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A NEW DAY FOR INVESTMENTS

2013 INVESTMENT PRORITIES PLAN

COHERENT,

CONSISTENT

& CREATIVE

BOARD OFINVESTMENTS

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3/682013 INVESTMENT PRIORITIES PLAN

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CONTENTS

Memorandum Order No. 59 3

Message of te President of te Pilippines 4

Foreword:

Message of DTI Secretary Gregory L. Domingo 5

2013 INVESTMENT PRIORITIES PLAN

I. Preferred Activities 8

II. Mandatory List 10

III. Eport Activities 12

IV. ARMM LIST 12

PART I: DEFINITION OF TERMS 16

PART II: GENERAL POLICIES

I. Approval of Application and Entitlement to Incentives 22

II. Equity Ownersip 22

III. Equity Requirement 22

IV. Locational Policy 22

V. Eport of Products in Sort Domestic Supply 23

VI. ITh Availment 23

VII. Multi-pase Projects 25 VIII. Corporate Social Responsibility (CSR) 25

Ix. Good Corporate Governance 25

x. Support to Environmental Protection and Conservation 25

xI. International Standards Certication 26

xII. Equipment 26

xIII. Projects in te Autonomous Region in Muslim

Mindanao (ARMM) 26 xIV. Projects wit Revenues Derived from Carbon

Credits Pursuant to te Kyoto Protocol 26

xV. Outsourcing of Production Process or Services 26

xVI. Public Welfare Consideration 26

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PART III: SPECIFIC GUIDELINES

I. Preferred Activities

1. Agriculture/Agribusiness and Fisery 28

2. Creative Industries/Knowledge-Based Services 29

3. Sipbuilding 30

4. Mass housing 30

5. Iron and Steel 33

6. Energy 33

7. Infrastructure 34 8. Researc and Development 40

9. Green Projects 41

10. Manufacture of Motor Veicles 41

11. Strategic Projects 43

12. hospital/Medical Services 43

13. Disaster Prevention, Mitigation and Recovery Projects 44

II. Mandatory List 1. Industrial Tree Plantation 45

2. Eploration, Mining, Quarrying and

Processing of Minerals 45

3. Publication or Printing of Books/ Tetbooks 45

4. Rening, Storage, Marketing and Distribution

of Petroleum Products 46

5. Ecological Solid Waste Management 46

6. Clean Water Projects 47 7. Reabilitation, Self-Development and

Self-Reliance of Persons wit Disability 47

8. Renewable Energy 48

9. Tourism 48

III. Eport Activities

A. Production and Manufacture of Eport Products 51

B. Services Eports 52 C. Activities in Support of Eporters 52

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MALACAAN PALACEMANiLA

by thE PrEsidENt of thE PhiLiPPiNEs

MEMORANDUM ORDER NO. 59

APPROVING THE 2013 INVESTMENT PRIORITIES PLAN

____________________

Note: Memorandum Order no. 59 approving te 2013 Investments Priorities Plan was publised on20 November 2013 in te Manila Bulletin wit eectivity fteen (15) days tereafter, i.e. 5 December2013.

Pursuant to Article 29 of te Omnibus Investment Code of 1987, as amended,

te attaced 2013 Invesment Priorities Plan (IPP) is ereby APPROVED. Furterto te provision of said Article, upon eectivity of te IPP, all governmentagencies and entities are enjoined to adopt policies and implement programsconsistent wit te IPP.

Tis Order sall take eect fteen (15) days after its publication in a newspaperof general circulation as required under Article 31 of te Omnibus InvestmentCode of 1987.

DONE,in te City of Manila, tis 13tday of November in te year of Our Lord,

Two Tousand and Tirteen.

By te President

PAQUITO M. OCHOA, JR.Eecutive Secretary

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Te Pilippines looks forward to rapid economic epansion,emerging as a preferred investment destination in te

region. Investor condence remains strong as our economyperformed above epectations, posting a GDP growt of 7.8percent in te rst quarter of 2013.

Propelled by our determination for reform, and byinstitutionalizing good governance and applying soundeconomic fundamentals, our country as reaped te gains ofour collective ard work, signied by te strong sowing ofte peso, multiple record igs in te stock market, and tePilippines repeated investments status upgrades by leadingdevelopment indices landmark acievements arming our

dedication to leadersip based on accountability, integrity,and transparency, and reversing a decade of decline in tecountrys credit ratings. Tese positive developments andnewfound optimism from te business sector ave openedmore prospects for investment, giving us motivation toredouble our eorts and ensure tat tese opportunities aremaimized.

Steadfast in our commitment to reduce poverty and bringequitable progress, te 2013 invemen Pe Plan(iPP) will focus on key areas tat will increase eports, create

more jobs for Filipinos, promote skills development, advancetecnology, raise revenue generation, spur countrysideempowerment, and contribute to te preservation of teenvironment.

Wit a vibrant economy in place and te 2013 IPP as aplatform of investor condence, we will continue to pusforward to attract more investments and furter acceleratete momentum of our growt. Given te support andpartnersip of te business community, we are committedas ever to bring our country even closer to te brigter

tomorrow we ave long aspired for.

BENIGNO S. AQUINO III

MALACAAN PALACEMANiLA

MESSAGE

M A N I L ANovember 2013

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FOREWORD

In pursuit of investors need for a stable and predictable business environment asreected in te governments investment priorities, te 2012 Investment Priorities Plan

(IPP) as been carried over as tis years IPP. Advancing te same teme: A New Dayfor Investments: Coerent, Consistent and Creative, and moving towards te samegoal of aving More Investments, More Jobs, te 2013 IPP as been furter renedto target investment areas tat are considered enablers and triggers to acievea more focused IPP consistent wit te objectives to: Maimize te opportunitiesfrom te implementation of free trade agreements (FTAs); Enance public-privatepartnersips (PPP); Strengten te countrys competitiveness; and Promote a greeneconomy, wic, in turn, would create more jobs, enance te delivery of basic socialservices, and address te callenges of climate cange.

Te commitment to pursue inclusive economic growt, as envisaged in President

Aquinos Social Contract wit te Filipino People, remains to be te primordialconsideration in te adoption of te 2013 IPP. Tis commitment, coupled witTuwid na Daan platform of governance, led to a 6.6 percent economic growt in2012.

To ensure tat investments generated would continue to contribute to tedevelopment goals of te country, entitlement to incentives under te 2013 IPPwould depend on te projects net value added, job generation, multiplier eect andmeasured capacity.

Te 2013 IPP contains te following priority investment areas:

Te Regular List, wic as tirteen (13) priority investment areas tat were identiedto support te current priority programs of te government.

Te Export Activities, wic covers manufacture of eport products, services eportsand activities in support of eporters.

Te Mandatory List, contains areas/activities were te inclusion in te IPP and/orte grant of incentives under Eecutive Order (EO) No. 226 is mandated by law.

Te ARMM List, wic encompasses priority investment areas tat ave been

determined by te Regional Board of Investments of te Autonomous Region inMuslim Mindanao (RBOI-ARMM) in accordance wit EO 458.

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Te formulation of te 2013 IPP was undertaken troug te concerted eortsof te IPP Inter-Agency Working Group speareaded by te BOI, in coordinationwit te RBOI-ARMM, National Economic Development Autority (NEDA), and teDepartments of Finance (DOF), Energy (DOE), Environment and Natural Resources(DENR), healt (DOh), Labor and Employment (DOLE), Tourism (DOT), and Social

Welfare and Development (DSWD).

Oter participating agencies were te Bureau of Eport Trade Promotion (BETP), CivilAeronautics Board (CAB), Commission on higer Education (ChED), Department ofAgriculture - Biotec, Environmental Management Bureau (EMB), Eport DevelopmentCouncil (EDC), Fertilizer and Pesticide Autority (FPA), Film Development Council ofte Pilippines (FDCP), Forest Management Bureau (FMB), Intellectual PropertyOce (IPO), Local Water Utilities Administration (LWUA), Maritime IndustryAutority (MARINA), Mines and Geosciences Bureau (MGB), National Commission forCulture and te Arts (NCCA), National Book Development Board (NBDB), Nationalhistorical Commission of te Pilippines (NhCP), National Power Corporation (NPC),

National Solid Waste Management Commission (NSWMC), Pilippine DomesticConstruction Board (PDCB), Pilippine Economic Zone Autority (PEZA), PilippineOverseas Construction Board (POCB), Pilippine Ports Autority (PPA), Public-PrivatePartnersip (PPP) Center, and Tecnical Education and Skills Development Autority(TESDA).

Private sector inputs were likewise obtained troug well-attended public earingsin Pampanga on 05 Marc 2013, and in Cebu, Davao and Manila on 06 Marc 2013.

GREGORY L. DOMINGO Cairman, Board of Investments Secretary, Department of Trade and Industry

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2013 INVESTMENT PRIORITIES PLAN

Te coverage, description and entitlement to incentives of te following listedactivities sall be dened and claried in te General Policies and SpecicGuidelines to be issued by te Board of Investments (BOI).

Te etent of entitlement to incentives sall be based on te projects net valueadded, job generation, multiplier eect and measured capacity1.

I. PREFERRED ACTIVITIES

1. Agriculture/Agribusiness and Fishery

Tis covers commercial production and commercial processing ofagricultural, erbal and sery products (including teir by-productsand wastes).

Tis also covers agriculture- and sery-related activities suc asirrigation, post arvest, cold storage, blast freezing, and te productionof fertilizers and pesticides.

2. Creative Industries/Knowledge-Based Services

Tis covers business process outsourcing (BPO) activities, and IT andIT-enabled services tat involve original content.

3. Shipbuilding

Tis covers te construction and repair of sips. Tis also coverssipbreaking/siprecycling.

4. Mass Housing

Tis covers te development of low-cost mass ousing. Tis alsocovers te manufacture of modular ousing components preferablyusing indigenous materials.

1Section 20 of EO 226 denes measured capacity as te estimated additional volume of production orservice wic te Board determines to be considerable in eac preferred area of investment in orderto supply te needs of te economy at reasonable prices, taking into account te eport potential ofte product including economies of scale wic would render suc product competitive in te worldmarket. Measured capacity sall not be less tan te amount by wic te measurable domestic andcountrys potential eport market demand eceeds te eisting productive capacity in said preferredareas. For eport market industries, wen warranted, te Board sall base measured capacity on teavailability of domestic raw materials after deducting te needs of te domestic market terefor.

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5. Iron and Steel

Tis covers basic iron and steel products, long steel products (billetsand reinforcing steel bars), and at ot-/cold-rolled products.

6. Energy

Tis covers te eploration, development, and/or utilization of energysources adopting environmentally-friendly tecnologies.

7. Infrastructure

Tis covers transport, water, logistics, waste management facilities,pysical infrastructure (tollways, railways and telecommunication

facilities) and PPP projects.

8. Research and Development

Tis covers R&D activities and te establisment of researc/ testinglaboratories, Centers of Ecellence (COE) and tecnical vocationaleducation and training institutions.

9. Green Projects

Tis covers te manufacture/assembly of goods and te establismentof energy eciency-related facilities (suc as district cooling systems),were eiter utilization of wic would signicantly lead to eiter teecient use of energy, natural resources or raw materials; minimize/prevent pollution; or reduce greenouse gas emissions.

10. Motor Vehicles

Tis covers te manufacture/assembly of motor veicles, includingalternative fuel veicles (AFVs) and electric veicles (EVs) but ecluding

2-stroke motorcycles, and manufacture of motor veicles parts andcomponents.

11. Strategic Projects2

Tis covers projects tat eibit very ig social economic returns tatwill signicantly contribute to te countrys economic development.

2Projects under tese activities will be approved upon determination by te Board in consultation witte DOF, NEDA and oter appropriate government agencies.

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12. Hospital/Medical Services

Tis covers te establisment and operation of medical facilitiesincluding general and specialty ospitals, and oter ealt facilities

pursuant to Department of healt (DOh) Administrative Order No.(AO) 2012-0012.

13. Disaster Prevention, Mitigation and Recovery Projects

Tis covers projects tat will prevent or mitigate adverse impacts ofcalamities and disasters (e.g., installation of ood control systems,installation of early warning systems for typoons, eartquakeoccurrences, tsunami, volcanic eruptions, dikes, etc.).

Tis also covers projects to reabilitate areas aected by calamitiesand disasters (e.g., rebuilding of roads and bridges after eartquakes/oodings, volcanic eruptions, oil spill clean-up, etc.).

Tis furter covers training for disaster preparedness, mitigation orrecovery/reabilitation/reconstruction.

II. MANDATORY LIST

Tis covers activities tat require teir inclusion in te IPP as provided forunder eisting laws.

1. Industrial Tree Plantation3

Tis covers etensive plantation of forest land of tree crops (eceptfruit trees) for commercial and industrial purposes.

2. Exploration, Mining, Quarrying and Processing of Minerals4

Tis covers te eploration and development of mineral resources,mining/quarrying and processing of metallic and non-metallicminerals.

3. Publication or Printing of Books/ Textbooks5

Tis covers printing, re-printing, publication and content developmentof books or tetbooks.

3P.D. No. 705 (Revised Forestry Code of te Pilippines)4 R.A. No. 7942 (Pilippine Mining Act of 1995). It is understood tat te incentives sall be limited to

Zero Duty on any importation of capital equipment, spare parts and accessories by BOI-registeredenterprises under Eecutive Order No. 70.

5 R.A. No. 8047(Book Publising Industry Development Act)

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4. Rening, Storage, Marketing and Distribution of PetroleumProducts6

Tis covers rening, storage, distribution, and marketing of petroleum

products.

5. Ecological Solid Waste Management7

Tis covers te establisment of waste recycling facilities.

6. Clean Water Projects8

Tis covers te establisment of wastewater treatment facilities, andsewage collection integrated wit treatment facilities and te adoption

of water pollution control tecnology, cleaner production and wasteminimization.

7. Rehabilitation, Self-Development and Self-Reliance of Persons withDisability9

Tis covers te manufacture of tecnical aids and appliances for te useand/or reabilitation of persons wit disability, and te establismentof special scools, omes, residential communities or retirementvillages solely to suit te needs and requirements of persons wit

disability.

8. Renewable Energy10

Tis covers developers of renewable energy facilities, including ybridsystems.

Tis also covers manufacturers, fabricators and suppliers of locally-produced renewable energy (RE) equipment and components.

9. Tourism11

Tis covers tourism enterprises tat are outside te tourism enterprisezones (TEZs) and are engaged in te following:

1. Tourist transport services weter for land, sea and air transportfor tourist use;

6 R.A. No. 8479 (Downstream Oil Industry Deregulation Act of 1998)7R.A. No. 9003 (Ecological Solid Waste Management Act of 2001)8R.A. No. 9275 (Pilippine Clean Water Act of 2004)9R.A. No. 7277 (Magna Carta for Persons wit Disability)10R.A. No. 9513 (Renewable Energy Act of 2008)11R.A. No. 9593 (Tourism Act of 2009)

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2. Establisment and operation of: Accommodation establisments suc as but not limited to

otels, resorts, apartment otels, tourist inns, motels, pensionouses, private omes for omestay, ecolodges, condotels,

serviced apartments, and bed and breakfast facilities; Convention and eibition facilities or meetings, incentives,conventions and eibition (MICE) facilities;

Amusement parks; Adventure and ecotourism facilities; Sports facilities and recreational centers; Teme parks; healt and wellness facilities suc as but not limited to spas; Agri-tourism farms and facilities; and Tourism training centers and institutes.

3. Development of retirement villages.4. Restoration/ preservation and operation of istorical srines,landmarks and structures.

III. EXPORT ACTIVITIES

Tis covers te manufacture of eport products, services eports andactivities in support of eporters.

IV. ARMM LIST

Te ARMM List covers priority activities tat ave been identied by teRegional Board of Investments of te ARMM (RBOI-ARMM) in accordancewit E.O. No. 458. Te RBOI-ARMM may also register and administerincentives to activities in tis IPP for projects locating in te ARMM.

A. Export Activities

1. Eport Trader and Service Eporters2. Support Activities for Eporters

B. Agriculture, Agribusiness/Aquaculture & Fishery

Tis covers te production and processing of agricultural and seryproducts (production of halal meat and foods), vegetable oils, foodcrops, integrated coconut processing and plantation, activated carbon,production of beverage crops and plantation, seaweeds productionand processing, fruit processing, aquaculture (s production andprocessing), young/sweet corn production, potato and sweet potatoplantation/processing, cutower production/processing, abacaplantation/processing, oil palm plantation/processing/rening andgerminated oil palm seeds, feeds production, jatropa plantation/processing, sugarcane plantation/processing and reneries, quality

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seed and seedlings of fruit trees and oter planting materialspropagated aseually or by tissue culture, pearl culture/processing,production of livestock and poultry tat includes processing, crocodilefarming and processing, sericulture, feeds production and production

of plantation crops and oter parmaceuticals, medical erbs/essentialoil plants, biomass, rubber, carrageenan, mangosteen and moringa.

C. Basic Industries

Tis covers te production of parmaceuticals suc as antibioticsand medical devices, tetile and tetile products, inorganic andorganic fertilizers using solid wastes materials, mining eploration anddevelopment of mineral resources (mining and quarrying of metallicand non-metallic minerals wic includes small scale as dened under

P. D. 1899 but to eclude river beds in operations and processing ofminerals suc as beneciation and oter metallurgical metods)and cement production of at least 1.0 million MTPY capacity (clinkerbased).

D. Consumer Manufactures

Tis covers processing of rubber products to be integrated witplantation and leater products.

E. Infrastructure and Services

Tis covers public utilities wit developmental route of te veprovinces and one city of ARMM and oter adjacent cities andprovinces suc as common carriers, electric transmission/distribution,water supply facilities/waterways and sewerage systems, buses/cargotrucks, oter specialized mass transport systems, power generation likeydro power, geotermal and natural gas, and telecommunicationswit international gateways.

F. Industrial Service Facilities

Tis covers testing and quality control laboratories, training anddemonstration centers, tool sops and similar facilities, metal casting,metal working, furniture, ceramics and food processing, petrocemicalcomple and industrial gases.

G. Engineering Industries

Tis covers engineering products, electronics and telecommunicationproducts, fabrication of construction materials and ydropower plant.

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H. Logistics

Tis covers te transportation of cargoes and/or passengers (air, seaand/or land) and freigt/cargo forwarding.

I. BIMP EAGA Trade and Investment Enterprises

Tis covers enterprises located or ave teir base of operation in teBIMP EAGA, namely, Brunei; Saba and Sarawak in Malaysia; Maluku,Sulawesi, Kalimantan and Iringaya in Indonesia; and Mindanao andPalawan in te Pilippines, wo sall invest and engage in economicactivity in te ARMM including te age old Traditional Barter TradingSystem in te BIMP EAGA.

J. Tourism

Tis covers te establisment of tourism estate subject to guidelinesdeveloped jointly by RBOI-ARMM and te Department of Tourism ARMM, tourist accommodation facilities, tourist transport facilitiesand development of retirement villages wic sall include ealtand medical facilities including amenities required by te PilippineRetirement Autority (PRA) and subject to te guidelines to be approvedby RBOI-ARMM in consultation wit te PRA, te Department of healt(DOh), te Regional Planning and Development Oce (RPDO) and

oter concerned agencies.

K. Health and Education Services and Facilities

Tis covers te establisment of private ospitals, medical clinics,wellness centers, primary education, secondary education, tertiaryeducation (colleges, universities and vocational tecnical scools)and ancillary services including any and all ealt and educationrelated investment.

L. Halal Industry

Tis covers services and te production and processing of productsunder muslim or islamic law.

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a) Book- a printed non-periodical publication of at least forty-eigt (48) pages,eclusive of cover pages, publised in te country and made available tote public.

b) Booked Sales refers to cas collections tat are recorded in te nancialrecords. Tis includes bot initial payments (unearned revenue) andrecognized revenues from sales of low cost ousing unit/s, wic is at least25% of total contract price.

c) Content Development of Booksconsists of te following:

(1) Development of new tecnologies directly related to book printingor publising, suc as but not limited to digitization, electronic books(E-books), internet-based arciving and retrieval systems, electroniccontent creation and development systems, educational and/or ow-to audio-visual presentations wit or witout interactive segments,and te like.

(2) Researc and development activities directly related to book printingor publising, suc as but not limited to translation, editing, analysisand/or interpretation of tet and materials into local dialects oradaptation/application to te domestic setting.

d) Copy refers to te certied true copy of te original document.

e) Distribution- refers to bunkering and fuels sipping and transport. Fuelssipping and transport cover sipping and transport troug land suc astank trucks, lorries and pipeline and tankers, and barges for te fuels to getto te points or areas were tey are needed. Bunkering covers te activity

of selling fuel for direct use by a vessel, usually for water and air transport,troug a smaller transport vessel. Distribution projects are limited to toseacquiring brand new equipment.

f) Existing Project refers to a project of an eisting enterprise tat asstarted commercial operation at te time of application wit te Board.

g) Expansion Project refers to a project of an eisting enterprise tat wouldinvolve te installation of additional facilities/equipment tat will result inincrease in capacity of te same/similar activity witin te same eistingplant/facilities of te enterprise. Projects tat do not qualify as new sall be

considered as epansion.

) Fullment House/Center refers to a facility tat oers to store, receivete orders, package, and ten sip te ordered item to te end consumer,on bealf of te product owner.

DEFINITION OF TERMS

Part I

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i) General Hospital refers to a ospital wit Levels 1, 2 or 3 tat providesservices for all kinds of illnesses, diseases, injuries, or deformities. It sallprovide medical, surgical, maternity, newborn, and cildcare. It sall employBoard-certied/eligible medical specialists and oter licensed pysicians.

j) General Hospital Level 1 refers to a ospital tat as te following:

(1) Sta of qualied medical, allied medical and administrative personneleaded by a pysician duly licensed by Professional RegulationCommission (PRC);

(2) Operating room wit standard equipment and provision for sterilizationof equipment and supplies;

(3) Post-operative recovery room;(4) Maternity facilities consisting of ward(s), room(s), a delivery room,

eclusively for maternity patients and newborns;

(5) Isolation facilities wit proper procedures for te care and control ofinfections and communicable diseases;(6) Separate dental section/clinic;(7) Blood station;(8) DOh licensed secondary clinical laboratory wit te services of a

consulting patologist;(9) DOh licensed level 1 imaging facility wit te services of a consulting

radiologist;(10) DOh licensed parmacy.

k) General Hospital Level 2 refers to a ospital tat as, as minimum, all of

Level 1 capacity including te following:

(1) An organized sta of qualied and competent personnel wit Ciefof hospital/Medical; Director and appropriate board certied ClinicalDepartment heads;

(2) General ICU for critically ill patients;(3) Provision for Neonatal Intensive Care Unit (NICU);(4) Provision for hig Risk Pregnancy Unit (hRPU);(5) Provision for respiratory terapy services;(6) DOh licensed tertiary clinical laboratory;

(7) DOh licensed level 2 imaging facility wit mobile -ray inside teinstitution and capability for contrast eaminations.

l) General Hospital Level 3- refers to a ospital tat as, as minimum, all ofLevel 2 capacity including te following:

(1) Teacing and/or training ospital wit accredited residency trainingprogram for pysicians in te four (4) major specialties namely:Medicine, Pediatrics, Obstetrics and Gynecology, and Surgery;

(2) Provision for pysical medicine and reabilitation unit;(3) Provision for ambulatory surgical clinic;

(4) Provision for dialysis facility;(5) Provisions for blood bank;(6) DOh licensed tertiary clinical laboratory wit standard equipment/

reagents/supplies; necessary for te performance of istopatologyeaminations;

(7) DOh licensed level 3 imaging facility wit interventional radiology.

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m) Government Guarantee refers to te assured rate of return or minimumrevenues or absorption of nancial risk in case of default granted by teregulating agency to include prot and te recovery of capital ependiture(guaranteed rate of return), assured payment weter or not services/product were produced/delivered (take or pay provision), and assurance tolender by a government agency tat a nancial obligation will be onoredeven if te borrower is unable to repay te debt.

n) Government Subsidy- refers to te nancial contribution by te nationalgovernment or any of its agencies to defray, pay for or soulder a portion ofte project cost or te epenses and costs in operating or maintaining teproject.

o) Job Generation - refers to te number of jobs directly generated by teproject regardless of te lengt of employment.

p) Marketing of Petroleum Products/Natural Gascovers te following:

(1) Retailing or selling in retail generally directed to te end users, trougdispensing pumps in stations or in packaged containers suc as drumsfor te liquid fuels or metal cylinders tat are compliant wit PNS.Tis includes te establisment and operation of gasoline/natural gasstations and retailing.

(2) Fuels bulk marketing or selling in wolesale troug tank trucks,lorries, double-ulled vessels/tankers, barges or pipelines, wic maybe sourced from ones own storage facilities and stocks. Investmentsall include underground tanks and oter equipment intended forfuels retailing troug outlets suc as gasoline/natural gas stationsand LPG/LNG outlets.

(3) A combination of storage, distribution, and marketing activities.

q) Measured Capacity - te estimated additional volume of production/service wic te Board determines to be desirable in eac preferred areaof investment taking into account te eport potential of te product. Formass ousing projects, te estimated ousing backlog for units betweenfour undred tousand and tree million pesos (economic to low-costousing) in te country sall be te basis of measured capacity.

r) Metro Cebu is composed of Cebu City, Lapu-Lapu City, Mandaue City,Cordova, Consolacion, Liloan, Compostela, Talisay, Minglanilla, and Naga.

s) Modernization Project refers to a project of an eisting enterprise tatwould involve improvements in systems, processes, equipment, and/or

facilities tat must result in any of te following:

(1) At least 25% substantial reduction of production cost/cost of provisionof te service; or

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(2) Upgrading of product/service quality or classication of te facility(e.g., ospitals, otels, resorts) to a iger class in accordance witaccreditation standards applicable to te industry concerned.

t) Multiplier Eect - refers to te increase in economic activity andinterrelationsips generated and stimulated by te investment.

u) New Plantation Area- refers to new ectarage of plantation or lands tatave been idle for at least one year or tose involving cange of crops/variety to acieve iger yield or sifts in te production system suc asorganic farming.

v) New Project - refers to a project/activity listed in te IPP tat as not startedcommercial operation undertaken by:

(1) A newly organized/formed enterprise tat:i. as no common stockolders in any eisting enterprise, orii. as common stockolders in te eisting enterprise but own not

more tan fty percent (50%) of equity in te new enterprise, oriii. as common stockolders but will engage in an entirely distinct

and separate activity, oriv. as common stockolders (regardless of percentage of common

ownersip) and will engage in te same activity as tat of teeisting enterprise but will locate in a dierent municipality,province, or region.

(2) An eisting enterprise tat sall engage in:i. An entirely distinct and dierent activity from its eisting business

operations; orii. Te same activity provided it sall establis a new facility1 not

contiguous to te premises of its eisting project and wit newinvestments.

(3) An enterprise involving te manufacture of products utilizing local R&D.Applications for registration utilizing local R&D must be endorsed byte Department of Science and Tecnology (DOST) stating tat tis wasundertaken in te Pilippines and as not yet been commercialized.

(4) For industrial tree plantations, an enterprise involved in tedevelopment of any public or private land to plantation of timber andnon-timber species to supply te raw material requirements of forest-based industries. It also includes plantation wit eisting tree crops,wic ave not yet reaced commercial arvest.

w) Net Value-added- refers to te value of nal product/service less te valueof inputs. Te projects net value added sould be at least 25% ecept forprojects dependent on imported raw materials/ supplies.

1New facility refers to new complete line used in te production of te registered product/serviceseparate from eisting line.

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) Other Health Facilities sall refer to te following:

(1) Primary Care Facility a rst contact ealtcare facility tat oersbasic services including emergency service and provision for normaldeliveries.

(2) Custodial Care Facility a ealt facility tat provides long-term care,including basic uman services like food and selter to patients witcronic or mental illness, patients in need of reabilitation owingsubstance abuse, people requiring ongoing ealt and nursing caredue to cronic impairments and a reduced degree of independence inactivities of daily living.

(3) Diagnostic/ Terapeutic Facility a facility tat eamines te umanbody or specimens from uman body (ecept laboratory for drinkingwater analysis) for te diagnosis, sometimes treatment of diseases.

(4) Specialized Out-patient Facility a facility wit igly competent andtrained sta tat performs igly specialized procedures on an out-patient basis.

y) Specialty Hospital refers to a ospital tat specializes in a particulardisease or condition or in one type of patient. A specialized ospital maybe devoted to treatment of any of te following:

(1) Treatment of particular types of illness for a particular conditionrequiring a range of treatment. Eamples of tese ospitals arePilippine Ortopedic Center, National Center for Mental healt, SanLazaro hospital, and ospitals dedicated to te treatment of cancer.

(2) Treatment of patients suering from diseases of a particular organ orgroups of organs. Eamples of tese ospitals are Lung Center of tePilippines, Kidney and Transplant Institute, and ospitals dedicated totreatment of eye disorders.

(3) Treatment of patients belonging to a particular group as cildren,women, elderly and oters. Eamples of tese ospitals are PilippineCildrens Medical Center, National Cildrens hospital, and Dr. JoseFabella Memorial hospital.

z) Storage - refers to te business of receiving/discarging and storingpetroleum crude and/or products of oters for compensation or prot.Storage projects are limited to tose establising new facility i.e. depot orstorage tanks.

aa) Textbook refers to an eposition of generally accepted principles in onesubject, intended primarily as a basis of instruction in a classroom or pupil-book-teacer situation.

bb) TSD (treatment, storage, and disposal) Facilities- are te facilities were

azardous wastes are stored, treated, recycled, reprocessed, or disposedof.

cc) Upgrading - refers to te improvement of te facility/infrastructure byadding or replacing components. Tis may be treated as an epansion/modernization project.

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I. APPROVAL OF APPLICATION AND ENTITLEMENT TO INCENTIVES

Te approval of application for registration and entitlement to incentivesunder tis IPP is subject to Article 7, paragrap 3 of Eecutive Order (E.O.)No. 226.

Te approval of applications for registration sall be based on te IPP listing.however, te etent of entitlement to incentives sall be based on te

projects net value-added, job generation, multiplier eect and measuredcapacity.

Te BOI, if national interest requires, may deny registration of projectsengaged in te eport of a product including industry inputs tat are insort supply domestically.

II. EQUITY OWNERSHIP

Ecept as provided for under te Constitution and te Foreign InvestmentAct (Republic Act No. 7042, as amended), tere are no restrictions on foreignownersip of eport-oriented and/or pioneer enterprise tat will engage inte activities listed in te IPP.

III. EQUITY REQUIREMENT

Te minimum equity of te project applied for registration is 25% of teproject cost unless eempted under any of te following:

1. Projects of applicants wit good track record in implementingregistered projects;

2. Projects of publicly-listed companies; or3. Projects not entitled to ITh.

For projects wit a gestation period of more tan tree (3) years, te 25%equity requirement sall be based on te annual capital requirement of teproject; Provided tat te total equity requirement of 25% is complied witon te rst year of ITh availment. Non-compliance wit tis policy sallresult in forfeiture of ITh incentives for te taable year.

IV. LOCATIONAL POLICY

A. Regional Dispersal of Industries

Te dispersal of economic activities to te countryside is encouraged.

Projects in any of te identied less developed areas (LDAs) listed inAnne A sall be entitled to pioneer incentives and additional deductionfrom taable income equivalent to 100% of epenses incurred in tedevelopment of necessary and major infrastructure facilities unlessoterwise specied in te Specic Guidelines.

GENERAL POLICIES

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B. Locational Restriction in NCR

Te BOI sall limit incentives to rms tat locate in congested urbancenters. Te locational restriction applies to te National Capital Region(NCR) werein projects are not entitled to ITh. Eemption from teabove locational restriction, owever, may be given to te following:

1. Projects in government industrial estates2 declared by nationallaw or presidential proclamation prior to 01 January 1989 (unlesssubsequently privatized);

2. Projects tat will engage in service type activities;3. Epansion of eport-oriented projects eected witin te rms

eisting premises;4. Modernization projects;5. Strategic Activities as dened under tis IPP (see Part III, I.11

Strategic Activities).V. EXPORT OF PRODUCTS IN SHORT DOMESTIC SUPPLY

Te eport commitment of a registered enterprise may be suspended tosatisfy national interest or in an emergency situation.

VI. ITH AVAILMENT

A. General Rules

1. In te grant of incentives, te Board sall give priority to projectswit substantial benets to te economy. In tis regard, te etentof te projects ITh entitlement sall be based on te followingparameters: (1) projects net value added, (2) job generation, (3)multiplier eect, and (4) measured capacity.

In te event tat te registered enterprise fails to implement teproject as represented in its project application, te Board mayopt to reduce te projects ITh availment proportionate to teactual performance (e.g. investments, employment generation,

production and sales, timetable) of te enterprise. Te income qualied for ITh sall be limited to te income

directly attributable to te revenue generated from te registeredproject.

2. Net income qualied for ITh availment sall not be a result ofgross revenues eceeding 10% of te projected gross revenuerepresented by te rm in its application.

2Government Industrial Estates

a) Dagat-Dagatan (P.D. No. 569 dated 30 October 1974)b) Vitas Industrial Estate, Tondo (E.O. No. 1086 dated 31 January 1986, as amended/epanded troug

Presidential Proclamation No. 39 dated 09 September 1992 and Proclamation No. 465 dated 01August 1994) (Vitas Industrial Estate/Smokey Mountain)

c) Bagong Silang Industrial Estate, Caloocan City (Presidential Proclamation No. 843 dated 26 July1971)

d) Food Terminal Inc., Taguig (LOI No. 900 dated 25 July 1979)e) Navotas Fising Port Comple (E.O. No. 772 dated 08 February 1982)

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In cases were te projects actual revenues eceed teprojections in its application due to, e.g., new markets/orders,additional employment/sifts, additional investments, teBoard may increase te projects ITh availment proportionately.Request/s for adjustments of projected revenue must be ledbefore te ling of application for ITh.

3. In case of projects intended for own use, ITh sall only beapplicable to revenues on sales generated or services renderedto oter enterprises.

4. Only net income from operation of registered activity as certiedunder oat by CEO or CFO sall be entitled to ITh.

5. Enterprises wit multiple registrations wit te Board and/orseveral activities (weter BOI-registered or not) sall submita list of cost items tat are common wit te qualied projectand teir cost allocation metodology for te said cost items, toensure proper, fair and equitable allocation of common cost sucas overead and administrative costs.

B. Base Figure and Rate of Exemption

In general, ITh of epansion projects are subject to a base-gureequivalent to te enterprises igest sales volume in case ofomogenous products or sales value in case of eterogeneousproducts, in te last tree (3) years, prior to te ling of te applicationfor registration of te project.

Projects registered under te modernization program witoutincrease in capacity may be entitled to tree (3) years ITh and oterincentives witout prejudice to compliance wit oter requirements.Te computation of ITh for projects witout increase in capacity is asfollows:

For single product/activity:

New Investment (in US$)

Rate of Eemption (ROE) = --------------------------------- 100Total Investments(replacement cost + new)Relative to te Concerned Plant(in US$)

For multiple products/activities or wen ITh entitlement of oterproducts/ activities as lapsed:

Sales arising from te modernizationproject

% Sales Entitled to ITh = --------------------------------------- 100 Total Sales

New Investment (in US$)ROE = -------------------------------------------------------------- 100

Total Investments (replacement cost + new)Relative to te concerned plant (in US$)

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Were: ROE sall be ed for te ITh entitlement period. Ecange rate sall be te eisting rate at te time of actual

investment or time of availment of ITh wicever will result in lowerrate of ITh.

Replacement cost sall refer to te appraised value of its Fied Assetsrelative to te concerned plant in te rst year of ITh availmentduly assessed and certied by an Independent Appraiser. Tis salltereon be used as a basis in succeeding ITh availments until teend of te ITh entitlement period of te project.

% Sales Entitled to ITh sall be based on actual sales values for teyear of availment.

C. Projects with Government Guarantee

Projects wit government guarantee/subsidy are not entitled to ITh.VII. MULTI-PHASE PROJECTS

Projects of an enterprise wit multiple pases/locations may be registeredon a per pase/location.

VIII. CORPORATE SOCIAL RESPONSIBILITY (CSR)

BOI registered entities, recognizing te benets derived from te scalincentives granted by te government, sould endeavour to undertake

meaningful and sustainable CSR projects in te locality were te projectsare implemented.

IX. GOOD CORPORATE GOVERNANCE

BOI registered enterprises must be committed to te tenets of GoodCorporate Governance. Boards must function properly in decision-makingprocesses tat aect teir stakeolders.

X. SUPPORT TO ENVIRONMENTAL PROTECTION AND CONSERVATION

Registered enterprises sall adopt measures intended to reduce climatecange risks in support of te National Framework Strategy on ClimateCange. Likewise, registered enterprises are encouraged to implementbest practices to protect and conserve biodiversity in teir respective areaand/or activities, wenever applicable.

New and epansion projects sall be required to secure an EnvironmentalCompliance Certicate (ECC) pursuant to P.D. No. 1586 (PilippineEnvironmental Impact Statement System) and oter clearances underrelevant environmental laws.

A Certicate of Non-Coverage (CNC) issued by te EnvironmentalManagement Bureau (EMB) sall be submitted for projects tat are notcritical to te environment.

Applicants for BOI registration must submit proof of application for ECC/CNC led wit DENR

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Registered projects are encouraged to participate in te Pilippines Eco-labeling Program (ELP), wen applicable.

Registered enterprises are encouraged to secure environmental certicationsbased on internationally recognized standards, wenever applicable.

XI. INTERNATIONAL STANDARDS CERTIFICATION

Registered projects sall obtain applicable certications based oninternationally recognized standards suc as a hazard Analysis and CriticalControl Points (hACCP), ISO certication, quality standards (e.g., ICC, CE) oroter similar certications.

XII. EQUIPMENT

Registered enterprises sall use brand new equipment ecept for projectsutilizing consigned equipment, projects involving transfer of facilities, andwen specied in te Specic Guidelines, and apply production processestat meet environmental standards. Application for availment of capitalequipment incentive sall be led prior to te ordering of equipment.

XIII. PROJECTS IN THE AUTONOMOUS REGION IN MUSLIM MINDANAO (ARMM)

Te ARMM List covers priority activities tat ave been identied by teRegional Board of Investments of te ARMM (RBOI-ARMM) in accordancewit E.O. No. 458. Te RBOI-ARMM may also register and administer

incentives to activities in tis IPP for projects locating in te ARMM.

Projects in te ARMM sould register wit te BOI-ARMM.

XIV. PROJECTS WITH REVENUES DERIVED FROM CARBON CREDITS PURSUANT TO THEKYOTO PROTOCOL

Revenues from te sale of carbon credits troug certied emissionreduction (CER) units generated from registered activity may be consideredas part of te income entitled to ITh, provided tat te enterprise made

representation at te time of application for registration tat suc projectswould earn CER units.

XV. OUTSOURCING OF PRODUCTION PROCESS OR SERVICES

Portion/s of te production process or services of te registered activitymay be outsourced provided tat te core activity or te integrated natureof operation is undertaken by te registered enterprise.

XVI. PUBLIC WELFARE CONSIDERATION

Te BOI may deny applications for registration and/or grant of incentivesfor reasons of public ealt or morals or for environmental considerations.

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I. PREFERRED ACTIVITIES

1. Agriculture/Agribusiness and Fishery

Tis covers commercial production and commercial processing ofagricultural, erbal and sery products (including teir by-productsand wastes).

Tis also covers agriculture- and sery-related activities suc asirrigation, post arvest, cold storage, blast freezing, and te productionof fertilizers and pesticides.

a. Commercial production

Tis covers te production of agricultural (crops, poultry andlivestock) and sery products.

In general, crop production sould involve new plantation areasto qualify for registration.

Tis also covers intercropping of ig value crops as identied byte Department of Agriculture (DA).

Application for registration must be accompanied by anendorsement from te Department of Agriculture (DA).

b. Commercial processing

Tis covers te following:i. Conversion of agricultural and sery products, teir by-

products and wastes, to a form ready for furter processingor nal consumption;

ii. Etraction of iger value substances from agriculturaland forest-based raw materials troug bioprocessing asendorsed by te concerned government agency; and

iii. Production of animal and aqua feeds ecluding tose for gameanimals, fowls and oter species for pet/leisure purposes.

Processing of agricultural products sould involve domesticallyproduced raw or semi-processed agricultural products, unlesste raw or semi-processed raw materials are not locally produced(NLP) or not in sucient quantity (NISQ).

SPECIFIC GUIDELINES

Part III

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If using imported raw or semi-processed agricultural productstat are locally produced (LP) or in sucient quantity (ISQ), teproject may qualify for registration, provided tat te nised/nalproduct is for eport, or te project qualies for pioneer status.

c. Services in Support of Agriculture / Agribusiness and Fishery

Irrigation

Tis covers irrigation system primarily intended to renderservice to agricultural farms.

Irrigation system sall include water source, distributionlines and control mecanisms. Te system may also include

prime movers, pumps, generators and transformers. Systemcapacity is epressed in terms of cubic meters of irrigationwater per year.

Only revenues generated from services rendered to oteragricultural farms may be entitled to ITh.

Harvesting Services

Tis covers mecanized arvesting services.

Post Harvest Facilities

Tis covers te establisment and operation of te followingfacilities:i. cold storage,ii. freezing,iii. bulk andling and storage,iv. packing ouses,v. trading centers,

vi. ice plants in LDAs, andvii. triple A slaugterouses as endorsed by te National

Meat Inspection Service (NMIS).

Only revenues generated from services rendered to oteragricultural enterprises may be entitled to ITh.

2. Creative Industries/Knowledge-Based Services

Tis covers creative industries/knowledge-based services wit originalcontent suc as but not limited to software development, animation,engineering and arcitectural design, product design, and game andapplications development.

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Prior to registration, applicant must submit proof of ownersip orrigts over te intellectual property concerned, suc as copyrigtled wit National Library/Supreme Court Library or teir deputizedagencies.

All ICT projects sall install internal security system compliant wit ISO27001 or its equivalent.

3. Shipbuilding

Tis covers te construction and repair of vessels, sipbreaking andsip recycling.

Te following are te qualications for registration:

For Sipbuilding, vessels to be built must be at least 500 GT. For Sipbreaking/ Sip recycling, facilities must ave a dry-dockingor dismantling slipway wit a minimum capacity of 1,500 DWT.

Registered enterprises must comply wit DOLE Department CircularNo. 1 series of 2009 on te Guidelines on Occupational Safety andhealt in Sipbuilding, Sip Repair and Sipbreaking Industry andsecure a copy of Department of Environment and Natural Resources(DENR) issued Environmental Compliance Certicate (ECC).

Registered enterprises involved in sipbreaking/sip recycling mustcomply wit te requirements of te hong Kong InternationalConvention for te Safe and Environmentally Sound Recycling ofSips including te preparation of a Sip Recycling Facility Plan andte Tecnical Guidelines for te Environmentally Sound Managementof te Full and Partial Dismantling of Sips.

Any of te following may qualify for pioneer status: Sipbuilding or sip repair facilities wit a minimum lifting capacity

of 20,000 DWT

Sipbuilding or sip repair facilities wit a minimum bertingcapacity of 7,500 DWT

Prior to start of commercial operation, te registered enterprise mustsubmit a copy of its License/Autorization or its equivalent from teMARINA or oter concerned agency.

4. Mass Housing

Tis covers te development of low-cost mass ousing. Tis alsocovers te manufacture of modular ousing components preferablyusing indigenous materials.

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Te following are te qualications for registration: Te selling price of eac ousing unit sall be more tan

Pp450,000.00 but not eceeding Pp 3.0 million; Must be new or epanding low-cost mass ousing project;

For vertical ousing projects, at least 51% of te total oor area,ecluding common facilities and parking areas, must be devoted toousing units.

In cases of un-incorporated joint venture and similar arrangementsbetween landowner and developer werein te saring scemeis in terms of te number of lots or units built, only te sare of tedeveloper may qualify for registration.

Projects tat ave already been completed and ave incurred sales

(booked sales) of ousing packages sall not qualify for registration.

Any of te following may be considered as an epansion project: Construction of additional oors or annees intended for mass

ousing units; If te project will locate adjacent or contiguous to an eisting mass

ousing project owned by te same entity and sall sare commonfacilities including access to te eisting project.

For tis purpose, all low-cost mass ousing projects must comply wit

te following:

Socialized ousing requirement by building socialized ousing unitsin an area equivalent to at least 20% of te total registered projectarea or total BOI registered project cost for orizontal ousing and20% of te total oor area of qualied saleable ousing units forvertical ousing projects.

Tis may be done troug any of te following modes: Development of a new settlement directly undertaken by te

registered entity; Development of a new settlement troug joint venture

arrangements wit any of te following:i. Local Government Unit,ii. Subsidiary of te BOI-registered entity,iii. Developer accredited by te hLURB.

In te case of joint venture projects, te BOI registered entity sall berequired to provide proof of funds transferred to te implementingentity.

In lieu of te above modes for compliance wit te socializedousing requirement, vertical mass ousing projects may opt todonate provided: (1) te donation is made to BOI accredited NGOand (2) te amount to be donated sall be equivalent to 30% of(20% of te building construction cost based on te actual number

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or equivalent total oor area of qualied saleable low cost ousingunits) or not less tan 40% of te estimated ITh. Equivalent totaloor area refers to te sum total of te oor area of all te registeredlow-cost mass ousing units.

Compliance wit te socialized ousing requirement mustbe completed witin te ITh availment period and sould beproportionate to te number of low-cost ousing units beingapplied for ITh for te taable year.

Non-compliance wit te 20% socialized ousing requirementson previous registrations sall result in denial of applications forregistration for succeeding projects.

Project sall conform wit te design standards set fort in te Rulesand Regulations to Implement B.P. No. 220/P.D. No. 957 and oterrelated laws.

Application for registration must be accompanied by a copy of teDevelopment Permit issued by hLURB or concerned LGU.

Prior to registration, orizontal ousing project applicant must submitcopies of License to Sell (LTS) and Certicate of Registration (CoR)issued by hLURB. For vertical ousing project, applicant may submit a

copy of its temporary LTS provided tat te copies of te nal LTS andCoR sall be submitted prior to start of commercial operation.

Eligible projects in NCR, and Metro Cebu sall be entitled to tree (3)years ITh.

Interest income arising from in-ouse nancing sall not be entitledto ITh.

Modular housing components

Tis covers te manufacture of modular ousing componentspreferably using indigenous materials. Tese include roof/framingsystems, wall/partition systems, ooring systems, door/windowsystems, and nising/ceiling systems.

Application for registration must be accompanied by an endorsementfrom AITECh.

Te rm sall sell at least 50% of total annual production to massousing projects.

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5. Iron and Steel

Tis covers basic iron and steel products, long steel products (billetsand reinforcing steel bars), and at ot-/cold-rolled products.

Basic iron products include rened iron ore and primary steelproducts.

Tis also covers te manufacture of at products, long products andfabrication of macinery, equipment and implements.

All iron and steel products must be compliant wit te applicablePilippine National Standards (PNS) or International standards.

6. Energy

Tis covers te eploration, development, and/or utilization of energysources adopting environmentally-friendly tecnologies tat complywit te Clean Air Act, te Environmental Impact System law, teBiofuels Act, were applicable, and oter relevant environment laws.

In te case of coal-red projects, submission of ECC is a pre-registrationrequirement.

Projects tat would utilize raw materials or semi-processed rawmaterials tat are not locally produced (NLP) or not in sucientquantity (NISQ) are eempt from NVA requirement.

Witin one (1) year from date of registration, projects wit loancomponents in teir nancing sceme must ave acieved nancialclosing; oterwise te projects registration sall be subject toautomatic cancellation. As evidence of nancial closing, te enterprisesall submit a certication, in a form and substance satisfactory to BOI,issued and addressed by te lenders to BOI conrming te nancial

agreements are in full force and in eect.

Any of te following may qualify for pioneer status: Power generation projects located in missionary areas or o-grid

areas; Projects tat cost at least te Pilippine Peso equivalent of US$2

million per megawatt;

For power generation projects, only revenues from power generatedand sold to te grid, oter entities and/or communities based onbilateral contracts approved by te ERC may be entitled to ITh.

Power projects tat are built contiguous to eisting generating facilitiessall be considered as epansion projects. however, if te eisting baseload plant as consistently dispatced at least 80% of teir registered

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capacity for te past 3 years, te project to be registered may beconsidered new.

Te amount of ITh to be granted sall not eceed 10% of te total

revenue of generated power.

Applications for registration must be endorsed by te Department ofEnergy (DOE).

7. Infrastructure

Tis covers transport, water, logistics, waste management facilities,pysical infrastructure (tollways and telecommunication facilities) andPPP projects.

a. Transport

Tis covers air, water and land mass transport.

(1) Air Transport

Air transport operation includes passenger and/or cargooperation for commercial purposes.

Lease wit option to purcase an aircraft may be allowed.

Acquisition of additional brand new aircraft/s may beregistered as new.

Application for registration must be accompanied by anendorsement from te Civil Aeronautics Board (CAB), wenapplicable. Suc endorsement must contain information onte routes to be served.

Prior to start of commercial operation of eac aircraft, teregistered enterprise must submit a copy of te Certicateof Airwortiness issued by Civil Aviation Autority of tePilippines (CAAP).

Only revenues derived from cargo air freigt fares, passengerair fares, and income from ancillary revenues on refund,cancellation and rebooking fees sall be entitled to ITh.Incidental revenues suc as tose earned from ecessbaggage (including prepaid baggage), seat selector options,mercandise sales suc as sale of meals/beverages, souvenirs,travel related products and oter commodities, package toursand oter incidental revenues as may be determined by teBoard sall not be entitled to ITh.

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(2) Water Transport

Tis covers domestic/inter-island sipping, i.e. pure cargo,passenger, and passenger-cargo vessel operations including

RORO Terminal System operations.

Te following are te qualications for registration: Must comply wit te following age requirements:

Type of VesselMaximum Age from

Original Date of LaunchingTankers 10 yearshig-speed Craft 5 yearsPassenger/Cargo 15 years

Te age of te vessel sall be reckoned from te sipsdate of launcing based on te Builders Certicate orVessel Registry and must be complied wit at te time ofapplication.

Tankers, hig-speed Craft, RORO Vessels serving primaryroutes and Passenger/Cargo vessels must ave grossweigt of 150 GT and above.

Application for registration must be accompanied by tefollowing:i. an endorsement by MARINA; andii. proof of accreditation of te sipping enterprise by

MARINA.

Prior to start of commercial operation, te registeredenterprise must submit te following:i. proof tat te vessel is registered wit MARINA, andii. copies of Class and Statutory Certicates as required

by MARINA.

RORO operator /enterprise serving missionary routes, asindicated in te Certicate of Public Convenience (CPC)issued by MARINA, may qualify for pioneer status.

Acquisition of additional vessel/s may be registered asnew project.

Lease or carter of foreign-owned vessel wit option to

purcase may be allowed. Pure lease or bareboat cartermay be allowed provided te lease contract is for aminimum of ve (5) years.

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Modernization of sips may be allowed wit entitlementto ITh limited to investments in safety and navigationdevices and equipment. Investments in anti-pollutiondevices and equipment may be additionally considered

in te computation of ITh rate of eemption.

(3) Land Mass Transport

Tis covers mass transport using brand new Alternative FuelVeicle (AFV) buses.

AFV buses sall be limited to buses tat run on electricbatteries, compressed natural gas, or ybrid veicles tat runon electric batteries and gasoline/diesel/oter fuels.

Te following are te qualications for registration: Must utilize brand new electric buses or oter AFV buses

wit at least Euro 4 compliant engine and using Euro 4fuel;

Must ave its own terminal and garage tat canaccommodate all te buses under its francise(s).

Application for registration must be accompanied by a copyof te application for francise wit te Land Transportation

Francising & Regulatory Board (LTFRB).

Prior to start of commercial operation, te registered enterprisemust submit a copy of its francise(s) from te LTFRB.

b. Water Supply and/or Distribution

Tis covers bulk supply projects and new water distributionsystems.

Applications covering bot supply and distribution projects sallbe unbundled sowing te revenue and cost structure of eac.

Supply of water sall be limited to treated water and sould bein accordance wit te Pilippine National Standard for DrinkingWater.

Distribution activity sould include etraction of water, treatmentand installation of distribution lines and ow metering systems.

Application for registration must be accompanied by a copy ofte Water Permit.

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Prior to start of commercial operations, te registered enterprisemust submit a copy of te Certicate of Public Convenience(CPC).

Projects involving any of te foregoing areas of water operationsdedicated to a particular industrial estate, industrial community,or subdivision are not qualied for registration under tis listing.

c. Logistics

Tis covers ports, terminals (cargo terminals/container yards,LNG/CNG storage terminals, natural gas refueling stations andcarging stations for electric veicles), and wareouses.

(1) Ports

Tis covers te development and operation of airports andseaports.

Application for registration must be accompanied by anendorsement from te CAAP or te Pilippine Ports Autority(PPA), wicever is applicable.

(2) Terminals

(a) Cargo terminals/Container yards

Tis covers terminals/yards andling solid or liquidcargo.

Te following are te qualications for registration: Must ave new facilities; and Must ave a system of ingress and egress to prevent

trac buildup/obstruction of torougfares on a

24-our basis as certied by DOTC, MMDA and/oroter concerned agency.

(b) LNG/CNG storage, distribution and marketing

Tis covers te establisment and operation of storage,distribution and marketing facilities for te bulk andling/sale of natural gas in accordance wit relevant PilippineNational Standards (PNS).

Tis also covers te establisment and operation ofnatural gas refueling station and related infrastructuresand facilities in accordance wit relevant PilippineNational Standard (PNS). Foreign-owned stations mustcomply wit te Retail Trade Law (R.A. No. 8762).

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For marketing, distribution and refueling stations, teregistered enterprise must submit a copy of its Permit toOperate and Supply Natural Gas issued by te DOE priorto start of commercial operations.

For storage, te registered enterprise must submit a copyof its Permit to Operate issued by te DOE prior to start ofcommercial operation.

Te following are te qualications for registration forstorage, marketing and distribution: Must ave new facilities; Must cater to power plants, industrial plants,

sipping vessels, commercial establisments or land

transport; and Must cater to at least one (1) clientele, oter tan teproponents own business.

(c) Charging stations for electric vehicles

Tis covers te establisment of carging stations forelectric veicles. Te carging stations could refer to aservice station designed to simultaneously fast cargemultiple veicles similar to gasoline/diesel stations or a

network of at least 5 carging stands.

Application for registration must be accompanied by anendorsement from te Department of Energy (DOE).

(3) Warehouses

Tis covers te establisment of automated wareousingfacilities wit automated retrieval systems, conveyors, cranesand oter cargo andling equipment.

Tis also covers distribution or fullment centers.

Only revenues generated from services rendered to oterenterprises may be entitled to ITh.

d. Waste Management Facilities

Tis covers te establisment of toic and azardous waste(ThW) treatment facilities.

Te following are te qualications for registration: Must involve treatment, storage and disposal (TSD) Must be capable of andling ThW Must andle only locally generated wastes.

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Prior to start of commercial operation, te registered enterprisemust submit a copy of its TSD Registration Certicate issued byte Environmental Management Bureau (EMB) of te DENR. Ifandling radioactive wastes, te registered enterprise must

submit a copy of te License to Operate a Radioactive WasteManagement Facility from te Pilippine Nuclear ResearcInstitute (PNRI) of te Department of Science and Tecnology(DOST) in addition to te TSD Registration Certicate.

e. Physical Infrastructure

Tis covers tollways, and telecommunication facilities.

(1) Tollways

Tis covers te development, including reabilitation,upgrading, and/or epansion, and/or operation of tollways.

Upgrading of eisting pysical infrastructure may be registeredas a new project provided tat te cost of upgradingalready approimates at least 90% of te prevailing cost ofconstructing a new pysical infrastructure, as certied by teconcerned agency.

If te cost of upgrading of te pysical infrastructure isless tan 90% of te prevailing cost of constructing a newpysical infrastructure, te project may be registered as amodernization activity but not entitled to ITh.

For projects tat will involve te development and operationof pysical infrastructure to be undertaken by separate entities,bot te developer and operator may qualify for registration.however, te developer may be entitled only to incentive oncapital equipment directly needed for te operation of te

pysical infrastructure.

(2) Telecommunication infrastructure

Tis covers te establisment of new telecommunicationsinfrastructure in te provinces particularly in te rural areas asendorsed by te National Telecommunications Commission(NTC) and utilizing at least ber optic tecnology.

f. PPP Projects

Tis covers projects implemented under Republic Act 6957, asamended by Republic Act 7718 (Amended Build-Operate-and-Transfer Law).

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Application for registration must be accompanied by anendorsement from te Public-Private Partnersip (PPP) Center.

8. Research and Development

Tis covers R&D activities and te establisment of researc/testinglaboratories, Centers of Ecellence (COE) and tecnical vocationaleducation and training institutions.

a. Research and Development

Tis covers all R & D activities including te establismentof researc/testing laboratories (e.g., for parmaceuticals,electronics, construction, etc.).

Tis also covers te establisment and operation of facilities forte conduct of clinical trials (e.g. Clinical Researc Organizationor CRO). Te registered CRO must submit a copy of Permit forClinical Investigational Use (PCIU) issued by Food and DrugsAdministration (FDA) before te conduct of eac clinical trial.

Application for registration must be accompanied by anendorsement from te DOST or oter concerned agency, as maybe deemed necessary.

b. Center of Excellence (COE)

Tis covers te establisment of te following:1) Entrepreneurial/ tecnology/business incubation centers,2) Common service facilities, and3) Manufacturing, service and agribusiness entities located in

te premises of state universities and colleges (SUCs) outsideMetro Manila and wit a special arrangement wit te SUCto develop competencies in entrepreneursip, and researc

and development.

c. Training/Learning Institutions

Tis covers te establisment of institutions specializing in tetecnical vocational education and training (e.g., engineering,culinary arts, etc.) in support of te activities listed in tis IPP.

Te following are te requirements for registration: Te curriculum must be approved by eiter te Tecnical

Education and Skills Development Autority (TESDA) fortraining courses or te Commission on higer Education(ChED) for degree courses or oter concerned governmentagencies/autority and endorsed by te appropriate industryassociation.

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Te registered education/training/learning institutions mustprovide training laboratories and equipment, if applicable.

9. Green Projects

Tis covers te manufacture/assembly of goods and te establismentof energy eciency-related facilities (suc as district cooling systems),were eiter utilization of wic would signicantly lead to eiter teecient use of energy, natural resources or raw materials; minimize/prevent pollution; or reduce greenouse gas emissions.

Mere installation of energy eciency-related equipment/device/tures sall not qualify for registration.

To qualify for registration, assembly operations must be integratedwit te manufacture of at least one part/component for use in teassembly.

Green Projects covers only projects oter tan tose already listed intis IPP.

10. Manufacture of Motor Vehicles

a. Manufacture/assembly of motor vehicles

Te project sall involve te manufacture/assembly of brandnew motor veicle units, ecluding 2-stroke engine motorcyclesand traditional tricycles tat are compliant wit te prevailingnational standards and regulations on te registration, use andoperation of motor veicles.

Any of te following may qualify as new: Projects tat will involve te establisment of a factory

complete wit production macinery/equipment and

facilities suc as welding section, assembly section, metaltreatment section, painting section, testing facility for roadwortiness and emission standard compliance, and pre-delivery inspection section.

Projects of an eisting motor veicle manufacturer/assemblerof passenger car/commercial veicle tat involves teproduction of a new model or a full model cange (FMC),provided tere is new investments of at least Pp 200 millionwic may include manufacture of parts and components.

Any of te following may qualify for pioneer status: Projects covered under paragrap a.1 above for manufacture/

assembly of passenger cars and/or commercial veicleswit investments of at least US$50 million and for te

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manufacture/assembly of motorcycle wit investments of atleast US$4 million. Investments may include te cost of teacquisition of an eisting assets or facilities.

Projects covered under paragrap a.2 above wit

investments of at least US$20 million for passenger cars and/or commercial veicles, US$1.5 million for motorcycles Projects on te manufacture/assembly of alternative fuel

veicle and electric veicles. Alternative fuel veicles includete following: hybrid veicles are veicles tat run on electric batteries

and gasoline/diesel/oter fuels. Electric veicles are veicles tat run solely on electric

power. Fleible-fuel veicles are veicles tat run on gasoline/

diesel in combination wit alternative fuel suc as butnot limited to: Bioetanol veicles tat run on gasoline and a

minimum etanol content/blend of at least 20% Biodiesel veicles tat run on diesel and a minimum

biodiesel blend/content of at least 5% Compressed Natural Gas Veicles are veicles tat

run on Compressed Natural Gas (CNG) Oter veicles powered by LPG, fuel cell and oter

alternative fuels.

Manufacture/assembly of brand new tree or four-weelPilippine utility veicles for cargos and/or passengers

Entitlement to ITh is subject to a Net Value Added (NVA) of atleast 40% wit full eemption for projects wit NVA of at least65%. ITh eemption for projects wit NVA between 40% and 60%sall be subject to pro-ratio.

b. Manufacture of parts and components

Tis covers te manufacture of motor veicle parts andcomponents eiter as original equipment manufacturer (OEM)or after-market products.

Any of te following may qualify for pioneer status: Manufacture of engines and transmissions; Manufacture of tool & die to produce cassis and engine; Establisment of common facility for eat treatment, forging,

stamping of motor veicle parts and components; Production of electric motors, batteries oter tan lead acid

batteries, controller assembly and battery carger for electricveicles.

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11. Strategic Projects

Tis covers projects tat eibit very ig social economic returns tatwill signicantly contribute to te countrys economic development.

Te social economic returns of te proposed project sall be measuredin terms of te following: Consumer-based benets (e.g., price, availability, quality); Forward and backward linkages wit eisting industries in te

country; Generation of at least 500 direct employment or use of igly-

specialized or advanced tecnology; Generation of at least US$1 million in foreign ecange savings,

wen applicable;

Stature of te proponent as a global player, wen applicable.

Notwitstanding te preceding paragraps, manufacture ofpackaging products tat will involve product or process innovation,wic sall lead to signicant improvements in quality, and value ofte packaged products sall also be deemed as Strategic Project.Likewise, te manufacture of essential drugs and medicines as listedin te Pilippine National Drug Formulary (PNDF) sall be deemed asStrategic Project.

Projects under tese activities will be approved upon determinationby te Board in consultation wit te Department of Finance (DOF),National Economic Development Autority (NEDA) and oterappropriate government agencies.

12. Hospital/Medical Services

Tis covers te establisment and operation of medical facilitiesincluding general and specialty ospitals, and oter ealt facilities.

Application for registration must be accompanied by an endorsementfrom te Bureau of healt Facilities and Services of te DOh.

Only facilities outside Metro Manila may qualify for registration.

Only revenues from te provision of medical and diagnostic servicessall be entitled to ITh. Revenues from operating a parmacy, foodservices and any oter non-treatment related services will not beeligible for ITh.

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Prior to start of commercial operation, te registered enterprise mustsubmit copies of License to Operate issued by te DOh and PilealtAccreditation.

13. Disaster Prevention, Mitigation and Recovery Projects

a. Tis covers projects tat will prevent or mitigate adverse impactsof calamities and disasters, wic may include installation ofood control systems; installation of early warning systemsfor typoons, eartquake occurrences, tsunami and volcaniceruptions; manufacture or assembly of goods critical to disastermanagement; construction of dikes; and salvaging operations.

Tese include te manufacture and assembly of equipment and

goods tat will be used for disasters, calamities and emergencies,te provision of rescue and retrieval services, te provisionof information services related to disaster management, teprovision of specialized equipment and services needed to restorevital public services in a fast and ecient manner, te provision oftraining services for rst responders and any oter activity tat willcontribute to te goals of mitigating risks to public safety causedby disasters, calamities and emergencies.

Salvaging pertains to te rescue of a seriously damaged/

incapacitated sip tat may include reoating and towing of tesip to a safe place. It also pertains to te removal of a sunken orwrecked sip, derelict or azards including cargoes tereof.

Only income from salvaging operations (ecluding income fromartifacts/treasure recovered from sunken vessels/sips) may beentitled to ITh.

b. Tis also covers projects to reabilitate areas aected by calamitiesand disasters or areas ocially declared under a State of Calamity,

wic may include rebuilding of roads and bridges and oterinfrastructure after typoons, eartquakes/ooding, volcaniceruptions, oil spill clean-up, and oter disasters.

For projects tat will involve te development and operation ofpysical infrastructure to be undertaken by separate entities, botte developer and operator may qualify for registration. however,te developer may be entitled only to incentive on capitalequipment directly needed for te operation of te pysicalinfrastructure.

c. Tis furter covers training for disaster preparedness, mitigationor recovery/reabilitation/reconstruction.

Application for registration must be accompanied by anendorsement from te concerned agency.

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Disaster Prevention, Mitigation and Recovery Projects covers onlyprojects oter tan tose already listed in tis IPP.

II. MANDATORY LIST

1. Industrial Tree Plantation3

Tis covers etensive plantation of forest land of tree crops (eceptfruit trees) for commercial and industrial purposes.

Tree crops include timber and non-timber species suc as rubber,bamboo, rattan, etc. (ecluding fruit trees) for commercial and industrialpurposes.

Eac Industrial Tree Plantation (ITP) project must ave an approvedand issued Integrated Forest Management Agreement (IFMA).

In cases of tree plantations tat are joint venture agreements wit oterprivate entities, community organizations or government entities, onlyte sare of te registered enterprise may be entitled to ITh.

Application for registration must be accompanied by an endorsementfrom te DENR.

2. Exploration, Mining, Quarrying and Processing of Minerals

Tis covers te eploration and development of mineral resources,mining/quarrying and processing of metallic and non-metallicminerals.

Mining/quarrying and mineral processing projects are not entitled toITh.

Application for registration must be accompanied by a copy of te

Eploration Permit, Mineral Production Saring Agreement (MPSA),or Financial or Tecnical Assistance Agreement (FTAA), wicever isapplicable.

3. Publication or Printing of Books/ Textbooks

Tis covers printing, re-printing, publication and content developmentof books or tetbooks.

Application for registration sall be on a per book or title basis andmust be accompanied by an endorsement from te National BookDevelopment Board (NBDB).

3Industrial Tree Plantation (ITP) is also known as Industrial Forest Plantation (IFP) based on DENR AO1999-53

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4. Rening, Storage, Marketing and Distribution of PetroleumProducts

Tis covers rening, storage, distribution, and marketing of petroleum

products.

For gasoline retailing stations, ecept tose locating in LDAs listed intis IPP, te applicant sall be required to invest a minimum capitalof PP10 million per station, ecluding land, or suc amount as maybe determined jointly by BOI and DOE for augmentation purposes,as te need arises; Provided, tat foreign retailers sall comply witte requirements provided under R.A. No. 8762, oterwise known aste Retail Trade Liberalization Law, and its implementing rules andregulations.

For storage, marketing and distribution, only investments of newindustry participants may be entitled to incentives.

Application for registration must be accompanied by an endorsementfrom te DOE certifying tat te applicant is a new industry participantwit new investments.

For storage, marketing and distribution, petroleum products ecludingliqueed petroleum gas (LPG), sall be sourced from te new industry

participants as dened under R.A. No. 8479, ecept in cases ofemergency supply situation.

For projects tat involve more tan one activity, i.e., storage, marketingand distribution, eac must be unbundled sowing te revenuestreams and costs for eac activity.

Blending of petroleum products alone may only be entitled to capitalequipment and oter non-scal incentives.

Applicant enterprises sall elect to be governed by te provisionsof E.O. No. 226 or R.A. No. 8479 at te time of teir application forregistration, provided tat suc election once made sall be nal.

5. Ecological Solid Waste Management

Tis covers te establisment of waste recycling facilities weter ornot integrated wit manufacturing facility, using as inputs 100% locallygenerated solid waste materials or scraps from te recycling facility toproduce semi-nised or nised product.

Tis also covers te establisment of an integrated solid wastemanagement facility tat includes te following: 1) materials recoveryfacility wit a processing center tat sall be used to manufacture goodsfrom recyclable wastes (biodegradable, non-biodegradable, recyclable

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and residual) as te raw materials; and 2) categorized sanitary landlltat sall accommodate only residual wastes tat were not recycleddue to te absence of appropriate tecnology for recycling.

Waste recycling projects witout a manufacturing/processing facilityare not entitled to ITh.

Registered projects may avail of capital equipment incentive.

Application for registration must be accompanied by an endorsementfrom te Environmental Management Bureau of DENR.

Projects tat will employ new or proprietary tecnologies sall submitan Environmental Tecnology Verication (ETV) issued by te DOST.

6. Clean Water Projects

Tis covers te establisment of wastewater treatment facilities andsewage/septage collection integrated wit treatment facilities and teadoption of water pollution control tecnology, cleaner production andwaste minimization undertaken troug BOT or non-BOT scemes.

Activities suc as 5S and Good housekeeping are not qualied forregistration.

Wastewater treatment facilities and sewage collection integrated wittreatment facilities may be entitled to ITh.

Projects adopting water pollution control tecnology, cleanerproduction and waste minimization are only entitled to capitalequipment incentive.

Application for registration must be accompanied by an endorsementfrom te DENR, te Laguna Lake Development Autority (LLDA) or

oter concerned agency.

Projects tat will employ new or proprietary tecnologies sall submitan Environmental Tecnology Verication (ETV) issued by te DOST.

7. Rehabilitation, Self-Development and Self-Reliance of Persons withDisability

Tis covers te manufacture of tecnical aids and appliances for te useand/or reabilitation of persons wit disability, and te establismentof special scools, day care centers, omes, residential communitiesor retirement villages solely to suit te needs and requirements ofpersons wit disability.

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Manufacturing of tecnical aids and appliances used by persons witdisability includes but is not limited to te following: Walk-in bats designed for persons wit disabilities; Commode cairs;

Braille books; hoists and lifting cairs designed for incapacitated people,including stair lifts;

Weelcairs, scooters and automobiles using special controls orassistive tecnology designed for persons wit disabilities;

hearing-aids; Articial limbs, ortotics, prostetics and ortopedic braces; Automatic/mecanical lifts to be attaced to motor veicle.

Application for registration must be accompanied by an endorsement

from te Department of Social Welfare and Development (DSWD).

8. Renewable Energy

Tis covers developers of renewable energy facilities, including ybridsystems.

Tis also covers manufacturers, fabricators and suppliers of locally-produced renewable energy (RE) equipment and components.

Application for registration must be accompanied by a copy of teDOE Certicate of Registration, Certicate of Accreditation or DOEendorsement, wicever is applicable.

Applicant enterprises sall elect to be governed by te provisions of E.O.No. 226 or R.A. No. 9513 at te time of teir application for registration.Under E.O. No. 226, RE projects may qualify for pioneer status.

9. Tourism

Tis covers tourism enterprises tat are outside te tourism enterprisezones (TEZs) and are engaged in te following:

a) Tourist transport services weter for land, sea and air transportfor tourist use;

b) Establisment and operation of: Accommodation establisments suc as but not limited to

otels, resorts, apartment otels, tourist inns, motels, pensionouses, private omes for ome stay, eco-lodges, condotels,serviced apartments, and bed and breakfast

Boi Ipp 2013

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