The Board of Investments (BOI) has breached its trillion-peso target for investment pledges earlier than expected, after approving the multibillion-dollar project of the country’s long-awaited, albeit controversial, China-backed third telco player.
A total of P1.1 trillion worth of projects has been registered at the BOI in the first 10 months of the year, giving tax breaks to big companies at a time when the government plans to rationalize the country’s tax incentives.
The BOI hit its 2019 target as early as October, top BOI officials announced in a press briefing on Wednesday. This marked the third consecutive year it broke its all-time record in terms of investment approvals, BOI Managing Head Ceferino Rodolfo said.
Back in September, the investment promotion agency only had P764.7 billion worth of pledges, which was still a long way from its 2019 year-end target.
But the agency picked up steam in October when it approved the big-ticket proposal of Dito Telecommunity Corp., a consortium backed by some of President Duterte’s allies—Davao-based businessman Dennis Uy and China Telecom.
BOI Chair and Trade and Industry Secretary Ramon Lopez told reporters on the sidelines of the press briefing that Dito’s investment was the biggest project the BOI approved for the month of October.
While Lopez did not disclose the investment cost, Dito has previously said it would spend about P257 billion over a five-year period as it planned to start commercial operations sometime in 2020.
The BOI has a list of preferred business activities that are eligible for tax breaks. Last updated in 2017, the investment priority list includes telecommunications as one of its preferred investments, limiting it only to “new players” who are not part of either telco giants PLDT Inc. and Globe Telecom.
The incentive package will likely help Dito, formerly called the Mislatel Consortium, as it aims to break the duopoly created by PLDT and Globe.
Mr. Duterte pressured the Department of Information and Communications Technology to look for the country’s third telco player, a long and complicated search that brought the agency far and wide.
Other than the telco project, investments in other sectors such as energy propped up the pledges to its current level from January to October.
The agency has been breaking all-time records since 2017. In 2017, it hit P616.8 billion, then did so again in 2018 with P915 billion.
Lopez said that investment pledges would likely end 2019 at P1.2 trillion. Once hit, the figure will set a high bar for the BOI in the last few years of the Duterte administration.
Asked for next year’s target, he said, offhand, that the agency might target P1.5 trillion in 2020.