Makati City, Philippines — The Board of Investments (BOI) announced a surge in agricultural investments following the issuance of Fiscal Incentives Review Board (FIRB) Resolution No. 003-24 on February 2, 2024. This resolution empowers the BOI to approve projects with an investment capital of up to PHP 15 billion.

Aligned with President Ferdinand R. Marcos, Jr.’s directive to ease doing business in the country, FIRB Resolution No. 003-04 streamlined the process for investors. Investment Promotion Agencies (IPAs) can now approve projects with PHP 15 billion or less in investment capital, as stated in their monthly reports to the FIRB Secretariat.

Previously, IPAs could only approve incentives for projects under PHP 1 billion in investment capital, while the FIRB approved tax perks for projects exceeding PHP 1 billion, adhering to the provisions of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

From February 2 to June 11, the BOI has already approved six projects with investment capital between PHP 1 billion and Php15 billion. These projects represent a total investment of PHP 13.38 billion, with the agriculture sector leading at PHP 6.05 billion, followed by the transportation and storage industry at PHP 3.95 billion.

“Recent approvals with investments ranging from PHP 1 billion to PHP 15 billion highlight the benefits of increased investment thresholds for the agriculture sector. These projects, upon completion, will drive the adoption of new technologies and strengthen food security. This is crucial to meet the rising food demand, and sustain resilient agricultural systems despite climate change and other challenges,” said Department of Trade and Industry Secretary and BOI Chairman Fred Pascual.

Investments in agriculture include the registration of a new producer of dressed whole, further processed, or cut-up chickens; a dairy farm and milk-processing facility; and a cold storage facility project.

While IPAs now handle applications up to PHP 15 billion, projects exceeding this amount remain under FIRB’s jurisdiction. Previously submitted tax incentive applications from IPAs for projects with investment capital up to PHP 15 billion will be returned to the respective IPAs for processing and approval.

Granting IPAs greater authority to approve incentives, FIRB Resolution No. 003-24 will boost their role in managing the country’s incentive regime. This ensures compliance among registered business enterprises (RBEs) regardless of the amount of investment capital.

Since the implementation of the CREATE Act in 2021, the FIRB has approved 28 projects valued at over PHP 1 billion but below Php15 billion, with a total investment of PHP 126.61 billion. In the same period, FIRB also endorsed and approved 15 projects with investment amounts exceeding PHP 15 billion, totaling PHP 835.89 billion.

“This increased project cost threshold for IPA approval affirms the government’s push to streamline business processes and manage incentives prudently. This sends a clear message to investors: The Philippines is actively fostering an environment conducive to sustainable business growth,” Secretary Pascual emphasized.

The FIRB’s recent move accelerates project registration for investors and addresses previous concerns regarding lengthy application evaluations with unclear timelines for final FIRB approval. ♦

Date of release: 22 June 2024