Board of Investments General Policies and Specific Guidelines to Implement the 2009 Investments Priorities Plan (IPP)

May 13, 2009

BOARD OF INVESTMENTS

GENERAL POLICIES AND SPECIFIC GUIDELINES TO IMPLEMENT THE 2009 INVESTMENTS PRIORITIES PLAN (IPP)

PART II

General Policies

I. APPROVAL OF APPLICATION AND ENTITLEMENT TO INCENTIVES

The approval of application for registration and entitlement to incentives under the 2009 IPP is subject to Article 7, paragraph 3 of Executive Order No. (EO) 226, to wit:

"ART. 7. Powers and Duties of the Board. — ...

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

II. EQUITY OWNERSHIP

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

III. EQUITY REQUIREMENT

In general, the minimum equity required to finance the project applied for registration shall be equal to 25% of project cost.

IV. REGIONAL DISPERSAL OF INDUSTRIES

The dispersal of economic activities in the countryside is encouraged. Projects in Less Developed Areas (LDAs) and the thirty (30) poorest provinces enumerated hereunder shall be entitled to full incentives.

LESS DEVELOPED AREAS

REGION	PROVINCE

CAR	Abra
	Apayao
	Ifugao
	Kalinga
	Mt. Province

II	Quirino
	Nueva Vizcaya

IV	Aurora
	Marinduque

V	Masbate

VI	Guimaras

VII	Siquijor

VIII	Biliran
	Eastern Samar
	Southern Leyte

ARMM	Basilan
	Maguindanao
	Sulu
	Tawi-Tawi

30 POOREST PROVINCES 1

REGION	PROVINCE

CAR	Abra
	Apayao
	Kalinga
	Mt. Province

IV	Marinduque
	Occidental Mindoro
	Oriental Mindoro
	Palawan
	Romblon

V	Camarines Sur
	Masbate
	Sorsogon

VI	Antique
	Aklan

VII	Negros Oriental

VIII	Eastern Samar
	Northern Samar

IX	Zamboanga del Norte

X	Lanao del Norte
	Lanao del Sur
	Misamis Occidental

XI	Davao Oriental

XII	Saranggani
	Sultan Kudarat

ARMM	Maguindanao
	Sulu
	Tawi-Tawi

CARAGA	Agusan del Sur
	Surigao del Norte
	Surigao del Sur

Projects in LDAs shall be entitled to the following additional incentives: aEAcHI

• Six (6) year income tax holiday (ITH) regardless of status (pioneer or non-pioneer) or type of project (new or expansion).

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

Subject to Article 40 of EO 226, any area within a province may be considered as LDA.

A. Projects in government industrial estates declared by national law or presidential proclamation prior to 01 January 1989 (unless subsequently privatized),as follows:

1. Dagat-Dagatan (P.D. 569 dated 30 October 1974).

2. Vitas Industrial Estate, Tondo (E.O. 1086 dated 31 January 1986, as amended/expanded through Presidential Proclamation No. 39 dated 09 September 1992 and Proclamation 465 dated 01 August 1994) (Vitas Industrial Estate/Smokey Mountain).

3. Bagong Silang Industrial Estate, Caloocan City (Presidential Proclamation No. 843 dated 26 July 1971).

4. Food Terminal Inc., Taguig (LOI 900 dated 25 July 1979).

5. Navotas Fishing Port Complex (E.O. 772 dated 08 February 1982).

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

B. Projects that will engage in service type activities.

C. Export-oriented projects.

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

D. Modernization projects.

E. Projects of micro and small enterprises (MSEs).

F. Strategic Activities as defined under this IPP (see Part I, I.B.7 "Strategic Activities"). ACTEHI

G. Projects under the Contingency List.

VI. EXPORT OF MANUFACTURED/PROCESSED GOODS

Except for agricultural products, goods should undergo manufacturing or processing.

Mineral products are covered by the Specific Guidelines (see Part III, II.B Philippine Mining Act of 1995 (R.A. 7942)

Production of goods and products from recycled materials involving simple processing covering any or a combination of activities such as but not limited to cleaning, sorting, cutting, shredding, pulverizing, grinding, crushing, compacting, dissolving and filtration are not qualified for registration.

VII. EXPORT OF PRODUCTS IN SHORT DOMESTIC SUPPLY

The application for registration of projects engaged in the export of products in short domestic supply may be suspended if national interest so requires.

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

VIII. PROMOTION OF MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES (MSMEs)

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

IX. ASSISTANCE TO MICRO, SMALL AND MEDIUM-SIZED PROJECTS

The BOI extends the following:

A. Preparation of simplified project application for BOI registration.

B. Identification of MSME support companies.

C. Sourcing financing support.

In addition, the following assistance are provided for micro and small enterprises:

A. Reduced fees as follows:

Type of Fee	Micro Enterprises	Small Enterprises

Filing Fee	PhP500.00	PhP1000.00

Issuance Fee	1/2 of 1% of amount of	1/2 of 1% of amount of
	incentive granted but not	incentive granted but not
	more than PhP500.00	more than PhP1,000.00

B. One-day processing of application for registration.

C. Exemption from application and registration fees for micro enterprises.

D. Seventy five percent (75%) reduction in application and registration fees for small enterprises.

E. Exemption from the twenty five percent (25%) equity requirement.

F. Posting of the Notice of Filing of Application in provincial, city, municipal or barangay hall, in lieu of publication in a newspaper of general circulation. HTAEIS

G. Simplified reportorial requirements.

H. Simplified application for incentives.

X. PROJECT TYPE AND STATUS

A. New Projects

The following are considered new projects:

1. Projects undertaken by a newly formed or organized entity.

2. Project of an existing enterprise that is entirely distinct and different from its existing business operation in terms of either final product or service, production process, equipment or raw materials.

3. Products manufactured from locally designed and developed Research and Development (R & D).

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

4. Project of an existing enterprise similar to its existing operations, provided that it meets all of the following:

a. The project will establish a new complete line.

"New Complete Line" refers to new facilities used in the production of the registered product/service. This line may use a common facility such as warehouse, finishing, quality control, or laboratory.

"New Facility" refers to the space or area, physical structure and equipment provided for a particular purpose or segment of the production process/service activity.

b. There is new investment in fixed assets and working capital. DaCEIc

5. Projects acquired from PMO/GFIs/GOCCs:

This covers projects involving assets purchased/leased from the Privatization and Management Office (PMO),government financial institutions (GFIs) and government owned or controlled corporations (GOCCs),or entities wherein the government has ownership or interest.

The ITH shall be subject to the limitations set forth under Part II, I. "Approval of Application and Entitlement to Incentives".Projects with ITH incorporated in the bid price may be entitled to ITH.

Pioneer status may be granted to either:

• Projects with a new investment of at least the Philippine Peso equivalent of US$100 million covering purchased cost, pre-operating cost, rehabilitation cost, if any, and working capital; or

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

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

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

B. Expansion Projects

These are activities involving the same products of or services rendered by an existing enterprise, as follows:

1. Projects involving the installation of additional capacity-determinant equipment within the same existing plant or facility of the enterprise. cTSHaE

2. Projects involving the modernization and rehabilitation of an existing facility of activities listed in the IPP that will result in increase in existing capacity.

3. ICT projects located in the same building and using the same basic common facilities such as servers, backup generators, internet connections, etc.,shall be considered as expansion.

4. Other service type activities that do not meet the qualification requirements for new projects under Part II, X.A.

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

C. Modernization Projects

1. For purposes of this IPP, rehabilitation is considered a form of modernization.

2. The modernization program should identify the phases/stages of production sought to be modernized. In general, the program should be completed within two (2) years from date of registration.

3. To be eligible for pioneer status, the project must comply with Article 17 of EO 226 unless other conditions are provided in the Specific Guidelines covering the activity.

4. In general, modernization of manufacturing activities shall result to a yield rate of at least 95%.For rehabilitation, the minimum requirement shall be the restoration of the plant rated capacity.

5. Projects registered under the modernization program without increase in capacity may be entitled to three (3) years ITH and other incentives.

6. The general policy on brand new equipment also applies to modernization program.

7. The computation of ITH for projects without increase in capacity is as follows:

	New Investment (in US$)
Rate of Exemption (ROE) =	–––––––––––––––––––––––––––– x 100
	Total Investments (existing + new)
	relative to the concerned plant (in US$)

a. For single product/activity.

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

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

		New Investment (in US$)
ROE	=	–––––––––––––––––––––––––––––– x 100
		Total Investments (existing + new)
		Relative to the concerned plant (in US$)

Where:

(1) The ROE shall be fixed for the ITH entitlement period.

(2) The exchange rate shall be the existing rate at the time of actual investment or time of availment of ITH whichever will result to lower rate of ITH.

(3) For purposes of determining existing investments, the Total Fixed Assets relative to the concerned plant including the land on which the project is situated shall be based on the latest audited financial statements at the time of application for registration.

(4) The % share in Total Sales shall be based on actual sales values for the year of availment.

D. Existing Export Projects

Existing producers that will export part of production may qualify for registration with limited incentives under certain conditions, i.e.,Tax Credit and/or VAT zero rating of their exported products.

XI.PIONEER STATUS AND INCENTIVES

In general, pioneer status with pioneer incentives shall be governed by Article 17 of EO 226.

Pioneer status with pioneer incentives may be granted to projects that meet the minimum investment requirement and other qualifications as provided in the Specific Guidelines.

Pioneer status with non-pioneer incentives may be granted to projects that meet the minimum investment requirement as provided in the Specific Guidelines.

XII.PROJECTS WITH SOVEREIGN GUARANTEE OR GUARANTEED RATE OF RETURN

In general, projects with sovereign guarantee or guaranteed rate of return are not entitled to ITH.

Projects with take or pay provisions are not entitled to ITH.

Projects with sovereign guarantee for risks other than commercial risk may be granted ITH subject to certification as such by the agency/institution providing the guarantee.

XIII.UNSOLICITED BOT PROJECTS

Unsolicited BOT projects are not entitled to ITH.

XIV.MULTI-PHASED PROJECTS WITH MULTIPLE LOCATIONS

In general, projects of an enterprise with multiple phases/location may be registered on a per revenue stream basis. ETDAaC

XV.CORPORATE SOCIAL RESPONSIBILITY PURSUANT TO SOCIAL OBJECTIVES OF E.O. 226

Registered enterprises with non-pioneer incentives are encouraged to undertake Corporate Social Responsibility (CSR) activities, which may be chosen from the list of activities identified by the National Anti-Poverty Commission (NAPC).

Registered enterprises with pioneer incentives are enjoined to undertake CSR activities. The grant of the last two years of their ITH shall be subject to submission of proof thereof not later than the end of the 4th year of ITH entitlement.

XVI.PROJECTS CRITICAL TO THE ENVIRONMENT

New and expansion projects shall be required to secure an Environmental Compliance Certificate pursuant to P.D. No. 1586 (Philippine Environmental Impact Statement System) and other clearances under relevant environmental laws. AHECcT

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.

XVII.FOOD PROCESSING PROJECTS

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

XVIII.INTERNATIONAL CERTIFICATION

All enterprises that will register under the 2009 IPP are encouraged to acquire international certification such as ISO 9000 certification, Quality Standards (QS) or other similar certifications to improve efficiency and global competitiveness. STcaDI

XIX.EQUIPMENT

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

XX.PROJECTS IN THE AUTONOMOUS REGION OF MUSLIM MINDANAO

Projects in the Autonomous Region of Muslim Mindanao (ARMM) should register with the BOI-ARMM.

XXI.PROJECTS WITH REVENUES DERIVED FROM CARBON CREDITS PURSUANT TO THE KYOTO PROTOCOL

Revenues from the sale of carbon credits through certified emission reduction (CER) units generated from registered activity may be considered as part of the income entitled to ITH, provided that the enterprise made representation at the time of application for registration that such projects would earn CER units.

Projects with foreign exchange earnings generated from CER units of at least more than 50% of their total revenues may be registered as export-oriented projects.

XXII.OUTSOURCING OF PRODUCTION PROCESS OR SERVICES

Portion/s of the production process or services of the registered activity may be outsourced provided that the core activity or the integrated nature of operation is undertaken by the registered enterprise.

XXIII.PUBLIC WELFARE CONSIDERATION

The BOI may deny applications for registration for reasons of public health or morals.

PART III

Specific Guidelines

I.PREFERRED ACTIVITIES

A. CONTINGENCY LIST

Job Saving/Creation Projects

1. This covers existing projects and/or activities affected by the current global economic crisis that will:

a. Retain investments and maintain current number of workers;

b. Retain investments and increase current number of workers;

c. Increase investments and maintain current number of workers; or

d. Increase investments and increase current number of workers. AEDcIH

Enterprises maintaining their workers applying retention schemes such as assignment of workers to tasks other than their regular tasks, reduction of working hours, etc. may be qualified.

Workers shall refer to personnel directly engaged in the registered activity excluding line supervisors, warehousemen, quality control personnel outside the production line, utility and maintenance personnel and subcontracted labor.

The determination of the number of workers to be maintained is on the basis of the number of workers before the enterprise was affected by the crisis. For this purpose, the firm shall submit proof showing the numbers of workers before the crisis and the current workers at the time of application such as certified true copies of SSS contribution payment return and BIR Form 1601 — C.

For purposes of ITH under this Contingency List, start of commercial operation shall be the date when a particular enterprise actually begins generating positive Earnings Before Income Tax and Depreciation Allowance (EBITDA) for projects under (A.1.a) and (A.1.b) or the date specified in the project study submitted to the Board for projects under (A.1.c) and (A.1.d).

To qualify for registration under this list, the enterprise must prove that its operation has been affected by the global economic crisis impairing its viability as reflected in its Audited Financial Statements (AFS).The Board may, however, consider other factors that will establish the causal link between the present condition of the enterprise vis-Ã -vis the global economic crisis.

BOI-registered enterprises shall waive their remaining incentives provided for under their existing registrations in order to qualify for the applicable incentives under this List.

2. This also covers new projects of micro, small and medium enterprises as defined under R.A. 9501.

The projects enumerated in Annex "A" are not qualified under this listing.

NOTE: The Contingency List is a temporary inclusion in the IPP to mitigate the effects of the global crisis and will be delisted upon an official pronouncement by the National Economic Development Authority (NEDA) that the crisis no longer exists; Provided however, that the Board, based on certain indicators, may continue to qualify under this list industries/sectors that are still affected by the crisis.

B. REGULAR LIST

1. Agriculture/Agribusiness and Fishery

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

This also covers biotechnological products and services.

a. Commercial production

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

b. Commercial processing

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

The following are the qualifications for registration:

• The production of refined sugar, cooking oil and rice should comply with the applicable provisions of the Philippine Food Fortification Act of 2000 (R.A. 8976); production of iodized salt should comply with the applicable provision of the ASIN law (R.A. 8172). EScAID

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

c. Biofuels

This covers the production and/or processing of biofuel crops.

Production of crops for use as feedstock supply and processing of biofuel crops must be consistent with the Philippine Biofuels Program under R.A. 9367.

d. Feed Milling

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

e. Production of Organic Fertilizer

f. Biotechnological Products and Services

This covers the extraction of higher value substances from traditional crops through bioprocessing. This also covers the development of modern biotech products for commercial purposes.

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

2. Infrastructure

This covers transport (air, water and mass rail transport),water (water supply and/or distribution),logistics, energy (power generation projects using renewable 2 and other energy sources adopting environmentally-friendly technologies, power generating plants located in missionary areas, and privatized plants), mass housing, physical infrastructure, pipeline projects for oil and gas, and projects under the Build-Operate-Transfer (BOT) Law.

a. Transport

This covers air, water and mass rail transport.

(1) Air Transport

Air transport operation includes passenger and/or cargo operation classified as a public utility. cCAIDS

Lease with option to purchase aircraft may be allowed.

Pure lease may be allowed provided that the lease contract is for a minimum of five (5) years; Provided further, that the lease may be renewed on a yearly basis.

Acquisition of additional aircraft/s may be registered as new project.

Any of the following may qualify for pioneer status:

• Serving the missionary/developmental routes, as indicated in the Certificate of Public Convenience and Necessity (CPCN).

• Air transport projects involving purchase/lease-purchase of brand new aircraft. For lease-purchase, the option to purchase should be exercised before the end of the 4th year of ITH availment.

All applications for registration must be endorsed by the Civil Aeronautics Board (CAB).Such endorsement must contain information on the routes to be served. HaAIES

Prior to start of commercial operation of each aircraft, the registered enterprise must submit a Certificate of Airworthiness issued by Civil Aviation Authority of the Philippines (CAAP).

(2) Water Transport

This covers domestic, overseas, and RORO shipping, and towing and salvaging operations. HETDAa

(a) Domestic/inter-island shipping

This covers pure cargo, passenger, and passenger-cargo vessel operations including Roll-On/Roll-Off Terminal System (RRTS) operations.

The following are the qualifications for registration:

•RORO vessels must not be more than fifteen (15) years old and must be at least 250 gross tonnage (GT) for those serving primary routes and at least 100 GT for those serving the secondary, tertiary and developmental routes.

•Tankers must be double-hulled and not more than ten (10) years old.

•High-speed passenger crafts must not be more than five (5) years old.

•Vessels other than tankers and hi-speed passenger crafts must be at least 200 GT and must not be more than fifteen (15) years old.

Age of the vessel shall be reckoned from the date of launching as indicated in the vessel's Certificate of Construction.

Any of the following may qualify for pioneer status:

•RORO operator/enterprise serving the secondary, tertiary or developmental routes, as indicated in the Certificate of Public Convenience (CPC) issued by Maritime Industry Authority (MARINA).

•Acquisition of brand new vessels.

(b) Overseas shipping

The following are the qualifications for registration:

• Must be a Philippine shipping enterprise accredited with the MARINA.

• Vessel must be registered and operated under the Philippine Flag.

• Vessels must be at least 500 GT and must not be more than fifteen (15) years old.

Acquisition of brand new vessels may qualify for pioneer status.

Acquisition of additional vessel/s may be registered as new project.

Lease or charter of foreign-owned vessel with option to purchase may be allowed. ACaDTH

Pure lease or bareboat charter may be allowed provided that the lease contract is for a minimum of five (5) years; Provided further, that the lease may be renewed on a yearly basis.

All applications for registration must be endorsed by the MARINA. Such endorsement should contain information on the routes to be served.

Vessels for tourism purposes must also be endorsed by the Department of Tourism (DOT).

Prior to start of commercial operation of each vessel, the registered enterprise must submit a Certificate of Seaworthiness issued by MARINA.

This covers the provision of towing and salvaging services to a vessel on sea, ocean, lake, canal or river.

Towing involves the provision of services by a tugboat to a ship owner by pulling, pushing, hauling, or dragging the latter's vessel to a designated place or port.

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.

The following are the qualifications for registration:

• The project must engage in both towing and salvaging operations.

• The tugboat or vessel used for salvaging must not be more than ten (10) years old.

Only income from salvaging operations may be entitled to ITH.

All applications for registration must be endorsed by the Philippine Ports Authority (PPA),the Philippine Coast Guard (PCG),and other concerned government agencies with respect to the salvaging operations.

(3) Mass Rail Transport

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

b. Water Supply and/or Distribution

This covers the supply and/or distribution of water.

Supply of water shall be limited to supply of bulk water extracted from its natural source, except shallow and deep wells, and treated for commercial purposes.

Distribution activity must involve extraction of water from natural source, except shallow and deep wells, treatment and installation of a piping network that includes water main service pipelines and flow metering systems. Applicants must submit a copy of its Certificate of Public Convenience (CPC) or its equivalent.

Projects involving any of the foregoing areas of water operations dedicated to a particular industrial estate, industrial community, or subdivision are not qualified for registration under this listing.

c. Logistics

This covers ports, terminals, natural gas refueling stations, warehouses, and post harvest facilities.

(1) Ports

This covers the development and operation of airports and seaports.

All applications for registration must be endorsed by the CAAP or the PPA, whichever is applicable.

(2) Terminals

This covers the development and operation of the following:

(a) Passenger/intermodal terminals

The following are the qualifications for registration:

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

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

(b) Cargo terminals/Container yards

The following are the qualifications for registration:

• Must have new facilities; and

• Must have a system of ingress and egress to prevent traffic buildup/obstruction of thoroughfares on a 24-hour basis as certified by the appropriate DOTC/Metropolitan Manila Development Authority (MMDA) traffic management office. cSIHCA

The following are the qualifications for registration:

• Must have new facilities;

• Must cater to shipping vessels and land transport or a combination of both; and

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

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

(d) Natural gas refueling stations

This covers the establishment and operation of natural gas refueling station and related infrastructures and facilities in accordance with relevant Philippine National Standard (PNS).

Foreign-owned corporations must comply with the Retail Trade Law (R.A. 8762).

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

(3) Warehouses

This covers the establishment and operation of warehouses complete with state-of-the-art facilities.

(4) Post Harvest Facilities

This covers the establishment and operation of cold storage, freezing, bulk handling and storage facilities.

d. Power Generation Projects

This covers any of the following:

(1) Those utilizing renewable energy sources such as biomass, solar, wind, geothermal, hydro and tidal. 3

(2) Other energy sources adopting environmentally-friendly technologies.

(3) Power generating plants located in missionary areas.

(4) Those under the Power Sector Asset and Liabilities Management (PSALM) privatization plan.

Any of the following may qualify for pioneer status:

• Power generation projects using renewable energy sources.

• Power generating plants located in missionary areas.

Projects that cost at least the Philippine Peso equivalent of US$1 million per megawatt may be granted pioneer status but with non-pioneer incentives.

Only income from the sale of electricity generated from the plant shall be entitled to ITH.

e. Low-Cost and Socialized Mass Housing

Low cost housing refers to a housing program for low and middle-income groups substantially constructed by the private sector as a business venture.

Socialized housing refers to a housing program or project covering houses and lots undertaken by the government or private sector for underprivileged and homeless citizens. The following are the qualifications for registration: IDScTE

General requirements:

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

• All low cost mass housing projects, new or expansion, are required to provide socialized housing equivalent to at least 20% of the total project cost. For horizontal mass housing projects, developers are required to develop an area for socialized housing equivalent to at least 20% of the total subdivision area or total subdivision project cost within the same city or municipality, whenever feasible.

• Must be new or expanding mass housing project.

• Minimum of twenty (20) livable dwelling units in a single site or building.

• Project shall conform with the design standards set forth in the Rules and Regulations to Implement B.P. 220 and other related laws.

(1)Requirements for horizontal housing projects:

• Land development components for housing sites must contain provisions for road system, drainage system, water supply system, power system, sewage system in conformity with the minimum design standards for B.P. 220 and provisions for amenities and utilities.

• Mass housing projects must be located in areas zoned and classified for residential use/purposes in conformity with the approved Comprehensive Land Use Plan and Zoning of the concerned Local Government Unit (LGU).

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

(2)Requirement for vertical housing projects:

• At least 51% of the total floor area, excluding common facilities and parking areas, must be devoted to housing units.

Any of the following may be considered as an expansion project:

• Unfinished projects, the construction of which had stopped for at least one (1) year. Only the unsold units may qualify for registration.

• Conversion to low cost or socialized housing project of a building originally intended for commercial, office spaces, or exclusive condominiums.

• Construction of additional floors or annexes intended for mass housing units.

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

The ITH shall be limited only to the revenue generated from the registered housing project.

There shall be no double availment of similar incentives for socialized housing projects that avail of incentives under R.A. 7279 or the Urban Development and Housing Act (UDHA).

f. Physical Infrastructure

This covers the development, including rehabilitation, upgrading, and/or expansion, and/or operation of tollroads, highways, railways, roads, bridges, and power transmission lines.

This also covers the establishment of telecommunication infrastructure as endorsed by National Telecommunications Commission (NTC).

Power transmission line projects under the PSALM privatization plan may qualify for registration. aCHDST

Application for registration of "power transmission line" projects must include a Certificate of Compliance from the Energy Regulatory Commission (ERC) under the Electric Power Industry Reform Act (EPIRA).

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 cost of constructing a new physical infrastructure, as certified by appropriate agency.

If the cost of upgrading the physical infrastructure is less than 90% of the cost of constructing a new physical infrastructure, the project may be registered as a modernization activity but not entitled to ITH.

For projects that will involve the development and operation of physical infrastructure to be undertaken by separate entities, both the developer and operator may qualify for registration. However, the developer may be entitled only to incentive on capital equipment directly needed for the operation of the physical infrastructure.

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

g. Pipeline Projects for Oil and Gas

Application for registration on the establishment of infrastructure for transport of petroleum products and natural gas, petrochemical, and similar products, must include proof of filing of an application for Authority to Operate Pipeline System with the DOE.

h. Projects under the BOT Law

Application for registration must include an endorsement from concerned government agency or corporation or LGU, a copy of supply contract, and other relevant supporting documents.

BOT projects that cost at least PhP1.0 billion may be granted pioneer status but with non-pioneer incentives.

3. Engineered Products

This covers shipbuilding, manufacture of machinery and equipment, including their parts and components, manufacture of other transport equipment (air, water and land) including their parts and components, and manufacture of basic iron and steel products.

a. Shipbuilding

This covers shipbuilding and ship repair.

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

Ship Repair refers to the overhaul, alteration, modification or repair of hull, machinery, equipment, outfits and components of any type of ship.

Prior to start of commercial operation, the registered enterprise may be required to submit a copy of a Certificate of Registration or its equivalent from the MARINA or appropriate government authority.

Any of the following may qualify for pioneer status:

• Shipbuilding or ship repair facilities with a minimum lifting capacity of 20,000 DWT.

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

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

b. Machinery and Equipment

This covers the manufacture of machinery and equipment including its parts and components.

This also covers the manufacture of energy efficient lighting (EEL) such as compact fluorescent lights (CFL) and energy efficient version of linear fluorescent lamps (i.e., slim tube T8 triposphor),high intensity discharge (HID) lamps, ballasts (low loss electromagnetic and electronic),and energy efficient luminaires that are compliant with the PNS 4 or with internationally acceptable standards. Applications for registration must be endorsed by the DOE.

Mere assembly (screwdriver assembly) of machinery and equipment shall not qualify for registration.

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

c. Other Transport Equipment

This covers the manufacture of other transport equipment (air, water and land) including their parts and components.

(1) Aircraft and its Parts and Components

This covers the following:

(a) Manufacture or assembly of power-driven fixed-wing aircraft or power-driven aircraft supported by one or more rotors;

(b) Manufacture and/or assembly of aircraft engine, engine parts and other aircraft parts and components such as fuselage, wing, stabilizer, rudder, landing gear; and

(2) Other Water Transport and its Parts and Components

This covers boatbuilding and the manufacture of parts and components.

Boatbuilding refers to the design, construction, outfitting and launching of watercrafts with sizes below 24 meters in length but not less than 3 GT.

(3) Motor Vehicle and its Parts and Components

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

This also covers the manufacture of parts and components of motor vehicles.

The following are the qualifications for registration for the assembly or manufacture of motor vehicles: cSHIaA

• Must be registered participants of good standing under the MVDP and must invest in the production of major parts and components such as engine, transmission, power train, differential, body, motorcycle frame, fuel, tank, swing arm, plastic injection parts and die cast products.

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

• New assemblers must comply with the minimum investment requirement under E.O. 156 plus the additional minimum investment requirement under the preceding bullet.

Investments in parts and components manufacturing as required for the assembly or manufacture of motor vehicles shall be in any of the following schemes:

• Equity investment, either minor or major stockholdings in new or existing motor vehicle parts manufacturing company.

• Investments in in-house motor vehicle parts manufacturing.

• Cost-sharing schemes with existing motor vehicle parts manufacturing companies in terms of tooling and/or modernization/upgrade of facilities.

• Participation under the DTI's SME Assistance Program.

• Other investments that BOI may consider for the development of the motor vehicle industry.

Projects complying with any of the following may qualify for pioneer status:

• At least US$50 million (for Passenger Cars and Commercial Vehicles) and US$4 million (for motorcycles) new investments, which may include acquisition of existing assets or facilities.

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

• At least US$20 million (for Passenger Cars, Commercial Vehicles and Buses) and US$1 million (for motorcycles) incremental investments for Modernization/Expansion projects.

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

• Manufacture of alternative fuel vehicle.

Alternative fuel vehicle covers the manufacture of the following brand new vehicles powered by alternative sources, as classified accordingly under Section 1 of Article 1 of E.O. 156 (passenger cars, commercial vehicles and motorcycles):

oHybrid vehicles — vehicles that run on electric batteries and gasoline/diesel/other fuels.

oElectric Vehicles — vehicles that run solely on electric power.

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

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

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

oCompressed Natural Gas Vehicles — vehicles that run on Compressed Natural Gas (CNG). TADIHE

Projects involving the manufacture of parts and components complying with any of the following may qualify for pioneer status:

• Manufacture of transmission/engines.

• Manufacture of tool & die to produce chassis and engine.

• Common facility for forging/metal stamping of motor vehicle parts and components.

d. Basic Iron and Steel Products

This covers the manufacture of refined iron ore, e.g.,pig iron, hot briquetted iron (HBI),direct reduction iron (DRI) and primary steel products.

Flat hot-/cold-rolled products integrated with basic iron and steel production may qualify for registration.

Modernization must result in at least five percent (5%) reduction in energy usage. IaAEHD

4. Tourism

This covers the establishment of tourist accommodation facilities, resorts, and retirement villages, medical tourism and healthcare and wellness products and services.

a. Tourist Accommodation Facilities

This covers the following:

(1) Hotels, apartels/serviced residence, condotels, tourist inns, and pension houses as classified and endorsed by DOT.

The following are the qualifications for registration:

• For hotel projects located within Metro Manila, project cost, excluding cost of land, must be at least the Philippine Peso equivalent of US$20,000/room. CDHaET

• Condotel/Apartel/Serviced Residence:

o100% of the total number of units/rooms per building must cater to tourists/guests.

oEach unit must have fully equipped kitchen and laundry facilities.

Any of the following may qualify for pioneer status:

• Hotel projects classified as first class or deluxe by the DOT and costing at least the Philippine Peso equivalent of US$100,000/room.

• Condotel/Apartel/Serviced Residence costing at least the Philippine Peso equivalent of US$100,000/room and complying with the standards for first class or deluxe hotel as certified by the DOT.

• Projects locating 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. HDITCS

(2) Resorts that include special interest activities (that may or may not have accommodation facilities) such as but not limited to eco-tourism, agri-tourism, theme parks, conventions and exhibition/trade.

(a) Eco-tourism projects or those involving environmentally sound tourism activities, which blend with the natural and cultural environment in a given eco-system/specific locality.

(b) Agri-tourism projects or those involving working farms where the working environment forms part of the tourism project and promotes an appreciation of local culture, heritage and traditions through personal contact with people and maximize the potentials of income generation of existing farms through tourism-related activities.

(c) Theme parks are amusement/leisure parks wherein the landscaping, buildings, and attractions are based on one or more specific themes and offer a wide range of recreational activities and may include accommodation facilities.

Any of the following may qualify for pioneer status:

• Projects located outside Metro Manila classified as "AAA" by the DOT and with project cost of at least the Philippine Peso equivalent of US$10 million.

• Projects located in Metro Manila classified as "AAA" by the DOT and with project cost of at least the Philippine Peso equivalent of US$20 million.

• Theme parks, including those located in Metro Manila, 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.

• Projects locating in LDA.

• Agricultural and ecological tourism projects with a minimum lot area of fifty (50) hectares. ACTEHI

(3) Homestay

This covers the development of a chain of accommodation for travelers that would include restoration of historical structures and upgrading of homes and other facilities, implementing a quality system for the homestay network.

All applications for registration must be endorsed by the DOT.

b. Retirement Village

This refers to areas suitable for development that will ensure healthful, safe and environmentally-sound community life with prescribed carrying capacities of village facilities and activities such as but not limited to accommodation, food, recreation, medical/health care needs, security and other amenities/facilities, and provided with roads, power and water supply systems, drainage and sewerage systems and other infrastructures. The village should be under a unified and continuous management.

The following are the qualifications for registration:

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

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

Locators inside the retirement villages/parks such as retirement centers/condominiums or those engaged in the activities listed in the IPP that are related to retirement business may be registered as separate activity.

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

c.Medical Tourism

(1)Hospital/Medical Services

This covers tertiary care hospitals and specialized services as endorsed by the DOT.

"Tertiary care hospital" is a teaching and training hospital that provides clinical care and management on the prevalent diseases in the locality as well as specialized and sub-specialized forms of treatment, surgical procedure and intensive care.

"Specialized services" refers to focused expertise on certain types of services mostly with low patient numbers, and need critical mass of patients to make treatment centers cost effective. Services generally include training of specialist staff, high quality research programs and use of scarce resources like expertise, high technology equipment and donated organs. Construction of additional floors or annexes for new rooms and medical treatment facilities may be considered as an expansion project.

Any of the following may qualify for pioneer status:

•Tertiary hospitals with a minimum capacity of 100 beds and with investment cost of at least the Philippine Peso equivalent of US$10 million.

•Specialized services with project cost of at least the Philippine Peso equivalent of US$10 million and uses state-of-the art medical equipment and facilities as endorsed by the appropriate agency/ies.

Prior to availment of ITH, hospitals classified for 'medical tourism' must be accredited by the DOT.

(2)Ambulatory Surgical Services

This covers services such as elective (non-emergency) surgical procedures ranging from minor to major operations, where patients are discharged within the day for continuing post-operative care. This includes comprehensive ophthalmologic, dermatologic, cosmetic, and reconstructive surgeries, etc.

All applications for registration must be endorsed by the DOT.

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

(3)Dental Services

This covers the establishment of a dental services facility offering both regular and specialized dental services such as orthodontic procedures, dental implants and cosmetic dentistry.

(4) Rehabilitation and Recuperation Services

To qualify for registration, it must have a minimum investment of at least the Philippine Peso equivalent of US$1 million, excluding the cost of land.

d.Healthcare and Wellness Products and Services

This covers the following:

(1) Health Spa

This covers the establishment and operation of destination spa, resort/hotel spa, and traditional healing and therapeutic centers, e.g.,Philippine "hilot","dagdagay","ventossa",etc.

All applications for registration must be endorsed by the DOT.

(2)Healthcare and Wellness Products

This covers the manufacture of drugs and medicines in accordance with the Philippine National Drug Formulary (PNDF), food supplements limited to Vitamin A, iron and iodine compounds either mixed, coated or incorporated in appropriate medium added to flour, rice, sugar, oil as required by Food Fortification Law (R.A. 8976) and salt as required by ASIN Law (R.A. 8172), herbal medicines, and active substances of these drugs. The production of generic drugs and medicines is strongly encouraged.

Prior to availment of ITH, the firm shall submit a License to Operate (LTO) issued by the Bureau of Food and Drugs (BFAD).

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

5. Business Process Outsourcing (BPO)

This covers voice and non-voice IT-enabled services such as contact center, business/knowledge processing, software development, animation, data transcription, engineering design, and ICT support services.

A contact center project must have a minimum investment cost of Philippine Peso equivalent of US$2,500 per seat to qualify for registration. This amount covers the cost of equipment (hardware and software),office furniture and fixture, building improvements and renovation, and other fixed assets except land, building and working capital:

• If equipment used were leased, the same should be converted to assets in terms of commercial interest rates and amortized over a five-year period.

• If equipment were consigned, the same should have an assigned value to be considered part of project cost.

Any of the following may qualify for pioneer status:

• Introduces a major innovation in technology.

• With project cost of at least the Philippine Peso equivalent of US$5 million (excluding cost of land and building) to be put up during the first year of operations .

All ICT projects shall install internal security system compliant with BS 7799 or its equivalent.

6. Creative Industries

This covers non-BPO IT-enabled services and film, TV and theater arts production. Non-BPO IT-enabled services include development of original digital content for video games or game development.

For film and TV productions, applications for registration (per project basis) must be endorsed by the Film Development Council of the Philippines. The BOI may consult and/or require an endorsement from other concerned government agencies such as National Historical Institute (NHI) and the National Commission for Culture and the Arts (NCCA).

For theater arts production, applications for registration must be endorsed by the National Commission for Culture and the Arts (NCCA) or other appropriate government authorities. Only income derived from the box office returns, royalties including publication rights, and rentals for special showing earned by the producer within the incentive period shall be entitled to ITH.

7. Strategic Activities

This covers activities with a minimum project investment cost of the peso equivalent of US$300 million and complies with either of the following:

• Employment generation of at least 1,000 that should be maintained during the ITH entitlement period; or

• Use of internationally accepted high level of technology.

This also covers major projects of global companies intended to be located only in one country as a regional hub where the Philippines is one of the short-listed countries for investment location.

A global company is one that has manufacturing and/or services operations in at least two (2) countries.

Projects under Strategic Activities will be approved upon determination by the Board in consultation with the DOF, NEDA and other appropriate agencies.

8. Research and Development

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

a. Commercial/Contract R & D

This covers R & D activities done for external clients. This also covers the establishment of bio-availability and bio-equivalence test laboratory for commercial purposes.

All applications for registration must be endorsed by the Department of Science and Technology (DOST) or appropriate government authority.

b. In-House R & D

This covers R & D activities for in-house use. This also covers R & D activities whose products are subsequently manufactured using the output of the R & D activities. These products, provided listed in the IPP, are qualified for registration.

c. Center of Excellence (COE) shall serve as venue for at least two (2) of the following activities:

(1) Innovation and skills development through the provision of training facilities and programs.

The COE shall offer continuing education for purposes of acquiring new skills and/or providing advanced training in the area of excellence it is in. This may involve the establishment of specialized schools, finishing schools and schools offering bridging courses/programs. Only the courses/trainings/programs catering to the activities or created in support of the activities listed in the IPP, except those identified to be not applicable to COE, may qualify for registration and may be granted incentives. LLjur

The course offered by COE shall be accredited either by Commission on Higher Education (CHED) (for academic institutions) or by Technical Education and Skills Development Authority (TESDA) or other appropriate accrediting bodies (for occupational skills).

(2) Research and development and other productivity enhancement activities.

(3) Technology scanning, selection and adoption.

(4) Incubation program.

(5) Common service facilities.

d. Training/Learning Institutions cover those key employment generators (KEGs) identified by the Department of Labor and Employment (DOLE) and those specializing in developing skills for the manufacturing, agriculture/agribusiness, fishery, mining, tourism, infrastructure, creative industries, and service (including the training of maintenance personnel, seafarers complying with international standards and the development of environmental/sustainable disciplines — i.e.,pollution control officers/managers, environmental management auditors) sectors.

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 appropriate government agencies.

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

II.MANDATORY LIST

A.Revised Forestry Code of the Philippines (P.D. 705)

This covers extensive plantation of forest land of tree crops, except fruit trees, for commercial and industrial purposes.

Tree crops include timber and non-timber species such as rubber, bamboo, rattan, etc. (excluding fruit trees) for commercial and industrial purposes. ADSTCI

New project refers to the development of any public or private land to plantation of timber and non-timber producing species to supply the raw material requirements of forest-based industries. It also includes plantation with existing tree crops, which have not yet reached commercial harvest.

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

• Socialized Industrial Forest Management Agreement (SIFMA).

• Integrated Forest Management Agreement (IFMA).

• Private Forest Development Agreement (PFDA).

• Community-based Forest Management Agreement (CBFMA).

In general, ITP projects are not entitled to ITH.

B. Philippine Mining Act of 1995 (R.A. 7942)

This covers the exploration, development and utilization of mineral resources: aCATSI

1. Exploration of mineral resources including those covered by mineral agreements may qualify for pioneer status.

2. Mining, quarrying and/or processing of metallic and non-metallic minerals (except those involving riverbed operations, cave mining and beach mining).

ITH may be granted to domestic or export-oriented mining projects engaged in any of the following:

a. Mining and/or processing of metallic minerals:

• The mining and/or mineral processing projects require a process or technology other than the normal or usual processes or technology to mine and/or process the minerals, without which, the resource will not be developed or the mining activity will not be possibly undertaken.

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

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

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

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

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

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

All projects must have a mine life of at least ten (10) years.

All projects must locate outside the National Capital Region and must have the necessary permits/licenses from appropriate government authorities. CcTIAH

C.Printing, Publication and Content Development of Books or Textbooks (R.A. 8047)

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

Book is defined as a printed non-periodical publication of at least forty-eight (48) pages, exclusive of cover pages, published in the country and made available to the public. Textbook is an exposition of generally accepted principles in one subject, intended primarily as a basis of instruction in a classroom or pupil-book-teacher situation.

Content development of books consists of the following:

a. Development of new technologies directly related to book printing or publishing, such as but not limited to digitization, electronic books (E-books),internet-based archiving and retrieval systems, electronic content creation and development systems, educational and/or "how-to" audio-visual presentations with or without interactive segments, and the like. SHDAEC

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

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

D. Downstream Oil Industry Deregulation Act of 1998 (R.A. 8479)56

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

1. Oil refining refers to the manufacture of all petroleum products as defined under RA 8479 through distillation, conversion and treatment of crude oil and other naturally occurring petroleum hydrocarbons. This may include expansion, modification and modernization of a refinery, resulting in an increase in existing volume of production and/or improvement in the quality of petroleum products in conformance with the Philippine National Standards (PNS), the Clean Air Act, and other applicable laws and regulations. aTEScI

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

3. Distribution refers to bunkering and fuels shipping and transport. Fuels shipping and transport cover shipping and transport through land such as tank trucks, lorries and pipeline and tankers, and barges for the fuels to get to the points or areas where they are needed. Bunkering covers the activity of selling fuel for direct use by a vessel, usually for water and air transport, through a smaller transport vessel.

Distribution projects are limited to those utilizing brand new equipment and double-hulled vessels.

4. Marketing covers the following:

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

For gasoline retailing stations, except those locating in LDAs listed in this IPP, the applicant shall be required to invest a minimum capital of PhP10 million per station, excluding land, or such amount as may be determined jointly by BOI and DOE for augmentation purposes, as the need arises; Provided, that foreign retailers shall comply with the requirements provided under R.A. 8762, otherwise known as the Retail Trade Liberalization Law, and its implementing rules and regulations. DTSaIc

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

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

For storage, marketing and distribution, only investments of new industry participants may be entitled to incentives. The applicant shall submit an endorsement from the Department of Energy certifying that the applicant is a new industry participant with new investments.

Projects involving storage, marketing and distribution of petroleum products may be entitled to ITH when located in government identified logistics hubs, LDAs or 30 poorest provinces; otherwise, projects will only be entitled to capital equipment and other non-fiscal incentives under EO 226.

Refinery projects, in general, may be entitled to ITH under EO 226. Blending alone, within or outside the refinery, may only be entitled to capital equipment and other non-fiscal incentives. ETDHSa

Projects registered under R.A. 8479 are entitled to the incentives provided therein.

E. Ecological Solid Waste Management Act of 2000 (R.A. 9003)

This covers the establishment of waste recycling facilities integrated with manufacturing facility 7 using as inputs 100% locally generated solid waste materials or scraps from the recycling facility to produce semi-finished or finished product.

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

F. Philippine Clean Water Act of 2004 (R.A. 9275) 7

This covers the establishment of industrial wastewater treatment facilities, and sewage collection integrated with treatment facilities and the adoption of water pollution control technology, cleaner production and waste minimization undertaken through BOT or non-BOT schemes. HSaIDc

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

Industrial wastewater treatment facilities and sewage collection integrated with treatment facilities may be entitled to ITH.

Projects adopting water pollution control technology, cleaner production and waste minimization are only entitled to capital equipment incentive.

All applications for registration must be endorsed by the Department of Natural Resources (DENR),the Laguna Lake Development Authority (LLDA) or other appropriate government authority.

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

G. Magna Carta for Disabled Persons (R.A. 7277)

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

Disabled Persons are those suffering from restriction or different abilities, as result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being.

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

• Walk-in baths designed for people with disabilities.

• Commode chairs.

• Braille books.

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

• Wheelchairs, scooters and automobiles using special controls or assistive technology designed for people with disabilities.

• Hearing-aids.

• Artificial limbs, orthotics, prosthetics and orthopedic braces.

• Automatic/mechanical lifts to be attached to motor vehicles. aDCIHE

All applications for registration must be endorsed by the Department of Social Welfare and Development (DSWD).

H. Renewable Energy Act of 2008 (R.A. 9513)

The coverage and description of activities pertinent hereto shall be determined in accordance with the Implementing Rules and Regulations (IRR) of the R.A. 9513.

III.EXPORT ACTIVITIES

This covers the production/manufacture of non-traditional export products (excluding mineral products that are covered by specific guidelines thereon),export services and activities in support of exporters.

A. Production and Manufacture of Export Products

This covers the production/manufacture of non-traditional export products and with export requirement of at least 50% of its output, if Filipino-owned or at least 70%,if foreign-owned. DIETHS

Non-traditional products include but not limited to electronics, garments and textile, footwear and leather goods, furniture, jewelry, marine and aquaculture, and others.

B. Export Services

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.

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.

5. Logistics services. cEaCAH

This General Policies and Specific Guidelines shall take effect immediately after its publication.

(SGD.) EFREN V. LEAÑOExecutive Director Management Services Group

ANNEX A

Projects Not Qualified Under the Contingency List:

• Banks and financial institutions (as provided under Article 11 of E.O. 226).

• Retailing business as defined under R.A. 8762.

• All services except those qualified under the Regular List.

• Small-scale mining as defined under P.D. 1899 and R.A. 7076.

• Activities that are restricted/regulated by law or ordinances for reasons of security, defense and risk to health and morals (e.g.,beerhouse; "health clubs";manufacture/distribution of dangerous drugs; race track operations and forms of gambling, among others).

• Activities of non-Philippine nationals engaged in small and medium-sized domestic market enterprises that are not qualified under the Foreign Investment Act (R.A. 7042) as amended by R.A. 8170. IEDaAc

• Non-agricultural basic consumer goods.

• Personal care products.

• All existing power and infrastructure projects with sovereign guarantee or granted ITH.

• Other activities as may be determined by the Board.

Footnotes

1.Identified by the National Statistics Coordinating Board (NSCB) based on the 2006 NSO survey.

2.Power generation projects using renewable energy shall be transferred from the Infrastructure listing to the Renewable Energy Act under the Mandatory List upon effectivity of the Rules and Regulations to implement R.A. 9513 otherwise known as the Renewable Energy Act of 2008.

3.Power generation projects using renewable energy shall be transferred from the Infrastructure listing to the Renewable Energy Act under the Mandatory List upon effectivity of the Rules and Regulations to implement R.A. 9513 otherwise known as the Renewable Energy Act of 2008.

4.Compliance with PNS will apply only to self-ballasted lamps. Other EELs must comply with internationally acceptable standards until such time that the BPS issues PNS for these lightings.

5.In general, not entitled to ITH.

6.Entitled to Income Tax Holiday if registered under R.A. 8479 (Downstream Oil Deregulation Act).

7.In general, not entitled to Income Tax Holiday.