The Philippine Board of Investment Address: Industry and Investment Bldg., 385 Sen. Gil J Puyat Avenue 1200 Makati City, Philippines Phone: (632) 897 6682 Fax: (632) 895 3521 Website: www.boi.gov.ph

The Board of Investment (BOI) plays a crucial role in the Philippines’ economy. In their quest to promote investment in the country, they believe in strengthening the key qualities, which minimize investment risk. BOI educates investors about, “the quality manpower, strategic business location, liberalized and business friendly economy, hospitable lifestyle and unlimited business opportunities” that exist in the Philippines, which makes the country a very attractive investment destination within South East Asia.

The Philippine Board of Investment acts under the portfolio of the country’s Department of Trade and Investment led by Secretary Hon. Peter B. Favila. Under his mandate, BOI is the leading government agency responsible for investment promotion in the Philippines.

Actively assisting Filipino and foreign investors to venture and prosper in the desirable and vast areas of the country’s economic activities. Investors are welcomed to experience first-hand the opportunities that the booming industrial sector holds. These opportunities are prevalent in the food processing, construction, metal production, communication, power and infrastructure industries. An endless list of profitable projects await for those decision makers whose vision allows them to foresee profitable and successful investment in a country full of business opportunities.

The Board of Investment is structured in four main operating groups:

• Investments Promotion Group
• Technical Services Group
• Industry Development Group
• Project Assessment Group

Investment Law in the Philippines

The Omnibus Investments Code was enacted in 1987 to develop the country's industries, establish a competitive investment environment and discourage monopolies within the sectors. The law provides a list of incentives to registered investments and sets into place systematic procedures by which local or foreign companies can easily register.

An important aspect of the law is the provision of incentives, fiscal and non-fiscal, to preferred areas of investments known as pioneer or non-pioneer, export production as well as rehabilitation or expansion of existing operations. Pioneer enterprises are registered enterprises engaged in the manufacture and processing of products or raw materials that are not yet produced in the Philippines in large volume. It also involves the design, formula or system applied as well as agricultural, forestry and mining activities, the services and energy sectors. Non-pioneer enterprises refer to all registered producer enterprises not included in the pioneer enterprise list.

Those projects which qualify are granted a host of incentives, including a 4 to 8 year Income Tax Holiday (ITH), duty-free importation on imported capital equipment, tax credit on raw materials and supplies, employment of foreign nationals, exemption from wharfage dues, among some other incentives and rights. Investors are assured the right to repatriate investments, remittance of earnings as well as, the right to foreign loans and contracts and freedom from expropriation.

2006 IPP

The 2006 Investment Priorities Plan (IPP), which embodies the development thrust of the government for sustained and equitable economic growth under President Macapagal-Arroyo’s Administration was prepared by the Board of Investment and launched last year. The plan focuses on the sectors identified in the Medium Term Philippine Development Plan (MTPDP) 2004-2010 concluding with President Arroyo’s single term mandate.

With a very ambitious slogan “Propelling the Nation to 1st World Country Status in 20 Years”, the Philippine administration is set to overcome challenges and continue to provide a conducive environment. Through job creation, Agribusiness Development, Energy Independence, Modernization of Infrastructure and Logistics and the development of micro, small and medium enterprises to just name a few of the plan’s objectives, there is no doubt that the Philippines is set on track to become a fast growing economy positioning itself to compete with the world’s economic globalization process.

Recognizing the importance of providing an enabling environment that will encourage the continuous operations of existing investors in the Philippines, the 2006 IPP includes two new listings, namely:

• Projects under Retention, Expansion and Diversification
• Relocation Activities - Referring to investments from other countries that would relocate into the Philippines

Year on year BOI updates the Investments Priority Plan. The outlook for the 2007 IPP is fairly similar to the one of the previous year with the exception of the Red Program (Retention, Expansion and Diversification projects)

Last year alone, through the relentless efforts of the Board of Investment, the Philippine Economic Zone Authority and in collaboration with the Subic Bay Freeport Zone and Clark Development Corporation, the Philippines experienced FDI totaling in over 3.1 billion dollars.

The important inflow of FDI, along with annual remittances from overseas workers, totaling over 10 billion US dollars, are just two of the economic indicators that allowed the country to quickly recover from a slight dip in 2001. The Philippines was also less affected by the Asian financial crisis in 1998 than its neighbors. These economic statistics along with the continuous GDP growth rate year-on-year reflect not only the success of the service sector, improved exports and agricultural output but as well, shows the entire world the strong standing position with which the Philippine economy is clearly on track to achieving its desired status as 1st world country.