A DRAFT of the Strategic Investment Priority Plan (SIPP) retains all the priority industries listed in the 2020 plan while creating two other tiers for “green” industries and research and development (R&D) activities, among others.
The draft, which was released to the media by House Ways and Means Committee Chairman and Albay Rep. Jose Ma. Clemente S. Salceda, remains unsigned but appears to be set for implementation via executive order (EO). The draft itself that Mr. Salceda released appears to be set to go out initially as a memorandum order to be issued by the Office of the President (OP), over the signature of Executive Secretary Salvador C. Medialdea.
The latest version of SIPP will be a companion document to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law and seeks to identify the industries to which the government hopes to attract investment by offering tax incentives.
According to the draft, Tier I consists of industries included in the 2020 version of the SIPP. The 2020 SIPP was carried over as a transitional list pending the release of a new SIPP that conforms to the provisions of CREATE, which took effect in April 2021.
Tier II was defined as activities “that are supportive of a competitive and resilient economy and will fill in gaps in the Philippines’ industrial value chains, which are critical in promoting green ecosystems, ensuring a dependable health system, achieving robust self-reliance in defense systems, and transforming industrial and agricultural sectors to being modern, competitive, and resilient,” according to the draft.
Tier III will include activities which are “supportive of the acceleration of the transformation of the economy primarily through the application of research and development (R&D) and attracting technology investments.” The tie also proposes to incentivize equipment and parts manufacturing and services related to new technologies, as well as the commercialization of R&D.
A draft foreword to the SIPP that was to go out in the name of Trade Secretary Ramon M. Lopez listed the Tier I projects as follows: various manufacturing activities including agro-processing projects; strategic services; healthcare and disaster risk reduction management services; mass housing; infrastructure and logistics projects including public-private partnerships entered into with local governments; innovation drivers, innovative business models, environment or climate-change-related projects; and energy.
Tier I also incentivizes export activities and other projects granted incentives by special laws.
According to a draft message that was to go out in the name of President Rodrigo R. Duterte that was attached to the draft SIPP, the President expressed hope that the plan will allow the Philippines to “attract more investments that will help propel economic recovery beyond the pre-pandemic levels while promoting sustainable inclusive growth, which will put us back on track towards upper-middle income country status in the long term.”
CREATE is the second package of the Comprehensive Tax Reform Program. It reduces the corporate income tax rate to 20% from 30%, and makes fiscal incentives more time-bound and performance-based.
According to Mr. Lopez of the Department of Trade and Industry, the Palace is due to receive a draft EO this week to implement the SIPP.
“The details of the executive order have been finalized also by the technical working group, and the draft EO on SIPP will be transmitted to OP this week,” Mr. Lopez said in a Viber message. — Jaspearl Emerald G. Tan