Question & AnswerQ&A (MEMORANDUM ORDER NO. 50)
The legal basis for the approval of the 2020 Investment Priorities Plan is Article 29 of Executive Order No. 226 (s. 1987), also known as the Omnibus Investments Code of 1987, as amended.
The Memorandum Order takes effect fifteen (15) days after its publication in a newspaper of general circulation as required under Article 31 of the Omnibus Investments Code of 1987.
Preferred activities under the 2020 IPP include (A) Preferred Activities for Investment such as qualified activities relating to the fight against COVID-19, manufacturing, agriculture, strategic services, healthcare, mass housing, etc., and (B) Export Activities including production and manufacture of export products and service exports.
Activities producing or manufacturing medicines, medical devices, PPE, surgical supplies, laboratory equipment and reagents, medical supplies, sanitizers, and related products, including repurposing manufacturing lines to produce such goods, as well as services like crematoriums, health waste treatment, laboratories, hospitals, and quarantine facilities are qualified.
The Board of Investments may provide up to six (6) years of Income Tax Holiday to qualified activities under these categories upon determination of their essentiality to national goals under RA 11469 and RA 11494.
Strategic services include IC design, creative industries/knowledge-based services (like animation, game development, software and healthcare information management systems), Maintenance Repair and Overhaul (MRO) of aircraft, charging/refueling stations for alternative energy vehicles (except LPG), industrial waste treatment, telecommunications for new players, and state-of-the-art engineering, procurement and construction services for industrial plants and infrastructure.
Key focus areas include export activities, agriculture and agribusiness, aquaculture and fishery, basic industries, infrastructure and services, industrial service facilities, engineering industries, logistics, BIMP-SAGA related enterprises, tourism, health and education services, halal industry, Islamic banking investments, and energy including off-grid and Small Power Utility Group areas.
Strategic industries include telecommunications infrastructures such as international gateway facilities and connectivity projects servicing BARMM areas, air/land/water transportation, logistics and supply chain networks, shipping, ports, and related allied industries like arrastre and stevedoring in BARMM ports.
Inclusive Business projects that provide business opportunities to micro and small enterprises as part of their value chains may qualify for Pioneer status incentives under the 2020 IPP.
Special laws include PD 705 (Industrial Tree Plantation), RA 7942 (Mining, limited to capital equipment incentive), RA 8047 (Publication or Printing of Books/Textbooks), RA 8479 (Refining, Storage, Marketing, and Distribution of Petroleum Products), RA 7277 (Rehabilitation, Self-Development and Self-Reliance of Persons with Disability), RA 9513 (Renewable Energy), RA 9593 (Tourism), and RA 11285 (Energy Efficiency and Conservation).
The Board of Investments ensures that incentives granted are consistent with the State policies and national goals, determines qualified activities, issues rules for implementation, and the Chairman is required to render an annual report to the President on the accomplishments and implementation of the IPP.