The Philippines posted a surge in agricultural investments following the issuance of Fiscal Incentives Review Board (FIRB) Resolution No. 003-24 on February 2, 2024. This resolution empowers the BOI to approve projects with an investment capital of up to ₱15 billion.
Aligned with President Ferdinand R. Marcos, Jr.’s directive to ease doing business in the country, FIRB Resolution No. 003-04 streamlined the process for investors. Investment Promotion Agencies (IPAs) can now approve projects with ₱15 billion or less in investment capital, as stated in their monthly reports to the FIRB Secretariat.
Previously, IPAs could only approve incentives for projects under ₱1 billion in investment capital, while the FIRB approved tax perks for projects exceeding ₱1 billion, adhering to the provisions of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
From February 2 to June 11, the BOI has already approved six projects with investment capital between ₱1 billion and ₱15 billion. These projects represent a total investment of ₱13.38 billion, with the agriculture sector leading at ₱6.05 billion, followed by the transportation and storage industry at ₱3.95 billion.
“Recent approvals with investments ranging from ₱1 billion to ₱15 billion highlight the benefits of increased investment thresholds for the agriculture sector. These projects, upon completion, will drive the adoption of new technologies and strengthen food security. This is crucial to meet the rising food demand, and sustain resilient agricultural systems despite climate change and other challenges,” said Department of Trade and Industry Secretary and BOI Chairman Fred Pascual.
Investments in agriculture include the registration of a new producer of dressed whole, further processed, or cut-up chickens; a dairy farm and milk-processing facility; and a cold storage facility project.
While IPAs now handle applications up to ₱15 billion, projects exceeding this amount remain under FIRB’s jurisdiction. Previously submitted tax incentive applications from IPAs for projects with investment capital up to ₱15 billion will be returned to the respective IPAs for processing and approval.
Granting IPAs greater authority to approve incentives, FIRB Resolution No. 003-24 will boost their role in managing the country’s incentive regime. This ensures compliance among registered business enterprises (RBEs) regardless of the amount of investment capital.
Since the implementation of the CREATE Act in 2021, the FIRB has approved 28 projects valued at over ₱1 billion but below ₱15 billion, with a total investment of ₱126.61 billion. In the same period, FIRB also endorsed and approved 15 projects with investment amounts exceeding ₱15 billion, totaling ₱835.89 billion.
“This increased project cost threshold for IPA approval affirms the government’s push to streamline business processes and manage incentives prudently. This sends a clear message to investors: The Philippines is actively fostering an environment conducive to sustainable business growth,” Secretary Pascual emphasized.
The FIRB’s recent move accelerates project registration for investors and addresses previous concerns regarding lengthy application evaluations with unclear timelines for final FIRB approval.