Incentives granted by the Board of Investment (BOI) to registered companies also stretches out to micro, small, and medium enteprises (MSMEs), a key official reminded local companies.
“We are encouraging everybody to go into this. BOI is not pro-big, nor is it pro-small. It’s pro-business,” said BOI Investments Assistance Service Director Domingo Bagaporo, in a press conference held at the Harold’s Hotel on the Investment Priorities Plan (IPP) Roadshow and Investment Awareness Seminar.
From 2010 to 2014, there were 1,200 BOI-registered projects in the country. Thirty-three percent of them or close to 400 are MSMEs. Currently, there are more than 3,000 BOI-registered projects nationwide, and more than 200 of them are in Cebu, according to BOI Cebu Officer-in-Charge Philip Torres.
BOI-registered businesses can avail of fiscal incentives, particularly those that venture into the identified “priority sectors.”
Under the IPP for 2014-2016, eight priority sectors were keyed out, namely: manufacturing, agribusiness and fishery, services, economic and low-cost housing, hospitals, energy, public infrastructure and logistics, and PPP projects.
BOI incentives, according to Bagaporo, are on a per project basis of the company. There are 3,000 projects registered with the BOI and are currently availing of the incentives.
The incentives typically include income tax holiday from four years to a maximum of eight years, depending on whether the activity is considered pioneering or not. Registered projects also have the privilege of importing capital goods free of duties, among other incentives.
In return for these privileges, Bagaporo said companies with BOI-registered projects have to submit annual reports to the BOI and fulfill the terms and conditions of their registration.
For companies whose businesses are not part of the eight priority sectors, Bagoporo said they may still avail of the incentives if they are involved in export activities.
In addition, those who are involved in businesses covered under special laws can also avail of the incentives, like those involved in renewable energy projects.
Priority investment areas determined by the Regional Board of Investments of Autonomous Region in Muslim Mindanao (ARMM) can also avail of BOI’s incentives.
Bagaporo said that while BOI requires a handful of requirements for BOI registration, he assured the board will assist the applicants in the entire process.
One of the initiatives is the signing of memorandum of agreements (MOA) with four government agencies, namely: the Department of Environment and Natural Resources (DENR), Food and Drugs Administration (FDA), Department of Tourism (DOT), and the Securities and Exchange Commission (SEC) to help facilitate the issuance of licenses and endorsements with these specific agencies.
Bagaporo added that BOI will soon sign MOAs with the Department of Agriculture (DA), Housing and Land Use Regulatory Board (HLURB), and the Department of Energy (DOE).
He is optimistic that more MSMEs will register with BOI and avail themselves of the fiscal incentives.
While the present IPP identified only eight sectors, the official said the list is subject to review yearly. Businesses involved in non-priority sectors may submit a position paper, so the board can make studies and consider including the sector in the list.
In the past 27 years, this is the first time that the IPP was rolled into a three-year plan, according to Bagaporo. Normally, the IPP changes yearly, but a three-year plan was undertaken to ensure “continuity, consistency, and predictability”--factors, according to BOI, that are seriously considered by domestic and foreign investors.
The 2014-2016 IPP will, however, be reviewed annually. The BOI-drafted IPP is a product of multiple consultations with government agencies and the private sector.
The present IPP’s theme is focused on “Industry Development for Inclusive Growth.” Hence, MSMEs are vital to participate and avail of the BOI incentives.
Participation of SMEs in the Asia Pacific economies in the global trade been the a topic visited in the recent Asia Pacific Economic Cooperation (APEC) meetings in the Philippines.
MSMEs account for over 97 percent of all enterprises and employ over half of the workforce across APEC economies. MSMEs contribute significantly to economic growth, with SMEs’ share of GDP ranging from 20 percent to 50 percent in the majority of APEC economies. However, they account for only 35 percent or less of the direct exports.
The 21 APEC-member economies established the Small and Medium Enterprises Working Group (SMEWG) to push interventions for SMEs, particularly micro enterprises, for them to take part in global and regional trade through direct export of goods and integration in global value chains.