Large agribusiness and tourism companies that incorporate small enterprises and their host communities in their value chain could enjoy fiscal incentives to be given to firms categorized under inclusive business (IB) in the 2017 Investment Priorities Plan (IPP).
The draft 2017 IPP guidelines set the following requirements for agribusinesses that should be met within three years of operation: 25 percent of total cost of goods sold should be from micro and small enterprises (MSEs); 300 farmer/individual-beneficiaries should be engaged in the business, with 30 percent of those 300 being women; and these beneficiaries should see at least 20-percent increase in average income per head from the first to third year.
For tourism enterprises, the following must be met also within three years of operation: At least 25 percent of total cost of goods/services sold to be sourced from MSEs; At least 25 direct jobs (regular) generated for individuals in the identified databases with at least 30 percent women; and at least 20-percent increase in average income per head for those MSE suppliers from the first to third year.
In addition, the enterprise should provide technical assistance or capacity building to MSEs to increase productivity and address specific knowledge gaps needed for the job. On top of that, the firm should facilitate access to finance. The IB model refers to core business models of companies that provide solutions to the problems of poor and low-income communities. A salient point of the IB model is that the low-income communities act not just as a source of component to the big firm but also as a consumer base—completely integrated in the value chain of the company. If a firm qualifies as an IB model, they are entitled to fiscal perks, including income-tax holidays.
Also likely to get perks under the 2017 IPP are drug-rehabilitation centers outside of Metro Manila, as the Board of Investments (BOI) plans to expand the coverage of health-care facilities that will qualify for government incentives.
In the previous IPP, the BOI stated that health-care facilities, particularly custodial-care facilities, are entitled to such incentives, “except for those for rehabilitation owing to substance abuse”.
With the inclusion of rehabilitation centers, the BOI hopes to respond to the Duterte administration’s war versus illegal drugs.
Also to be included are custodial-care facilities, diagnostic/therapeutic facilities (not including clinical laboratory, drug-testing laboratory, laboratory for drinking-water analysis), geriatric care facilities and specialized out-patient facilities excluding In-vitro fertilization center and stem-cell facility.