to tasks other than their regular tasks, reduction of working hours, etc. may be qualified. Workers shall refer to personnel directly engaged in the registered activity excluding line supervisors, warehousemen, quality control personnel outside the production line, utility and maintenance personnel and subcontracted labor. The determination of the number of workers to be maintained is on the basis of the number of workers before the enterprise was affected by the crisis. For this purpose, the firm shall submit proof showing the number of workers before the 2008 global economic crisis and the current workers at the time of application such as certified true copies of SSS contribution payment return and BIR Form 1601 - C. For purposes of ITH under this Contingency List, start of commercial operation shall be the date when a particular enterprise actually begins generating positive Earnings Before Interest, Taxes and Depreciation Allowance (EBITDA). To qualify for registration under this list, the enterprise must prove that its operation has been affected by the global economic crisis impairing its viability as reflected in its Audited Financial Statements (AFS). The Board may, however, consider other factors that will establish the causal link between the present condition of the enterprise vis-à-vis the global economic crisis. BOI-registered enterprises shall waive their remaining incentives provided for under their existing registrations in order to qualify for the applicable incentives under this List.

2. This also covers new projects of micro and small enterprises pursuant to R.A. No. 9501. The projects enumerated in Annex “A” are not qualified under this listing. NOTE: The Contingency List is a temporary inclusion in the IPP to enable existing enterprises to recover from the effects of the global economic crisis and will be delisted upon an official pronouncement by the National Economic Development Authority (NEDA) that the crisis no longer exists.

B . REGULAR LIST

1. Agriculture/Agribusiness and Fishery

This covers production and processing of agricultural and fishery products, including their by-products and wastes, biofuels, feeds and fertilizers. This also covers biotechnological products and services.

a. Commercial production

This covers the production of agricultural, fishery and livestock products for commercial purposes.

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b. Commercial processing This covers the conversion of agricultural, fishery and livestock products, their by-products and wastes, to a form ready for further processing or final consumption. The following are the qualifications for registration: • Processing of agricultural products should involve domestically produced raw or

semi-processed agricultural products. Those involving imported agricultural products, raw or semi-processed, may qualify for registration, provided that the finished/final product is for export, or the project qualifies for pioneer status.

• The production of refined sugar, cooking oil, and rice should comply with the

applicable provisions of the Philippine Food Fortification Act of 2000 (R.A. No. 8976); production of iodized salt should comply with the applicable provision of the ASIN law (R.A. No. 8172).

Qualifications for registration of rice millers: 1. Must be a National Food Authority (NFA) licensed rice miller 2. Milling recovery must not be less than 70% and the milled rice must meet the

following specification:

a. Whole kernels must not be less than 75% b. Brokens must not be more than 5 % c. Damaged grains including yellow/discolored kernels and brewers must not be

more than 1.5 % d. Moisture content must not be more than 14%

c . Biofuels

This covers the production of biofuel crops and/or processing of biomass materials. Production of crops for use as feedstock supply and processing of biomass materials must be consistent with the Philippine Biofuels Program under R.A. No. 9367.

d. Feed Milling This covers processing of agricultural, fishery and livestock products and wastes into feeds, excluding those for game animals, fowls and other species for pet/pleasure purposes.

e. Fertilizer This covers the manufacture of inorganic fertilizer and production of organic fertilizer. Production of organic fertilizer for own use may be entitled to capital equipment incentive only.

f. Biotechnological Products and Services This covers the extraction of higher value substances from agricultural and forest- based raw materials through bioprocessing. This also covers the development of modern biotech products for commercial purposes. All applications for registration must be endorsed by the concerned Competent National Authority.

Projects that cost at least the Philippine Peso equivalent of US$20 million may be granted pioneer status but with non-pioneer incentives.

2. Infrastructure This covers transport (air, water and mass rail transport), water (water supply and/or distribution), logistics, energy (power generation projects, projects/activities under the

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PSALM privatization plan, power generation projects located in missionary areas, and rehabilitation of power plants), waste management facilities, mass housing, physical infrastructure, pipeline projects for oil and gas, and projects under the Build-Operate-Transfer (BOT) Law. a. Transport

This covers air, water and mass rail transport. (1) Air Transport

Air transport operation includes passenger and/or cargo operation for commercial purposes. Lease with option to purchase an aircraft may be allowed. Pure lease may be allowed provided that the lease contract is for a minimum of five (5) years. Acquisition of additional aircraft/s may be registered as new project. Any of the following may qualify for pioneer status: • Serving the missionary/developmental routes, as indicated in the Certificate

of Public Convenience and Necessity (CPCN) • Air transport projects involving purchase/lease-purchase of brand new

aircraft. For lease-purchase, the option to purchase should be exercised before the end of the 4th year of ITH availment

All applications for registration must be endorsed by the Civil Aeronautics Board (CAB), when applicable. Such endorsement must contain information on the routes to be served. Prior to start of commercial operation of each aircraft, the registered enterprise must submit a Certificate of Airworthiness issued by Civil Aviation Authority of the Philippines (CAAP).

(2) Water Transport This covers domestic, overseas, and Roll-On/Roll-Off (RORO) shipping. (a) Domestic/inter-island shipping

This covers pure cargo, passenger, and passenger-cargo vessel operations including RORO Terminal System operations. The following are the qualifications for registration: • Must be a Philippine shipping enterprise accredited with the Maritime

Industry Authority (MARINA) • Vessel must be registered and operated under the Philippine Flag • RORO vessels must not be more than fifteen (15) years old and must be

at least 250 gross tonnage (GT) for those serving primary routes. • Tankers must be double-hulled and not more than ten (10) years old • High speed passenger crafts must not be more than five (5) years old • Vessels other than tankers and high speed passenger crafts must be at

least 200 GT and must not be more than fifteen (15) years old Age of the vessel shall be reckoned from the date of launching as indicated in the vessel’s Class Certificate. Any of the following may qualify for pioneer status:

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• RORO operator/enterprise serving the missionary routes, as indicated in the Certificate of Public Convenience (CPC) issued by MARINA

• Acquisition of brand new vessels

(b) Overseas shipping The following are the qualifications for registration: • Must be a Philippine shipping enterprise accredited with the MARINA • Vessel must be registered and operated under the Philippine Flag • Vessels must be at least 500 GT and must not be more than fifteen (15)

years old Acquisition of brand new vessels may qualify for pioneer status.

Acquisition of additional vessel/s may be registered as new project. Lease or charter of foreign-owned vessel with option to purchase may be allowed. Pure lease or bareboat charter may be allowed provided the lease contract is for a minimum of one (1) year; Provided further, that any replacement of vessels shall be covered by the enterprise’s existing registration involving the leased vessel, which shall be valid for at least five (5) years. All applications for registration must be endorsed by the MARINA. All vessels must be seaworthy and must obtain valid Class and Statutory Certificates as required by MARINA.

(3) Mass Rail Transport This covers mass rail transport system for passengers and cargoes in line with the transport development plans and programs of the Department of Transportation and Communications (DOTC).

b. Water Supply and/or Distribution This covers the supply and/or distribution of water. Supply of water shall be limited to supply of bulk water extracted from surface water sources and treated for commercial purposes. Distribution activity must involve extraction of water from surface water sources, treatment and installation of a piping network that includes water main service pipelines and flow metering systems. Applicants must submit a copy of its Certificate of Public Convenience (CPC) or its equivalent. Projects involving any of the foregoing areas of water operations dedicated to a particular industrial estate, industrial community, or subdivision are not qualified for registration under this listing.

c. Logistics This covers ports, terminals, natural gas refueling stations, warehouses, post harvest facilities and relocation of oil terminals. (1) Ports

This covers the development and operation of airports and seaports. All applications for registration must be endorsed by the CAAP or the Philippine Ports Authority (PPA), whichever is applicable.

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(2) Terminals (a) Passenger/Intermodal terminals

The following are the qualifications for registration: • Must have new facilities with parking, comfort rooms, ticketing and

reservation office, air-conditioned waiting area and provide shuttle services; and

• Must cater to shipping lines or airlines and/or different land transportation systems (rail system, buses, taxis, etc.).

(b) Cargo terminals/Container yards

The following are the qualifications for registration: • Must have new facilities; and • Must have a system of ingress and egress to prevent traffic

buildup/obstruction of thoroughfares on a 24-hour basis as certified by DOTC, Metropolitan Manila Development Authority (MMDA) and/or other Competent National Authority.

(c) LNG/CNG storage terminals

The following are the qualifications for registration: • Must have new facilities; • Must cater to shipping vessels and land transport or a combination of

both; and • Must cater to at least one (1) clientele, other than the proponent’s own

business. Prior to start of commercial operation, the registered enterprise must submit a copy of its Permit to Operate issued by the Department of Energy (DOE).

(d) Natural gas refueling stations This covers the establishment and operation of natural gas refueling station and related infrastructures and facilities in accordance with relevant Philippine National Standard (PNS). Foreign-owned corporations must comply with the Retail Trade Law (R.A. No. 8762). Prior to start of commercial operation, the registered enterprise must submit a copy of its Permit to Operate issued by the DOE.

(3) Warehouses This covers the establishment and operation of IT-enabled and automated warehousing facilities.

(4) Post Harvest Facilities This covers the establishment and operation of cold storage, freezing, bulk handling and storage facilities. The refrigeration system should use non-ozone depleting substances.

(5) Relocation and putting up of a new oil terminal Projects that cost at least PhP1 billion may be granted pioneer status but with non-pioneer incentives. All applications for registration must be endorsed by the DOE.

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All applications for registration must show such project’s compliance with appropriate land use/zone plans including safety and security measures prescribed by the local government unit (LGU)/agency that approved the same.

d. Energy This covers any of the following: (1) Grid-connected power generation projects except oil-fired plants (2) Missionary power generation projects located in off-grid and Qualified Third Party

(QTP) areas (3) Rehabilitation of power plants (4) Projects/activities under the PSALM privatization plan All PSALM-privatized power generation projects must involve rehabilitation of plant facilities. Whenever applicable, plant efficiency should increase by 50% for hydro electric and diesel engine power generating plants and thermal efficiency should increase by 50% for coal and oil fired thermal power generating plants to qualify for ITH. Only income based on approved contracts by the Energy Regulatory Commission (ERC) may be entitled to ITH. Any of the following may qualify for pioneer status: • Power generation projects using renewable energy sources • Power generating plants located in missionary areas • Projects that cost at least the Philippine Peso equivalent of US$1 million per

megawatt but with non-pioneer incentives • Privatized power generating plants but with non-pioneer incentives • Rehabilitation of power plants but with capital equipment incentives only

e. Waste Management Facilities This covers the establishment of toxic and hazardous waste (THW) treatment facilities. The following are the qualifications for registration: • Must involve treatment, storage and disposal (TSD) • Must be capable of handling toxic and hazardous waste (THW) • Must handle only locally-generated wastes. Prior to start of commercial operation, the registered enterprise must submit a copy of its TSD Facility Permit issued by the EMB of the Department of Environment and Natural Resources (DENR). If handling radioactive wastes, the registered enterprise must submit a License to Operate a Radioactive Waste Management Facility from the Philippine Nuclear Research Institute (PNRI) of the DOST in addition to the TSD Facility Permit.

f. Low-Cost and Socialized Mass Housing Low cost housing refers to a housing program for low and middle-income groups substantially constructed by the private sector as a business venture. Socialized housing refers to a housing program or project covering houses and lots undertaken by the government or private sector for underprivileged and homeless citizens. The following are the qualifications for registration: General requirements:

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• The cost of housing units shall not exceed the amount for socialized and low cost housing as set by the Housing and Urban Development Coordinating Council (HUDCC)

• All low cost mass housing projects must comply with the socialized housing requirement by developing an area for socialized housing equivalent to at least 20% of the total subdivision area or total subdivision project cost for horizontal housing and 20% of the total cost of building construction and site preparation for vertical housing projects whether within or outside the same city or municipality. This may be done through any of the following modes:

o Development of a new settlement; o Slum upgrading or renewal of areas for priority development either

through zonal improvement programs or slum improvement and resettlement programs; and

o Joint-venture projects with either the local government units or any of the housing agencies.

• Must be new or expanding mass housing project • Minimum of twenty (20) livable dwelling units in a single site or building • Project shall conform with the design standards set forth in the Rules and

Regulations to Implement B.P. No. 220 and other related laws

(1) Requirements for horizontal housing projects: • Land development components for housing sites must contain provisions for

road system, drainage system, water supply system, power system, sewage system in conformity with the minimum design standards for B.P. No. 220 and provisions for amenities and utilities.

• Mass housing projects must be located in areas zoned and classified for

residential use/purposes in conformity with the approved Comprehensive Land Use Plan and Zoning of the concerned LGU.

A project shall be considered as an expansion if it will locate adjacent or contiguous to an existing mass housing project owned by the same entity and shall share common facilities with the existing project.

(2) Requirement for vertical housing projects:

• At least 51% of the total floor area, excluding common facilities and parking

areas, must be devoted to housing units Any of the following may be considered as an expansion project: • Unfinished projects, the construction of which had stopped for at least one (1)

year. Only the unsold units may qualify for registration • Conversion to low cost or socialized housing project of a building originally

intended for commercial, office spaces, or exclusive condominiums • Construction of additional floors or annexes intended for mass housing units

Projects that have already been completed and have incurred sales (booked sales) of housing packages shall, in general, not qualify for registration. The ITH shall be limited only to the revenue generated from the registered housing project. There shall be no double availment of similar incentives for socialized housing projects that avail of incentives under R.A. No. 7279 or the Urban Development and Housing Act (UDHA). Projects in less-served areas, as may be determined by the Board, may be entitled to four (4) years ITH otherwise, three (3) years. In general, projects in NCR may be entitled to three (3) years.

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g. Physical Infrastructure (1) This covers the development, including rehabilitation, upgrading, and/or

expansion, and/or operation of tollroads, highways, railways, roads, and bridges. (2) This also covers the establishment of telecommunication infrastructure as

endorsed by National Telecommunications Commission (NTC). Upgrading of existing physical infrastructure may be registered as a new project provided that the cost of upgrading already approximates at least 90% of the prevailing cost of constructing a new physical infrastructure, as certified by Competent National Authority. If the cost of upgrading the physical infrastructure is less than 90% of the prevailing cost of constructing a new physical infrastructure, the project may be registered as a modernization activity but not entitled to ITH. For projects that will involve the development and operation of physical infrastructure to be undertaken by separate entities, both the developer and operator may qualify for registration. However, the developer may be entitled only to incentive on capital equipment directly needed for the operation of the physical infrastructure. Projects that cost at least the Philippine Peso equivalent of US$100 million may be granted pioneer status but with non-pioneer incentives.

h. Pipeline Projects for Oil and Gas This covers the establishment of infrastructure for transport of petroleum products and natural gas, petrochemical, and similar products. All applications for registration must be endorsed by the DOE and/or other concerned Competent National Authority.

i. Projects under the BOT Law Application for registration must include an endorsement from concerned government agency or corporation or LGU, a copy of supply contract, and other relevant supporting documents. BOT projects that cost at least PhP1.0 billion may be granted pioneer status but with non-pioneer incentives.

3. Manufactured Products This covers shipbuilding and the manufacture of machinery and equipment including their parts and components, other transport equipment (air, water and land) including their parts and components, cement, modular housing components (for mass housing projects) and iron and steel products. This also covers manufacture of chemical compounds or biological substances, other than food, intended for use in the treatment, prevention or diagnosis of disease in humans or animals, including: a. articles recognized in official Pharmacopoeia or national drug formulary; b. articles intended for use as a component of the articles in one (1) above; and c. herbal and/or traditional drugs which are articles of plant or animal origin used in

alternative medicine. a. Shipbuilding

This covers shipbuilding and ship repair. Shipbuilding refers to the design, construction, outfitting, equipping and launching of any type of ship.

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Ship Repair refers to the overhaul, alteration, modification or repair of hull, machinery, equipment, outfits and components of any type of ship. Prior to start of commercial operation, the registered enterprise may be required to submit a copy of a Certificate of Registration or its equivalent from the MARINA or other Competent National Authority. Any of the following may qualify for pioneer status: • Shipbuilding or ship repair facilities with a minimum lifting capacity of 20,000

DWT • Shipbuilding or ship repair facilities with a minimum berthing capacity of 7,500

DWT Projects that cost at least the Philippine Peso equivalent of US$10 million may be granted pioneer status but with non-pioneer incentives.

b. Machinery and Equipment This covers the manufacture of machinery and equipment including its parts and components. Mere assembly (screwdriver assembly) of machinery and equipment shall not qualify for registration. Projects that cost at least the Philippine Peso equivalent of US$20 million may be granted pioneer status but with non-pioneer incentives.

c . Other Transport Equipment This covers the manufacture of other transport equipment (air, water and land) including their parts and components. (1) Aircraft and Its Parts and Components

This covers the following: (a) Manufacture or assembly of power-driven fixed-wing aircraft or power-

driven aircraft supported by one or more rotors; (b) Manufacture and/or assembly of aircraft engine, engine parts and other

aircraft parts and components such as fuselage, wing, stabilizer, rudder, landing gear; and

(c) Complete overhauling or rebuilding of aircraft to original design specifications.

(2) Other Water Transport and Its Parts and Components

This covers boatbuilding and the manufacture of parts and components. Boatbuilding refers to the design, construction, outfitting and launching of watercrafts with sizes below 24 meters in length but not less than 3 GT. Prior to start of commercial operation, the registered enterprise may be required to submit a copy of a Certificate of Registration or its equivalent from the MARINA or other Competent National Authority.

(3) Motor Vehicle and Its Parts and Components This covers the assembly or manufacture of motor vehicles under the Motor Vehicle Development Program (MVDP) provided there is investment in the production of major parts and components. This also covers the manufacture of parts and components of motor vehicles.

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The following are the qualifications for registration for the assembly or manufacture of motor vehicles: • Must be registered participants of good standing under the MVDP and must

invest in the production of major parts and components such as engine, transmission, power train, differential, body, motorcycle frame, fuel, tank, swing arm, plastic injection parts and die cast products

• Existing MVDP participants must have minimum additional investments of Philippine Peso equivalent of US$5 million for passenger cars and commercial vehicles, and US$2 million for motorcycles

• New assemblers must comply with the minimum investment requirement under E.O. No. 877 plus the additional minimum investment requirement under the preceding bullet

Investments in parts and components manufacturing as required for the assembly or manufacture of motor vehicles shall be in any of the following schemes: • Equity investment, either minor or major stockholdings in new or existing

motor vehicle parts manufacturing company • Investments in in-house motor vehicle parts manufacturing • Cost-sharing schemes with existing motor vehicle parts manufacturing

companies in terms of tooling and/ or modernization/upgrade of facilities • Participation under the DTI’s SME Assistance Program • Other investments that BOI may consider for the development of the motor

vehicle industry Projects complying with any of the following may qualify for pioneer status: • New investments of at least US$50 million for Passenger Cars and

Commercial Vehicles, and US$4 million for motorcycles, which may include acquisition of existing assets or facilities

• Exports of at least 10,000 units for Passenger Cars and Commercial Vehicles, 30,000 units for motorcycle and 500 units for buses per annum of completely-built-up (CBU) motor vehicles

• Incremental investments of at least US$20 million for Passenger Cars, Commercial Vehicles and Buses, and US$1 million for motorcycles for Modernization/Expansion projects

• Manufacture/assembly of brand new three or four-wheel Philippine utility vehicles for cargos and/or passengers

• Manufacture of alternative fuel vehicle Alternative fuel vehicle covers the manufacture of the following brand new vehicles powered by alternative sources, as classified accordingly under Section 1 of Article 1 of E.O. No. 877 (passenger cars, commercial vehicles and motorcycles): o Hybrid vehicles – vehicles that run on electric batteries and

gasoline/diesel/other fuels o Electric Vehicles – vehicles that run solely on electric power o Flexible-fuel vehicles – vehicles that run on gasoline/diesel in

combination with alternative fuel such as but not limited to:

− Bioethanol vehicles that run on gasoline and a minimum ethanol content/blend of at least 20%

− Biodiesel vehicles that run on a diesel and a minimum biodiesel blend/content of at least 10%

o Compressed Natural Gas Vehicles – vehicles that run on Compressed

Natural Gas (CNG) Projects involving the manufacture of parts and components complying with any of the following may qualify for pioneer status: • Manufacture of transmission/engines

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• Manufacture of tool & die to produce chassis and engine • Common facility for forging/metal stamping of motor vehicle parts and

components

d. Cement This covers the manufacture of cement whether or not integrated with quarrying. New finishing mills may be considered for registration. Existing cement manufacturers, which will put up new facilities or expand existing operations, must show compliance of at least 85% utilization based on clinker capacity2

e. Modular housing components

of their existing plants and no existing plant shall fall below 85% utilization based on clinker capacity2. New cement manufacturer, with Interlocking Directors, regardless of whether their interest in an existing cement manufacturing company is nominal or substantial, must show compliance of at least 85% utilization based on clinker capacities2 of said existing cement manufacturing company. The same proof of compliance shall also be required from new cement manufacturing companies consisting of stockholders of an existing cement manufacturing company. The 85% utilization based on existing clinker capacity2 imposed on cement manufacturers as referred to under paragraphs two (2) and three (3) above, is a continuing requirement for the qualified project to avail of ITH.

This covers the manufacture of modular housing components using new and environment-friendly materials or technology. These include roof/framing systems, partition systems, flooring systems, door/window systems, finishing/ceiling systems, and plumbing/sewerage systems. The firm shall sell at least 70% of total annual production to mass housing projects. Applicants must submit proof/certification from the Competent National Authority that its products/systems are modular.

f. Iron and Steel Products This covers the manufacture of refined iron ore, e.g., pig iron, hot briquetted iron (HBI), direct reduction iron (DRI) and primary steel products. This also covers the manufacture of flat products (hot-/cold-rolled coils, plates and sheets; tin plates; galvanized and pre-painted sheets in coils; roll-formed steel sheets provided integrated with galvanizing and pre-painting facilities) and long products (bars, wire rods and seamless pipes and tubes). All iron and steel products must be compliant with the PNS, if applicable. Production of steel products involving simple processes such as cutting, grooving, ribbing or a combination thereof is not qualified for registration.

g. Drugs and Medicines This also covers manufacture of chemical compounds or biological substances, other than food, intended for use in the treatment, prevention or diagnosis of disease in humans or animals, including: (1) articles recognized in official Pharmacopoeia or national drug formulary; (2) articles intended for use as a component of the articles in one (1) above; and (3) herbal and/or traditional drugs which are articles of plant or animal origin used in

alternative medicine. 2 Clinker capacity is based on the industry association’s submitted data as of January 2010.

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4. Business Process Outsourcing (BPO)

This covers voice and non-voice IT-enabled services including procurement and sourcing services, contact center, business/knowledge processing, software development, animation, data transcription, engineering design, and ICT support services. A contact center project must have a minimum investment cost of Philippine Peso equivalent of US$2,500 per seat to qualify for registration. This amount covers the cost of equipment (hardware and software), office furniture and fixture, building improvements and renovation, and other fixed assets except land, building and working capital. • If equipment used were leased, the same should be converted to assets in terms of

commercial interest rates and amortized over a five-year period • If equipment were consigned, the same should have an assigned value to be

considered part of project cost Any of the following may qualify for pioneer status: • Introduces a major innovation in technology • With project cost of at least the Philippine Peso equivalent of US$5 million (excluding

cost of land and building) to be put up during the first year of operations All ICT projects shall install internal security system compliant with BS 7799 or its equivalent.

5. Creative Industries This covers non-BPO IT-enabled services and film, TV and theater arts production. Non-BPO IT-enabled services include development of original digital content for video games or game development. For film, TV and theater arts production, the BOI may consult and/or require an endorsement from concerned Competent National Authority such as Film Development Council of the Philippines (FDCP), National Historical Institute (NHI) and the National Commission for Culture and Arts (NCCA). Registration of film, theater and TV productions is on a per project basis. All films, TV and theater productions with at least 50% of revenues derived from export may qualify for pioneer status. Only income derived from sales, advertisements, tickets/box office returns, royalties including publication rights, and rentals for special showing earned by the producer within the incentive period may be entitled to ITH.

6. Strategic Activities 1. This covers projects that exhibit high social economic returns and require large

investments that will significantly contribute to the country’s economic development taking into consideration any two (2) of the following:

a. Minimum project investment cost of the peso equivalent of US$ 300 Million b. Employment generation of at least 1,000 c. Use of new, emerging and technologically advanced products/services involving

breakthrough processes and innovation 2. This also covers major projects of global companies intended to be located only in

one country as a regional hub where the Philippines is one of the short-listed countries for investment location. A global company is one that has manufacturing and/or services operations in at least two (2) countries.

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Projects under Strategic Activities will be approved upon determination by the Board in consultation with the DOF, NEDA and other concerned Competent National Authority.

7. Green Projects 1. This covers the production of goods (such as but not limited to capital equipment,

lighting, and construction materials), the utilization of which would lead to either the efficient use of energy, natural resources, raw materials, or minimize/prevent pollution.

2. This also covers systems/processes that would involve the application of cleaner and

more efficient technologies on carbon and/or other greenhouse gases emission reduction.

The following are the qualifications for registration: a. reduce greenhouse gas emissions b. use less natural resources c. create less waste d. affordable products/goods Green Projects covers only projects other than those already listed in this IPP.

8. Disaster Prevention, Mitigation and Recovery Projects 1. This covers projects that will prevent or mitigate adverse impacts of calamities and

disasters, which may include installation of flood control systems; installation of early warning systems for typhoons, earthquake occurrences, tsunami and volcanic eruptions; manufacture of goods critical to disaster management; construction of dikes; salvaging operations; and installation of power generating and auxiliary equipment. For projects involving installation of power generating and auxiliary equipment, this shall be limited to those that are in areas declared by the President under State of Calamity in view of the extensive effects of power crisis. Salvaging pertains to the rescue of a seriously damaged/incapacitated ship that may include refloating and towing of the ship to a safe place. It also pertains to the removal of a sunken or wrecked ship, derelict or hazards including cargoes thereof. Only income from salvaging operations may be entitled to ITH.

2. This also covers projects to rehabilitate areas affected by calamities and disasters, which may include rebuilding of roads and bridges after earthquakes/flooding, volcanic eruptions, and oil spill clean-up. For projects that will involve the development and operation of physical infrastructure to be undertaken by separate entities, both the developer and operator may qualify for registration. However, the developer may be entitled only to incentive on capital equipment directly needed for the operation of the physical infrastructure.

3. This further covers training for disaster preparedness, mitigation or recovery/rehabilitation/reconstruction.

All applications for registration must be endorsed by concerned Competent National Authority. Disaster Prevention, Mitigation and Recovery Projects covers only projects other than those already listed in this IPP.

9. Research and Development and Innovation This covers commercial and in-house R & D activities, establishment of Centers of Excellence (COE), innovation, and skills development training institutions.

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a. Research & Development This covers all R & D activities including the establishment of testing laboratories, and Clinical Research Organization (CRO) that will conduct clinical trials. Applications for registration must be endorsed by the DOST, or other concerned Competent National Authority. The registered CRO must submit a copy of Permit for Clinical Investigational Use (PCIU) issued by Food and Drugs Administration (FDA) before the conduct of each clinical trial.

b. Center of Excellence (COE) This covers the establishment of incubation centers and common service facilities. Projects that cost at least the Philippine Peso equivalent of US$ 2 million may be granted pioneer status but with non-pioneer incentives.

c. Training/Learning Institutions This covers institutions specializing in the development of skills for the activities listed in this IPP. The following are the requirements for registration: • The curriculum must be approved by either the Technical Education and Skills

Development Authority (TESDA) for training courses or Commission on Higher Education (CHED) for degree courses or other concerned government agencies/authority and endorsed by the appropriate industry association.

• The registered education/training/ learning institutions must provide training laboratories and equipment, if applicable.

d. Innovation

Innovation refers to the development of a new or improved product, processes and technology, which may be patentable, in support of the activities listed in the IPP.

II. Mandatory List

A. Revised Forestry Code of the Philippines (P.D. No. 705) This covers extensive plantation of forest land of tree crops, except fruit trees, for commercial and industrial purposes. Tree crops include timber and non-timber species such as rubber, bamboo, rattan, etc. (excluding fruit trees) for commercial and industrial purposes. New project refers to the development of any public or private land to plantation of timber and non-timber producing species to supply the raw material requirements of forest-based industries. It also includes plantation with existing tree crops, which have not yet reached commercial harvest. Each Industrial Tree Plantation (ITP) project must have an approved and issued forest management/development agreement such as: • Socialized Industrial Forest Management Agreement (SIFMA) • Integrated Forest Management Agreement (IFMA) • Private Forest Development Agreement (PFDA) • Community-based Forest Management Agreement (CBFMA) In general, ITP projects are not entitled to ITH.

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B . Philippine Mining Act of 1995 (R.A. No. 7942) This covers the exploration, development and utilization of mineral resources. 1. Exploration of mineral resources including those covered by exploration permits or

mineral agreements may qualify for pioneer status. 2. Mining, quarrying and/or processing of metallic and non-metallic minerals (except those

involving riverbed operations, cave mining and beach mining)

ITH may be granted to domestic or export-oriented mining projects engaged in any of the following (a.1 to b.2): a. Mining and/or processing of metallic minerals

a.1. The mining and/or mineral processing projects require a process or technology

other than the normal or usual processes or technology to mine and/or process the minerals.

a.2. For copper and gold project, a hurdle on the magnitude of investments equivalent to US$50 million for gold and US$300 million for copper

a.3. For nickel, chromite and iron projects, an additional processing step that will add further value to the mineral end product is required (e.g., ferronickel, mixed sulfides, pig iron, ferrochrome, refractory bricks)

b. Quarrying and/or processing of non-metallic minerals

b.1. Must support a domestic downstream industry, e.g., clay for ceramic manufacturing, silica for glass manufacturing

b.2. For processing of marble and/or other dimension stones, must export at least fifty percent (50%) of production, if Filipino-owned or at least seventy percent (70%), if foreign-owned

Mere quarrying of non-metallic minerals and processing of aggregates are not entitled to ITH.

All projects must have a mine life of at least ten (10) years. All projects must locate outside the National Capital Region and must have the necessary permits/licenses from concerned Competent National Authority.

C . Printing, Publication and Content Development of Books or Textbooks (R.A. No. 8047)

This covers printing, re-printing, publication and content development of books or textbooks. Book is defined as a printed non-periodical publication of at least forty-eight (48) pages, exclusive of cover pages, published in the country and made available to the public. Textbook is an exposition of generally accepted principles in one subject, intended primarily as a basis of instruction in a classroom or pupil-book-teacher situation. Content development of books consists of the following: a. Development of new technologies directly related to book printing or publishing, such as

but not limited to digitization, electronic books (E-books), internet-based archiving and retrieval systems, electronic content creation and development systems, educational and/or “how-to” audio-visual presentations with or without interactive segments, and the like

b. Research and development activities directly related to book printing or publishing, such as but not limited to translation, editing, analysis and/or interpretation of text and materials into local dialects or adaptation/application to the domestic setting

Application for registration shall be on a per book or title basis and must be endorsed by the National Book Development Board (NBDB).

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D. Downstream Oil Industry Deregulation Act of 1998 (R.A. No. 8479)3, 4

This covers refining, storage, distribution, and marketing of petroleum products.

1. Oil refining refers to the manufacture of all petroleum products as defined under R.A. No. 8479 through distillation, conversion and treatment of crude oil and other naturally occurring petroleum hydrocarbons. This may include expansion, modification and modernization of a refinery, resulting in an increase in existing volume of production, and/or improvement in the quality of petroleum products in conformance with the PNS, the Clean Air Act, and other applicable laws and regulations.

2. Storage refers to the business of receiving/discharging and storing petroleum crudes

and/or products of others for compensation or profit. 3. Distribution refers to bunkering and fuels shipping and transport. Fuels shipping and

transport cover shipping and transport through land such as tank trucks, lorries and pipeline and tankers, and barges for the fuels to get to the points or areas where they are needed. Bunkering covers the activity of selling fuel for direct use by a vessel, usually for water and air transport, through a smaller transport vessel. Distribution projects are limited to those utilizing brand new equipment and double-hulled vessels.

4. Marketing covers the following: a. Retailing of petroleum products refers to selling of petroleum products or fuels in retail

generally directed to the end users, through dispensing pumps in gasoline stations or in packaged containers such as drums for the liquid fuels or metal cylinders for LPG that are compliant with PNS. This includes the establishment and operation of gasoline stations and LPG retailing. For gasoline retailing stations, except those locating in LDAs listed in this IPP, the applicant shall be required to invest a minimum capital of PhP10 million per station, excluding land, or such amount as may be determined jointly by BOI and DOE for augmentation purposes, as the need arises; Provided, that foreign retailers shall comply with the requirements provided under R.A. No. 8762, otherwise known as the Retail Trade Liberalization Law, and its implementing rules and regulations.

b. Fuels bulk marketing refers to the selling of petroleum products or fuels in wholesale through tank trucks, lorries, double-hulled vessels/tankers, barges or pipelines, which may be sourced from one’s own storage facilities. Investment shall include underground tanks and other equipment intended for fuels retailing through outlets such as gasoline stations and LPG outlets.

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

For storage, marketing and distribution, only investments of new industry participants may be entitled to incentives. The applicant shall submit an endorsement from the DOE certifying that the applicant is a new industry participant with new investments. Projects involving storage, marketing and distribution of petroleum products may be entitled to ITH when located in government identified logistics hubs, LDAs or 30 poorest provinces; otherwise, projects will only be entitled to capital equipment and other non-fiscal incentives under E.O. No. 226. Refinery projects, in general, may be entitled to ITH under E.O. No. 226. Blending alone, within or outside the refinery, may only be entitled to capital equipment and other non-fiscal incentives. Projects registered under R.A. No. 8479 are entitled to the incentives provided therein.

3 In general, not entitled to Income Tax Holiday. 4 Entitled to Income Tax Holiday if registered under R.A. No. 8479 (Downstream Oil Deregulation Act).

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E . Ecological Solid Waste Management Act of 2000 (R.A. No. 9003) This covers the establishment of waste recycling facilities5

F . Philippine Clean Water Act of 2004 (R.A. No. 9275)5

integrated with manufacturing facility using as inputs 100% locally generated solid waste materials or scraps from the recycling facility to produce semi-finished or finished product. Recycling integrated with manufacturing facility refers to the treating of waste or used materials (i.e., biodegradable, non-biodegradable, recyclable, special and residual) through a process of making them suitable for beneficial use and for other purposes, which includes any process wherein solid waste materials are transformed into new products in such a manner that the original products may lose their identity, and which may be used as raw materials for the production of other goods or services.

This covers the establishment of industrial wastewater treatment facilities, and sewage collection integrated with treatment facilities and the adoption of water pollution control technology, cleaner production and waste minimization undertaken through BOT or non-BOT schemes. Activities such as 5S and Good Housekeeping are not qualified for registration. Industrial wastewater treatment facilities and sewage collection integrated with treatment facilities may be entitled to ITH. Projects adopting water pollution control technology, cleaner production and waste minimization are only entitled to capital equipment incentive. All applications for registration must be endorsed by the DENR, the Laguna Lake Development Authority (LLDA) or other concerned Competent National Authority. Projects that will employ new or proprietary technologies shall submit an Environmental Technology Verification (ETV) issued by the DOST.

G . Magna Carta for Disabled Persons (R.A. No. 7277) This covers the manufacture of technical aids and appliances for the use and/or rehabilitation of disabled persons, and the establishment of special schools, homes, residential communities or retirement villages solely to suit the needs and requirements of persons with disability. Disabled Persons are those suffering from restriction or different abilities, as result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being. Manufacturing of technical aids and appliances used by disabled persons includes but not limited to the following: • Walk-in baths designed for people with disabilities • Commode chairs • Braille books • Hoists and lifting chairs designed for incapacitated people, including stair lifts • Wheelchairs, scooters and automobiles using special controls or assistive technology

designed for people with disabilities • Hearing-aids • Artificial limbs, orthotics, prosthetics and orthopedic braces • Automatic/mechanical lifts to be attached to motor vehicle All applications for registration must be endorsed by the Department of Social Welfare and Development (DSWD).

5 In general, not entitled to Income Tax Holiday.

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H. Renewable Energy (RE) Act of 2008 (R.A. No. 9513) This covers RE developers of renewable energy facilities, including hybrid systems, and manufacturers, fabricators and suppliers of locally produced RE equipment and components. All applications for registration must submit DOE Certificate of Registration or Certificate of Accreditation. RE developers of renewable energy facilities, including hybrid systems, and manufacturers, fabricators and suppliers of locally-produced RE equipment and components shall, at the time of their application for registration, elect to be governed by the provisions of E.O. No. 226 or R.A. No. 9513, provided that such election once made shall be final; Provided, That those who elect to be governed by E.O. No. 226 shall be covered by its laws, rules, regulations, policies and guidelines, including incentives and incentives administration.

I. The Tourism Act of 2009 (R.A. No. 9593) This covers tourism enterprises that are outside the tourism enterprise zones (TEZs) and are engaged in the following: 1. Tour operations; 2. Tourist transport services whether for land, sea and air transport for tourist use; and 3. Establishment and operation of:

− Accommodation establishments such as but not limited to hotels, resorts, apartment hotels, tourist inns, motels, pension houses, private homes for homestay, ecolodges, condotels, serviced apartments, and bed and breakfast facilities;

− Convention and exhibition facilities or “meetings, incentives, conventions and exhibition” (MICE) facilities;

− Amusement parks; − Adventure and ecotourism facilities; − Sports facilities and recreational centers; − Theme parks; − Health and wellness facilities such as but not limited to spas, tertiary hospitals, and

ambulatory clinics; − Agri-tourism farms and facilities; and − Tourism training centers and institutes.

1. Tour operations cover packaged inbound tour services rendered to tourists from

transport, accommodation, recreation to guided tours and other related services. The following are the qualifications for registration: • Must own at least two (2) service vehicles • Must be equipped with IT-enabled reservation system • Must employ Department of Tourism (DOT)-accredited tour guides

2. Tourist transport services whether for land, water and air transport for tourist use All tourist transport operators must have terminal, hangar, berthing/docking facilities. Applications for registration of water and air transport operators must be endorsed by MARINA or CAAP, respectively.

3. Tourism-related facilities: − Accommodation establishments such as but not limited to hotels, resorts, apartment

hotels, tourist inns, motels, pension houses, private homes for homestay, ecolodges, condotels, serviced apartments, and bed and breakfast facilities;

− Convention and exhibition facilities or “meetings, incentives, conventions and exhibition” (MICE) facilities;

− Amusement parks; − Adventure and ecotourism facilities; − Sports facilities and recreational centers; − Theme parks;

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− Health and wellness facilities such as but not limited to spas, tertiary hospitals, and ambulatory clinics;

− Agri-tourism farms and facilities; and − Tourism training centers and institutes. For condotel/apartment hotel/serviced apartment, 100% of the total number of units/rooms per building must cater to tourists/guests to qualify for registration. Each unit must have fully equipped kitchen and laundry facilities. Any of the following may qualify for pioneer status: • Hotel projects/ Apartment Hotels / Serviced Apartments / Condotels classified as first

class or deluxe by the DOT and costing at least the Philippine equivalent of US$100,000/room

• Resort projects classified as “AAA” by the DOT and with project cost of at least the Philippine Peso equivalent of US$10 million

• Projects located in LDAs • Modernization of hotels classified as first class or deluxe by the DOT with a project

cost of at least the Philippine Peso equivalent of US$ 10,000/ room • Amusement parks/ theme parks with minimum project cost of the Philippine Peso

equivalent of US$10 million involving the development of sites or attractions considered as novel in the Philippines

• Adventure and ecotourism facilities/ Agri-tourism farms and facilities with a minimum lot area of fifty (50) hectares

Health and Wellness a. Health Spa

This covers the establishment and operation of destination spa, resort/hotel spa, and traditional healing and therapeutic centers, e.g., Philippine “hilot”, “dagdagay”, “ventossa”, etc. Projects that cost at least Philippine Peso equivalent of US$ 20 million may be granted pioneer status but with non-pioneer incentives.

b. Tertiary Hospital Tertiary hospitals with a minimum capacity of 100 beds and with investment cost of at least the Philippine Peso equivalent of US$10 million may qualify for pioneer status.

c. Ambulatory Clinics

This covers services such as elective (non-emergency) surgical procedures ranging from minor to major operations, where patients are discharged within the day for continuing post-operative care. This includes comprehensive ophthalmologic, dermatologic, cosmetic, and reconstructive surgeries, etc. Prior to start of commercial operation, the registered enterprise must submit a copy of its License to Operate from the Department of Health (DOH).

Tourism Training Centers and Institutes The following are the requirements for registration: • The curriculum must be endorsed by the appropriate industry association and

approved by either the TESDA for training courses or CHED for degree courses or other concerned government agencies/authority.

• The registered education/training/learning institutions must provide training

laboratories/On-the-Job facilities and equipment.

Projects under this listing are subject to standards to be adopted by the BOI in consultation with the DOT.

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Applications must be endorsed by DOT. DOT accreditation must be submitted prior to ITH availment. Only income derived from tourism- related activities shall be entitled to ITH.

III. EXPORT ACTIVITIES

This covers the production/manufacture of non-traditional export products, export services and activities in support of exporters. A. Production and Manufacture of Export Products

This covers the production/manufacture of non-traditional export products and with export requirement of at least 50% of its output, if Filipino-owned or at least 70%, if foreign-owned. Export products include electronics, garments and textiles (including brassieres, gloves and mittens, and infant’s wear), footwear and leather goods, furniture, jewelry, marine and aquaculture, mineral products and others.

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ANNEX “A”

Projects Not Qualified Under the Contingency List and MSE Projects

• Banks and financial institutions (as provided under Article 11 of E.O. No. 226) • Retailing business as defined under R.A. No. 8762 • All services except those qualified under the Regular List • Small-scale mining as defined under P.D. No. 1899 and R.A. No. 7076 • Activities that are restricted/regulated by law or ordinances for reasons of security,

defense and risk to health and morals (e.g., beerhouse; “health clubs”; manufacture/distribution of dangerous drugs; race track operations and forms of gambling, among others)

• Activities of non-Philippine nationals engaged in small and medium-sized domestic market enterprises that are not qualified under the Foreign Investment Act (R.A. No. 7042) as amended by R.A. No. 8170

• Non-agricultural basic consumer goods • Personal care products • All existing power and infrastructure projects with sovereign guarantee or granted ITH • Other activities as may be determined by the Board ***********************************NOTHING ELSE FOLLOWS**************************************