Approval of 1997 Investment Priorities Plan ( Memorandum Order No. 424 )

April 01, 1997

April 1, 1997



Pursuant to Article 29 of the Omnibus Investments Code of 1987 (EO 226), the attached 1997 Investment Priorities Plan (IPP) is hereby approved.

This Memorandum Order shall take effect fifteen (15) days after its publication as required under Article 31 of the Omnibus Investments Code of 1987.

DONE in the City of Manila, this 1st day of April, in the year of Our Lord, Nineteen Hundred and Ninety-Seven.



"Pole-vaulting to Global Competitiveness" is the theme of this year's Investment Priorities Plan (IPP). Philippine economy is at a stage where initial economic reforms have begun to make its impact positively felt through the country's main economic indicators. Although reforms are still continuing and more investment enhancing measures are still being pursued, there are indications that the country can fastrack priority economic activities to pole-vault the economy's development. The 1997 IPP is crafted in such a way that it seeks to reinforce past and current measures that are aimed at expanding productivities and improving on capabilities for Philippine global competition.

The 1997 IPP, in this regard, reflects the current year's overall plan for investments eligible for investment incentives that are provided under the Omnibus Investments Code of 1987, as amended.

The 1997 IPP continually supports the objectives of the Medium-Term Philippine Development Plan (MTPDP) (1993-1998) of the government. The MTPDP has set three objectives in attaining a sustainable agri-industrial development.

1. Industrial restructuring for worldwide competitiveness and expansion of capacities for the production of goods and services for the domestic and export markets, including tourism;

2. Strong productive and ecological-sound links between agriculture and industry; and,

3. Higher income and productivity, and better access to resources among small entrepreneurs, farmers and fishermen.

Together with support to the MTPDP is support to the social programs of Government by the 1997 IPP. Firstly, there is the Special Zone of Peace and Development (SZOPAD) primarily for the Filipinos in the south which seeks to ensure the newfound peace, cooperation and development in that part of the country. Then, there is the continuing Social Reform Agenda of the Government to which the 1997 IPP addresses in its goals and in the less developed areas it is presently covering. Finally, the 1997 IPP seeks to push for economic activities it deems shall deliver the Philippine economy to a higher plane of economic state as the country prepares to celebrate the Philippine Centennial or the 100th year of Philippine political independence. These social programs substantially impact on the economy and ultimately the Filipino.

The goals for the 1997 IPP are the same as those laid down in earlier IPPs, to wit:

1. To further enhance global competitiveness of Philippine industrial products;

2. To increase exports;

3. To support small and medium enterprises (SMEs);

4. To increase agricultural productivity;

5. To set-up and upgrade infrastructure and support facilities;

6. To ensure efficient environmental management;

7. To disperse industry in the countryside; and

8. To alleviate poverty.

As these goals are of the medium-term basis, the major categories under the 1997 IPP are carried from the 1996 IPP as follows:

1. Export-oriented Industries

2. Catalytic Industries

3. Industries Undergoing Adjustment

4. Support Activities

5. Mandatory Inclusions

The major difference though is that the 1997 IPP focuses and qualifies further the following activities: a) Reinforced support to the agricultural sector as its activities link up with the manufacturing sector; b) Modernization programs — 19 critical economic activities in the current IPP are identified to warrant a modernization program for these industries to compete globally through technology upgrade of existing capacities or via complete adoption of state-of-the-art technology. As modernization of industries is not an overnight activity, but a continuing one until certain breakthroughs are attained, the program is envisioned to run until the year 2000. Industries availing of the program shall, however, complete the modernization in either 2 or 3 years from date of registration of the individual project, depending on the average operation period of a project and c) Environmental activities are made more focused by more specific listings of environmental projects.

Thirty-two (32) economic activities are listed in this year's plan as compared to the 35 areas listed in 1996.

In addition to the national listing of the 1997 IPP is a special listing of economic activities determined for promotion and eligible for investment incentives by the Autonomous Region for Muslim Mindanao (ARMM). The ARMM IPP is the list of priority areas which have been independently determined by the Regional Board of Investments (RBOI) of the ARMM in accordance with E.O. 458. Economic activities in this special listing shall be pursued in the ARMM only. However, economic activities listed in the national IPP may have its location also inside the ARMM.

The 1997 IPP was completed in consultation with the Inter-agency Working Group on the IPP [members of which are: Presidential Management Staff (PMS), the National Economic and Development Authority (NEDA), the Departments of Agricultural (DA), Environment and Natural Resources (DENR), Labor and Employment (DOLE), Finance (DOF), Science and Technology (DOST), Tourism (DOT), Trade and Industry (DTI) and Board of Investments (BOI)] in December 1996. Public hearings in consultation with multisectoral groups in Manila and the provinces of Cebu, North Cotabato, Albay, Leyte and Zamboanga were also held in February 1997. Consultation with the Special Joint Cabinet Clusters A and B was held in March 1997.

C. B. Bautista

Chairman, Board of Investments and

Secretary, Dept. of Trade and Industry


Part I: Priority Investment Areas (Countrywide)


  LIST OF PRIORITY           
I. EXPORT-ORIENTED   1. Export producer  
  INDUSTRIES (P/NP) *     Manufacturers of non-traditional export
              products/services with capability to
              export at least 50% of its output, if
              Filipino-owned and at least 70%,
              if foreign-owned.
          2. Export trader  
          3. Service exporter  
          4. Agri-export processing estates
          5. Activities in support of exporters
  A. Manufacturing          
    1. Composite Board (P/NP) Manufacture of composite boards using as raw
          materials the following:    
          natural resource-based materials
          industrial wastes  
    2. Drugs and Medicines (P/NP) 1. Manufacture of bulk chemicals, including
            those derived from indigenous plants
          2. Formulation or preparation of bulk
            chemicals into dosage form
          for catastrophic diseases;
          for animal vaccines; and,
          biologics for animal diseases
    3. Shipbuilding/Shiprepair/ 1. Construction of cargo/passenger vessels
      Shipbreaking (P/NP) 2. Repair of cargo/passenger vessels
          3. Breaking of cargo/passenger vessels
          Steel re-rolling and/or steel scrap supply
          agreement with local millers must be submitted
          to support the application for shipbreaking.
    4. Processed Foods (P/NP) *  1. Processed fruits and vegetables (except
            those that are identified as export winners)
          2. Seafoods (except shrimps and tuna)
          3. Meat (Western style such as ham, salami,
            bacon, bologna, etc.)  
          4. Cocoa products  
          5. Confectionery  
          6. Cereal and cereal preparations
          Cocoa and cocoa preparations, confectionery,
          cereal and cereal preparations may only be
          registered if they will adopt "state-of-the-art"
          and/or cost-effective technology.
    5. Cement (P) Limited to NEW projects only.  
          Cement projects with at least 1.0 million
          MTPY capacity (clinker base) may qualify for
          registration but, ITH is limited to four (4) years
          and not entitled to bonus years.
  B. Agriculture, Food and Forestry        
    1. Production of Planting 1. Commercial production of quality/
      Materials, Breeders, Genetic   certified seeds and/or seedlings;
      Materials & Fingerlings (P/NP) 2. Breeder stocks of livestock and poultry
            or its genetic materials; and,
          3. Fingerlings of fish and crustaceans.
          New and expansion projects may qualify for
          pioneer status if they are endorsed by the
          Dept. of Agriculture (DA) as highly essential
          to the attainment of the national goals of food
          security and global competitiveness.
    2. Pulp and Paper (P/NP) *  Modernization activity for the manufacture of
          products such as:    
          printing and writing;  
          packaging; and  
          specialty paper.  
          New and expansion projects using pulp-based
          materials other than waste paper, may be
          registered on pioneer status.  
  A. Textiles (P/NP) *  1. Spinning;    
          2. Weaving;    
          3. Knitting; and,  
          4. Dyeing & finishing.  
          Only pioneer new and expansion projects may
          be registered. Specialized mills with project
          cost of at least P1.0B may qualify for pioneer
  B. Chemical Products (P/NP) * 1. Manufacture of both organic and inorganic
          2. Manufacture of petroleum products from
            refining of crude oil with a minimum
            annual processing capacity of 36 million
            barrels, even without the introduction of
            new process/technology, may qualify for
            pioneer status.  
          Similar projects regardless of capacity but
          locating in Visayas or Mindanao may
          qualify for pioneer status.  
          Further processing of refinery petroleum
          products leading to another product may
          also qualify for registration.  
          3. Production of organic fertilizers of plant
            and animal origin may be registered,
            a) production of microbial fertilizer with
              nitrogen-fixing organism and,
            b) mycorrhiza.
          Mere mixing and compounding of organic
          fertilizers are not covered.  
          Only pioneer new and expansion projects may
          be registered.    
  C. Sugarcane Plantation/Sugar 1. Sugarcane plantation;
    Mills/Sugar Refineries (P/NP) *  2. Sugar mills; and,  
          3. Refineries.
          New and expansion projects must be endorsed
          by the Sugar Regulatory Administration (SRA)
          and the Department of Agriculture (DA).
  D. Packaging Products (P)        
  E. Machinery and Equipment 1. Manufacture of engines or motors;
    and/or their Parts and 2. Metalworking and woodworking
    Components (P/NP) *   machinery;
          3. Special purpose industrial machinery;
          4. Agricultural machinery;
          5. Equipment for power generation;
          6. Communication equipment and apparatus;
          7. Office computing and accounting
            machinery; and,
          8. Medical equipment/devices.
          Radio and television are limited to modernization
  F. Coconut Plantation and Coco Oil 1. Coconut plantation; and,
    Mills/Refineries (P/NP) * 2. Coconut oil mills and refineries
          New coconut oil mills (crude) may be allowed
          provided these are integrated with plantation.
          (Plantation refers to planted areas with coconut
          trees still in their pre-production stage.)
  G. Fishery Production (P/NP) *  1. Fish    
          2. Crustaceans  
          3. Mollusks    
  H. Feeds Production (P/NP) 1. Feeds for:    
            a) aquaculture
            b) livestock  
          2. Feeds production, integrated with corn
            production and/or other feed ingredient
            production, may qualify for pioneer status.
  A. Infrastructure (P/NP) *  1. Development of industrial estates;
          2. Industrial communities;
          3. Service cities;  
          4. Telecommunications;  
          5. Ports;    
          6. Water supply;  
          7. Waterway and sewerage systems;
          8. Tollroads/highways;  
          9. Power generation and transmission; and
          10. Distribution facilities for refined petroleum
            products/liquified petroleum gas (LPG),
            including depot/bulk handling.
          Infrastructure projects may be undertaken under
          any of the following schemes:
          a) Joint venture agreement between the
            private sector and government entity
            concerned; or,  
          b) Other schemes feasible for
            infrastructure development.
          For ports and airports, the project must be
          endorsed by the Philippine Ports Authority
          (PPA) and Air Transportation Office (ATO),
          Industrial Estates refer to:
            1. Large tracts of land for the use of a
              community or manufacturing industries
              and services which include science and
              technology parks and,
            2. Technology incubation centers or science
              and technology centers under a unified and
              continuous management.
              Development of industrial estates must be
              outside Metro Manila, Laguna and Cavite.
              Industrial estates in Laguna and Cavite may
              apply for registration under the Philippine
              Economic Zone Authority (PEZA).
              Registrations for the development of industrial
              estates in underdeveloped areas of Laguna and
              Cavite shall be determined by the Board.
              Applications for registration shall include
              approvals from the local government unit
              (LGU) concerned, Dept. of Agrarian Reform
              (DAR) for land conversion, and other relevant
              government agencies.
          Industrial Communities refer to:
            1. Large tracts of land for development with
              carrying capacity for town facilities, such
              a) accommodation facilities;
              b) multi-purpose centers;
              c) health centers;
              d) drugstores;
              e) schools; and,
              f) other livelihood centers
            2. Located within a 5-kilometer radius from
              an industrial estate and must be located
              outside Metro Manila.
          Service Cities refer to:
            1. A well-planned, well-managed, well-
              developed, environmentally sustainable and
              globally competitive metropolis, provided
              with a full range of products, services and
              amenities, such as:
              a) educational institutions
              b) medical facilities
              c) a grand central station to serve as
                transportation hub
              d) a well-lighted parking system and
              e) integrated design and adaptable utility
              f) latest telecommunication system
              g) theaters, concert halls and galleries and,
              h) multi-modal stations and convention
            2. Service cities must have an area of not less
              than 500 hectares and be located outside
              Metro Manila.
          Telecommunication includes:  
            1. The establishment and operation of local
            2. Public calling offices;
            3. International gateway facilities;
            4. Multi-media training systems; and,
            5. Inter-exchange carrier network operations
              (satellite or terrestrial-based).
            The use of digital systems are encouraged.
            A National Telecommunications Commission
            (NTC) endorsement should be submitted with
            the application.  
            1. May be registered as NEW provided that
              the cost of upgrading already approximates
              the cost of constructing a new road (i.e.,
              90% and above).
            2. Cost of upgrading shall be certified by the
              Toll Regulatory Board (TRB), including a
              further TRB certification that the upgrading
              activity will result in low toll charges.
          Power Projects *
            1. Power generation; and
            2. Power transmission.
            All power projects, except power generation
            derived from waste treatment and indigenous
            sources of energy making use of environment-
            friendly processes (e.g., geothermal, liquified
            natural gas (LNG), coal, solar energy, wind),
            are not entitled to ITH.  
            All applications for registration must be
            endorsed by the Department of Energy (DOE).
          Distribution Facilities
            1. Oil depot/bulk handling for refined
              petroleum products/liquified petroleum gas
  B. Common Carriers (P/NP) * 1. Land transport *  
            a) public utility buses (PUBs)
              Only buses for provincial 
                operations may be registered
                provided franchises are available
                for particular routes.
            b) cargo truck operations
              integrated cargo handling and
                trucking may be registered
                provided, this would include
                Brand-New (not
                reconditioned) cargo trucks;
              Cargo handling may include rail
                transport of cargoes; and
              Subcontracting of cargo handling
                shall not be extended incentives.
          2. Air Transport Facilities
            a) passenger aircrafts; and,
            b) cargo aircrafts without franchises
          Applications must be endorsed by the Civil
          Aeronautics Board (CAB).  
          3. Inter-island shipping *
            a) pure cargo vessels; and,
            b) passenger-carrying vessels
            For passenger/cargo and pure cargo vessels,
            age limit must not be more than ten (10) years
            old. For high-speed passenger crafts, age limit
            is five (5) years.  
            All applications for registration must be
            endorsed by the Maritime Industry Authority
            (MARINA). Vessels for tourism purposes must
            also be endorsed by the Department of Tourism
  C. Agricultural Services Related to 1. Establishment and operation of facilities
    Crops, Livestock, Fish Production   that render services to agricultural and
    and Post-Harvest Facilities (NP) *   fishery producers  
            a) cold storage;
            b) farm machinery & equipment services;
            c) irrigation, etc.
          Registered operators may be allowed to
          utilize not more than 20% for its own 
          2. Ice plant projects, as a separate activity,
            may be registered if they locate in less-
            developed areas or Key Production Areas
            (KPAs) identified by the DA.
  D. Environmental/Ecological Support        
    Facilities *          
    Environmental Degradation/ 1. Development or Conversion of Industrial
    Abatement/Mitigation and Ecology   Estates into Industrial Ecosystems
    Management/Maintenance (P/NP) An industrial ecosystem is composed of
          a group of industries with varying nature of
          operations but where the wastes/residues of
          one industry become raw materials of
          another, or used in another's system in a
          substantive manner. A symbiotic
          relationship among industries and adjacent
          communities exists and that companies
          exchange by-products for use as raw
          materials instead of virgin materials
          resulting to wastes accumulation.
          2. Industry Self-Regulation/Upgrading At
            Plant/Firm Level  
          As an extension/offshoot of modernization
          program, capital equipment/systems 
          acquisition designed to make firm manufacturing 
          facilities conform to such EMS as ISO 14000 
          may be eligible to enjoy incentives except
          the income tax holiday.  
          3. Establishment of Toxic and Hazardous
            Wastes (THW) Merchant Facility
            Refers to plants capable of handling a
            wide range of wastes. The facility must
            incorporate physical, chemical and
            biological treatment, together with an
            incinerator and a dedicated THW landfill
            site for final disposal.
          4. Establishment of New or Expansion,
            Rehabilitation, Modernization of 
            Sewerage Systems for
            Industrial/Municipal Wastes *
            Refers to plant facility capable of
            handling non-toxic and hazardous wastes
            (THW) incorporating a wide range of
            treatment methods or any other innovative
            system. Standard facilities should preferably
            be provided with recycling loop capable of
            efficient segregation/classification where applicable.
          5. Restoration/Rehabilitation of Major
            Water Catchment Basins/Waterways and
            Related Infrastructure, Man-made or
            Natural (may or may not be integrated with
            reclamation works)
          6. Establishment of Stationary and Mobile
            Facilities for Emission-Testing (preferably
            with rehabilitation capability.)
          Refers to emission-testing facilities for
          industrial/commercial types of equipment,
          including motor vehicles.  
  E. Research and Development   1. In-house R&D activities of any
    Activities (P)       manufacturing/producing firm; and,
            2. Commercial R&D activities of private firms
              and research institutions
      The research activities shall fall within the        
      Science and Technology Agenda for National        
      Development (STAND) of the Department of        
      Science and Technology (DOST) and the        
      National Agricultural Research and Extension        
      Agenda (NAREA) of the DA.        
      Endorsement by the DOST or DA is required.        
  F. Support to Other Government        
    Priority Programs        
    1. Rice and Corn Production   Growing and cultivation of rice and corn up to
      (NP)     storing and drying.
      Preferred areas are listed in the Key Grain        
      Areas of the Dept. of Agriculture's Medium-        
      Term Agricultural Development Plan.        
    2. Production and Processing of   1. Production of swine or poultry;
      Livestock and Poultry (NP)   2. Cattle raising for beef and/or dairy; and,
    3. Crocodile farming (excluding game        
      animals/fowls and other species for        
      pet/pleasure purposes).        
      Contract growers and integrators may be        
      registered jointly or separately.        
      Preferred areas are listed in the Key Livestock        
      Development Areas of the Dept. of Agriculture's        
      Medium-Term Agricultural Development Plan.        
3. Housing Components for Fabrication of major mass housing components
  Socialized/Low Cost using non-traditional, structurally-sound,
  Housing Projects (P/NP) environment-friendly materials/technology
            a) roof/framing systems;
            b) partition systems;
            c) flooring systems;
            d) door/window systems;
            e) finishing/ceiling systems; and,
            f) water/sewerage systems
          Products other than steel-based should conform
          with the Modular Coordination System (MCS)
          of the Construction Industry Authority of the
          Endorsement by both the Housing and Urban
          Development Coordinating Council and the
          DOST is required.    
4. Motor Vehicle Parts and Manufacture of parts and components for the
  Components (P/NP) *   motor vehicle industry.
5. Social Services (P/NP) *  Establishment of:  
          1. Educational/training institutions;
          2. Rehabilitation centers;
          3. Health service facilities * ; and,
          4. New retirement villages.
          Applications for registration of health services
          must be endorsed by the Department of Health
          (DOH). Projects must locate in an area
          identified by the DOH while educational and
          training institution must be endorsed by
          TESDA and DOST. Applications for
          retirement villages must be endorsed by the
          Philippine Retirement Authority.
6. Tourism (P/NP) *   1. Tourist accommodation facilities * ;
          2. Tourism estates;  
          3. Eco-tourism projects; and,
          4. Tourist buses  
          New, expansion and modernization of tourist
          accommodation facilities in Metro Manila may
          be registered but limited to capital equipment
          incentives only.    
          Applications for registration must be endorsed
          by the Department of Tourism (DOT).
  A. Mineral Resources [R.A. No. 7942 1. Exploration of Mineral Resources
    (The Philippine Mining Act of   Projects are qualified for pioneer status.
    1995)] (P/NP)          
            Qualified Projects:  
            a) Projects with approved exploration
              permit, mineral agreement or Financial
              and/or Technical Assistance Agreement
              (FTAA) under E.O. 279, series of 1987
              or under R.A. No. 7942;
            b) Projects are not entitled to Income Tax
              Holiday (ITH).
          2. Mining quarrying and Processing of 
            Minerals *
          All processing projects must locate outside
          Qualified projects:    
          a) Projects involving mining, quarrying
            and processing of minerals except those
            involving river bed operations, cave
            mining and beach mining.
          b) All marble processing projects, whether
            or not integrated with mining or
            quarrying, to qualify for registration,
            must export at least 50% of production,
            if Filipino-owned and at least 70% of
            production, if foreign-owned.
          c) Projects with approved FTAA under
            E.O. 279, series of 1987 or under R.A.
            7942 are considered pioneer with ITH
            limited to four (4) years for new
            projects unless complying with Art. 17,
            Title 1 of E.O. 226, as amended.
            Foreign-owned corporations, as defined
            under R.A. 7942 and holders of valid
            mineral processing permits, may
            register their mineral processing
            projects on pioneer status but with ITH
            limited to four (4) years for new
            projects unless complying with either
            criterion under Art. 17, Title 1 of E.O.
            226, as amended.  
          d) Projects that will involve only mining or
            quarrying without processing shall be
            entitled only to capital equipment and
            non-fiscal incentives.  
          e) Mining or quarrying integrated with
            mineral processing shall be entitled to
            full incentives.  
          f) Processing without mining or quarrying
            shall be entitled to full incentives.
  B. Iron and Steel (RA No. 7103 — The following may be registered only on pioneer
    Iron and Steel Act) (P/NP) * status:      
      1. Basic iron and steel-making integrated with        
      2. Flat products;        
      3. Seamless pipes production;        
      4. Long products;        
      5. Galvanizing integrated with steel fabrication        
        in support of infrastructure projects such as        
        transmission towers, electric poles,        
        highway guards, pier sheet pilings, industrial        
        tanks, structural bridge members, streetlight        
        poles, steel columns and beams for        
        industrial plants and buildings, agricultural        
        grain silos and highway steel culverts; and,        
      6. Fabricated steel structural members        
        produced from computer-aided processes in        
        support of infrastructure projects, such as        
        in reinforced-concrete bridges, highways,        
        overpasses, skyways, and industrial plants        
        and buildings.        
  C. Industrial Tree Plantation (P) Establishment of forest tree plantations:
    Section 36 (f) of P.D. 705 1. rubber    
          2. bamboo    
          3. non-timber forest species for commercial
            and industrial purposes
            The activity may be integrated with nursery
            The plantation may be in private land or
            covered by an Industrial Forest Management
            Agreement (IFMA).  
  D. Book Publishing (Sec. 12, R.A. 1. Production of books  
    8047 or the "Book Publishing 2. Production of textbooks
    Industry Development Act") (NP)   Applications for registration must be endorsed
            by the National Book Development Board.
  E. BOT Projects (R.A. 6957, as Construction, rehabilitation, improvement,
    amended by R.A. 7718) (P/NP) * betterment, expansion, modernization, operation;
          financing and maintenance of the following
          types of projects:    
          1. Highways, including expressways, roads,
            bridges, interchanges, tunnels, and related
          2. Railways or rail-based projects packaged
            with commercial development opportunities;
          3. Non-rail based mass transit facilities,
            navigate inland waterways and related
          4. Port infrastructure like piers, wharves,
            quays, storage, handling, ferry services
            and related facilities;  
          5. Airports, air navigation, and related
          6. Power generation, transmission,
            distribution, and related facilities;
          7. Telecommunications, backbone network,
            terrestrial and satellite facilities and related
            service facilities;  
          8. Information technology and data base
          9. Irrigation and related facilities;
          10. Water supply, sewerage, drainage, and
            related facilities;  
          11. Education and health infrastructure;
          12. Land reclamation, dredging and other
            related development facilities;
          13. Industrial and tourism estates or townships,
            including related infrastructure facilities and
          14. Government buildings, housing projects;
          15. Markets, slaughterhouses, and related
          16. Warehouses and port-harvest facilities;
          17. Public fishports and fishponds, including
            storage and processing facilities; and
          18. Environmental and solid waste management
            related facilities such as collection
            equipment, composting plants, incinerators,
            landfill and tidal barriers, among others.
          The foregoing projects may be undertaken
          under any of the following schemes or
          contractual arrangements:  
          1. Build-operate-and-transfer (BOT);
          2. Build-and-transfer (BT);
          3. Build-own-and-operate (BOO);
          4. Build-lease-and-transfer (BLT);
          5. Build-transfer-and-operate (BTO);
          6. Contract-add-and-operate (CAO);
          7. Develop-operate-and-transfer (DOT);
          8. Rehabilitate-operate-and-transfer (ROT);
          9. Rehabilitate-own-and-operate (ROO).
          Applications for registration must be
          accompanied by: 1) endorsement from
          concerned government agency or corporation or
          Local Government Unit (LGU) with a
          certification that BOI incentives have been
          considered in the supply contract; 2) copy of
          supply contract; and 3) Environmental
          Compliance Certificate (ECC).  
  F. ASEAN Industrial Cooperation Manufacture of all products, other than those in
    (AICO) Projects (P/NP) the General Exception List of the Common
          Effective Preferential Tariff (CEPT) scheme
          under the ASEAN Free Trade Agreement
          (AFTA), shall be eligible for registration.
          An AICO Arrangement is a cooperative
          arrangement consisting of a minimum of two
          participating companies from two different
          ASEAN countries.    
          To form an AICO Arrangement, the prospective
          companies must fulfill the following criteria:
          be incorporated and operating in any
            ASEAN country;  
          have a minimum 30% national equity; and,
          undertake resource-sharing, industrial
            complementation or industrial cooperation.
          complementation or industrial cooperation



PART II: Additional Priority Investment Areas for the Autonomous Region in Muslim Mindanao

Presented in this section is the list of priority areas which have been independently identified by the Regional Board of Investments of the Autonomous Region in Muslim Mindanao (ARMM), in accordance with E.O. 458. The BOI-ARMM can grant registration and administer incentives to activities listed herein, provided these are located in the ARMM .


A. Export Trader and Service Exporters

B. Support Activities for Exporters


A. Processed Food

1. Halal Meat

2. Leguminous and other vegetable — Based Protein

(Textured, pelletized or liquid)

3. Spices Processing (e.g., hot pepper, black pepper, etc.)

Note: (May be integrated with plantation)

4. Vegetable Oils (e.g., peanut oil, rice bran oil, sunflower and soybean oil)

5. Coconut Oil

6. Seaweeds Processing

7. Cassava Processing

Note:(May be integrated with plantation)

8. Fruit Processing (e.g., durian, mangosteen, jack fruit, marang, banana)


Note: May be integrated with plantation

9. Fish Production and Processing

a) Frozen fish

b) Chilled fish

c) Canned fish

d) Abalone

e) Crab fattening

f ) Eel production

10. Corn Flour Mill

11. Young Corn Production

Note: May include processing/canning

B. Cutflower Production

C. Pearl Culture

D. Industrial Tree Plantation (Includes Mangrove, Rattan, Bamboo, etc.)

E. Shipbuilding

F. Abaca Pulp Plantation and Processing

G. Palm Oil Plantation and Processing

H. Coffee Processing (May be integrated with plantation)

I. Particle Board (Use of agri-based waste materials such as rice straw, wood waste, etc.)

J. Activated Carbon Manufacturing (Use of coconut shell, wood-based, etc.)

K. Feeds Production


A. Textile and Textile Products

1. Yarns and fabrics

2. Non-woven textiles

3. Specialty fabrics

4. Tire cord fabrics

Note: Must be integrated with weaving and dipping units.

5. Ramie (degumed, staple fiber, combed tops, noils, and silvers)

6. Fish nets

B. Fertilizers (organic and inorganic)


A. Rubber Products such as:

1. High pressure and hydraulic rubber hoses

2. Rubber bolts

3. Industrial rubber rollers

4. Rubber tires

B. Leather Products


A. Public Utilities (With developmental route of the four provinces of the ARMM and other adjacent Cities and Provinces)

1. Common Carrier (land, air and water transport facilities)

2. Electric Transmission/distribution

3. Water Supply Facilities

4. Buses

B. Tourism

1. Tourism Estates

 Subject to guidelines developed jointly by the BOI-ARMM and

Department of Tourism (DOT)

2. Tourist Accommodation Facilities

a. Hotels

b. Resorts

c. Other tourist accommodation facilities such as apartels, pension houses, tourist inns, and others.

3. Tourist Transport Facilities

a) Air

b) Water

c) Tourist Buses and taxi/van

Note: * Endorsed by the DOT

** New and expansion projects may be registered

C. Industrial Service Facilities

This will cover the following activities:

1. Common Centers:

a) Testing and Quality Control Laboratories

b) Training and Demonstration Centers

c) Tool Shops and Similar Facilities

d) Metal Working

* Electroplating

* Foundry

* Forging

* Machining

* Heat Treatment

e) Furniture

* Kiln Drying

* Treatment and processing facilities

f) Ceramics

* Kiln

* Glazing

g) Food Processing

* Bottling and Canning

* Vapor Heat Treatment

* Slaughterhouse/Abattoir

h) Automotive Battery Plate Manufacturing

i) Tire Recapping

Note: The following criteria must be met:

* The project will serve the common needs of the industry in the locality and;

* The project will improve the relative status and comparative advantages of the industry

2. Development of Retirement Villages

a. Shall include Health and Medical facilities including amenities required by the Philippine Retirement Authority (PRA).

b. Subject to the guidelines to be approved by BOI-ARMM in consultation with the PRA, the Department of Health (DOH), the Regional Planning and Development Office (RPDO) and other concerned agencies.

c. Pipeline Bulk Transport System for Petroleum and Natural Gases and Liquids and Coal Slurry (Underwater and Underground)


A. Engineering Products

1) Motor Vehicle parts and components

2) Automobile parts and assembly

3) Modern offset printing

B. Electronics and Telecommunications Products


NOTE: Listed below are potential tourist destinations which need further exploration and evaluation for intensified promotions, development and marketing.








1. Non-pioneer status.

2. In general, must be completed in 2 years. Completion shall be reckoned from date of registration with the Board.

3. For existing projects located in NCR, modernization shall be exempted from the industrial location policy.

4. May avail of Income Tax Holiday (ITH) for 3 years which shall be applied to the incremental income resulting from the increase in capacity due to modernization.

5. Modernization to be registrable may or may not result to increase in capacity but the following conditions should be met:

a) area must be listed in the IPP specifically for modernization or rehabilitation;

b) phases/stages of production sought to be modernized/rehabilitated must be identified; and

c) must result in any of the following:

 substantial reduction of production cost; or

 significant increase in productive efficiency including debottlenecking; or

 meaningful upgrading of product quality; or,

 keeping abreast with the state-of-the-art in the production of registered product.

[Section 1(ff), Rules and Regulations to Implement Exec. Order No. 226, Otherwise known as the Omnibus Investments Code of 1987].


Modernization, in general, is limited to the coverage of each area listed in the IPP where such modernization activity is allowed.


  Preferred Economic Activity   Guidelines
1. Export-Oriented Industries Subject to general modernization policies.
2. Processed Foods Subject to general modernization policies.
3. Pulp and Paper Subject to general modernization policies.
4. Textiles Subject to general modernization policies.
5. Chemical Products Subject to general modernization policies.
6. Sugarcane Plantation/Sugar Mills/ For sugar plantations, modernization must
  Sugar Refineries   be completed in two (2) years.
    For sugar mills and sugar refineries,
      modernization must be completed within
      three (3) years.
7. Machinery and Equipment and/or their Subject to general modernization policies.
  Parts and Components      
    For radio and television, modernization
      may be allowed provided 50% of the
      incremental volume shall be exported.
8. Coconut Plantation and Coco Oil Modernization only for coconut oil mills
  Mills/Refineries   and coconut oil refineries.
    For coconut oil mills, registration may be
      allowed provided it is integrated with
      coconut oil refineries.
9. Fishery Production Modernization is allowed only in deep-
      sea fishing.
10. Infrastructure Modernization is allowed for registration
      in activities such as rail-based projects,
      ports and airport.
    For power projects, modernization may
      be allowed provided completion is
      a) For three (3) years, provided
        generating capacity of the power plant
        is 100MW and above;
      b) For two (2) years, for generating
        capacity below 100MW.
11. Common Carriers Modernization of PUBs, including those
      in Metro Manila, that involves refleeting,
      is allowed under the following conditions:
      a) brand-new buses shall be acquired;
      b) refleeting is within the coverage of
        existing franchises (i.e., as to the
        number of units);
      c) substituted old units should not be
        used for public conveyance in any
        form; and,
      d) submission of a scheduled system per
        bus trip.
    For inter-island shipping, this shall be
      subject to the general policies on
12. Agricultural Services Related to Modernization is allowed for:
  Crops, Livestock, Fish Production   a) slaughterhouses/dressing plants; and,
  and Post-Harvest Facilities   b) cold storages
    Above activities are subject to the general
      policies on modernization.
13. Environmental/Ecological Support Subject to general modernization policies.
14. Motor Vehicle Parts and Components Subject to general modernization policies.
15. Social Services Modernization of health facilities is
      allowed and subject to general
      modernization policies.
16. Tourism Modernization of tourist accommodation
      facilities is allowed.
      a) For facilities in Metro Manila, capital
        equipment incentives only are allowed;
      b) For facilities outside Metro Manila,
        modernization shall entitle enterprises
        to full incentives to modernization
    Subject to general modernization policies.
17. Mineral Resources Modernization projects must be
      completed within three (3) years.
18. Iron and Steel Subject to general modernization policies.
19. BOT Projects Subject to general modernization policies.
  * With modernization program