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SEVENTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
First Regular Session 
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*16 
JUL 21 
P 2 : 1 1
SENATE
798
S. No.
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Introduced by Senator Ralph G. Recto
AN ACT
HARMONIZING THE GRANT AND ADMINISTRATION OF FISCAL AND NON­
FISCAL INCENTIVES, AND FOR OTHER PURPOSES
Explanatory Note
This bill seeks to rationalize our system of fiscal incentives that paved the way to a 
regime of irrational investment plans and wasteful tax breaks. For almost three decades, the 
Investment Priority Plans have been ineffective in attracting more significant and sustained 
investments.
The United Nations Conference On Trade And Development Foreign Direct Investments 
(FDI) Attraction Index, which measures the success of economies in attracting FDI (combining 
total FDI inflows and inflows relative to GDP), features 5 developing and 5 developing 
economies in the top ten (10). At $1.76 Trillion global FDI in 2015, the FDI inflows in the 
country last year amounted to USD5.234 billion while FDI outflows, or Philippine companies’ 
investments in different parts of the world, was higher at USD5.602 billion.tl]
The Philippines ranked eleventh in most preferred host for multinational enterprises’ 
investments in the next years, wherein among the most promising industries for attracting FDI 
are the sectors of agriculture, utilities, food and beverages, and information and communication.
This measure also aims to end the indiscriminate dispensation of fiscal perks to investors 
who are primarily motivated by the prospects in the domestic market and investments that would 
have been made even without incentives. These redundant incentives, in the form of income tax 
holidays and VAT exemptions, are enough to pave 12,500 kilometers of national roads * [2], fund 
various PPP projects [3], construct 41,728 classrooms, and even wipe out tuberculosis.[4]
This bill will streamline the administration of fiscal incentives. At present there are more 
than 200 laws which created a myriad of incentive-providing authorities. It aims to consolidate 
all Investment Promoting Agencies (IPAs) into one centralized agency. Thus, the Board of 
Investments (BOI) and Philippine Economic Zone Authority (PEZA) will be merged to form the 
Philippine Investment Promotion Administration (PIPA). This would then prevent locators from 
cherry-picking incentives by registering with different IP As to avail themselves of the best 
possible incentives package.
United Nations Publication. “World Investment Report 2016. Investor Nationality: Policy Challenges”
2 Cost estimates for work item of projects as of March 2015 given by the DPWH -  Bureau of Construction: 
asphalt/concrete overlay of national road 50mm thickness = P9.69 M/km
3 Modernization of the Philippine Orthopedic Center P5.7 B, LRT Line 1 South Extension Project P59.2 B, NLEX- 
SLEX Connector Road P21.2 B, Cavite-Laguna Expressway P43.33 B, httn://t)Dp.gov.Dli/wp- 
content/uploads/2012/10/PPPBrochure Sept2012.pdf
4 Per the World Health Organization’s Global Tuberculosis Report 2015, the total funding required for TB Care and 
control would be US$ 298 million, http://www.who.int/tb/publications/global report/en/ (Accessed on 30 June 
2016)