By Bernie Cahiles-Magkilat
The Board of Investments (BOI) has approved the grant of tax and fiscal incentives, particularly income tax holiday to government infrastructure, power, and real estate projects, which boosted the agency’s investment pledges by 38.1 percent as of October this year.
The government’s premier investment generating agency yesterday announced that it approved the registration of 369 projects, which are 30.39 percent higher than the 283 projects last in the same period last year, in the first 10 months of the year reached P408.7 billion from P296.038 billion in the same first ten months in 2016.
Total employment generation for the January-October 2017 period reached 69,862, up 35.1 percent from the same frame last year. Approved projects numbered 369, up from 283 last year or a 30 percent spike.
Investment pledges in October soared 187 percent to P27.6 billion from P9.6 billion in the same month last year.
Notably, the BOI data showed that of the first ten-month’s P408.7-billion total investment commitments, foreign investors contributed only P15.317 billion, a substantial decline from P52.665 billion in 2016.
The BOI grants six-year income tax holiday to pioneer projects and 4 years or lower to non-pioneer and expansion projects. The BOI also grants zero duty on capital equipment importation needed for the operation of their approved projects.
In a statement, BOI said that majority of the investment pledges the agency registered for tax and fiscal incentive purposes were renewable and power projects, government infrastructure projects and real estate.
Notably, construction projects and infrastructure projects of the government followed closely with P127.7 billion, reflecting 105 percent increase from P62.3 billion in 2016.
The two biggest infrastructure projects were SMC Mass Railway Transit 7, Inc. with project cost of P79.191 billion and MPCALA Holdings, Inc. with investment of P48.467 billion. Both projects started during the previous Aquino administration’s Public-Private Partnership (PPP) Program.
Combined cost from the power and renewable projects almost equal that of the infrastructure projects with total commitments of P128.9 billion.
Real estate projects, these are mostly housing projects that still continued to enjoy income tax holidays, registered total investment commitment of P78.3 billion, up 90.1 percent from P41.1 billion in 2016.
The manufacturing investments continue to be robust with P38.5 billion, up 81.7 percent from P21.2 billion the previous year. Transportation and storage sector attracted total investments of P13.3 billion while accommodation and food service generated P11.3 billion, up 268.5 percent from P3 billion in the same period in 2016.
Among the approved manufacturing projects, the Gokongwei-owned JG Summit Petrochemical Corp. was the biggest.
JG Summit Petrochemical has registered as new producer of P10.018-billion bimodal polyethelene plant in Batangas City.
Another big manufacturing project was the P6.5-billion expansion of Eagle Cement Corp. of businessman Ramon Ang.
Except for another Gokongwei-owned Cebu Air Inc., which registered its P6.076 billion investments to service new routes to Incheon and Bangkok, the rest of the top ten investments approved in October were in the renewable and energy projects.
In terms of location, the CALABARZON (Region IV-A) attracted the most number of projects with P150.9 billion, up from 341 percent from P34.2 billion last year. Central Luzon (Region III) registered P115.1 billion or 138 percent increase from last year’s P48.3 billion.
But the National Capital Region has only P42.5 billion, a substantial 43 percent decline from P74.3 billion in 2016. Central and Western Visayas generated P42.3 billion in investment pledges. Cagayan Valley and Ilocos got a share of P21.5 billion. Northern Mindanao and Davao Region had a total of P12 billion.
The BOI aims to achieve P500 billion in total investment approvals this year.
“We remain bullish in attracting more investments in the last two months of the year as the infrastructure program of the government is now in full swing,” said Trade Secretary and BOI Chairman Ramon Lopez.