Regulatory Framework & Tax Incentives

 

The Government of the Republic of the Philippines has implemented a liberal program of fiscal and non-fiscal incentives to attract foreign capital and technology that complement local resources. Under the Omnibus Investments Code of 1987 (Executive Order 226), investors may enjoy certain incentives when investments are made in preferred areas found in the current Investment Priorities Plan (IPP).

Issued by the Philippine Board on Investments (BOI) annually, the IPP is a list of priority investment areas eligible for tax incentives in consulation with related government agencies and the private sector. Even if the activity is not listed in the IPP, an enterprise may still be entitled to incentives as long as at least 50% of production is for export (in the case of Filipino-owned enterprises), or at least 70% of production is for export (if majority foreign-owned enterprises or those with more than 40% foreign equity). In certain instances as indicated in the IPP, the BOI may completely or partially limit the incentives available to export products.

Under Book I of the Omnibus Investments Code, BOI-registered enterprises are given incentives in the form of tax exemptions and concession, as follows:

  • Income tax holiday – exemption from corporate income tax for four years (non-pioneer projects) or six years (pioneer projects)
  • Duty-free importation of capital equipment
  • Additional deduction for labor expese equivalent to 50% of the wages of additional skilled and unskilled workforce
  • Tax and duty-free importation of breeding stocks and genetic materials
  • Tax credit on domestic breeding stocks and genetic materials
  • Simplified customs procedures for the importation of equipment, spare parts, raw materials and supplies / exports of processed products
  • Unrestricted use of consigned equipment
  • Employment of foreign nationals in supervisory, technical or advisory positions
  • Exemption from taxes and duties on imported spare parts

 

Important Local Regulations

Foreign nationals are not allowed to own land in the Philippines as the Constitution limits land ownership Filipino citizens or companies that are at least 60% owned Filipinos. Foreign investors can viably lease commercial lands in the Philippines for a maximum of 75 years under Republic Act 7652. Intellectual property is protected under Republic Act 8293.

 

Local Incentives

The Provincial Government of Isabela offers a sensible package of incentives to investors, as well as unique inducements to businessmen in unique circumstances. These include the free use of the real properties of the Provincial Government, exemption from payment of basic real property tax for the first five years, and assistance in labor recruitment and arbitration. Current locators have established their businesses in Isabela also because of the Provincial Government’s high absorptive capacity, assuring them of the readiness of the Isabeliños for the investment as well as of the sustainability of the business environment they have chosen.

Priority Investment Areas

 

Doing business in Isabela provides investors with more than just profit gains. The province offers unique and exceptional treasures not found anywhere else – diverse natural resources, breath-taking sceneries, vibrant culture, adequate infrastructure network, and most importantly, warn and committed people.

Isabela occupies a strategic location between Cagayan Economic Zone and the national capital region of the country, Metro Manila. The province has productive forestlands and watershed areas and is known as the “Hybrid Cord and Rice Champion Producers of the Philippines.”

As the home of Magat Dam, the largest dam in Southeast Asia, Isabela is a major source of power and water supply for Northern Luzon and part of Metro Manila. It is also rich in mineral resources while having a lengthy range of coastlines totaling 147 kilometers from Maconacon to Dinapigue that are abundant in aquatic resources.

Foreign and local investors are invited to invest directly in greenfield projects and operating businesses by establishing new companies, subsidiaries or joint ventures in the following Priority Investment Areas of Isabela: 

 

Agri/Aqua-Based Industries

  • Hybrid Rice Production and Processing
  • Hybrid Corn Production and Processing
  • Corn Oil Production
  • Fruits and Vegetables Production and Processing
  • Livestock and Poultry Production and Processing
  • Dairy Production and Processing
  • Mango Processing and Export Trading
  • Sugarcane Production and Processing
  • Feeds Production
  • Banana Production and Processing
  • Seeweed Production and Processing
  • Sweet Sorghum Production and Processing
  • Tilapia and Prawn Production and Processing

Forest-Based Industries

  • Bamboo Industry Development
  • Rattan Industry Development
  • Woodworking/Furniture-Making

Tourism Development

  • Eco-Cultural and Historical Tourism
  • Tourism Accommodation and Facilities
  • Tour Operators and Travel Agencies
  • Health and Wellness Tourism
  • Religious Tourism
  • “Experiental” Tourism

Infrastructure Facilities

  • Development of Cauayan Agro-Industrial Center and Special Economic Zone
  • Airport Improvement
  • Mini Hydro Power Generation
  • Sugarcane Plantation for Biodiesel
  • Sweet Sorghum Production for Ethanol
  • Biomass Plant Development
  • Ilaguen Hydro Power Plant
  • Bio-Ethanol Plant Development
  • Rehabilitation of Ilagan-Divilacan Road
  • Construction of Pasa Small River Impounding Project
  • Road Construction linking Coastal Towns to Mainland

Gifts, Toys and Housewares

  • Basketry
  • Pottery
  • Ceramics
  • Novelty Items
  • Holiday Décor

Support and Allied Services/Knowledge-Based Industries

  • Information & Communication Technology / Business Process Outsourcing
  • Medical, Educational and Crisis Intervention Facilities

Road Links

 

Existing External Linkages of the Province

 

The province of Isabela has eight (8) existing road networks that link to its neighboring provinces. These are the Cordon-Santiago-San Pablo Road (Daang Maharlika), Cordon-Diffun Road, Santiago-Baluarte-Quirino Boundary Road, Santiago-Tuguegarao Road, Junction National-Potia Road, Santiago-Abut, Quezon-Agbannawag Road (Tabuk City) and Roxas-Paracellis Road.

 

The major trunkline that links Isabela to its neighboring provinces is the Cordon-Santiago-San Pablo Road or Maharlika Highway. This is complemented by the Santiago-Tuguegarao Road which lessens the travel time by an hour to and from Isabela to Cagayan, Kalinga and Apayao provinces via the western side of the province. These roads serve as the main thoroughfare for transporting the agriculture produce of the province to its neighboring provinces and the National Capital Region.

 

Along the eastern part of Isabela, there are 3 existing routes leading to the provinces of Quirino and Aurora in Region 03. These are the Cordon-Diffun Road, Junction Ipil-Quirino Road and Santiago-Baluarte-Quirino Boundary Road. Other routes which link Isabela to the Province of Ifugao, Kalinga and Mountain Province in Cordillera Administrative Region (CAR) are Junction National-Potia road, Santiago-Abut, Quezon-Agbannawag Road (Tabuk City) and Roxas-Paracellis Road, respectively.

 

Of these road networks, portions of the Cordon-Santiago-San Pablo Road or Maharlika Highway are prone to road closures particularly during the onslaught of typhoons and flooding. A short portion of the road in the city of Ilagan is prone to road sinking while the bridge in the municipality of San Pablo is prone to flooding. The closure of the road network would halt the flow of traffic and paralyze the economic activity of the province.

 

Internal Circulation Routes of the Province

 

 

Internal circulation routes are of great importance because it will provide linkage and access to the municipalities of Isabela. To date, the province has four (4) existing circulation routes that link its neighboring municipalities. These are the Cauayan-Cabatuan Road, Gamu-Roxas Road, Naguilian-San Mariano Road and Alicia-San Mateo Road. These roads likewise provide easier access to the comercial, institutional and production areas as well as government centers of the  province.

 

Support and Allied Services

 

 

BRO SERVICES 

 

1.    BRO-ASAP (Ayuda Sa Presyo

2.    BRO-Education

3.    BRO-Healthcare

4.    BRO-LAMFP (Loan Assistance for Marginalized Farmers Program)

5.    BRO-Livelihood

6.    BRO-Paiwi (Animal Dispersal)

7.    BRO-PhilHealth

8.    BRO-PNB M (Panegurong Nararapat na Benepisyo para sa mga Magsasaka)

9.    BRO-PPP (Pantawid Pamasahe Program)

10.  BRO-PSP (Pangeuro Sa Pananim)

11.  BRO-SSS M (Sapat Seguridad para Sa mga Magsasaka

12.  BRO-LUSOG (Feeding Program)

 

 

 

 

 

LINGAP CENTER

 

The Lingap Center for street children is a residential facility managed by the Provincial Government of Isabela since CY 2000. This center caters to neglected, abandoned, maltreated and other children victims of various forms of abuse with ages 7-17 years old. The center provide various programs and services namely home life, educational, spiritual, medical, recreational, psycho-social, psychological, value inculcation and Case Management. These services are geared towards the total development of the children.

 

The center is continuously reaching out to children province wide. For the 14 years of operation, the center is trying its best to provide a home atmosphere for its residents. It may not be a replacement of the home but the best alternative placement for the child while the family is in crisis situation.

 

The Lingap Center has complete staff complements providing substitute parental care to the children likewise provide training to the children in doing household chores which they need while growing up. They too are guided with their personal hygiene as they grow up to become adolescent. The center is considered a place where they learn to become independent, hard working and learn to appreciate diligence.

 

 

 

 

A.   Wage Rate

Industry Sector

Daily Minimum Wage Rate

(in Philippine Peso)

Non-Agriculture

Php 255.00

Agriculture

Php 243.00

Retail Service

 

Employing more than 10

Php 247.00

Employing less than 10

Php 220.00

 

B.   Power

Type

Average Rate per KWH

Residential

Php 10.1144

Commercial

Php 8.9243

Industrial

Php 8.9243

 

C.   Water

Type

Rate per cubic meter

Residential

Php 33.25

Commercial

Php 100.00

Industrial

Php 100.00

 

D.   Communication Rates

Telephone

Category

Installation Cost

Monthly Subscription Cost

Domestic Long Distance Calls (per minute)

International Long Distance Calls (per minute)

Residential

Php 1,100.00

Php 600.00

Php 5.00

Php 150.00 (using card)

Commercial

Php 1,500.00

Php 1,048.00

Php 5.00

Php 150.00 (using card)

 

Internet

Category

Rate per Hour

DSL Subscription

 

Residential Package

Php 1.80

Business Package

 

Internet Cafes

Php 20.00

 

E.   Real Estate Cost

Classification

Cost per square meter

Residential

Php 660.00

Commercial

Php 1,100.00

Agricultural

 

Irrigated

Php 400,000.00/hectare

Non-Irrigated

Php 220,000.00/hectare

 

F.    Rental Rates

 

Classification

Cost per square meter per month

Residential

Php 80-100/sq.m./month

Commercial Space

Php 100-150/sq.m./month

Building Space

Php 150-250/sq.m./month