Manufactured Products and their Qualifications for BOI

This covers shipbuilding, manufacture of machinery and equipment, including their parts and components, manufacture of other transport equipment (air, water and land) including their parts and components, cement, modular housing components (for mass housing projects) and manufacture of basic iron and steel products.


This also covers manufacture of chemical compounds or biological substances, other than food, intended for use in the treatment, prevention or diagnosis of disease in humans or animals, including:
1. articles recognized in official Pharmacopoeia or national drug formulary

2. articles intended for use as a component of the articles in one (1) above; and

3. herbal and/or traditional drugs which are articles of plant or animal origin used in alternative medicine.

a. Shipbuilding

 

This covers shipbuilding and ship repair.

Shipbuilding refers to the design, construction, outfitting, equipping and launching of any type of ship.

Ship Repair refers to the overhaul, alteration, modification or repair of hull, machinery,equipment, outfits and components of any type of ship.

Prior to start of commercial operation, the registered enterprise may be required to submit a copy of a Certificate of Registration or its equivalent from the MARINA or appropriate government authority.

Any of the following may qualify for pioneer status:

• Shipbuilding or ship repair facilities with a minimum lifting capacity of 20,000 DWT

• Shipbuilding or ship repair facilities with a minimum berthing capacity of 7,500 DWT


b. Machinery and Equipment

This covers the manufacture of machinery and equipment including its parts and components.

This also covers the manufacture of energy efficient lighting (EEL) such as compact fluorescent lights (CFL) and energy efficient version of linear fluorescent lamps (i.e., slim tube T8 triposphor), high intensity discharge (HID) lamps, ballasts (low loss electromagnetic and electronic), and energy efficient luminaires that are compliant with the PNS4 or with internationally acceptable standards. Applications for registration must be endorsed by the DOE.

Mere assembly (screwdriver assembly) of machinery and equipment shall not qualify for registration.

Projects that cost at least the Philippine Peso equivalent of US$20 million may be granted pioneer status but with non-pioneer incentives


c. Other Transport Equipment

This covers the manufacture of other transport equipment (air, water and land) including their parts and components.

(1) Aircraft and Its Parts and Components

This covers the following:

(a) Manufacture or assembly of power-driven fixed-wing aircraft or power-driven aircraft supported by one or more rotors;

(b) Manufacture and/or assembly of aircraft engine, engine parts and other aircraft parts and components such as fuselage, wing, stabilizer, rudder, landing gear; and

(c) Complete overhauling or rebuilding of aircraft to original design specifications.

(2) Other Water Transport and Its Parts and Components

This covers boat building and the manufacture of parts and components. Boat building refers to the design, construction, outfitting and launching of water-crafts with sizes below 24 meters in length but not less than 3 GT.

Prior to start of commercial operation, the registered enterprise may be required to submit a copy of a Certificate of Registration or its equivalent from the MARINA or appropriate government authority.

(3) Motor Vehicle and Its Parts and Components

This covers the assembly or manufacture of motor vehicles under the Motor Vehicle Development Program (MVDP) provided there is investment in the production of major parts and components.

This also covers the manufacture of parts and components of motor vehicles.

The following are the qualifications for registration for the assembly or manufacture of motor vehicles:

– Must be registered participants of good standing under the MVDP and must invest in the production of major parts and components such as engine, transmission, power train, differential, body, motorcycle frame, fuel, tank, swing arm, plastic injection parts and die cast products

– Existing MVDP participants must have minimum additional investments of Philippine Peso equivalent of US$5 million for passenger cars and commercial vehicles, and US$2 million for motorcycles

– New assemblers must comply with the minimum investment requirement under E.O. 156 plus the additional minimum investment requirement under the preceding bullet

Investments in parts and components manufacturing as required for the assembly or manufacture of motor vehicles shall be in any of the following schemes:

– Equity investment, either minor or major stockholdings in new or existing motor vehicle parts manufacturing company

– Investments in in-house motor vehicle parts manufacturing

– Cost-sharing schemes with existing motor vehicle parts manufacturing companies in terms of tooling and/ or modernization/upgrade of facilities

– Participation under the DTI?s SME Assistance Program

– Other investments that BOI may consider for the development of the motor vehicle industry

Projects complying with any of the following may qualify for pioneer status:

– New Investments of at least US$50 million (for Passenger Cars and Commercial Vehicles) and US$4 million (for motorcycles) new investments, which may include acquisition of existing assets or facilities

– Exports at least 10,000 units (for Passenger Cars and Commercial Vehicles); 30,000 units (for motorcycle) and 500 units (for buses) per annum of completely-built-up (CBU) motor vehicles

– Incremental Investments of at least US$20 million (for Passenger Cars, Commercial Vehicles and Buses) and US$1 million (for motorcycles) incremental investments for Modernization/Expansion projects

– Manufacture/assembly of brand new three or four-wheel Philippine utility vehicles for cargos and/or passengers

– Manufacture of alternative fuel vehicle

Alternative fuel vehicle covers the manufacture of the following brand new vehicles powered by alternative sources, as classified accordingly under Section 1 of Article 1 of E.O. 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 blend/content of at least 10%

– Compressed Natural Gas Vehicles – vehicles that run on Compressed Natural Gas (CNG)

Projects involving the manufacture of parts and components complying with any of the following may qualify for pioneer status:

– Manufacture of transmission/engines

– Manufacture of tool & die to produce chassis and engine

– Common facility for forging/metal stamping of motor vehicle parts and components


d. Cement

This covers the manufacture of cement whether or not integrated with quarrying. New finishing mills may be considered fore registration.

Existing cement manufacturers, which will put up new facilities or expand existing operations, must show compliance of at least 85% utilization based on clinker capacity of their existing plants and no existing plant shall fall below 85% utilization based on clinker capacity.

New cement manufacturer, with Interlocking Directors, regardless of whether their interest in an exisitng cement manufacturing company is nominal or substantial, must sow compliance of at least 85% utilization based on clinker capacities of said existing cement manufacturing company.

The same proof of compliance shall also be required from new cement manufacturing companies consisting of stockholders of an existing cement manufacturing company.

The 85% utilization based on existing clinker capacity imposed on cement manufacturers as referred to under paragraph 2 and 3 above, is a continuing requirement for the qualified project to avail of an Income Tax Holiday.


e. Modular Housing Components

 

This covers manufacture of modular housing components using new and environment-friendly materials or technology. These include roof/framing systems, partition sysytems, flooring systems, door window systems finshins ceiling systems, and plumbing /sewage sysytems.

The firm shall sell at least 70% of total annual production to mass housing projects.

Applicants must submit proof/certification from the Competent National Authority that its products/systems are modular.


f. Basic Iron and Steel Products

This covers the manufacture of refined iron ore, e.g., pig iron, hot briquetted iron (HBI), direct reduction iron (DRI) and primary steel products.

This also covers flat products (hot/cold-rolled coils, plates and sheets; tin plates; galvanized and pre-painted sheets in coils; roll-formed steel sheets provided integrated with galvinizing and pre-painting facilities) and long products (bars, wire rods and seamless pipes and tubes).

All iron and steel products must be compliant with the PNS, if applicable.

Production of steel products involving simple process such as cutting, grooving, ribbing or a combination thereof is qualified for registration.


g. Drugs and Medicines

This also covers manufacture of chemical compounds or biological substances, other than food, intended for use in the treatment, prevention or diagnosis of disease in humans or animals, including:

1. articles recognized in official Pharmacopoeia or national drug formulary

2. articles intended for use as a component of the articles in one (1) above; and

3. herbal and/or traditional drugs which are articles of plant or animal origin used in alternative medicine.


Triple I can set-up your Project in the Philippines, and register with the BoI for tax incentives:

  • Business Registration in the Philippines
  • Preparation of your BoI application documents
  • Philippines Office Set-up
  • Completion and Awarding of BoI certificate
  • Ongoing accounting works quarterly with BoI
  • Filing with BIR to receive tax incentives

Visit to the Board Of Investments BoI, Check out 2010 Investment Priorities Plan to see which businesses can avail of tax incentives