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24 March 2010

Philippine govt gives greenlight to investments eligible for perks

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The Cabinet has approved this year’s list of business activities eligible for tax perks and has asked President Gloria Macapagal-Arroyo to approve it as well, Business World daily reported, quoting Trade Secretary Jesli A. Lapus.

An executive order enforcing the 2010 investment priority plan, which will, among others, grant hiring incentives, should come out by end-March, Lapus said.

"It was approved. The Cabinet asked for clarifications only but no changes were made... It is for the signature of the President," Lapus told BusinessWorld in a telephone interview after the meeting.

The draft that hurdled Cabinet scrutiny retained last year’s incentives for crisis-hit firms that have kept or expanded their investments and workforce. This provision will not be limited to the export sector, he said.

"It was retained upon the recommendation of the National Economic and Development Authority even though the worst is over," said Lapus, who this month moved from the Education department to take over the Trade portfolio left by Peter B. Favila.

Firms that qualified under this listing last year were granted up to three years of income tax holiday once their earnings before tax and depreciation are in the black.

Power generation, which makes a regular appearance on the list, has been expanded this year to include "all types" and not just those that use renewable energy, he added.

"This includes the rehabilitation of power plants and nuclear energy and the importation of generator sets, as long as these are not done by traders but by users. All are included because the power requirement forecast is that by 2020, we will need double the existing capacity," Lapus said.

New additions to the investment priority plan introduced in the draft presented to the public last February — green projects and disaster management activities — also breezed through the Cabinet screening, he said.

"[It now needs] the signature of the President and the preparation of specific guidelines. Normally, the executive order should come out by the end of March," Lapus said.


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