MANILA, Philippines—The Department of Trade and Industry (DTI) will only make minor adjustments in the Investment Priorities Plan (IPP) for 2013, putting off the major changes to 2014.
“Our preference is just to keep the current list for 2013 because we want to issue a new list for the 2014 IPP at the end of 2013,” Trade Secretary Gregory L. Domingo told reporters.
The Trade department, Domingo said, wants to issue the 2014 IPP earlier to better guide investors. The 2013 IPP still has not been issued and, as such, is already “late.”
But the DTI must first agree with the Department of Finance (DOF) on the content and timing of the 2013 and 2014 IPPs. Both departments are already going over the investment plans, Domingo said.
The Finance department “will want to minimize the incentives. On our end, we want to, if it makes sense, to offer incentives to promote investments,” Domingo explained.
The DTI will only make minor adjustments in the 2013 IPP such as the removal of tax holidays for tourism accommodations in four major destinations (Metro Manila, Cebu City, Mactan Island, Boracay Island), Domingo said. Major issues, like mass housing, will be addressed in the 2014 IPP.
The DOF wants to remove mass housing from the list of investment priorities because it has turned into a profitable undertaking for investors. DOF is also keen to remove “mainstay” sectors such as shipbuilding, iron and steel, and motor vehicle manufacturing from the IPP.
In a position paper sent to Trade Undersecretary Adrian S. Cristobal Jr., Finance Undersecretary Jeremias N. Paul Jr. said “subsidizing projects that do not need tax incentives should be avoided because they represent wastage of government resources.”
Also, the DOF wants to limit the 2013 IPP to export-oriented investments (such as creative industries, knowledge-based services, medical tourism), qualified micro and small enterprises (such as agribusiness and fishery), and research and development activities (such as green technology and laboratories for clinical trials).
As for infrastructure, energy, and public-private partnership projects, these have cost recovery mechanisms and will function even without tax incentives, according to the DOF official.