Philippines has approved the grant of incentives to preferred activities under the 2012 Investment Priorities Plan, which opens the gates for the entry of foreign investors in the iron and steel industry that will be critical for the country’s backward integration and industrialization hopes.
Trade Undersecretary Mr Adrian S Cristobal said Malacañang made no major revisions to the draft IPP that the Board of Investments submitted to the Palace.
The 2012 IPP is highlighted by the re entry of iron and steel on the list of priority investments that will qualify for fiscal and non fiscal incentives, such as income tax holidays and duty free importation of capital equipment and raw materials.
Mr Cristobal said that iron and steel are important for the country's industrialization thrust. The 2011 IPP did not include iron and steel on the list of preferred activities. He added that "There is no debate that we need iron and steel. It is not just a wish because there is strong interest from foreign producers to come into the Philippines, where they see high growth in the immediate and near future."
He said foreign investors are aware of the rapid expansion in the different sectors that require iron and steel, including the shipping industry, infrastructure, tourism related developments, and projects falling under the public private partnership scheme.
Mr Cristobal said while there is already a strong interest from foreign investors, the grant of incentives will make it more attractive to them. The BOI will now consult with the different sectors for the drafting of the 2012 IPPs implementing rules. Once the rules are published, the new IPP will become effective.
He added that "We will be assessing the soundness of the rules, and we will make sure that we will get value for our incentives. We will tighten some of these rules, and make sure the incentives are sound and are used effectively to ensure the goals of inclusive growth."
Other preferred activities in the 2012 IPP include power generation, tourism, PPP, agribusiness, creative industries and knowledge based services, research and development, motor vehicle, shipbuilding, mass housing, hospital and medical, disaster mitigation, prevention and recovery projects and strategic projects.
The BOI is using the IPP to lure new investments in these priority sectors.
Mr Cristobal said that the government's target is to exceed the PHP 360 billion fresh investments in 2012 than that were registered by the BOI in 2011.
Source - ABS CBN News
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