Strategic Investment Priority Plan undergoes significant makeover

The Philippines’ list of preferred areas of economic activities that the government will be granting juicy tax and incentive packages to is undergoing significant makeover with the implementation of the CREATE (Corporate Recovery and Tax Incentives for Enterprises) Law. The CREATE Law provides for the creation of the Strategic Investment Priority Plan (SIPP) that will replace the current Investment Priorities Plan (IPP), being administered by the Board of Investments. While the SIPP is still being finalized, the 2020 IPP serves as the transition SIPP. The SIPP seeks to list projects or economic activities that promote long-term growth and sustainable development. It supports the country’s new industrial policy as the domestic economy is still recovering from the economic impact of the pandemic and the continuing effects of the protracted war in Ukraine. It should serve as a catalyst and engine for industrial development and industrial revolution to transform and upgrade industries and produce more diversified, complex and sophisticated products. As such, the Philippines’ new industrial policy must strengthen competitiveness by adoption of advanced technologies in agriculture, manufacturing and services through structural change and industrialization. The economy needs new technologies essential for recovery, reduce carbon footprints, clean technology solutions, and new business models. There is a need for smart agriculture, advanced manufacturing and knowledge-based economy. The economy also requires the building of a robust industrial base, investment in research and development (R&D), promote vibrant startup ecosystem, build modern infrastructure, and skilled workforce. Most of all, the Philippines must address supply and value chain gaps. These should be integrated in production systems to ensure domestic industries can participate in the global value chain. As such, the SIPP list should consist of industries with existing, emerging and latent comparative advantage. These should promote modern infrastructure, ensure food security, health, high-tech agriculture and fishing, IT-BPM services, creative industries, countryside development, green metals processing, and sustainability in clean energy. Under the CREATE Law, investors in these economic activities are entitled to a package of tax incentives and facilitation by the government under the Tier 1 classification, without prejudice to upgrade to Tiers II and III if qualified. All an investor must do is get in touch online with any of the government’s investment promotion agencies (IPAs), which  can facilitate and expedite the setting up and operation of investment projects, assist in the registration process, and provide information and advice on the incentives package applicable. IPAs will assist in coordinating with local government units and other government agencies. Then the project proponent can create an account under the Fiscal Incentives Registration and Monitoring System to proceed with filing of its application. The IPAs will review the applications and reply through email. The inter-agency Fiscal Incentives Review Board will give the final approval of the incentives for these projects. Investors should take advantage of these modern incentive packages, which are performance-based, targeted, transparent and time-bound.