Govt removes ‘contingency list’ from proposed 2010 IPP

THE Board of Investments (BOI) is dropping the “contingency list” from the 2010 Investment Priorities Plan (IPP), after the National Economic and Development Authority (NEDA) declared that the economic crisis ended last year.

Trade Undersecretary Elmer Hernandez, who is also BOI managing head, told reporters that the board decided to remove the contingency list from the draft 2010 IPP after the agency was informed that the NEDA declared the crisis as over at end-December last year.

Hernandez, however, said that the BOI is verifying NEDA’s position on the matter.

The NEDA had said that the Philippines averted a recession. Last Thursday, the National Statistical Coordination Board said the government hit the low-end of the official economic growth target of 0.8 percent to 1.8 percent, after a 1.5 percent expansion in the fourth quarter led to full-year growth of 0.9 percent.

Earlier, Hernandez said the 2010 IPP would likely carry the contingency list for six months, or until NEDA declares that the crisis is over.

Under the 2009 IPP, the Contingency List covers existing activities and/or projects affected by the global economic crisis that will retain investments and employment, retain investments and increase employment, increase investments and retain employment, or increase investments and employment.

Incentives to micro, small businesses

Hernandez said the 2010 IPP would also grant incentives to micro and small businesses in line with the government’s efforts to support entrepreneurship.

He said new projects of micro and small enterprises could register under the BOI’s one-day approval process so they can avail of tax breaks. But medium enterprises would not be covered by this list, the official said.

Micro enterprises are businesses with assets of no more than P3 million, or employment of up to nine people. A small enterprise has assets of between P3 million and P15 million, or employ between 10 and 99 workers.

Latest data from the Department of Trade and Industry shows that about 92 percent of local businesses are micro enterprises, and about 7 percent are small enterprises.

However, projects not qualified under the micro-small enterprises list are those of banks and financial institutions; retail businesses; services; small-scale mining; activities that are restricted/regulated by law or ordinances for reasons of security, defense and risk to health and morals; activities of non-Philippine nationals that are not qualified under the Foreign Investment Act; non-agricultural basic consumer goods; personal care products; power and infrastructure projects with sovereign guarantee or granted income tax holiday (ITH); and other activities as may be determined by BOI.

Last year, new projects of micro, small and medium enterprises (MSMEs) were covered by the unique contingency list in the 2009 IPP, but Hernandez said BOI has come up with a separate listing for micro and small projects as the incentive-giving agency would no longer include a contingency list in this year’s IPP. –BEN ARNOLD O. DE VERA Reporter, Manila Times