Approval of 1997 Investment Priorities Plan ( Memorandum Order No. 424 )

April 1, 1997

MEMORANDUM ORDER NO. 424

APPROVING THE 1997 INVESTMENT PRIORITIES PLAN

Pursuant to Article 29 of the Omnibus Investments Code of 1987 (EO 226), the attached 1997 Investment Priorities Plan (IPP) is hereby approved.

This Memorandum Order shall take effect fifteen (15) days after its publication as required under Article 31 of the Omnibus Investments Code of 1987.

DONE in the City of Manila, this 1st day of April, in the year of Our Lord, Nineteen Hundred and Ninety-Seven.

1997 INVESTMENT PRIORITIES PLAN

FOREWORD

"Pole-vaulting to Global Competitiveness" is the theme of this year's Investment Priorities Plan (IPP). Philippine economy is at a stage where initial economic reforms have begun to make its impact positively felt through the country's main economic indicators. Although reforms are still continuing and more investment enhancing measures are still being pursued, there are indications that the country can fastrack priority economic activities to pole-vault the economy's development. The 1997 IPP is crafted in such a way that it seeks to reinforce past and current measures that are aimed at expanding productivities and improving on capabilities for Philippine global competition.

The 1997 IPP, in this regard, reflects the current year's overall plan for investments eligible for investment incentives that are provided under the Omnibus Investments Code of 1987, as amended.

The 1997 IPP continually supports the objectives of the Medium-Term Philippine Development Plan (MTPDP) (1993-1998) of the government. The MTPDP has set three objectives in attaining a sustainable agri-industrial development.

1. Industrial restructuring for worldwide competitiveness and expansion of capacities for the production of goods and services for the domestic and export markets, including tourism;

2. Strong productive and ecological-sound links between agriculture and industry; and,

3. Higher income and productivity, and better access to resources among small entrepreneurs, farmers and fishermen.

Together with support to the MTPDP is support to the social programs of Government by the 1997 IPP. Firstly, there is the Special Zone of Peace and Development (SZOPAD) primarily for the Filipinos in the south which seeks to ensure the newfound peace, cooperation and development in that part of the country. Then, there is the continuing Social Reform Agenda of the Government to which the 1997 IPP addresses in its goals and in the less developed areas it is presently covering. Finally, the 1997 IPP seeks to push for economic activities it deems shall deliver the Philippine economy to a higher plane of economic state as the country prepares to celebrate the Philippine Centennial or the 100th year of Philippine political independence. These social programs substantially impact on the economy and ultimately the Filipino.

The goals for the 1997 IPP are the same as those laid down in earlier IPPs, to wit:

1. To further enhance global competitiveness of Philippine industrial products;

2. To increase exports;

3. To support small and medium enterprises (SMEs);

4. To increase agricultural productivity;

5. To set-up and upgrade infrastructure and support facilities;

6. To ensure efficient environmental management;

7. To disperse industry in the countryside; and

8. To alleviate poverty.

As these goals are of the medium-term basis, the major categories under the 1997 IPP are carried from the 1996 IPP as follows:

1. Export-oriented Industries

2. Catalytic Industries

3. Industries Undergoing Adjustment

4. Support Activities

5. Mandatory Inclusions

The major difference though is that the 1997 IPP focuses and qualifies further the following activities: a) Reinforced support to the agricultural sector as its activities link up with the manufacturing sector; b) Modernization programs — 19 critical economic activities in the current IPP are identified to warrant a modernization program for these industries to compete globally through technology upgrade of existing capacities or via complete adoption of state-of-the-art technology. As modernization of industries is not an overnight activity, but a continuing one until certain breakthroughs are attained, the program is envisioned to run until the year 2000. Industries availing of the program shall, however, complete the modernization in either 2 or 3 years from date of registration of the individual project, depending on the average operation period of a project and c) Environmental activities are made more focused by more specific listings of environmental projects.

Thirty-two (32) economic activities are listed in this year's plan as compared to the 35 areas listed in 1996.

In addition to the national listing of the 1997 IPP is a special listing of economic activities determined for promotion and eligible for investment incentives by the Autonomous Region for Muslim Mindanao (ARMM). The ARMM IPP is the list of priority areas which have been independently determined by the Regional Board of Investments (RBOI) of the ARMM in accordance with E.O. 458. Economic activities in this special listing shall be pursued in the ARMM only. However, economic activities listed in the national IPP may have its location also inside the ARMM.

The 1997 IPP was completed in consultation with the Inter-agency Working Group on the IPP [members of which are: Presidential Management Staff (PMS), the National Economic and Development Authority (NEDA), the Departments of Agricultural (DA), Environment and Natural Resources (DENR), Labor and Employment (DOLE), Finance (DOF), Science and Technology (DOST), Tourism (DOT), Trade and Industry (DTI) and Board of Investments (BOI)] in December 1996. Public hearings in consultation with multisectoral groups in Manila and the provinces of Cebu, North Cotabato, Albay, Leyte and Zamboanga were also held in February 1997. Consultation with the Special Joint Cabinet Clusters A and B was held in March 1997.

C. B. Bautista

Chairman, Board of Investments and

Secretary, Dept. of Trade and Industry

1997 INVESTMENT PRIORITIES PLAN

Part I: Priority Investment Areas (Countrywide)

 

	LIST OF PRIORITY
	AREAS/ACTIVITIES		COVERAGE/DEFINITION
I.	EXPORT-ORIENTED		1.	Export producer
	INDUSTRIES (P/NP) *			—	Manufacturers of non-traditional export
							products/services with capability to
							export at least 50% of its output, if
							Filipino-owned and at least 70%,
							if foreign-owned.
					2.	Export trader
					3.	Service exporter
					4.	Agri-export processing estates
					5.	Activities in support of exporters
II.	CATALYTIC INDUSTRIES
	A.	Manufacturing
		1.	Composite Board (P/NP)	Manufacture of composite boards using as raw
					materials the following:
					—	natural resource-based materials
					—	industrial wastes
		2.	Drugs and Medicines (P/NP)	1.	Manufacture of bulk chemicals, including
						those derived from indigenous plants
					2.	Formulation or preparation of bulk
						chemicals into dosage form
					—	for catastrophic diseases;
					—	for animal vaccines; and,
					—	biologics for animal diseases
		3.	Shipbuilding/Shiprepair/	1.	Construction of cargo/passenger vessels
			Shipbreaking (P/NP)	2.	Repair of cargo/passenger vessels
					3.	Breaking of cargo/passenger vessels
					Steel re-rolling and/or steel scrap supply
					agreement with local millers must be submitted
					to support the application for shipbreaking.
		4.	Processed Foods (P/NP) *	1.	Processed fruits and vegetables (except
						those that are identified as export winners)
					2.	Seafoods (except shrimps and tuna)
					3.	Meat (Western style such as ham, salami,
						bacon, bologna, etc.)
					4.	Cocoa products
					5.	Confectionery
					6.	Cereal and cereal preparations
					Cocoa and cocoa preparations, confectionery,
					cereal and cereal preparations may only be
					registered if they will adopt "state-of-the-art"
					and/or cost-effective technology.
		5.	Cement (P)	Limited to NEW projects only.
					Cement projects with at least 1.0 million
					MTPY capacity (clinker base) may qualify for
					registration but, ITH is limited to four (4) years
					and not entitled to bonus years.
	B.	Agriculture, Food and Forestry
		1.	Production of Planting	1.	Commercial production of quality/
			Materials, Breeders, Genetic		certified seeds and/or seedlings;
			Materials & Fingerlings (P/NP)	2.	Breeder stocks of livestock and poultry
						or its genetic materials; and,
					3.	Fingerlings of fish and crustaceans.
					New and expansion projects may qualify for
					pioneer status if they are endorsed by the
					Dept. of Agriculture (DA) as highly essential
					to the attainment of the national goals of food
					security and global competitiveness.
		2.	Pulp and Paper (P/NP) *	Modernization activity for the manufacture of
					products such as:
					—	newsprint;
					—	printing and writing;
					—	packaging; and
					—	specialty paper.
					New and expansion projects using pulp-based
					materials other than waste paper, may be
					registered on pioneer status.
III.	INDUSTRIES UNDERGOING
	INDUSTRIAL ADJUSTMENT
	A.	Textiles (P/NP) *	1.	Spinning;
					2.	Weaving;
					3.	Knitting; and,
					4.	Dyeing & finishing.
					Only pioneer new and expansion projects may
					be registered. Specialized mills with project
					cost of at least P1.0B may qualify for pioneer
					status.
	B.	Chemical Products (P/NP) *	1.	Manufacture of both organic and inorganic
						chemicals.
					2.	Manufacture of petroleum products from
						refining of crude oil with a minimum
						annual processing capacity of 36 million
						barrels, even without the introduction of
						new process/technology, may qualify for
						pioneer status.
					Similar projects regardless of capacity but
					locating in Visayas or Mindanao may
					qualify for pioneer status.
					Further processing of refinery petroleum
					products leading to another product may
					also qualify for registration.
					3.	Production of organic fertilizers of plant
						and animal origin may be registered,
						including:
						a)	production of microbial fertilizer with
							nitrogen-fixing organism and,
						b)	mycorrhiza.
					Mere mixing and compounding of organic
					fertilizers are not covered.
					Only pioneer new and expansion projects may
					be registered.
	C.	Sugarcane Plantation/Sugar	1.	Sugarcane plantation;
		Mills/Sugar Refineries (P/NP) *	2.	Sugar mills; and,
					3.	Refineries.
					New and expansion projects must be endorsed
					by the Sugar Regulatory Administration (SRA)
					and the Department of Agriculture (DA).
	D.	Packaging Products (P)
	E.	Machinery and Equipment	1.	Manufacture of engines or motors;
		and/or their Parts and	2.	Metalworking and woodworking
		Components (P/NP) *		machinery;
					3.	Special purpose industrial machinery;
					4.	Agricultural machinery;
					5.	Equipment for power generation;
					6.	Communication equipment and apparatus;
					7.	Office computing and accounting
						machinery; and,
					8.	Medical equipment/devices.
					Radio and television are limited to modernization
					only.
	F.	Coconut Plantation and Coco Oil	1.	Coconut plantation; and,
		Mills/Refineries (P/NP) *	2.	Coconut oil mills and refineries
					New coconut oil mills (crude) may be allowed
					provided these are integrated with plantation.
					(Plantation refers to planted areas with coconut
					trees still in their pre-production stage.)
	G.	Fishery Production (P/NP) *	1.	Fish
					2.	Crustaceans
					3.	Mollusks
	H.	Feeds Production (P/NP)	1.	Feeds for:
						a)	aquaculture
						b)	livestock
					2.	Feeds production, integrated with corn
						production and/or other feed ingredient
						production, may qualify for pioneer status.
IV.	SUPPORT ACTIVITIES
	A.	Infrastructure (P/NP) *	1.	Development of industrial estates;
					2.	Industrial communities;
					3.	Service cities;
					4.	Telecommunications;
					5.	Ports;
					6.	Water supply;
					7.	Waterway and sewerage systems;
					8.	Tollroads/highways;
					9.	Power generation and transmission; and
					10.	Distribution facilities for refined petroleum
						products/liquified petroleum gas (LPG),
						including depot/bulk handling.
					Infrastructure projects may be undertaken under
					any of the following schemes:
					a)	Joint venture agreement between the
						private sector and government entity
						concerned; or,
					b)	Other schemes feasible for
						infrastructure development.
					For ports and airports, the project must be
					endorsed by the Philippine Ports Authority
					(PPA) and Air Transportation Office (ATO),
					respectively.
					Industrial Estates refer to:
						1.	Large tracts of land for the use of a
							community or manufacturing industries
							and services which include science and
							technology parks and,
						2.	Technology incubation centers or science
							and technology centers under a unified and
							continuous management.
							Development of industrial estates must be
							outside Metro Manila, Laguna and Cavite.
							Industrial estates in Laguna and Cavite may
							apply for registration under the Philippine
							Economic Zone Authority (PEZA).
							Registrations for the development of industrial
							estates in underdeveloped areas of Laguna and
							Cavite shall be determined by the Board.
							Applications for registration shall include
							approvals from the local government unit
							(LGU) concerned, Dept. of Agrarian Reform
							(DAR) for land conversion, and other relevant
							government agencies.
					Industrial Communities refer to:
						1.	Large tracts of land for development with
							carrying capacity for town facilities, such
							as:
							a)	accommodation facilities;
							b)	multi-purpose centers;
							c)	health centers;
							d)	drugstores;
							e)	schools; and,
							f)	other livelihood centers
						2.	Located within a 5-kilometer radius from
							an industrial estate and must be located
							outside Metro Manila.
					Service Cities refer to:
						1.	A well-planned, well-managed, well-
							developed, environmentally sustainable and
							globally competitive metropolis, provided
							with a full range of products, services and
							amenities, such as:
							a)	educational institutions
							b)	medical facilities
							c)	a grand central station to serve as
								transportation hub
							d)	a well-lighted parking system and
								structure
							e)	integrated design and adaptable utility
								system
							f)	latest telecommunication system
							g)	theaters, concert halls and galleries and,
							h)	multi-modal stations and convention
								centers.
						2.	Service cities must have an area of not less
							than 500 hectares and be located outside
							Metro Manila.
					Telecommunication includes:
						1.	The establishment and operation of local
							exchanges;
						2.	Public calling offices;
						3.	International gateway facilities;
						4.	Multi-media training systems; and,
						5.	Inter-exchange carrier network operations
							(satellite or terrestrial-based).
						The use of digital systems are encouraged.
						A National Telecommunications Commission
						(NTC) endorsement should be submitted with
						the application.
					Tollroads/Highways
						1.	May be registered as NEW provided that
							the cost of upgrading already approximates
							the cost of constructing a new road (i.e.,
							90% and above).
						2.	Cost of upgrading shall be certified by the
							Toll Regulatory Board (TRB), including a
							further TRB certification that the upgrading
							activity will result in low toll charges.
					Power Projects *
						1.	Power generation; and
						2.	Power transmission.
						All power projects, except power generation
						derived from waste treatment and indigenous
						sources of energy making use of environment-
						friendly processes (e.g., geothermal, liquified
						natural gas (LNG), coal, solar energy, wind),
						are not entitled to ITH.
						All applications for registration must be
						endorsed by the Department of Energy (DOE).
					Distribution Facilities
						1.	Oil depot/bulk handling for refined
							petroleum products/liquified petroleum gas
							(LPG).
	B.	Common Carriers (P/NP) *	1.	Land transport *
						a)	public utility buses (PUBs)
							—	Only buses for provincial
								operations may be registered
								provided franchises are available
								for particular routes.
						b)	cargo truck operations
							—	integrated cargo handling and
								trucking may be registered
								provided, this would include
								Brand-New (not
								reconditioned) cargo trucks;
							—	Cargo handling may include rail
								transport of cargoes; and
							—	Subcontracting of cargo handling
								shall not be extended incentives.
					2.	Air Transport Facilities
						a)	passenger aircrafts; and,
						b)	cargo aircrafts without franchises
					Applications must be endorsed by the Civil
					Aeronautics Board (CAB).
					3.	Inter-island shipping *
						a)	pure cargo vessels; and,
						b)	passenger-carrying vessels
						For passenger/cargo and pure cargo vessels,
						age limit must not be more than ten (10) years
						old. For high-speed passenger crafts, age limit
						is five (5) years.
						All applications for registration must be
						endorsed by the Maritime Industry Authority
						(MARINA). Vessels for tourism purposes must
						also be endorsed by the Department of Tourism
						(DOT).
	C.	Agricultural Services Related to	1.	Establishment and operation of facilities
		Crops, Livestock, Fish Production		that render services to agricultural and
		and Post-Harvest Facilities (NP) *		fishery producers
						a)	cold storage;
						b)	farm machinery & equipment services;
							and,
						c)	irrigation, etc.
					Registered operators may be allowed to
					utilize not more than 20% for its own
					requirements.
					2.	Ice plant projects, as a separate activity,
						may be registered if they locate in less-
						developed areas or Key Production Areas
						(KPAs) identified by the DA.
	D.	Environmental/Ecological Support
		Facilities *
		Environmental Degradation/	1.	Development or Conversion of Industrial
		Abatement/Mitigation and Ecology		Estates into Industrial Ecosystems
		Management/Maintenance (P/NP)	An industrial ecosystem is composed of
					a group of industries with varying nature of
					operations but where the wastes/residues of
					one industry become raw materials of
					another, or used in another's system in a
					substantive manner. A symbiotic
					relationship among industries and adjacent
					communities exists and that companies
					exchange by-products for use as raw
					materials instead of virgin materials
					resulting to wastes accumulation.
					2.	Industry Self-Regulation/Upgrading At
						Plant/Firm Level
					As an extension/offshoot of modernization
					program, capital equipment/systems
					acquisition designed to make firm manufacturing
					facilities conform to such EMS as ISO 14000
					may be eligible to enjoy incentives except
					the income tax holiday.
					3.	Establishment of Toxic and Hazardous
						Wastes (THW) Merchant Facility
						Refers to plants capable of handling a
						wide range of wastes. The facility must
						incorporate physical, chemical and
						biological treatment, together with an
						incinerator and a dedicated THW landfill
						site for final disposal.
					4.	Establishment of New or Expansion,
						Rehabilitation, Modernization of
						Sewerage Systems for
						Industrial/Municipal Wastes *
						Refers to plant facility capable of
						handling non-toxic and hazardous wastes
						(THW) incorporating a wide range of
						treatment methods or any other innovative
						system. Standard facilities should preferably
						be provided with recycling loop capable of
						efficient segregation/classification where applicable.
					5.	Restoration/Rehabilitation of Major
						Water Catchment Basins/Waterways and
						Related Infrastructure, Man-made or
						Natural (may or may not be integrated with
						reclamation works)
					6.	Establishment of Stationary and Mobile
						Facilities for Emission-Testing (preferably
						with rehabilitation capability.)
					Refers to emission-testing facilities for
					industrial/commercial types of equipment,
					including motor vehicles.
	E.	Research and Development		1.	In-house R&D activities of any
		Activities (P)				manufacturing/producing firm; and,
						2.	Commercial R&D activities of private firms
							and research institutions
			The research activities shall fall within the
			Science and Technology Agenda for National
			Development (STAND) of the Department of
			Science and Technology (DOST) and the
			National Agricultural Research and Extension
			Agenda (NAREA) of the DA.
			Endorsement by the DOST or DA is required.
	F.	Support to Other Government
		Priority Programs
		1.	Rice and Corn Production		Growing and cultivation of rice and corn up to
			(NP)			storing and drying.
			Preferred areas are listed in the Key Grain
			Areas of the Dept. of Agriculture's Medium-
			Term Agricultural Development Plan.
		2.	Production and Processing of		1.	Production of swine or poultry;
			Livestock and Poultry (NP)		2.	Cattle raising for beef and/or dairy; and,
		3.	Crocodile farming (excluding game
			animals/fowls and other species for
			pet/pleasure purposes).
			Contract growers and integrators may be
			registered jointly or separately.
			Preferred areas are listed in the Key Livestock
			Development Areas of the Dept. of Agriculture's
			Medium-Term Agricultural Development Plan.
3.	Housing Components for	Fabrication of major mass housing components
	Socialized/Low Cost	using non-traditional, structurally-sound,
	Housing Projects (P/NP)	environment-friendly materials/technology
						a)	roof/framing systems;
						b)	partition systems;
						c)	flooring systems;
						d)	door/window systems;
						e)	finishing/ceiling systems; and,
						f)	water/sewerage systems
					Products other than steel-based should conform
					with the Modular Coordination System (MCS)
					of the Construction Industry Authority of the
					Philippines.
					Endorsement by both the Housing and Urban
					Development Coordinating Council and the
					DOST is required.
4.	Motor Vehicle Parts and	Manufacture of parts and components for the
	Components (P/NP) *		motor vehicle industry.
5.	Social Services (P/NP) *	Establishment of:
					1.	Educational/training institutions;
					2.	Rehabilitation centers;
					3.	Health service facilities * ; and,
					4.	New retirement villages.
					Applications for registration of health services
					must be endorsed by the Department of Health
					(DOH). Projects must locate in an area
					identified by the DOH while educational and
					training institution must be endorsed by
					TESDA and DOST. Applications for
					retirement villages must be endorsed by the
					Philippine Retirement Authority.
6.	Tourism (P/NP) *		1.	Tourist accommodation facilities * ;
					2.	Tourism estates;
					3.	Eco-tourism projects; and,
					4.	Tourist buses
					New, expansion and modernization of tourist
					accommodation facilities in Metro Manila may
					be registered but limited to capital equipment
					incentives only.
					Applications for registration must be endorsed
					by the Department of Tourism (DOT).
V.	MANDATORY INCLUSIONS
	A.	Mineral Resources [R.A. No. 7942	1.	Exploration of Mineral Resources
		(The Philippine Mining Act of		Projects are qualified for pioneer status.
		1995)] (P/NP)
						Qualified Projects:
						a)	Projects with approved exploration
							permit, mineral agreement or Financial
							and/or Technical Assistance Agreement
							(FTAA) under E.O. 279, series of 1987
							or under R.A. No. 7942;
						b)	Projects are not entitled to Income Tax
							Holiday (ITH).
					2.	Mining quarrying and Processing of
						Minerals *
					All processing projects must locate outside
					NCR.
					Qualified projects:
					a)	Projects involving mining, quarrying
						and processing of minerals except those
						involving river bed operations, cave
						mining and beach mining.
					b)	All marble processing projects, whether
						or not integrated with mining or
						quarrying, to qualify for registration,
						must export at least 50% of production,
						if Filipino-owned and at least 70% of
						production, if foreign-owned.
					c)	Projects with approved FTAA under
						E.O. 279, series of 1987 or under R.A.
						7942 are considered pioneer with ITH
						limited to four (4) years for new
						projects unless complying with Art. 17,
						Title 1 of E.O. 226, as amended.
						Foreign-owned corporations, as defined
						under R.A. 7942 and holders of valid
						mineral processing permits, may
						register their mineral processing
						projects on pioneer status but with ITH
						limited to four (4) years for new
						projects unless complying with either
						criterion under Art. 17, Title 1 of E.O.
						226, as amended.
					d)	Projects that will involve only mining or
						quarrying without processing shall be
						entitled only to capital equipment and
						non-fiscal incentives.
					e)	Mining or quarrying integrated with
						mineral processing shall be entitled to
						full incentives.
					f)	Processing without mining or quarrying
						shall be entitled to full incentives.
	B.	Iron and Steel (RA No. 7103 —	The following may be registered only on pioneer
		Iron and Steel Act) (P/NP) *	status:
			1.	Basic iron and steel-making integrated with
				slab-making;
			2.	Flat products;
			3.	Seamless pipes production;
			4.	Long products;
			5.	Galvanizing integrated with steel fabrication
				in support of infrastructure projects such as
				transmission towers, electric poles,
				highway guards, pier sheet pilings, industrial
				tanks, structural bridge members, streetlight
				poles, steel columns and beams for
				industrial plants and buildings, agricultural
				grain silos and highway steel culverts; and,
			6.	Fabricated steel structural members
				produced from computer-aided processes in
				support of infrastructure projects, such as
				in reinforced-concrete bridges, highways,
				overpasses, skyways, and industrial plants
				and buildings.
	C.	Industrial Tree Plantation (P)	Establishment of forest tree plantations:
		Section 36 (f) of P.D. 705	1.	rubber
					2.	bamboo
					3.	non-timber forest species for commercial
						and industrial purposes
						The activity may be integrated with nursery
						establishments.
						The plantation may be in private land or
						covered by an Industrial Forest Management
						Agreement (IFMA).
	D.	Book Publishing (Sec. 12, R.A.	1.	Production of books
		8047 or the "Book Publishing	2.	Production of textbooks
		Industry Development Act") (NP)		Applications for registration must be endorsed
						by the National Book Development Board.
	E.	BOT Projects (R.A. 6957, as	Construction, rehabilitation, improvement,
		amended by R.A. 7718) (P/NP) *	betterment, expansion, modernization, operation;
					financing and maintenance of the following
					types of projects:
					1.	Highways, including expressways, roads,
						bridges, interchanges, tunnels, and related
						facilities;
					2.	Railways or rail-based projects packaged
						with commercial development opportunities;
					3.	Non-rail based mass transit facilities,
						navigate inland waterways and related
						facilities;
					4.	Port infrastructure like piers, wharves,
						quays, storage, handling, ferry services
						and related facilities;
					5.	Airports, air navigation, and related
						facilities;
					6.	Power generation, transmission,
						distribution, and related facilities;
					7.	Telecommunications, backbone network,
						terrestrial and satellite facilities and related
						service facilities;
					8.	Information technology and data base
						infrastructure;
					9.	Irrigation and related facilities;
					10.	Water supply, sewerage, drainage, and
						related facilities;
					11.	Education and health infrastructure;
					12.	Land reclamation, dredging and other
						related development facilities;
					13.	Industrial and tourism estates or townships,
						including related infrastructure facilities and
						utilities;
					14.	Government buildings, housing projects;
					15.	Markets, slaughterhouses, and related
						facilities;
					16.	Warehouses and port-harvest facilities;
					17.	Public fishports and fishponds, including
						storage and processing facilities; and
					18.	Environmental and solid waste management
						related facilities such as collection
						equipment, composting plants, incinerators,
						landfill and tidal barriers, among others.
					The foregoing projects may be undertaken
					under any of the following schemes or
					contractual arrangements:
					1.	Build-operate-and-transfer (BOT);
					2.	Build-and-transfer (BT);
					3.	Build-own-and-operate (BOO);
					4.	Build-lease-and-transfer (BLT);
					5.	Build-transfer-and-operate (BTO);
					6.	Contract-add-and-operate (CAO);
					7.	Develop-operate-and-transfer (DOT);
					8.	Rehabilitate-operate-and-transfer (ROT);
						and,
					9.	Rehabilitate-own-and-operate (ROO).
					Applications for registration must be
					accompanied by: 1) endorsement from
					concerned government agency or corporation or
					Local Government Unit (LGU) with a
					certification that BOI incentives have been
					considered in the supply contract; 2) copy of
					supply contract; and 3) Environmental
					Compliance Certificate (ECC).
	F.	ASEAN Industrial Cooperation	Manufacture of all products, other than those in
		(AICO) Projects (P/NP)	the General Exception List of the Common
					Effective Preferential Tariff (CEPT) scheme
					under the ASEAN Free Trade Agreement
					(AFTA), shall be eligible for registration.
					An AICO Arrangement is a cooperative
					arrangement consisting of a minimum of two
					participating companies from two different
					ASEAN countries.
					To form an AICO Arrangement, the prospective
					companies must fulfill the following criteria:
					—	be incorporated and operating in any
						ASEAN country;
					—	have a minimum 30% national equity; and,
					—	undertake resource-sharing, industrial
						complementation or industrial cooperation.
					—	complementation or industrial cooperation
						activities.

 

 

PART II: Additional Priority Investment Areas for the Autonomous Region in Muslim Mindanao

Presented in this section is the list of priority areas which have been independently identified by the Regional Board of Investments of the Autonomous Region in Muslim Mindanao (ARMM), in accordance with E.O. 458. The BOI-ARMM can grant registration and administer incentives to activities listed herein, provided these are located in the ARMM .

I . EXPORT ACTIVITIES

A. Export Trader and Service Exporters

B. Support Activities for Exporters

II .  AGRICULTURE, FOOD AND FORESTRY-BASED INDUSTRIES

A. Processed Food

1. Halal Meat

2. Leguminous and other vegetable — Based Protein

(Textured, pelletized or liquid)

3. Spices Processing (e.g., hot pepper, black pepper, etc.)

Note: (May be integrated with plantation)

4. Vegetable Oils (e.g., peanut oil, rice bran oil, sunflower and soybean oil)

5. Coconut Oil

6. Seaweeds Processing

7. Cassava Processing

Note:(May be integrated with plantation)

8. Fruit Processing (e.g., durian, mangosteen, jack fruit, marang, banana)

 

Note: May be integrated with plantation

9. Fish Production and Processing

a) Frozen fish

b) Chilled fish

c) Canned fish

d) Abalone

e) Crab fattening

f ) Eel production

10. Corn Flour Mill

11. Young Corn Production

Note: May include processing/canning

B. Cutflower Production

C. Pearl Culture

D. Industrial Tree Plantation (Includes Mangrove, Rattan, Bamboo, etc.)

E. Shipbuilding

F. Abaca Pulp Plantation and Processing

G. Palm Oil Plantation and Processing

H. Coffee Processing (May be integrated with plantation)

I. Particle Board (Use of agri-based waste materials such as rice straw, wood waste, etc.)

J. Activated Carbon Manufacturing (Use of coconut shell, wood-based, etc.)

K. Feeds Production

III . BASIC INDUSTRIES

A. Textile and Textile Products

1. Yarns and fabrics

2. Non-woven textiles

3. Specialty fabrics

4. Tire cord fabrics

Note: Must be integrated with weaving and dipping units.

5. Ramie (degumed, staple fiber, combed tops, noils, and silvers)

6. Fish nets

B. Fertilizers (organic and inorganic)

IV . CONSUMER MANUFACTURES

A. Rubber Products such as:

1. High pressure and hydraulic rubber hoses

2. Rubber bolts

3. Industrial rubber rollers

4. Rubber tires

B. Leather Products

V . INFRASTRUCTURE AND SERVICES

A. Public Utilities (With developmental route of the four provinces of the ARMM and other adjacent Cities and Provinces)

1. Common Carrier (land, air and water transport facilities)

2. Electric Transmission/distribution

3. Water Supply Facilities

4. Buses

B. Tourism

1. Tourism Estates

— Subject to guidelines developed jointly by the BOI-ARMM and

Department of Tourism (DOT)

2. Tourist Accommodation Facilities

a. Hotels

b. Resorts

c. Other tourist accommodation facilities such as apartels, pension houses, tourist inns, and others.

3. Tourist Transport Facilities

a) Air

b) Water

c) Tourist Buses and taxi/van

Note: * Endorsed by the DOT

** New and expansion projects may be registered

C. Industrial Service Facilities

This will cover the following activities:

1. Common Centers:

a) Testing and Quality Control Laboratories

b) Training and Demonstration Centers

c) Tool Shops and Similar Facilities

d) Metal Working

* Electroplating

* Foundry

* Forging

* Machining

* Heat Treatment

e) Furniture

* Kiln Drying

* Treatment and processing facilities

f) Ceramics

* Kiln

* Glazing

g) Food Processing

* Bottling and Canning

* Vapor Heat Treatment

* Slaughterhouse/Abattoir

h) Automotive Battery Plate Manufacturing

i) Tire Recapping

Note: The following criteria must be met:

* The project will serve the common needs of the industry in the locality and;

* The project will improve the relative status and comparative advantages of the industry

2. Development of Retirement Villages

a. Shall include Health and Medical facilities including amenities required by the Philippine Retirement Authority (PRA).

b. Subject to the guidelines to be approved by BOI-ARMM in consultation with the PRA, the Department of Health (DOH), the Regional Planning and Development Office (RPDO) and other concerned agencies.

c. Pipeline Bulk Transport System for Petroleum and Natural Gases and Liquids and Coal Slurry (Underwater and Underground)

VI. ENGINEERING INDUSTRIES

A. Engineering Products

1) Motor Vehicle parts and components

2) Automobile parts and assembly

3) Modern offset printing

B. Electronics and Telecommunications Products

VII. ARMM PRIORITY AND TOURISM AREAS

NOTE: Listed below are potential tourist destinations which need further exploration and evaluation for intensified promotions, development and marketing.

 

NUCLEUS	GATEWAY	SATELLITE DESTINATION
AREA I - SULU	JOLO	SULU PROVINCE
AREA II - TAWI-TAWI	BONGAO	TAWI-TAWI PROVINCE
AREA III - LANAO DEL SUR	MARAWI CITY	LANAO DEL SUR PROVINCE
AREA IV - MAGUINDANAO	COTABATO CITY	MAGUINDANAO PROVINCE

 

 

CLARIFICATORY NOTES TO MODERNIZATION

PROGRAMS IN THE 1997 IPP

GENERAL POLICIES

1. Non-pioneer status.

2. In general, must be completed in 2 years. Completion shall be reckoned from date of registration with the Board.

3. For existing projects located in NCR, modernization shall be exempted from the industrial location policy.

4. May avail of Income Tax Holiday (ITH) for 3 years which shall be applied to the incremental income resulting from the increase in capacity due to modernization.

5. Modernization to be registrable may or may not result to increase in capacity but the following conditions should be met:

a) area must be listed in the IPP specifically for modernization or rehabilitation;

b) phases/stages of production sought to be modernized/rehabilitated must be identified; and

c) must result in any of the following:

• substantial reduction of production cost; or

• significant increase in productive efficiency including debottlenecking; or

• meaningful upgrading of product quality; or,

• keeping abreast with the state-of-the-art in the production of registered product.

[Section 1(ff), Rules and Regulations to Implement Exec. Order No. 226, Otherwise known as the Omnibus Investments Code of 1987].

SPECIFIC POLICIES

Modernization, in general, is limited to the coverage of each area listed in the IPP where such modernization activity is allowed.

 

	Preferred Economic Activity		Guidelines
1.	Export-Oriented Industries	—	Subject to general modernization policies.
2.	Processed Foods	—	Subject to general modernization policies.
3.	Pulp and Paper	—	Subject to general modernization policies.
4.	Textiles	—	Subject to general modernization policies.
5.	Chemical Products	—	Subject to general modernization policies.
6.	Sugarcane Plantation/Sugar Mills/	—	For sugar plantations, modernization must
	Sugar Refineries		be completed in two (2) years.
		—	For sugar mills and sugar refineries,
			modernization must be completed within
			three (3) years.
7.	Machinery and Equipment and/or their	—	Subject to general modernization policies.
	Parts and Components
		—	For radio and television, modernization
			may be allowed provided 50% of the
			incremental volume shall be exported.
8.	Coconut Plantation and Coco Oil	—	Modernization only for coconut oil mills
	Mills/Refineries		and coconut oil refineries.
		—	For coconut oil mills, registration may be
			allowed provided it is integrated with
			coconut oil refineries.
9.	Fishery Production	—	Modernization is allowed only in deep-
			sea fishing.
10.	Infrastructure	—	Modernization is allowed for registration
			in activities such as rail-based projects,
			ports and airport.
		—	For power projects, modernization may
			be allowed provided completion is
			undertaken:
			a)	For three (3) years, provided
				generating capacity of the power plant
				is 100MW and above;
			b)	For two (2) years, for generating
				capacity below 100MW.
11.	Common Carriers	—	Modernization of PUBs, including those
			in Metro Manila, that involves refleeting,
			is allowed under the following conditions:
			a)	brand-new buses shall be acquired;
			b)	refleeting is within the coverage of
				existing franchises (i.e., as to the
				number of units);
			c)	substituted old units should not be
				used for public conveyance in any
				form; and,
			d)	submission of a scheduled system per
				bus trip.
		—	For inter-island shipping, this shall be
			subject to the general policies on
			modernization.
12.	Agricultural Services Related to	—	Modernization is allowed for:
	Crops, Livestock, Fish Production		a)	slaughterhouses/dressing plants; and,
	and Post-Harvest Facilities		b)	cold storages
		—	Above activities are subject to the general
			policies on modernization.
13.	Environmental/Ecological Support	—	Subject to general modernization policies.
	Facilities
14.	Motor Vehicle Parts and Components	—	Subject to general modernization policies.
15.	Social Services	—	Modernization of health facilities is
			allowed and subject to general
			modernization policies.
16.	Tourism	—	Modernization of tourist accommodation
			facilities is allowed.
			a)	For facilities in Metro Manila, capital
				equipment incentives only are allowed;
			b)	For facilities outside Metro Manila,
				modernization shall entitle enterprises
				to full incentives to modernization
				projects.
		—	Subject to general modernization policies.
17.	Mineral Resources	—	Modernization projects must be
			completed within three (3) years.
18.	Iron and Steel	—	Subject to general modernization policies.
19.	BOT Projects	—	Subject to general modernization policies.
*	With modernization program