BOI Notice

September 4, 2012

BOI NOTICE

GENERAL POLICIES AND SPECIFIC GUIDELINES TO IMPLEMENT THE 2012 INVESTMENT PRIORITIES PLAN (IPP)

Notice is hereby given that the Board, in its meeting of 04 September 2012, approved the following General Policies and Specific Guidelines to implement the 2012 Investment Priorities Plan (IPP). EAISDH

PART I

Definition of Terms

a) Book — 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.

b) Content Development of Books consists of the following:

1. 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.

2. 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.

c) 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.

d) Existing Project — refers to a project of an existing enterprise that has started commercial operation at the time of application with the Board.

e) Expansion Project — refers to a project of an existing enterprise that would involve the installation of additional facilities/equipment that will result in increase in capacity of the same/similar activity within the same existing plant/facilities of the enterprise. Projects that do not qualify as new shall be considered as expansion.

f) Fulfillment house/center — refers to a facility that offers to store, receive the orders, package, and then ship the ordered item to the end consumer, on behalf of the product owner.

g) Government Guarantee — refers to the rate of return granted by the regulating agency to include profit and the recovery of capital expenditure (guaranteed rate of return), assured payment whether or not services/product were produced/delivered (take or pay provision), and assurance to lender by a government agency that a financial obligation will be honored even if the borrower is unable to repay the debt.

h) Government Subsidy — refers to the financial contribution by the national government or any of its agencies to defray, pay for or shoulder a portion of the project cost or the expenses and costs in operating or maintaining the project.

i) Job Generation — refers to the number of jobs directly generated by the project.

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

a. Retailing or selling in retail generally directed to the end users, through dispensing pumps in stations or in packaged containers such as drums for the liquid fuels or metal cylinders that are compliant with PNS. This includes the establishment and operation of gasoline/natural gas stations and retailing.

b. Fuels bulk marketing or selling 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/natural gas stations and LPG/LNG outlets. TcSAaH

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

k) Measured Capacity — the estimated additional volume of production/service which the Board determines to be desirable in each preferred area of investment taking into account the export potential of the product. For mass housing projects, the estimated housing backlog in the country shall be the basis of measured capacity.

l) Modernization Project — refers to a project of an existing enterprise that would involve improvements in systems, processes, equipment, and/or facilities that must result in any of the following:

1. at least 25% substantial reduction of production cost/cost of provision of the service; or

2. upgrading of product/service quality or classification of the facility (e.g., hospitals, hotels, resorts) to a higher class in accordance with accreditation standards applicable to the industry concerned.

m) Multiplier Effect — refers to the increase in economic activity and interrelationships generated and stimulated by the investment.

n) New Plantation Area — refers to new hectarage of plantation or lands that have been idle for at least one year or those involving change of crops/variety to achieve higher yield or shifts in the production system such as organic farming.

o) New Project — refers to a project/activity listed in the IPP that has not started commercial operation undertaken by:

1. A newly organized/formed enterprise that:

i. has no common stockholders in any existing enterprise; or

ii. has common stockholders in the existing enterprise but own not more than fifty percent (50%) of equity in the new enterprise, or

iii. has common stockholders but will engage in an entirely distinct and separate activity, or

iv. has common stockholders (regardless of percentage of common ownership) and will engage in the same activity as that of the existing enterprise but will locate in a different municipality, province, or region.

2. An existing enterprise that shall engage in:

i. An entirely distinct and different activity from its existing business operations; or

ii. The same activity provided it shall establish a new facility 1 in an area not contiguous to the premises of its existing project and with new investments.

3. An enterprise involving the manufacture of products utilizing local R&D. Applications for registration utilizing local R&D must be endorsed by the Department of Science and Technology (DOST) stating that this was undertaken in the Philippines and has not yet been commercialized.

4. For industrial tree plantations, an enterprise involved in the development of any public or private land to plantation of timber and non-timber 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.

p) Net Value-added — refers to the value of final product/service less the value of inputs. The project's net value added should be at least 25% except for projects dependent on imported raw materials/supplies. ETHSAI

q) Storage — refers to the business of receiving/discharging and storing petroleum crudes and/or products of others for compensation or profit.

r) Textbook — refers to an exposition of generally accepted principles in one subject, intended primarily as a basis of instruction in a classroom or pupil-book-teacher situation.

s) Upgrading — refers to the improvement of the facility/infrastructure by adding or replacing components. This may be treated as an expansion/modernization project.

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 (E.O.) No. 226.

The approval of applications for registration shall be based on the IPP listing. However, the extent of entitlement to incentives shall be based on the project's net value-added, job generation, multiplier effect and measured capacity.

The BOI, if national interest requires, may deny registration of projects engaged in the export of a product including industry inputs that are in short supply domestically.

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 foreign ownership of export-oriented and/or pioneer enterprise that will engage in the activities lifted in the IPP.

III. Equity Requirement

The equity of the project applied for registration is 25% of the project cost unless exempted under any of the following:

1. Projects of applicant with good track record in implementing registered project;

2. Projects of publicly-listed companies; or

3. Projects not entitled to ITH.

For large projects with a gestation period of more than one (1) year, the 25% equity requirement shall be based on the annual capital requirement of the project; Provided, that the total equity requirement of 25% is complied with on the first year of ITH availment.

IV. Locational Policy

A. Regional Dispersal of Industries

The dispersal of economic activities to the countryside is encouraged.

Projects in any of the identified less developed areas (LDAs) listed in Annex A 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 unless otherwise specified in the Specific Guidelines.

B. Locational Restriction in NCR

The BOI shall limit 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 2 declared by national law or presidential proclamation prior to 01 January 1989 (unless subsequently privatized) EIDATc

2. Projects that will engage in service type activities

3. Expansion of export-oriented projects

a. Expansion shall be effected within the firm's existing premises. 

b. The enterprise has a good track record of exports and has no record of violation of the terms and conditions governing its existing registration(s), specifically, the earlier project exceeded its projected export commitment in the past three (3) years.

4. Modernization projects

5. Strategic Activities as defined under this IPP (see Part III, I.11 "Strategic Activities")

V. Export of Products in Short Domestic Supply

The export commitment of a registered enterprise may be suspended to satisfy national interest or in an emergency situation.

VI. ITH Availment

A. General Rules

1. In the grant of incentives, the Board shall give priority to projects with substantial benefits to the economy. In this regard, the extent of the project's ITH entitlement shall be based on the following parameters: (1) project's net value added, (2) job generation, (3) multiplier effect, and (4) measured capacity.

 In the event that the registered enterprise fails to implement the project as represented in its project application, the Board may opt to reduce the project's ITH availment proportionate to the actual performance (e.g., investments, employment generation, production and sales, timetable) of the enterprise.

2. The income qualified for ITH shall be limited to the income directly attributable to the revenue generated from the registered project.

3. Net income qualified for ITH availment shall not be a result of gross revenues exceeding 10% of the projected gross revenue represented by the firm in its application.

 In cases where the project's actual revenues exceed the projections in its application due to, e.g., new markets/orders, additional employment/shifts, additional investments, the Board may increase the project's ITH availment proportionately. Request/s for adjustments of projected revenue must be filed before the filing of application for ITH.

4. In case of projects intended for own use, ITH shall only be applicable to revenues on sales generated or services rendered to other enterprises.

5. Only net income from operation of registered activity as certified under oath by CEO or CFO shall be entitled to ITH.

6. Enterprises with multiple registrations with the Board and/or several activities (whether BOI-registered or not) shall submit a list of cost items that are common with the qualified project and their cost allocation methodology for the said cost items, to ensure proper, fair and equitable allocation of common cost such as overhead and administrative costs.

B. Base Figure and Rate of Exemption

In general, ITH of expansion projects 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. aHECST

Projects registered under the modernization program without increase in capacity may be entitled to three (3) years ITH and other incentives without prejudice to compliance with other requirements. The computation of ITH for projects without increase in capacity is as follows:

For single product/activity:

For single product/activity:
		New investment (in US$)
Rate of Exemption (ROE) =	—————————————————	x 100
		Total Investments (replacement cost + new)
		Relative to the concerned plant (in US$)
For multiple products/activities or when ITH entitlement of other products/activities has lapsed:
		Sales of the Product subject of retooling
% Sales Entitled to ITH =	—————————————————	x 100
		Total Sales
	New Investment (in US$)
ROE =	——————————————————	x 100
	Total Investments (replacement cost + new)
	Relative to the concerned plant (in US$)

 

Where:

• ROE shall be fixed for the ITH entitlement period.

• 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.

• Replacement cost shall refer to the appraised value of its Fixed Assets relative to the concerned plant in the first year of ITH availment duly assessed and certified by an Independent Appraiser. This shall thereon be used as a basis in succeeding ITH availments until the end of the ITH entitlement period of the project.

• % Sales Entitled to ITH shall be based on actual sales values for the year of availment.

C. Projects with Government Guarantee

Projects with government guarantee/subsidy are not entitled to ITH except in cases where ITH has been considered in the grant of rates approved by the regulatory agency concerned.

The ITH is deemed to have been imputed in the grant of the government guarantee/subsidy if the ITH was incorporated in the bid documents of the project proponent/contract with government on the project, or the ITH was included in the financial model by the regulatory agency in approving the project's tariffs/rates. In the latter case, the availment of ITH shall be subject to a certification by the concerned regulatory agency.

VII. Multi-Phase Projects

Projects of an enterprise with multiple phases/locations may be registered on a per phase/location.

VIII. Corporate Social Responsibility (CSR)

BOI registered entities, recognizing the benefits derived from the fiscal incentives granted by the government, should endeavour to undertake meaningful and sustainable CSR projects in the locality where the projects are implemented.

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.

IX. Good Corporate Governance

BOI registered enterprises must be committed to the tenets of Good Corporate Governance. Boards must function properly in decision making processes that affect their stakeholders. IcEACH

X. Support to Environmental Protection and Conservation

Registered enterprises shall adopt measures intended to reduce climate change risks in support of the National Framework Strategy on Climate Change.

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.

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

XI. International Standards Certification

Registered projects shall obtain applicable certifications based on internationally-recognized standards such as a Hazard Analysis and Critical Control Points (HACCP), ISO certification, quality standards (e.g., ICC, CE) or other similar certifications.

XII. Equipment

Registered enterprises shall use brand new equipment except for projects utilizing consigned equipment, projects involving transfer of facilities, and when specified in the Specific Guidelines, and apply production processes that meet environmental standards. Application for availment of capital equipment incentive shall be filed prior to the ordering of equipment.

XIII. Projects in the Autonomous Region in Muslim Mindanao (ARMM)

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. The RBOI-ARMM may also register and administer incentives to activities in this IPP for projects locating in the ARMM.

Projects in the ARMM should register with the BOI-ARMM.

XIV. 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 more than 50% of their total revenues may be registered as export-oriented projects.

XV. 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.

XVI. Public Welfare Consideration

The BOI may deny applications for registration and/or grant of incentives for reasons of public health or morals or for environmental considerations. DIHETS

PART III

Specific Guidelines

I. Preferred Activities

1. Agriculture/Agribusiness and Fishery

This covers commercial production and commercial processing of agricultural, herbal and fishery products (including their by-products and wastes).

This also covers agriculture- and fishery-related activities such as irrigation, post harvest, cold storage, blast freezing, and the production of fertilizers and pesticides.

a. Commercial production

 This covers the production of agricultural (crops, poultry and livestock) and fishery products.

 In general, crops production should involve new plantation areas to qualify for registration.

 This also covers intercropping of high value crops as identified by the Department of Agriculture (DA).

b. Commercial processing

 This covers the conversion of agricultural and fishery products, their by-products and wastes, to a form ready for further processing or final consumption.

 This also covers the extraction of higher value substances from agricultural and forest-based raw materials through bioprocessing as endorsed by the concerned government agency.

 This also covers the production of animal and aqua feeds excluding those for game animals, fowls and other species for pet/leisure purposes.

 Processing of agricultural products should involve domestically produced raw or semi-processed agricultural products, unless the raw or semi-processed raw materials are not locally produced (NLP) or not in sufficient quantity (NISQ). 

 If using imported raw or semi-processed agricultural products that are locally produced (LP) or in sufficient quantity (ISQ), the project may qualify for registration, provided that the finished/final product is for export, or the project qualifies for pioneer status.

c. Services in Support of Agriculture/Agribusiness and Fishery

• Irrigation

 This covers irrigation system primarily intended to render service to agricultural farms.

 Irrigation system shall include water source, distribution lines and control mechanism. The system may also include prime mover, pump, generator and transformer. System capacity is expressed in terms of cubic meters of irrigation water per year.

 Only revenues generated from services rendered to other agricultural farms may be entitled to ITH.

• Harvesting Services

 This covers mechanized harvesting services.

• Post Harvest Facilities

 This covers the establishment and operation of cold storage, freezing, bulk handling, packing house, storage facilities and trading centers.

 This covers ice plants that will locate in LDAs.

 Only revenues generated from services rendered to other agricultural enterprises may be entitled to ITH.

Projects that cost at least the Philippine Peso equivalent of US$200,000 may be granted pioneer status. Applications for registration must be endorsed by the concerned agency, when applicable. aCTcDH

2. Creative Industries/Knowledge-Based Services

This covers business/knowledge processing.

This also covers non-voice business processing operations, creative and knowledge-based services. Non-voice business process operations include the undertaking of outsourced services such as administrative and business services, transcription-services, engineering and architectural services.

Creative industries/knowledge-based services with original content such as but not limited to software development, animation, engineering and architectural design, product design, game and applications development and software development; may be granted pioneer status provided that the project cost is at least the Philippine Peso equivalent of US$200,000 (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.

3. Shipbuilding

This covers the construction and repair of ships/boats, shipbreaking and ship recycling.

The following are the qualifications for registration:

General Requirements:

• Registered enterprises must have the minimum required paid-up capital, capital equipment and technical and skilled manpower as specified by Maritime Industry Authority (MARINA).

• Registered enterprises must comply with DOLE Department Circular No. 1, series of 2009 on the Guidelines on Occupational Safety and Health in Shipbuilding, Ship Repair and Shipbreaking Industry and secure a copy of Department of Environment and Natural Resources (DENR) issued Environmental Compliance Certificate (ECC).

Requirement for Ship/Boatbuilding:

• Ships/boats to be built must be at least 500 GT.

Requirements for Shipbreaking/Ship recycling:

• Must have a drydocking or dismantling slip with a minimum capacity of 1,500 DWT.

• Must comply with the requirements of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships including the preparation of a Ship Recycling Facility Plan and the Technical Guidelines for the Environmentally Sound Management of the Full and Partial Dismantling of Ships.

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$100 million may be granted pioneer status.

Registered enterprises may be required to submit a copy of its License/Authorization or its equivalent from the MARINA or other concerned agency prior to start of commercial operation.

4. Mass Housing

This covers the development of low-cost mass housing. This also covers the manufacture of modular housing components preferably using indigenous materials. ITCHSa

The following are the qualifications for registration:

General requirements:

• The selling price of each housing unit shall be more than PhP400,000 but not exceeding PhP3.0 million.

• Must be new or expanding low-cost 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/P.D. No. 957 and other related laws.

• 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 floor area of qualified saleable low cost housing units for vertical housing projects.

 This may be done trough any of the following modes:

o Development of a new settlement directly undertaken by the registered entity.

o Development of a new settlement through joint venture arrangements with either: a Local Government Unit, a Non-Government Organization accredited by the BOI, the National Housing Authority, a subsidiary of the BOI-registered entity, or a developer accredited by the HLURB.

 In the case of joint venture projects, the BOI registered entity shall be required to provide proof of funds transferred to the implementing entity.

o Slum upgrading or renewal of areas through zonal improvement programs or projects that will directly address the problem of informal settlers along the main river systems.

 Compliance with the socialized housing requirement must be completed within the ITH availment period and should be proportionate to the number of low-cost housing units being applied for ITH for the taxable year.

Requirement for horizontal housing projects:

• 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.

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.

• In lieu of the modes for compliance with the socialized housing requirement mentioned above, donation may be allowed. The option to donate is allowed provided: (1) the donation is made to BOI accredited NGO and (2) the amount to be donated shall be equivalent to 30% of (20% of the building construction cost based on the actual number or equivalent total floor area of qualified saleable low cost housing units) or not less than 40% of the estimated ITH. Equivalent total floor area refers to the sum total of the floor area of all the registered low-cost mass 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 TIDHCc

• 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

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.

Projects that have already been completed and have incurred sales (booked sales) of housing packages shall, in general, not qualify for registration.

In general, eligible projects in NCR, Metro Cebu and Metro Davao shall be entitled to three (3) years ITH.

In cases of un-incorporated joint venture and similar arrangements between land owner and developer wherein the sharing scheme is in terms of the number of lots or units built, only the share of the developer may qualify for registration.

Interest income arising from in-house financing shall not be entitled to ITH.

Modular housing components

This covers the manufacture of modular housing components preferably using indigenous materials. These include roof/framing systems, wall/partition systems, flooring systems, door/window systems, and finishing/ceiling systems.

The firm shall sell at least 50% of total annual production to mass housing projects.

5. Iron and Steel

This covers basic iron and steel products, long steel products (billets and reinforcing steel bars), and flat hot-/cold-rolled products.

Basic iron products include refined iron ore and primary steel products.

This also covers the manufacture of flat products, long products and fabrication of machinery, equipment and implements.

All iron and steel products must be compliant with the applicable Philippine National Standards (PNS) or International standards.

Projects that cost at least the Philippine Peso equivalent of US$500 million may be granted pioneer status.

6. Energy

This covers the exploration, development, and/or utilization of energy sources adopting environmentally-friendly technologies.

Only power plants utilizing environmentally-friendly energy sources and technologies may qualify for ITH.

Projects that would utilize raw materials or semi-processed raw materials that are not locally produced (NLP) or not in sufficient quantity (NISQ) are exempt from NVA requirement.

Only projects that have achieved financial closing for the project are qualified to apply for registration.

Any of the following may qualify for pioneer status:

• Power supply projects located in missionary areas or off-grid areas that are not receiving subsidies from PSALM;

• Projects that cost at least the Philippine Peso equivalent of US$1.5 million per megawatt;

• Projects with NVA of at least 30%. AcDaEH

For power generation projects, only revenues from power generated and sold to the grid, other entities and/or communities may be entitled to ITH. 

Power projects that are built contiguous to existing generating facilities shall be considered as expansion projects. However, if the existing base load plant has consistently dispatched at least 80% of their registered capacity for the past 3 years, the project to be registered may be considered new.

The amount of ITH to be granted shall not exceed 10% of the total revenue of generated power.

Applications for registration must be endorsed by the Department of Energy (DOE).

7. Infrastructure

This covers transport, water, logistics, waste management facilities, physical infrastructure (tollways, railways and telecommunication facilities) and PPP projects.

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.

 Aircraft/s must not be more than 14 years old from date of production to the date of filing the application.

 Any of the following may qualify for pioneer status:

• Projects serving the missionary/developmental routes, as indicated in the Certificate of Public Convenience and Necessity (CPCN) may qualify for pioneer status.

• 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 and overseas 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 MARINA

• Vessel must be registered and operated under the Philippine Flag

• Must comply with following age requirements:

Type of Vessel	Maximum Age from Original Date of
	Launching
Tankers	10 years
High-speed Craft	5 years
Passenger/Cargo	15 years

 The age of the vessel shall be reckoned from the ship's date of launching based on the Builder's Certificate of Vessel Registry and must be complied with at the time of application.

• Tankers, High-speed Craft, RORO Vessels serving primary routes and Passenger/Cargo vessels must have gross weight of 150 GT and above.

• Tankers must be double-hulled.

 RORO operator/enterprise serving missionary routes, as indicated in the Certificate of Public Convenience (CPC) issued by MARINA, may qualify for pioneer status. ITESAc

(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 1,000 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 one (1) year.

 All vessels must be seaworthy and must obtain valid Class and Statutory Certificates as required by MARINA.

 Modernization of ships may be allowed with entitlement to ITH limited to investments in safety and navigation devices and equipment.

 All applications for registration must be endorsed by the MARINA.

b. Water Supply and/or Distribution

 This covers bulk supply projects and new or upgrading of water distribution systems.

 Applications covering both supply and distribution projects shall be unbundled showing the revenue and cost structure of each.

 In cases of upgrading of existing projects, only revenues that are derived from incremental volume shall be eligible for ITH.

 Supply of water shall be limited to treated water and should be in accordance with the Philippine National Standard for Drinking Water.

 Distribution activity should include extraction of water, treatment and installation of distribution lines and flow metering systems.

 A copy of the Water Permit and/or Certificate of Public Convenience (CPC) must be submitted.

 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. EcDSHT

c. Logistics

 This covers, ports, terminals (passenger/intermodal terminals, cargo terminals/container yards, LNG/CNG storage terminals, natural gas refueling stations and charging stations for electric vehicles), warehouses 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.

(2) Terminals

(a) Passenger/Intermodal terminals

 The following are the qualifications for registration:

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

• Must have new facilities with parking, comfort rooms, ticketing and reservation office, air-conditioned waiting area and provide shuttle services; 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 concerned agency.

 Bus terminals that will integrate all bus lines operating within a particular municipality or city shall be eligible for registration. The facilities shall have ample parking spaces, comfort rooms and waiting areas. Projects of this nature undertaken in highly urbanized cities shall be granted pioneer status.

(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, MMDA and/or other concerned agency.

(c) LNG/CNG storage, distribution and marketing

 This covers the establishment and operation of storage, distribution and marketing facilities for the bulk handling/sale of natural gas in accordance with relevant Philippine National Standards (PNS).

 This also 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 stations must comply with the Retail Trade Law (R.A. No. 8762). TaISEH

 For marketing, distribution and refueling stations, the registered enterprise must submit a copy of its Permit to Operate and Supply Natural Gas issued by the DOE prior to start of commercial operations.

 For storage, the registered enterprise must submit a copy of its Permit to Operate issued by the DOE prior to start of commercial operation.

 The following are the qualifications for registration for storage, marketing and distribution:

• Must have new facilities;

• Must cater to power plants, industrial plants, shipping vessels, commercial establishments or land transport; and

• Must cater to at least one (1) clientele, other than the proponent's own business.

 Projects that cost at least PhP1 billion may be granted pioneer status.

d Charging stations for electric vehicles

 This covers the establishment of charging stations for electric vehicles. The charging stations could refer to a 'service station' designed to simultaneously fast charge multiple vehicles similar to gasoline/diesel stations or a network of at least 5 charging stands.

 All applications for registration must be endorsed by concerned agency.

(3) Warehouses

 This covers the establishment of automated warehousing facilities with automated retrieval systems, conveyors, cranes and other cargo handling equipment.

 Distribution or Fulfillment Centers with at least 50% of its revenues derived from serving other countries shall be granted Pioneer status.

 Only revenues generated from services rendered to other enterprises may be entitled to ITH.

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

 Projects that cost at least PhP1 billion may be granted pioneer status.

 All applications for registration must include a DOE endorsement and proof of the 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 Waste Management Facilities

 This covers the establishment of toxic and hazardous waste (THW) treatment facilities.

 The following are the qualifications for registration: HCITDc

• Must involve treatment, storage and disposal (TSD)

• Must be capable of handling THW

• Must handle only locally-generated wastes.

 Prior to start of commercial operation, the registered enterprise must submit a copy of its TSD Registration Certificate issued by the Environmental Management Bureau (EMB) of the 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 Department of Science and Technology (DOST) in addition to the TSD Registration Certificate. 

e. Physical Infrastructure

 This covers tollways, railways and telecommunication facilities.

(1) Tollways and railways

 This covers the development, including rehabilitation, upgrading, and/or expansion, and/or operation of tollways and railways.

 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 the concerned agency.

 If the cost of upgrading of 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.

(2) Telecommunication infrastructure

 This covers the establishment of new telecommunications infrastructure in the provinces particularly in the rural areas as endorsed by the National Telecommunications Commission (NTC) and utilizing at least fiber optic technology.

 Projects that cost at least the Philippine Peso equivalent of US$100 million may be granted pioneer status.

f. PPP Projects

 This covers projects under the Public-Private Partnership (PPP) Program of the government.

 Applications must be endorsed by the PPP Center or other concerned government agency/unit.

8. Research and Development

This covers R&D activities and the establishment of research/testing laboratories, Centers of Excellence (COE) and technical vocational education and training institutions.

a. Research and Development

 This covers all R&D activities including the establishment of research/testing laboratories (e.g., for pharmaceuticals, electronics, construction, etc.).

 This also covers the establishment and operation of facilities for the conduct of clinical trials (e.g., Clinical Research Organization or CRO). 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.

 Applications for registration must be endorsed by the DOST or other concerned agency, as may be deemed necessary.

b. Center of Excellence (COE)

 This covers the establishment of entrepreneurial, technology, business incubation centers, common service facilities, and manufacturing, service and agribusiness entities including those locating in the premises of state universities and colleges (SUCs) outside Metro Manila and with a special arrangement with the SUC to develop competencies in entrepreneurship, and research and development.

c. Training/Learning Institutions

 This covers the establishment of institutions specializing in the technical vocational education and training (e.g., engineering, culinary arts, etc.) in support of the activities listed in this IPP.

 The following are the requirement for registration:

• The curriculum must be approved by either the Technical Education and Skills Development Authority (TESDA) for training courses or the Commission on Higher Education (CHED) for degree courses or other concerned government agencies/authority and endorsed by the appropriate industry association. caEIDA

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

 Projects that cost at least the Philippine Peso equivalent of US$2 million may be granted pioneer status.

9. Green Projects

This covers the manufacture/assembly of goods and the establishment of energy efficiency-related facilities (such as district cooling systems), where either utilization of which would significantly lead to either the efficient use of energy, natural resources or raw materials; minimize/prevent pollution; or reduce greenhouse gas emissions.

To qualify for registration, assembly operations must be integrated with the manufacture of at least one part/component for use in the assembly.

Green Projects covers only projects other than those already listed in this IPP.

10. Manufacture of Motor Vehicles

a. Manufacture/assembly of motor vehicles

 The project shall involve the manufacture/assembly of brand new motor vehicle units (excluding 2-stroke motorcycles) that are compliant with the prevailing national standards and regulations on the registration, use and operation of motor vehicles.

 Any of the following may qualify as new:

1. Projects that will involve the establishment of a factory complete with production machinery/equipment and facilities such as welding section, assembly section, metal treatment section, painting section, testing facility for road worthiness and emission standard compliance, and pre-delivery inspection section.

2. Projects of an existing motor vehicle manufacturer/assembler that involves the production of a new model or full model change shall be considered new project, provided there is new investments of at least PhP100 million for four-wheel vehicles and manufacture of parts and components, otherwise the project will be considered expansion.

 Any of the following may qualify for pioneer status:

• Projects covered under paragraph a.1 above for manufacture/assembly of passenger cars and/or commercial vehicles with investments of at least US$50 million and for the manufacture/assembly of motorcycle with investments of at least US$4 million. Investments may include the cost of the acquisition of an existing assets or facilities.

• Projects covered under paragraph a.2 above with investments of at least US$20 million for passenger cars and/or commercial vehicles, US$1.5 million for motorcycles.

• Projects on the manufacture/assembly of alternative fuel vehicle and electric vehicles. Alternative fuel vehicles include the following: HaSEcA

- Hybrid vehicles are vehicles that run on electric batteries and gasoline/diesel/other fuels.

- Electric vehicles are vehicles that run solely on electric power.

- Flexible-fuel vehicles are vehicles that run on gasoline/diesel in combination with alternative fuel such as but not limited to:

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

o Biodiesel vehicles that run on diesel and a minimum biodiesel blend/content of at least 5%

o Compressed Natural Gas Vehicles are vehicles that run on Compressed Natural Gas (CNG)

o Other vehicles powered by LPG, fuel cell and other alternative fuels.

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

b. Manufacture of parts and components

 This covers the manufacture of motor vehicle parts and components either as original equipment manufacturer (OEM) or after-market products.

 Any of the following may qualify for pioneer status:

• Manufacture of engines and transmissions

• Manufacture of tool and die to produce chassis and engine

• Establishment of common facility for heat treatment, forging, stamping of motor vehicle parts and components

• Production of electric motors, batteries other than lead acid batteries, controller assembly and battery charger for electric vehicles

11. Strategic Projects

This covers projects that exhibit very high social economic returns that will significantly contribute to the country's economic development.

The social economic returns of the proposed project shall be measured in terms of the following:

• Consumer-based benefits (e.g., price, availability, quality)

• Forward and backward linkages with existing industries in the country

• Generation of at least 500 direct employment or use of highly-specialized or advanced technology

• Generation of at least US$1 million in foreign exchange savings, when applicable

• Stature of the proponent as a global player, when applicable cDAITS

Notwithstanding the preceding paragraphs, manufacture of packaging products that will involve product or process innovation which shall lead to significant improvements in quality and value of the packaged products shall also be deemed as "Strategic Project". Likewise, the manufacture of essential drugs and medicines as listed in the Philippine National Drug Formulary (PNDF) shall be deemed as "Strategic Project".

Projects that cost at least the Philippine Peso equivalent of US$500 million may be granted pioneer status.

Projects under these activities will be approved upon determination by the Board in consultation with the Department of Finance (DOF), National Economic Development Authority (NEDA) and other appropriate government agencies.

12. Hospital/Medical Services

This covers the establishment and operation of medical facilities including primary, secondary, tertiary hospitals and ambulatory facilities.

Only revenues from the provision of medical and diagnostic services shall be entitled to ITH. Revenues from operating a pharmacy, food services and any other non-treatment related services will not be eligible for ITH.

Secondary care hospitals with a minimum capacity of 50 beds and an investment cost of at least the Philippine Peso equivalent of US$2.5 million may qualify for pioneer status.

Only facilities outside of Metro Manila may qualify for registration.

Prior to availment of ITH, registered projects must submit copies of license to operate issued by the DOH and PhilHealth Accreditation.

13. Disaster Prevention, Mitigation and Recovery Projects

a. 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 or assembly of goods critical to disaster management; construction of dikes; and salvaging operations.

 These include the manufacture and assembly of equipment and goods that will be used for disasters, calamities and emergencies, the provision of rescue and retrieval services, the provision of information services relate to disaster management, the provision of specialized equipment and services needed to restore vital public services in a fast and efficient manner, the provision of training services for first responders and any other activity that will contribute to the goals of mitigating risks to public safety caused by disasters, calamities and emergencies. 

 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 (excluding income from artifacts/treasure recovered from sunken vessels/ships) may be entitled to ITH.

b. 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. THIECD

 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.

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

All applications for registration must be endorsed by concerned agency.

Projects that cost at least the Philippine Peso equivalent of US$100,000 may be granted pioneer status.

Disaster Prevention, Mitigation and Recovery Projects covers only project other than those already listed in this IPP.

III. Mandatory List

1. Industrial Tree Plantation

 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.

 Each Industrial Tree Plantation (ITP) project must have an approved and issued forest management/development agreement such as:

• Socialized Industrial Forest Management Agreement (SIFMA)

• Industrial Forest Management Agreement (IFMA)

• Private Forest Development Agreement (PFDA)

• Community-based Forest Management Agreement (CBFMA)

 In cases of tree plantations that are joint venture agreements with other private entities, community organizations or government entities, only the share of the registered enterprise may be entitled to ITH.

2. Exploration, Mining, Quarrying and Processing of Minerals

 This covers the exploration and development of mineral resources, mining/quarrying and processing of metallic and non-metallic minerals.

 Exploration of mineral resources including those covered by valid and existing exploration permits or mineral agreements may qualify for pioneer status.

 Mining and mineral processing projects are not entitled to ITH.

3. Publication or Printing of Books/Textbooks

 This covers printing, re-printing, publication and content development of books or textbooks.

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

4. Refining, Storage, Marketing and Distribution of Petroleum Products

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

 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.

 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.

 For storage, marketing and distribution, petroleum products excluding liquefied petroleum gas (LPG), shall be sourced from the new industry participants as defined under R.A. No. 8479, except in cases of emergency supply situation.

 For projects that involve more than one activity, i.e., storage, marketing and distribution, each must be unbundled showing the revenue streams and costs for each activity.

 Blending of petroleum products alone may only be entitled to capital equipment and other non-fiscal incentives.

 Applicant enterprises shall elect to be governed by the provisions of E.O. No. 226 or R.A. No. 8479 at the time of their application for registration, provided that such election once made shall be final.

5. Ecological Solid Waste Management

 This covers the establishment of waste recycling facilities whether or not 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.

 This also covers the establishment of an integrated solid waste management facility that includes the following: 1) materials recovery facility with a processing center that shall be used to manufacture goods from recyclable wastes (biodegradable, non-biodegradable, recyclable and residual) as the raw materials; and 2) categorized sanitary landfill that shall accommodate only residual wastes that were not recycled due to the absence of appropriate technology for recycling.

 Waste recycling projects without a manufacturing/processing facility are not entitled to ITH.

 Registered projects may avail of capital equipment incentive.

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

6. Clean Water Projects

 This covers the establishment of 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. cDTaSH

 Activities such as 5S and Good Housekeeping are not qualified for registration.

 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 agency.

 Projects that will employ new or proprietary technologies shall submit an Environmental Technology Verification (ETV) issued by the DOST.

7. Rehabilitation, Self-Development and Self-Reliance of Persons with Disability

 This covers the manufacture of technical aids and appliances for the use and/or rehabilitation of persons with disability, and the establishment of special schools, day care centers, homes, residential communities or retirement villages solely to suit the needs and requirements of persons with disability.

 Manufacturing of technical aids and appliances used by persons with disability includes but is not limited to the following:

• Walk-in baths designed for persons with disabilities

• Commode chairs

• Braille books

• Hoists and lifting chairs designed for incapacitated people, including stair lifts DACIHc

• Wheelchairs, scooters and automobiles using special controls or assistive technology designed for persons 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).

8. Renewable Energy

 This covers developers of renewable energy facilities, including hybrid systems.

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

 Sales of power generation projects with feed-in-tariffs (FIT) shall not be entitled to ITH unless that ITH was included in the financial model by ERC in approving the project's power (FIT) rate.

 Applications for registration must submit DOE Certificate of Registration, Certificate of Accreditation or DOE endorsement, whichever is applicable.

 Applicant enterprises shall elect to be governed by the provisions of E.O. No. 226 or R.A. No. 9513 at the time of their application for registration. Under E.O. No. 226, RE projects may qualify for pioneer status.

9. Tourism

 This covers tourism enterprises that are outside the tourism enterprise zones (TEZs) and are engaged in the following:

1. Tourist transport services whether for land, sea and air transport for tourist use; DTcACa

2. 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.

3. Development of retirement villages.

4. Restoration/preservation and operation of historical shrines, landmarks and structures.

1. Tourist transport

 This covers transport services whether for land, water and air transport for tourist use. EAIcCS

 Land transport covers the operation of brand new, world-class buses and/or mini-buses/coasters. The quantity or number of units of vehicles that may be allowed shall be determined based on the number of tourist arrivals in the area or the ratio of hotel/resort facilities/rooms.

 Tourist transport operators must have garage, hangar or berthing/docking facilities:

 Applications for registration of water and air transport operators must be endorsed by MARINA or CAAP, respectively. 

 Registered tourist land transport operators must submit a copy of CPC.

2. Tourism-related facilities

(1) Accommodation facilities

 Condotel/apartment hotel/serviced apartment/tourist inn/pension house/motel, must cater to tourists/guests to qualify for registration. Each unit must have fully equipped kitchen and laundry facilities.

 Income arising from gaming and mall operations are not qualified for ITH.

 For modernization projects, replacement of carpets, pillows, mattresses and other similar items shall be excluded from the computation of the ITH rate of exemption.

 For hotels and resorts, the quantity or number of units of buses and/or mini-buses/coasters that may be allowed shall be determined based on the number of tourist arrivals in the area or the ratio of hotel/resort facilities/rooms. cADEHI

 Any of the following may qualify for pioneer status:

• Hotel projects/apartment hotels/serviced apartments/condotels classified as first class or deluxe by the Department of Tourism (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 project cost of at least the Philippine Peso equivalent of US$5 million.

(2) Health and Wellness

(a) Health Spa

 This covers the establishment and operation of destination spa, resort/hotel spa, therapeutic centers, traditional healing (e.g., Philippine "hilot", "dagdagay", "ventossa", etc.), and other alternative healing and medical care services. aCHcIE

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

(b) Tertiary Hospital

 This covers tertiary hospitals with a minimum of (fifty) 50 rooms (suites and private rooms only) and with a minimum project cost of at least the Philippine Peso equivalent of US$10 million.

(c) Ambulatory Clinics

 This covers services such as elective (non-emergency) surgical treatment whether requiring local, regional or general anesthesia of out-patients whose recovery, under normal and routine circumstances, will not require in-patient care. This includes comprehensive ophthalmologic surgery, dermatology, cosmetic procedure, plastic and reconstructive surgery, cosmetic dentistry, and medical care (diagnosis, observation, treatment and rehabilitation). EASIHa

 Prior to start of commercial operation, the registered enterprise must submit a copy of its License to Operate from the Department of Health (DOH).

(3) 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.

 All applications for registration must be endorsed by the Department of Tourism (DOT).

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

3. Retirement Village

 The following are the qualifications for registration:

• A retirement village must have a minimum of four (4) hectares of contiguous land

• Project cost must be at least the Philippine Peso equivalent of US$10 million.

 Retirement villages with a minimum area of twenty (20) hectares may qualify for pioneer status. TcEaAS

 Locators engaged in the activities listed in the IPP that are related to retirement business may be registered as separate activity.

 Applications must be endorsed by the Philippine Retirement Authority (PRA). PRA accreditation must be submitted prior to ITH availment.

4. Restoration/preservation and operation of historical shrines, and landmarks and structures.

 This covers the conservations, preservation or restoration of national sites or properties.

 Projects undertaking the conservation and preservation, restoration or maintenance of historico-cultural heritage that includes any of the following may qualify for registration:

a. National shrines, monuments, and/or landmarks

b. Local historical sites/properties classified, identified, and listed in the National Registry of Historic Structures

c. Cultural properties, treasures and/or artifacts

 Any of the following historic-cultural heritage projects may qualify for pioneer status:

• Residential projects with a project cost of at least PhP10 million, or

• Other structures with a project cost of at least PhP20 million.

IV. Export Activities

This covers the manufacture of export products, services exports and activities in support of exporters. cETDIA

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.

In the export of mineral products, the Specific Guidelines for R.A. No. 7942 of this IPP shall apply suppletorily.

B. Services Exports

This covers service activities rendered to clients abroad and paid for in foreign currency with export requirement of at least 50% of its revenue, if Filipino-owned or at least 70%, if foreign-owned. STDEcA

Mere deployment of people or individual practice of profession abroad is not qualified for registration.

For contact centers, project must have a minimum investment cost of the 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 as part of the project cost.

In the case of contact centers, revenues shall be unbundled to show the breakdown of servicing domestic and overseas markets.

C. Activities in Support of Exporters

This covers activities directly supporting export producers as follows:

1. Manufacture of parts/components and materials and supplies directly/reasonably needed in the production of the export product;

2. Services comprising a portion of the manufacturing process;

3. Product testing and inspection;

4. Repair and maintenance; and

5. Logistics services

This also covers service providers to foreign film and television production projects in the country as endorsed by the Philippine Film Export Services Office (PFESO) as mandated by E.O. No. 674.

ANNEX A

LIST OF LESS-DEVELOPED AREAS (LDAs)

Province	Municipality/City
ABRA	Boliney
	Bucay
	Bucloc
	Danglas
	Daguioman
	Dolores
	Lacub
	Lagangilang
	Lagayan
	Langiden
	La paz
	Licuan-baay (Licuan)
	Luba
	Malibcong
	Manabo
	Peñarrubia
	Pidigan
	Pilar
	Sallapadan
	San Isidro
	San Juan
	San Quintin
	Tayum
	Villaviciosa
AGUSAN DEL NORTE	Remedios T. Romualdez
AKLAN	Buruanga
	Lezo
	Tangalan
ANTIQUE	Belison
	Libertad
BATANES	Itbayat
	Basco
	Sabtang
	Ivana
	Mahatao
	Uyugan
BATANGAS	Balete
	San Nicolas
	Santa Teresita
	Tingloy
BENGUET	Sablan
	Tublay
BILIRAN	Almeria
	Biliran
	Cabucgayan
	Caibiran
	Culaba
	Kawayan
	Maripipi
BOHOL	Alburquerque
	Anda
	Batuan
	Clarin
	Corella
	Cortes
	Dagohoy
	Lila
	Loay
	San Isidro
	Sevilla
	Sikatuna
CAGAYAN	Rizal
	Santa Praxedes
CAMARINES NORTE	San Vicente
CAMARINES SUR	Bombon
	Cabusao
	Gainza
	Camaligan
CAMIGUIN	Catarman
	Guinsiliban
	Mahinog
	Sagay
CATANDUANES	Bagamanoc
	Baras
	Bato
	Gigmoto
	Panganiban (Payo)
	San Miguel
CAVITE	General Emilio Aguinaldo
CEBU	Alcantara
	Alcoy
	Boljoon
	Ginatilan
	Malabuyoc
	Pilar
	Ronda
	Samboan
	Tudela
DAVAO DEL NORTE	San Isidro
DINAGAT ISLANDS	Dinagat
	Libjo (Albor)
	Tubajon
EASTERN SAMAR	Balangkayan
	General Macarthur
	Giporlos
	Hernani
	Jipapad
	Lawaan
	Maslog
	Mercedes
	Quinapondan
	Salcedo
	San Julian
	San Policarpo
GUIMARAS	San Lorenzo
IFUGAO	Hingyon
	Asipulo
ILOCOS NORTE	Adams
ILOCOS SUR	Gregorio del Pilar (Concepcion)
	Lidlidda
	Nagbukel
	San Esteban
	San Ildefonso
	San Vicente
	Santa Catalina
	Sigay
	Sugpon
ILOILO	Mina
	Batad
	Bingawan
	San Rafael
ISABELA	San Isidro
	Luna
KALINGA	Pasil
LAGUNA	Famy
	Mabitac
	Pakil
	Rizal
LANAO DEL NORTE	Kauswagan
	Linamon
	Magsaysay
	Matungao
	Pantar
	Salvador
	Sapad
	Tagoloan
	Tangcal
LANAO DEL SUR	Bayang
	Butig
	Calanogas
	Lumbatan
	Masiu
	Pagayawan (Tatarikan)
	Pualas
	Sultan Dumalondong
	Tamparan
	Tugaya
LA UNION	Bagulin
	Burgos
	Pugo
LEYTE	Hindang
	Julita
	La Paz
	Macarthur
	Mayorga
	Merida
	Pastrana
	Santa Fe
	Tabontabon
	Tolosa
	Tunga
MAGUINDANAO	Datu Unsay
	Kabuntalan (Tumbao)
	Mamasapano
	Northern Kabuntalan
	Sultan Mastura
MASBATE	Batuan
	Esperanza
	San Fernando
MISAMIS OCCIDENTAL	Baliangao
	Concepcion
	Panaon
	Sapang Dalaga
	Sinacaban
MISAMIS ORIENTAL	Balingoan
	Binuangan
	Gitagum
	Kinoguitan
	Lagonglong
	Libertad
	Sugbongcogon
MOUNTAIN PROVINCE	Barlig
	Besao
	Sabangan
	Sadanga
	Sagada
NEGROS ORIENTAL	San Jose
NORTHERN SAMAR	Allen
	Biri
	Capul
	Lapinig
	Mapanas
	Rosario
	San Antonio
	San Jose
	San Vicente
	Victoria
NUEVA ECIJA	Nampicuan
	Palayan City
NUEVA VIZCAYA	Ambaguio
	Villaverde
OCCIDENTAL MINDORO	Looc
PANGASINAN	Santo Tomas
PALAWAN	Agutaya
	Caganyancillo
	Linapacan
	Magsaysay
QUEZON	Agdangan
	Alabat
	Jomalig
	Patnanungan
	Perez
	Plaridel
	Quezon
	Sampaloc
QUIRINO	Saguday
ROMBLON	Alcantara
	Banton
	Calatrava
	Concepcion
	Corcuera
	Ferrol
	Magdiwang
	San Andres
	San Jose
	Santa Fe
	Santa Maria (Imelda)
SAMAR (WESTERN	Almagro
SAMAR)	Jiabong
	Marabut
	Matuguinao
	Pagsanghan
	San Sebastian
	Santo Niño
	Tagapul-an
	Talalora
	Zumarraga
SIQUIJOR	Enrique Villanueva
	Larena
	Maria
	San Juan
SORSOGON	Barcelona
	Prieto Diaz
	Santa Magdalena
SOUTHERN LEYTE	Anahawan
	Hinundayan
	Libagon
	Limasawa
	Padre Burgos
	Pintuyan
	San Francisco
	San Juan (Cabalian)
	San Ricardo
	Tomas Oppus
SULU	Hadji Panglima Tahil (Marunggas)
	Kalingalan Caluang
	Lugus
	Maimbung
	Panglima Estino (New Panamao)
	Pata
	Tapul
SURIGAO DEL NORTE	Alegria
	Bacuag
	Burgos
	Del Carmen
	General Luna
	Malimono
	Pilar
	San Benito
	San Francisco (Anao-aon)
	San Isidro
	Santa Monica (Sapao)
	Sison
	Tagana-an
	Tubod
SURIGAO DEL SUR	Bayabas
	Carmen
TARLAC	Anao
	Ramos
	San Clemente
TAWI-TAWI	Turtle Islands
ZAMBOANGA DEL	Mutia
NORTE	Rizal
	Sibutad
ZAMBOANGA DEL	Josefina
SUR	Sominot (Don Mariano Marcos)
	Tigbao
	Vincenzo A. Sagun
ZAMBOANGA	Talusan
SIBUGAY

 

ANNEX B

INCENTIVES FOR BOI-REGISTERED ENTERPRISES

Entitlement and availment of incentives shall be subject to the terms and conditions set forth under the relevant law and the project's Certificate of Registration as well as the rules and regulations of the implementing/administering agency.

A. Omnibus Investments Code of 1987 (E.O. No. 226)

1. Income Tax Holiday (ITH)

a. Six (6) years for projects with pioneer status and for projects located in a Less Developed Area (LDA)

b. Four (4) years for new projects with non-pioneer status

c. Three (3) years or expansion/modernization projects

2. Duty exemption on imported capital equipment, spare parts and accessories

3. Exemption from wharfage dues and any export tax, duty, impost and fees

4. Tax exemption on breeding stocks and genetic materials

5. Tax credits on imported raw materials

6. Tax and duty-free importation of consigned equipment

7. Additional deduction for labor expense

8. Employment of foreign nationals

9. Simplification of customs procedures aDTSHc

10. Access to bonded manufacturing warehouse

B. Revised Forestry Reform Code of the Philippines (P.D. No. 705)

Incentives under E.O. No. 226 or the following:

1. Treatment of the amounts expended by a lessee in the development and operation of an industrial tree plantation or tree farm prior to as ordinary and necessary business expenses or as capital expenditures; and

2. Deduction from an investor's taxable income for the year, of an annual investment allowance equivalent to thirty-three and one-third per cent (33-1/3%) of his actual investment during the year in an enterprise engaged in industrial tree plantation or tree farm.

C. Philippine Mining Act of 1995 (R.A. No. 7942)

Incentives under E.O. No. 226 and the following:

1. Exemption from real property tax and other taxes or assessments of pollution control devices

2. Income tax-carry forward of losses

3. Income tax-accelerated depreciation

D. Book Publishing Industry Development Act (R.A. No. 8047)

Incentives under E.O. No. 226

E. Downstream Oil Industry Deregulation Act of 1998 (R.A. 8479)

1. Income tax holiday (5 years)

2. Additional deduction for labor expenses

3. Minimum tax and duty of three percent (3%) and value-added tax (VAT) on imported capital equipment

4. Tax credit on domestic capital equipment

5. Exemption from contractor's tax

6. Unrestricted use of consigned equipment

7. Exemption from the real property tax on production equipment or machineries

8. Exemption from taxes and duties on imported spare parts

9. Such other applicable incentives under Article 39 of Executive Order No. 226. HTScEI

F. Ecological Solid Waste Management Act of 2000 (R.A. No. 9003)

1. Duty exemption on imported capital equipment, vehicles and spare parts

2. Tax and duty exemption of donations, legacies and gift

3. Non-fiscal incentives under E.O. No. 226

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

1. Tax and duty exemption on imported capital equipment, vehicles and spare parts

2. Tax and duty exemption of donations, legacies and gift

3. Non-fiscal incentives under E.O. No. 226

H. Magna Carta for Disabled Persons (R.A. No. 7277)

Incentives under E.O. No. 226

I. Renewable Energy Act of 2008 (R.A. No. 9513)

1. Income tax holiday (7 years)

2. Duty-free importation of RE machinery, equipment and materials

3. Net Operating Loss Carry-Over (NOLCO)

4. Corporate tax rate of 10% after ITH

5. Accelerated depreciation

6. VAT-zero rate on sale of fuel or power generated

7. Cash incentive for missionary electrification

8 Tax exemption of carbon credits

9. Tax credit on domestic capital equipment and services

J. Tourism Act of 2009 (R.A. No. 9593)

Incentives under E.O. No. 226

These General Policies and Specific Guidelines shall take effect immediately upon publication. TDcAIH

By the Authority of the Board:

 

(SGD.) LUCITA P. REYESExecutive Director

Footnotes

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

2. Government Industrial Estates

 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).

Published in The Philippine Star on September 28, 2012.