Investment Priorities Plan

• 2006 IPP
• 2007 IPP

Existing Incentives In the Energy Sector

Includes the fiscal and non-fiscal incentives, the Specific Implementing IPP Guidelines and the incentives or privileges under the laws or issuances governing the specific energy resource.

1. Alternative Fuels
2. Downstream Oil
3. Fossil Fuels
4. Power
5. Renewable Energy

Generally, under Book I of E.O. 226 or the Omnibus Investments Code of 1987, a qualified enterprise may enjoy certain benefits and incentives provided it invests in preferred areas of investments enumerated in the Investment Priorities Plan (IPP). The plan is issued annually by the BOI and contains the list of areas of investments eligible for government incentives. The 2005 IPP has been approved under Memorandum Order No. 169 and signed by President Arroyo on April 26, 2005. Listed as one of the preferred activities under the current IPP is Energy, which provides in part that:

“Energy covers the exploration, development, and/or utilization of energy sources. This also covers activities using energy technologies leading to energy efficiency and conservation in accordance with the program of the DOE.”

Upon registration with BOI, a qualified enterprise is entitled to the following fiscal and non-fiscal incentives:

Fiscal Incentives:

• Income tax holiday;
• Exemption from taxes and duties on imported spare parts;
  
• Exemption from wharfage dues and export tax, duty, impost and fees;
  
• Modified duty rate for capital equipment by virtue of E.O. 313;
  
• Tax credits; and,
  
• Additional deductions from taxable income.

  Non-fiscal incentives:

• Employment of foreign nationals;
  
• Simplification of customs procedures;
  
• Importation of consigned equipment; and,
  
• The privilege to operate a bonded manufacturing/trading warehouse subject to custom rules and regulations.