D. Motor Vehicle Products - this covers manufacture or assembly of motor vehicles under the Motor Vehicle Development Program and the production of their parts and components.

1. Manufacture/Assembly of Motor Vehicles - Applicants must be registered participants of good standing under the Motor Vehicle Development Program of the Board

f. Manufacture of alternative fuel vehicle

• Alternative fuel vehicle covers the manufacture of the following brand new vehicles powered by alternative sources, as classified according under Section 1 of Article 1 of EO 156 (passenger cars, commercial vehicles and motorcycles)
• Hybrid Vehicles - vehicles that run on electric batteries and gasoline/diesel/other fuels;
  
• Electric Vehicles - vehicles that run solely on electric power;
  
• Flexible-fuel Vehicles - vehicles that run on gasoline/diesel in combination with alternative fuel such as but not limited to:
  • Bioethanol vehicles that run on gasoline and a minimum ethanol content/blend of at least 20%;
    
  • Biodiesel vehicles that run on a diesel and a minimum biodiesel content/blend of at least 10%;
    
  • Compressed Natural Gas Vehicles - vehicles that run on Compressed Natural Gas (CNG)

2. Manufacture of parts and components of motor vehicles

• Manufacture of transmission/engines;
  
• Manufacture of tool and die to produce chasis and engine; or
  
• Common facility for forging/metal stamping of motor vehicle parts and components

E. Energy - This power generation using renewable and other energy sources using environmentally-friendly technologies (except oil-fired power generating plants), power transmission, and activities using energy technologies leading to energy efficiency and conservation such as production, blending, storage, and handling of biofuels, compressed natural gas (CNG) vehicle conversion shops, and CNG refueling stations.

1. Power Generation Projects as specified in the Power Development Plan that may qualify for registration are:

1. Those utilizing indigenous and renewable energy such as biomass, waste to energy, conversion, solar, wind, hydro and tidal;
   
2. Geothermal power plants;
   
3. Those under the NPC privatization plan;
   
4. Coal-fired power plant using environment-friendly technology;
   
5. Those using compressed/liquefied natural gas (CNG/LNG);
   
6. Cogeneration (Combined Heat and Power (CHP)) plants involving waste heat recovery producing electrical energy and forms of useful thermal energy (such as heat or steam) used for industrial, commercial, heating or cooling purposes; or
   
7. Power plants using other energy sources (except oil-fired power generating plants) using environment-friendly technologies.

2. Activities using energy technologies leading to energy efficiency and conservation such as:

a. Production of biofuels. Production may be integrated with blending, storage and handling.

Activities involving either or a combination of blending, storage, handling and/or distribution of biofuels are not entitled to income tax holiday (ITH)

b. Conversion shops providing all of the following services:

• converting, retrofitting, repairing and maintaining CNG vehicles in accordance with relevant Philippine National Standard (PNS) and shall provide warranties to clients;
  
• Projects costing at least the Philippine Peso equivalent of US$200,000

c. Installation and operation of CNG refueling stations and related infrastructures and facilities as endorsed by the DOE.

Foreign-owned corporations must comply with the Retail Trade Law (R.A. 8762).

Applications for registration shall be endorsed by the Department of Energy that shall include project's compliance with world class environmental standards.

Exploration, development and utilization of energy resources including coal covered under Industry Cluster. If availing incentives under P.D. 972, the project is not entitled to ITH.

The following may qualify for pioneer status:

• Power generation projects using renewable energy sources; or
  
• Power projects that cost at least the Philippine Peso equivalent of US$1 million per megawatt.

F. Infrastructure

This covers the development of infrastructure, logistics, transport systems, telecommunications facilities (limited only to unserved areas), low cost mass housing and infrastructure projects under the Build-Operate-Transfer (BOT) Law.

2. Logistics

b. Passenger and/or cargo terminals, inter-modal terminals

• Pipeline Operations
  This covers the establishment of infrastructure for transport of petroleum products, natural gas, petrochemicals, and similar products. Applications must include proof of filing of an application for Authority to Operate Pipeline System with the DOE and/or appropriate government agency.

3. Transport System

b. Land Transport
This covers the operation of tourist buses, Public Utility Bus (PUBs), Public Utility Articulate Buses (PUABs), including buses using CNG/LPG.

The following are the requirements for registration:

• Buses must be brand new and suited to local conditions
  
• Retrofitted/re-powered buses with brand new engines using CNG/LPG may be allowed
  
• Operators must have their own terminals and garage that can accommodate the total number of buses under their franchise
  
• Operators must undertake to operate within franchise routes

6. Infrastructure projects under the BOT Law

Application for registration must include an endorsement from concerned government agency or corporation or LGU, a copy of supply contract, and other relevant supporting documents.

In general, BOT projects with sovereign guarantee and/or government guaranteed rates of return are not entitled to ITH.

The following may qualify for pioneer status:

1. Physical infrastructure (except Agribusiness Parks), telecommunications, BOT, air and rail transport operation projects costing at least Philippine Peso equivalent of US$100 million.
   
2. Other infrastructure projects that cost at least PhP1.0 billion.

II. Mandatory Inclusions

All projects covered under this category shall only be entitled to the incentives provided for under their respective laws. Republic Act 8479, otherwise known as Oil Deregulation is included under this category.

D. Refining, Storage, Marketing and Distribution of Petroleum Products under
R.A. 8479

This covers all activities under the downstream oil industry, specifically refining,
storage, distribution and marketing of petroleum products.

1. Refinery refers to oil refining, oil processing and oil movements and storage within the refinery, defined as follows"

• Oil refining refers to and covers the activity of manufacturing locally petroleum products through distillation, conversion and treatment of crude oil and other naturally occurring petroleum hydrocarbons.
  
• Oil processing refers to and covers the activity of manufacturing locally petroleum products with or without the use of the distillation process.
  
• Oil movement and storage cover receiving/discharging and storing petroleum within the refinery intended for refining and/or processing and eventual distribution purposes.

Investments in oil refining and/or oil processing shall include expansion, modification and modernization of a refinery, resulting in an increase in existing volume of production, and/or improvement in the quality of petroleum products in conformance with the Philippine National Standards (PNS), the Clean Air Act, and other applicable laws and regulation.

Investments in oil movement and storage shall include expansion, modification and modernization of facilities in the refinery resulting in an increase in existing capacity for storage, handling and distribution in the refinery.

2. Storage refers to the business of receiving/discharging and storing petroleum crudes and/or products of others for compensation or profit. This shall include fuels transshipment or terminalling (pertains to the last point prior to distribution).
3. Distribution refers to the bunkering and fuels shipping and transport. Fuels shipping and transport cover shipping and transport through land such as tank trucks, lorries and pipeline and tankers, and barges of the fuels to get to the points or areas where they are needed. Bunkering covers the activity of selling fuel for direct use by a vessel, usually for water and air transport, trough a smaller transport vessel.

   Distribution projects are limited to those utilizing brand new equipment and double-hulled vessels.

4. Marketing covers the following:

• Retailing of petroleum products refers to selling of petroleum products or fuels in retail generally directed to the end users, through dispensing pumps in gasoline stations or in packaged containers such as drums for the liquid fuels or metal cylinders for LPG. This includes the establishment and operation of gasoline stations and LPG retailing.

  For gasoline retailing stations, except those locating in Less Developed Areas (LDAs) listed in this IPP, the applicant shall be required to invest a minimum capital of the Php10 million per station, excluding land, or such amount as may be determined jointly by BOI and DOE for augmentation purposes, as the need arises; Provided, that foreign retailers shall comply with the requirements provided under RA 8762, otherwise known as the Retail Trade Liberalization Law, and its implementing rules and regulations.

• Fuels bulk marketing covered the selling of petroleum products or fuels in wholesale through tank trucks, lorries, double-hulled vessels/tankers, barges or pipelines, which may be sourced from one's own storage facilities. Investment shall include underground tanks and other equipment intended for fuels retailing through outlets such as gasoline stations and LPG outlets.

• LPG refilling and marketing- a combination of storage, distribution, and marketing activities may also be eligible for registration. For storage, marketing and distribution, only investments of new industry participants may be entitled to incentives. The applicant shall submit an endorsement from the Department of Energy certifying that the applicant is new industry participant with new investments.

Except for availment of incentive on Duty of three (3) percent on imported capital equipment, a DOE certification on actual new investments of the registered enterprise shall be required in the application for incentives availment. Said investments shall be validated by an ocular inspection by the DOE

Incentives shall be available for a period of five (5) years from the date of registration except Income Tax Holiday (ITH), which shall be reckoned from date of commercial operation. Date of commercial operation shall refer to the scheduled start of commercial operation, which is indicated in the firm's specific registration terms and conditions, which shall be based on the following:

• For refineries, it will be the date when the registered enterprise actually first begins production of the registered product for commercial purposes. In cases of expansion, modification and rehabilitation of refineries, the start of commercial operation shall be the date after the scheduled completion of the said activities.
  
• For storage, it will be the date when the registered enterprise actually first received the registered product for storage.
  
• For distribution, it will be the date when the registered enterprise actually first transferred the registered product for distribution.
  
• For marketing, it will be the date when the registered enterprise actually first sold the registered product.
  
• For combinations involving storage, distribution, and marketing, it will be the date referred to in "marketing;" Provided no separate transactions for either storage or distribution is undertaken, otherwise it will be the earliest date of commercial operation, as defined, among the combined registered activities.

Activities covered under d.4. "Marketing" are entitled to capital equipment incentive only.

ITH shall be applicable to income derived from the activity covered by the registration reckoned five (5) years from date of commercial operation: Provided that in case of gasoline retailing stations, except those locating in LDAs, the incentive shall be available only to those with minimum capital requirement, excluding land, of Php 20 million or such amount as may be determined jointly by BOI and DOE for augmentation purposes, as the need arises.

Availment of ITH incentive shall be based on new investments made. New investments should account for at least 20% of the total investments (inclusive of equipment and plant facilities at acquisition cost or a minimum of Philippine Peso equivalent of US$2 million, whichever is lower.

2007 IPP Complete