Manila Investment Incentives Code of 2016

Policy and intent of incentives

The City Government of Manila must promote socio-economic growth by attracting private investment to expand employment opportunities and increase revenues.
The code provides incentives that are fair, clear, time-bound, and consistent with national laws, to ensure a level playing field.
The City recognizes the vital role of the private sector in commercial, industrial, and service enterprise growth in Manila.
The City commits to encourage growth in key sectors, including sectors supported by national government involvement, without waiving local autonomy.
The City aims to improve delivery of basic services and restore Manila’s status through investment-led development.

Core definitions and scope terms

“Biodiversity (BD)-Friendly Businesses” are investments that directly or indirectly support flora and fauna protection and other natural resource conservation initiatives.
“BOI” refers to the Board of Investments under the Omnibus Investments Code of 1987.
“Existing projects” are projects of an existing enterprise that started commercial operation at the time of application with the MIIB, and do not qualify as new expansion or modernization.
“Expansion projects” are installations of additional facilities/equipment that increase production capacity of the same product line within the same existing plant/facilities.
“Foreign Investment” is equity investment made by a resident or non-resident alien through foreign exchange and/or other assets actually transferred to the Philippines and duly registered with the BSP, which assesses and appraises the value of assets other than foreign exchange.
“Green Economy” is production of environment-friendly goods and services more sustainable in the long term that moderate climate change and biodiversity losses (including renewable energy, green transportation, carbon capture, and green building practices).
“Incentives” include fiscal incentives (levy and tax exemptions granted by the concerned LGU) and non-fiscal incentives (benefits granted to the proponent enterprise other than levy and tax exemptions).
“Investment Promotion Center (IPC)” is the office created under this code.
“Investment Promotions Fund” is a special fund allotted to expedite IPC Manila operations, with allocation to be immediately released.
“Investment Priorities Plans, Programs” are referred to as “IPP” and are formulated by the Office of the Mayor.
“Large Enterprise” has capitalization of PhP 100,000,000.00 and above.
“Local Investments” are investments made by Filipino citizens, individuals, partnerships, or corporations.
“Manila Investment Incentives Board (MIIB)” is the board created under this code.
“Modernization Project” is a project of a non-pioneer enterprise involving improvements in systems, processes, equipment, and/or facilities resulting in either:
- at least twenty-five percent (25%) reduction in production cost/cost of services; or
- upgrading product/service quality or reclassification of facilities to a higher class under applicable industry accreditation standards.
“New Projects” are periodically listed in the IPAs and have not started commercial operation, undertaken by:
1. a newly organized enterprise; or
2. an existing enterprise engaging in an entirely distinct and different activity; or
3. the same activity with a new facility in an area not contiguous to the premise of its existing project with new investments.
“PPP” refers to Preferred and Priority Investment Project under the Omnibus Investments Code of 1987.
“Philippine National” is a citizen of the Philippines; a domestic corporation/partnership/association wholly owned by Philippine citizens; or a corporation organized under Philippine laws where at least sixty percent (60%) of the capital stock outstanding and entitled to vote is owned by Philippine citizens.
“Pioneer Enterprise” includes registered enterprises that (1) manufacture/processing/produce (not merely assemble/pack) goods not produced in Manila on a commercial scale; or (2) use a new design/formula/scheme/method/process/system introduced in Manila; or (3) produce non-conventional fuels or manufacture equipment using non-conventional sources of energy, where production involves substantial use and processing of new materials.
“Non-pioneer Enterprise” is all registered producer enterprises other than pioneer enterprises.
“Processing” means conversion/transformation of raw materials into market-value goods through enumerated processing methods (physical, mechanical, chemical, electrical, biochemical, slaughtering, milling, pasteurizing, drying/desiccating, quick freezing) causing a change in the nature/state of products; mere packing/packaging does not constitute processing.
“Registered Enterprise” is any individual, partnership, corporation, cooperative, or other entity incorporated and/or organized and duly registered with the SEC and/or the Department of Trade and Industry, as the case may be.
“MSMEs” are Micro, Small and Medium Enterprises encouraged by the BOI, with capitalization thresholds:
- Micro enterprise: below Php. 3,000,000.00
- Small enterprise: Php. 3,000,000.00 up to Php. 15,000,000.00
- Medium enterprise: over Php. 15,000,000.00 but not over Php. 100,000,000.00

Manila Investment Incentives Board (MIIB)

The Manila Investment Incentives Board (MIIB) is created to implement this code.
The MIIB is composed of:
- Chairman: City Mayor
- Vice Chairman: President of the Manila Chamber of Commerce and Industry or other duly accredited private business association
- Members: the designated Investment Promotion Officer; Heads of specified city offices (Manila Tourism and Cultural Affairs Bureau, City Planning and Development Office, Bureau of Permits, City Treasurer’s Office, and the Department of Assessment as active economic movers); Sangguian Chairpersons of the Committees on Trade and Industry, Economic Development, Ways and Means, and Laws; and a private sector representative of significant business/industry appointed by the City Mayor for a term of two (2) years and duly accredited by the Sanggunian.
The MIIB meets once a month or as necessary; a quorum is the presence of at least a majority of all members.
Decisions and policies approved by a majority of members present during a meeting with quorum are valid.
The MIIB’s core functions include:
- promulgating the Implementing Rules and Regulations (IRR);
- recommending amendments to the code to the Sanggunian;
- adopting the investment promotion plan/programs formulated by the Office of the Mayor;
- periodically reviewing Investment Priority Areas (IPAs) eligible for incentives;
- acting on applications for project registration and availment of incentives;
- supervising IPC Manila operations;
- establishing cooperation undertakings with other LGUs, private sector, NGOs, and other institutions;
- enlisting assistance of local government offices, national agencies, and private sector organizations;
- establishing trade and investment satellite offices; and
- performing other tasks necessary and incidental to these functions.
The Chairman presides over regular and special meetings and signs the Certificate of Registration; the Chairman also exercises the listed functions necessary to carry out the code’s objectives.
The Vice Chairman presides in the Chairman’s absence and performs functions necessary for and on behalf of the Chairman.
MIIB members exercise visitorial power to conduct ocular inspection and/or examine business activity, including records and books, of any enterprise registered or applying for registration at reasonable time of day during office hours for verification of compliance or as necessary for effective performance of MIIB functions.

IPC Manila and Investment Priority Areas

The Investments Promotion Center of Manila (IPC Manila) is created as the lead office on investments promotion and to carry out the objectives of the code, either as a stand-alone office or subsumed under a relevant existing office.
The MIIB appoints the Head of IPC, who may be the Local Economic and Investment Promotion Officer (LEIPO) in accordance with DILG Memorandum Circular (MC) 2010-113 on designation of LEIPOs/IPOs.
IPC Manila functions as a One-Stop-Shop, serving as the Board’s Technical Secretariat and performing duties including:
- preparing and implementing the annual investments promotion plan approved by the MIIB;
- receiving, processing, and evaluating applications for registration and incentives and submitting recommendations to the MIIB within the specified period from receipt;
- assisting in securing licenses/permits, identifying partners/suppliers/sites, sourcing skilled manpower/service providers, and resolving investor concerns;
- rendering after-case services to registered enterprises;
- monitoring and evaluating project implementation;
- establishing and updating a data bank on general business information;
- strengthening networking relationships;
- preparing and disseminating promotional materials and cost of doing business collaterals;
- conducting briefings to investors;
- representing Manila in domestic and foreign trade/investment meetings, conferences, and conventions whenever directed by MIIB;
- collating and analyzing studies on potential or declared Investment Priority Areas;
- recommending modified/amended local legislation and procedures affecting investments; and
- performing other necessary functions to implement the code’s intent.
The City Government of Manila formulates Investment Priority Areas (IPAs) through IPC Manila consistent with the Investment Promotion Plan, City Development Plan, City Land Use Plan, Zoning Regulations, and criteria ensuring sustainable and equitable development.
Incentive-eligible priorities are guided by general criteria including:
- high-growth sectors contributing significantly to City GDP;
- high employment generation;
- location in relatively undeveloped/depressed/low-development areas;
- use of Manila growth resources (spacious land area and location sites);
- acceleration/enhancement of competitive advantages of existing enterprises;
- significant and growing contributions from new enterprises;
- complementing national government priorities contributing to national and local city development;
- promotion of the “Green economy” and environmentally friendly solid waste management;
- increasing business activities in commercial districts and developing districts/communities and restoring Manila’s prime business center distinction;
- promoting local tourism; and
- maximizing use of idle industrial and commercial lands.
The Office of the City Mayor periodically formulates Investments Priority Plans and Programs reflecting relative investment importance across sectors for rapid socio-economic development and investor attractiveness.
Preferred Investment Priority Areas include specified sector lists covering:
- Light Manufacturing (including luggage/handbags/wallets/small leather goods; measuring/controlling equipment; surgical/medical/dental equipment and medical furniture; rawboats/bancas/sailboats; renovation and repair of office machinery; quick freezing and cold packaging for fish/sea foods).
- Infrastructure and Services (public utilities and public transport; public markets/slaughterhouse and similar establishments; private infrastructure such as transit station and terminals; wholesale/retail stores including shopping malls; and similar establishments).
- Tourism and Hospitality Services and Facilities (including five-star and boutique/business hotels; cultural/historical centers and parks; theme and recreational parks; eco-tourism centers and facilities; convention and conference facilities; trade exposition central and facilities; sports and entertainment centers).
- Infrastructure and Communications Technology (customer contact centers/call centers; BPO; IT parks and centers; software development enterprises; telecommunications and communications service providers; cinema/broadcasting services for TV and cable; animation studios/digital arts productions).
- Environmental Protection and Enhancement (pollution abatement/mitigation; ecological facilities; water waste management and distribution; water treatment plant; solid waste disposal system and recycling facilities).
- Property Development and Mass Housing (housing components fabrication; mass housing/decent tenement residence/low-cost housing construction; resettlement estates for informal settlers and support facilities).
- Healthcare, Wellness and Health Services (healthcare and wellness facilities; paramedical/disasters control and management centers; healthcare and wellness park; retirement parks; hospitals/medical clinics/treatment facilities).
- Mass Transport Facilities (light rail transit system; environmentally designed transport vehicles; commuter terminals linking domestic/international airports; eco-tourism transport along Pasig River and Manila Bay).
- Electronic and Computer Products (automotive/wiring harness; micro-chips; computer/cellphone/e-gadgets manufacturing; household appliances).
IPC Manila undertakes periodic review and may consider amendments to IPAs, including:
- inclusion of additional areas based on employment, value added, local linkages/joint ventures, and historical/cultural value restoration;
- exclusion where sufficient investments exist but incentives should end;
- inability to attract investors within reasonable time/cost causing unfavorable business climate; or
- lack of progress in environmental management plan implementation.
Projects covered or allowed under Public-Private Partnerships arrangements under R.A. 6977 as amended enjoy incentives under this code in addition to those under R.A. 6977.

Registration, pre-qualification, and processing

Pre-qualification requirements for registration/incentive availment include:
- compliance with all existing laws/rules/regulations for doing business in the Philippines;
- activity must be listed in Manila’s IPAs;
- place of operation/production must be within Manila’s territorial jurisdiction;
- specified percentages of workforce must be bona fide Manila residents, giving equal opportunities for men, women, the poor, indigenous people, and physically and handicapped persons; and
- safeguards against pollution or resource use if necessary.
Allowed project types to register include:
- New Projects
- Extension Projects
- Modernization Projects
- Diversification Projects
Documentary requirements depend on enterprise type:
- For single proprietorship: business name registration issued by the Department of Trade and Industry; audited financial statements (if existing); completed application form; and other documents required by the City Government of Manila.
- For partnership/corporation: articles of partnership/corporation; certified true copy of SEC certificate of registration; board resolution authorizing filing for corporations; audited financial statements (if existing); completed application form; and other required documents.
- For BOI enterprises: certified true copy of BOI certificate of registration; and copies of documents submitted to BOI pertaining to BOI registration.
Applications must be filed with IPC Manila.
Applicants must undergo document check-listing for completeness and consistency of provided information.
Only complete applications are officially accepted and registered in the Registration Book; the date-stamp on the application is the date of official acceptance.
Notice of filing of the application in a conspicuous place in Manila City Hall satisfies publication requirements.
An order of payment is issued for complete applications for payment of required fees.
After official acceptance, IPC Manila evaluates applications and may conduct an ocular inspection when necessary; IPC’s evaluation is presented for MIIB action.
If approved, IPC Manila notifies the applicant and informs the City Treasurer and City Assessor for guidance and appropriate action.
If denied, IPC Manila informs the applicant in writing.
A MIIB Resolution is entered in the minutes of the meeting in both approval and denial cases.
Processing timing requires a stated processing time from official acceptance until MIIB acts, and inaction by the MIIB within the specified period results in the application being deemed approved.
A non-refundable filing fee is paid with the registration documents.
Micro enterprises may be exempted from the application fee.
Small enterprises may be granted a seventy-five percent (75%) reduction of application fees.
Upon approval, the enterprise receives a Certificate of Registration signed by the Chairmen of the Board or the officer designated by the Board.
The Certificate of Registration states, among others: the name of the registered enterprise; the Investment Priority Area (PA) where it will operate; the incentives granted and the period of availment; and other terms and conditions of registration.
A registered enterprise may not avail incentives under this code if it previously availed the same incentives under other laws or investment incentive programs.
IPC Manila provides assistance for BOI-registered MSMEs, including:
- preparation of simplified project applications;
- identification of MSME support companies;
- exemption from payment of application and registration fees;
- reduction of incentive application fees;
- posting of notice of filing in conspicuous place in Manila City Hall instead of publication in a newspaper of general circulation;
- simplified documentary and reportorial requirements and incentive applications.
Registered enterprises must undertake corporate social responsibility projects including:
- housing for employees;
- educational projects;
- cultural revivals;
- programs for women, children, elderly, persons with disability, out-of-school youth, and indigenous people;
- community infrastructure projects aligned with Manila’s development plan.
Registered enterprises must ensure:
- no industrial/manufacturing facility operates without proper air pollution devices, waste-water treatment facilities, and solid waste management facilities;
- no plant operates beyond the operating capacity of its waste treatment facilities to maintain effluent quality within standards required by law;
- periodic environmental compliance monitoring through operations/premises/facilities/system inspections coordinated with the Department of Environment and Natural Resources;
- refusal to submit to inspection is sufficient ground for forfeiture of any incentive and revocation of the Certificate of Registration and/or Business Permit.

Incentives granted to registered enterprises

Fiscal incentives may be granted consistent with the Local Revenue Code and Book II of Republic Act No. 7160 including:
- exemption from local business taxes under Section 133 (g) of the LGC;
- tax exemption privileges through ordinances approved under Section 192 of the LGC;
- exemption from payment of postal charges and fees under Article 282 of the LGC; and
- exemption from special levy on real property under Section 235.
Fiscal incentives are limited to new, expanding, and/or modernization projects situated in Manila.
The exemption under Section 133 (g) of the LGC is for:
- six (6) years for pioneer enterprises; and
- four (4) years for non-pioneer enterprises,
  from the date of registration.
Exemptions granted under this code are in addition to incentives under Executive Order No. 226 (Omnibus Investments Code of 1987), and additional incentives under other national laws as relevant; where registration is under this code, incentives are limited under Section 133 (g).
Postal charges exemptions must not exceed one (1) year from the actual date of start of business operations.
Real property special levy exemptions must not exceed one (1) year and apply only to Manila’s share.
Exemptions do not extend to fees and charges imposed for services rendered by the City of Manila (including garbage/sanitary/electrical inspection fees and similar fees), and do not extend to rentals for use of public utilities owned and operated by the City (including charges for actual consumption of water and electric power and toll fees for use of public roads and bridges), as well as charges for use of government facilities and properties.
Real property fiscal incentive duration is capped at not more than one (1) year, and applies only to the City of Manila’s share.
Non-fiscal incentives include:
- one-stop-center facilitation for simplified documentation/registration procedures with IPC Manila assistance;
- support through IPC Manila reconciliation and mediation for industrial piece;
- assistance in securing electric power and water supply connections;
- coordination in negotiating special utility rates for industries with a certain minimum load;
- assistance in site selection and negotiation for right-of-way;
- networking with national agencies such as TESDA and similar institutions for training to enhance workers’ skills;
- facilitation of outbound and inbound investor missions; and
- other after-care services for investors.
For preferred and priority projects under the Omnibus Investments Code of 1987, the City grants additional incentives deemed in addition to national incentives under Executive Order No. 226, EPZA, and other national laws.
These additional incentives for preferred enterprises take effect during the next calendar year for two (2) years, as provided in the implementing rules, and include:
- Mayor’s Permit Fees;
- Business Sales Taxes;
- Building Permit Fees;
- Occupancy Permit Fees;
- Basic Real Property tax due to the City excluding Barangay shares;
- Tax on transfer of real property ownership;
- Franchise tax;
- Local Contractor’s tax; and
- Amusement Tax.
Pioneer enterprises and expansions qualify for the above exemptions and assistance services when they have no previous operations in the City and for expansion operations increasing production capacities and/or branch operations, resulting in increased investments or capitalization in Manila.
Incentives under this code do not prejudice availment of other incentives provided under existing laws.

Administrative sanctions and implementing rules

Any violation of provisions on registration of projects/business triggers cancellation of the Certificate of Registration, which withdraws the incentives granted under this code.
Upon cancellation, all fees and charges previously granted become due and demandable.
Grounds for cancellation include:
- violation of this code or other applicable laws/rules/regulations/ordinances;
- violation of the terms and conditions in the Certificate of Registration; and
- material misrepresentation.
The Office of the Mayor must formulate and adopt IRR covering:
- specifications of qualifications and eligibility of proponents/investors;
- criteria for evaluation of investments proposals;
- processes for evaluating investments projects; and
- process flows and guarantees for City approval of projects and registered enterprises.
The IRR must be disseminated to the investors’ community and prospective investment proponents.

Appeals, suppletory rules, separability, repeal, effectivity

A proponent enterprise affected by decisions of the City Government through its implementing office may appeal, and a registered enterprise dissatisfied with certain aspects of the grant of preferences/incentives may appeal.
Appeals must be filed within fifteen (15) days to the Board of Investments (BOI).
The BOI decision is final and executory.
National laws and ordinances consistent with this code supplement its implementation.
The provisions are separable: invalidity or unconstitutionality of any section does not affect the validity and continued effect of other provisions.
Ordinances and executive directives inconsistent or in conflict with this code are repealed or modified.
Effectivity is triggered on the day following full publication of the code for two (2) consecutive weeks in a newspaper of general circulation.