THE Fiscal Incentives Review Board (FIRB) directed the Board of Investments (BOI) to finalize this month the Strategic Investment Priorities Plan (SIPP).
During the meeting of the Cabinet-level interagency board last month, FIRB and Finance Secretary Carlos G. Dominguez III pointed out that the release and publication of SIPP is only the first step in attracting potential investors. The SIPP will determine the priority industries, projects, and activities that can be granted fiscal incentives by the government under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
“As I have said before, once the categories are identified, the next step is for each of the investment promotion agencies [IPAs] to identify the specific companies they want to invite, and then discuss with them what it would take for them to invest in the country,” Dominguez was quoted as saying during the meeting.
Trade Secretary Ramon Lopez, who co-chairs the FIRB, agreed with Dominguez.
While the SIPP has yet to be finalized, the current SIPP being used is based on the 2020 Investment Priorities Plan of the BOI, an attached agency of the Department of Trade and Industry (DTI).
Given that a number of industry studies and parameters have already been considered in the drafting, Dominguez urged the BOI to finalize the SIPP for presentation to the FIRB Board this month.
House Ways and Means Committee Chairman and Albay Rep. Joey Salceda urged DTI last month to finally finish the SIPP mandated under the CREATE law, saying this creates uncertainty as industries are still unsure about the tax incentives that they will receive in this country.
Salceda also warned that the DTI should finish SIPP before March 2022, which is the first anniversary of the measure. Otherwise, the lawmaker said he will be forced to call oversight hearings.
Responding to Salceda’s remarks, Dominguez told finance reporters in a recent interview that they are working with DTI to come up with the SIPP plan.
“But you know, among our discussions, let us really focus on the industries that we want to bring in. Quite frankly, that requires for them a lot of study for the BOI on what the future will most likely emerge,” Dominguez said.
The FIRB chairman also stressed the need to change the country’s export strategies to address the inequality in economic recovery among countries especially given that the Covid-19 pandemic disrupted supply chains and caused declines in world trade during its peak.
“Manufacturing particularly took major hit during the pandemic. Services exports, such as the business process outsourcing sector, which relied not only on chips, but on the digital economy to deliver its services, remained resilient. We may have to reorient our exports strategies toward crisis-proof industries,” he said. “The SIPP, which is the list of industries eligible for incentives under CREATE Law, must then reflect this crisis-proofing direction. I don’t know exactly which products have to be redirected, but essentially industry and government have to sit down and look at what the future is emerging.”