New IPP encourages BPOs, telcos to expand outside MM

By Richmond Mercurio (The Philippine Star), Jan. 18, 2017

MANILA, Philippines – Business process outsourcing (BPO) companies are being encouraged to move their new projects out of Metro Manila under the new Investment Priorities Plan, while new telecommunication players are urged to support their provincial expansion.

Under the 2017 IPP awaiting the signature of President Duterte, the Board of Investments (BOI) will remove incentives given to new BPO projects locating in Metro Manila after 2020.

“BPOs applying with the BOI under EO 226 if located in Metro Manila will only be granted incentives until 2020. We are setting the timeline as a signal for them to move out of Metro Manila,” BOI managing head and Trade Undersecretary Ceferino Rodolfo said.

“This serves as signal for them to move their projects outside because Metro Manila is too crowded already and we need development outside,” he said.

Rodolfo said he has discussed this with the Information Technology and Business Process Association of the Philippines

(IBPAP) and asked the industry group to revise their goals toward more development outside Metro Manila.

“I told them that we want bigger percentage of their goals in terms of job creation outside Metro Manila than in Metro Manila,” he said.

Under the new roadmap, the country’s information technology and business process management (IT-BPM) industry is embarking on an aggressive six-year plan that targets nearly $40 billion in revenues and 1.8 million more jobs by 2022.

By the end of 2022, the IT-BPM industry is seen producing 1.8 million jobs, of which more than 500,000 will come from outside the National Capital Region and 73 percent are mid to high value.

To support its call for more BPO development outside Metro Manila, the government is also encouraging new players in the telecommunications industry to set up infrastructure projects.

The 2017 IPP has included telecommunications as a preferred activity for investment.

This will cover the establishment of connectivity facilities for fixed and mobile broadband services nationwide. Only new players, however, may qualify for registration.

“We put telecommunications in the IPP to incentivize those who will provide telco structures,” Rodolfo said, hoping these new facilities would serve the areas for new BPO development.

The BOI said the 2017 IPP has set specific objectives that will make investments more relevant to the economy and the society.

Priority investment areas for the new IPP include all qualified manufacturing activities, agriculture, fishery, forestry, strategic services, healthcare services including drug rehabilitation centers, mass housing, infrastructure and logistics including LGU public private partnership projects, innovation drivers, inclusive business models, environment or climate change related projects and energy.

The preferred list of activities will be entitled to fiscal and non-fiscal incentives under EO 226 otherwise known as the Omnibus Investments Code of 1987, as amended, provided they qualify certain criteria and fulfill the terms and conditions of registration with BOI.