MALACANAN PALACE

MANILA

^{_{MEMORANDUM   ORDER  NO.12 APPROVING  THE 2017 INVESTMENT  PRIORITIES PLAN}}

Pursuant to Article 29 of Executive Order No. 226 (s. 1987) or the Omnibus Investments Code of 1987, as amended, the attached 2017 Investment Priorities Plan (IPP) is hereby APPROVED .

Upon effectivity of the IPP, all government agencies and entities are enjoined  to issue the necessary regulations to ensure its implementation in a synchronized and integrated manner. No government body shall adopt any policy or take any course of action contrary to, or inconsistent with, the IPP.

The Chairman of the Board of Investments shall render an annual report to the President on the accomplishments and implementation of the  IPP.

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

DONE, in the City of Manila this 28th  day of  February

our Lord, Two Thousand and Seventeen.

, in the year  of

By the President:

Executive Secretary

REPUBLIC OF THE PHILIPPINES

PRRD 2016 - 001926                     THE PRESIDENT OF THE PHILIPPINES

FOREWORD

With the theme "Scaling Up and Disbursing Opportunities," the new IPP reflects the Administration's desire to see economic growth spread to a broader segment of the population. Intensifying implementation of the government's comprehensive national industrial strategy, we have made significant adjustments in the sectoral coverage qualified for registration with the Board of Investments (BOI).

Taking-off from the President' s zero + 10-point SocioEconomic Agenda and Ambisyon Natin 2040 and the objectives of the Philippine Development Plan, the BOl has identified ten (10) preferred activities for investments. This list significantly differs from the 2014 IPP with the inclusion of more MSME oriented , innovation-driven , health and environment conscious activities that  look  at  expanding job opportunities for more segments of the population and  bringing  more  frrrns  into the  local and global value chains. In addition, there is a deliberate policy to shift investments to the countryside.

The broadened coverage of the 2017 IPP aims to encourage  and  attract  new capital  in sectors and regions that can help address the inequality of growth and the jobs gap. Using experience from developing industry road.maps and implementing the new industrial policy, this IPP seeks to transform both the manufacturing and agricultural sectors by expanding their forward and backward linkages, particularly  with MSMEs.

The 2017 IPP is emphasizing two things - continuity of industrial policy direction and its implementation; and the identification of opportunities that can directly impact the lives of aU participants in the growth process.

The 2017 IPP contains the following priority  investment   areas:

l. Preferred Activities: All qualified manufacturing including agri- processing; Agricult ure, Fishery and Forestry; Strategic Services; Infrastructure and Logistics including LGU-PPPs; Health Care Services including drug rehabilitation; Mass Housing; lnclusive Bus iness Models; Environment and Climate-change; Innovation Drivers; and Energy.

1. Export Activities including services exports and activities in support    of exporters;
2. Actjvities based on Special Laws granting incentives ; and
   1. ARMM List.

This 20 I7 IPP list was formulated through a process that is both analytical and participative, covering a range of sectors and geographic areas. Regional consultations were held in Metro Manila, Cebu and Davao. Various  inter-agency  and  private sector consultative  meetings were held to finalize the Jist. A national Manufacturing Summit that had participants from major industry associations, government agencies, non-government organizations and the academe also helped in the crafting of sectoral priorities and identification of  necessary  incentives  and  binding  constraints.  These ensure that the important elements for a more inclusive and participative economic growth have been put into  the Plan.

Chairman, oard of Investments Secretary,  Department  of Trade and Industry

The 2017 Investment Priorities  Plan

Proposed  Theme: Scaling Up and Dispersing Opportunities

1. PREFERRED  ACTIVITIES FOR INVESTMENT

1. Preferred Activities

l.   All Qualified Manufacturing Activities including Agro-Processing1

This covers the manufacture of industrial goods and processing  of agricultural and fishery products, including Halal and Kosher food, into (a) semi-finished/intermediate goods for use as inputs in  the  production  of  other goods, or (b) finished products or consumer goods for  final consumption.

This also covers the manufacture of modular housing components and machinery and equipment including parts and  components.

Except for modernization projects, only projects located outside Metro Manila may qualify for registration.

1. Agric ulture, Fishery and Forestry

This covers commercial production of agricultural, fishery and forestry products.

This also covers production of seeds and seedlings, and establishment of nurseries and hatcheries, and support services and infrastructures, such as, facilities for drying, cold chain storage, blast freezing, bulk handling and storage; harvesting, plowing, and spraying/dusting; packing houses, trading centers, ice plants in Less Developed Areas, AAA slaught erhouse, AAA dressing plant.

Except for modernization projects, only projects located outside Metro  Manila may qualify for registration. Modernization projects  include those  for agricultural  support services and infrastructure only.

1. Strategic Services1

1. IC Design

This covers all logic and circuit design techniques required to design integrated circuits (ICs).

1 Subject to the criteria on the qualification for registration of projects to be defined and clarified by the Board  in the  implementing guidelines.

The 2017 Investment Priorities  Plan

Proposed Theme: Scaling Up and Dispersing  Opportunities

1. Creative  Industries/Knowledge-Based Services

This covers IT-BPM services for the domestic market (e.g., contact centers, data analytics), and those that involve original content such as animation, software development, game development, health information management  systems,  and engineering design.

This also covers digital or technological   start-ups/activities.

1. Maintenance, Repair, and Overhaul (MRO) of aircraft This covers the MRO of all types of  aircraft.
2. Charging/Re fueling Stations for Alternative Energy Vehicles

This covers the establishment of charging/refueling stations  for  alternative energy vehicles except LPG-run  vehicles.

1. Industrial  Waste Treatment

This covers the establishment of treatment facilities for toxic and hazardous wastes (THW) from an industrial  operation.

1. Telecommunications

This covers the establishment of connectivity facilities for fixed and mobile broadband services .

Only new players may qualify for registration.

1. State-of-the-art Engineering , P rocurement, and Construction

This covers engineering design , procurement , and construction for industrial  plants and infrastructure.

1. Healthcare Services including Drug Rehabilitation Centers 2

This covers the establishment and operation of general and specialty hospitals, and other medical/healthcare facilities  including  drug rehabilitation centers.

1. Mass Housing

This covers the development of mass housing units based on a price ceiling  of Php2.0 Million.

2 Subject to  positive list of location as endorsed by the DOH.

The 2017 Investment Priorities  Plan

Proposed Theme: Scaling Up and Dispersing  Opportunities

This also covers in-city low-cost housing projects for  lease.

Except for in-city low-cost housing for lease, only projects located outside Metro Manila may qualify for  registration.

1. Infrastructure and Logistics  including LGU-PPPs

This covers the establishment and operation of physical  infrastructures vital to the country's economic development and prosperity such as, but not  limited to: airports, seaports, (air, land and water) transport, LNG storage  and regasification facilities, pipeline projects for oil and gas, bulk water treatment and supply, training facilities, testing laboratories, and domestic industrial zones.

This also covers PPP projects including those initiated and/or implemented by Local Government  Units (LGUs).

1. Innovation Drivers

This covers research and development (R&D) activities, conduct of clinical trials (including drug trials) and the establishment of Centers of Excellence, innovation centers, business incubation hubs, and fabrication laboratories (fablabs)/co-working spaces.

This also covers commercialization of new and emerging technologies and products of DOST or government-funded R&D, such as, but not limited  to:

• Agricultural  biotechnology tools
  • Disaster  mitigation/prevention hardware or software
  • Hardware or software for increasing agricultural  productivity
  • Mechanized means for natural resources  conservation
  • Portable technologies - innovation on existing  bulky or heavy device  to make it portable, or a new device or service that can be brought virtually anywhere
  • Hardware or software for the prevention of disease outbreaks
  • Remote  monitoring devices or systems
    • Professional  services for remote sensing
    • Hardware or software for the upgrading of local  industries
      • Photonics  and Nanotechnology
        • Natural health products

1. Inclusive Business (IB) Models

This covers business activities of medium and large enterprises (MLEs)  in the agribusiness and tourism sectors that provide business opportunities to micro and small enterprises (MSEs) as part of their value  chains.

The 2017 Investment Priorities  Plan

Proposed Theme: Scaling Up anti Dispersing  Opportunities

IB projects may qualify for Pioneer status.

1. Environment  or Climate Change-Related Projects

This covers manufacture/assembly of goods  and  the  establishment  of energy efficiency-related facilities where either utilization of which would significantly lead to either the efficient use of energy, natural resources or raw materials; minimize/prevent pollution; or reduce greenhouse gas em1ss1ons.

This also covers green ship recycling based on international standards, and the establishment of privately-owned materials recovery  facility.

1. Energy

This covers power generation projects utilizing conventional fuels  (i.e. , coal, diesel, bunker, natural gas, and geothermal), waste heat and other wastes, and the establishment of battery energy storage  systems.

1. Exporl Activities

1. Production and manufacture of export  products
   1. Services Exports3
      1. Activities in support of exporters

1. Special Laws

This covers activities where inclusion in the IPP is mandated for purposes of incentives, as follows:

1. Industrial Tree Plantation (P.D. 705);
   1. Mining (R.A. 7942) (limited to capital equipment incen tive);
   2. Publication  or Printing of Books/Textbooks (R.A. 8047);
   3. Refining, Storage, Marketing and Distribution  of  Petroleum  Products (R.A. 8479);
   4. Rehabilitation, Self-Development and Self-Reliance of Persons with Disability (R.A. 7277);
   5. Renewable Energy (R.A. 9513); and
   6. Tourism  (R.A. 9593).

3 Contact centers and non-voice business  processing activities  that will  be located  in  Metro Manila  may no longer be qualified for incentives availment with  the Board oflnvestments  under  Executive Order  No. 226, otherwise  known  as the Omnibus Investments Code of  1987, as amended   by year  2020.

The 2017 Investment Priorities Plan

Proposed Theme: Scaling Up and Dispersing  Opportunities

1. ARMM LIST

The 2017-2019 ARMM List contains the following  priority investment  areas:

A.EXPORTACTIVITIES

1. Export Trader and Service Exporters

2. Support  Activities for Exporters

1. AGRICULTURE, AGRIBUSINESS,  AQUACULTURE  and FISHERY

B.1.  Agriculture and Agribusiness

This covers all types of agricultural production, farming, plantation , processing or manufacturing, as long as, the land  or  the  agricultural  production , plantation, processing or manufacturing is based in ARMM. It includes value­ chain, value-adding, logistical and supply chain agribusiness activities based in or involving ARMM agricultural products or the farmers of the region , such as silo storage and drying facilities.

1. 2. Aquaculture and Fishery

This covers the aquamarine industry; inland water  resources ;  seaweeds; fishing; fish pond including other marine, inland and brackish water farming, such as abalone farms, shrimp farming or crab fattening; the establishment of hatcheries or breeding of fingerlings and processing of such marine and inland water resources.

1. BASIC INDUSTRIES

This covers the production  of  pharmaceuticals such  as antibiotics;  traditional or herbal medicines and related activities such as bio-prospecting; textile or garments; water supply and treatment; ice plant  or  refrigeration;  traditional craft like boat building; production of inorganic and organic fertilizer; all types of heavy indu stries , such as the steel industry, petrochemical indus try, ship­ building, ship breaking, ship repair and servicing; dredging for industrial purposes and landfill; cement production and concrete  aggregates.

1. INFRASTRUCTURE AND SERVICES

This covers strategic infrastructure projects such as railways, bridges, tollway s, flood control and support industries like sand and gravel, batching plant and pre-mixing of cements; air, land and water transportation; telecommunications to include the construction and operation  of  international  gateway  facilities both satellite-linked or Jinked by terrestrial and submarine cables for internet connectivity, so long as these are based in ARMM and are holding ARMM franchise, or servicing ARMM. areas including to and from ARMM in order to increase inter-connectivity and support regional or national  integration.

The 2017 Investment Priorities  Piao

Proposed Theme: Scaling Up and Dispersing  Opportunities

1. INDUSTRIAL SERVICE FACILITIES

This covers industrial centers or industrial estates to include testing and quality control laboratories; manpower training and demonstration centers; vocational and technical skills services and facilities; call centers and Information Technology related enterprises such as business process outsourcing; tool and dye shops and similar facilities; metal casting and metal working; furniture and fixtures; ceramics and tile-making; petrochemical complex  and  industrial  gases.

1. ENGINEERING INDUSTRIES

This covers engineering products; electronics and telecommunication products; and fabrication of construction materials including pre-fabricated construction materials using new technologies (e.g. 3D printing) or indigenously sourced materials.

1. LOGISTICS

This covers the logist ics, supply chain and logistics  network  industry;  shipping, hauling and trucking; cargo shippers and forwarders; bulk carrier; warehousing and depots; storage; and other logistics facilities principally based in ARMM including transhipment hubs and services using ARMM ports, airports or located near its special economic zones. This also contemplates the ports industry and allied industry in the ARMM and ancillary services, such as arrastre and stevedoring, because the ARMM needs to  attract  more  port industry players.

H    BIMP -  EAGA RELATED INVESTMENT  ENTERPRISES

This covers enterprises using the BIMP-EAGA framework on trade and investments and who are located or have their base of operations in the BIMP­ EAGA namely, Brunei; Sabah and Sarawak in Malaysia; Maluku, Sulawesi , Kalimantan and Irian Jaya in Indonesia; and Mindanao and Palawan in the Philippines, who sbaU invest and engage in economic activity in the ARMM including traditional cross-border trade and the age-old barter trading to encourage the formalization of peripheral shadow  economies.

I   TOURISM

This covers the establishment of tourism-related facilities and attractions; tourism-related services; hotel and restaurants catering to ARMM tourists; Halal-based tourism; tourist accommodation facilities ; tourist  transport facilities and development of retirement villages, which shall include health or medical facilities and other amenities.