FIRB increases IPA projects approval threshold to roll out ‘red carpet’ to investors

In line with President Ferdinand R. Marcos, Jr.’s directive for the government to roll out a ‘red carpet’ for investors, the Fiscal Incentives Review Board (FIRB) has unanimously approved a resolution increasing the investment capital threshold for projects handled by Investment Promotion Agencies (IPAs) from PHP 1 billion to PHP 15 billion.

“I commend the FIRB for its swift action in improving the Philippines’ global competitiveness. IPAs play a vital role in attracting more productivity-enhancing investments to the country, and we will continue to support them by acting fast on measures that will further promote ease of doing business and cultivate an investment-friendly climate,” said Finance Secretary and FIRB Chairperson Ralph G. Recto.

On February 2, 2024, the FIRB increased the investment capital threshold for projects delegated to IPAs to PHP 15 billion through FIRB Resolution No. 003-24 to enhance the ease of doing business in response to concerns expressed by certain IPAs. This is expected to usher in more critical investments into the country.

Under the previous set-up, IPAs were responsible for approving incentives for projects with investment capital below PHP 1 billion, while the FIRB was tasked with selecting tax perks for projects exceeding PHP 1 billion, as mandated by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law. The FIRB may exercise the authority to increase the threshold without the need to amend the Tax Code.

The recent adjustment aligns with policy proposals in Congress, which aim to empower IPAs with greater authority in granting incentives.

Moreover, the move will boost the IPAs’ responsibility and accountability in managing the country’s incentive system and ensure steadfast compliance among registered business enterprises (RBEs) regardless of the amount of investment capital.

The revised threshold is likewise aligned with the Public-Private Partnership (PPP) Code of the Philippines, which states that PPP projects amounting to PHP 15 billion or higher shall be approved by the National Economic and Development Authority (NEDA) Board.

As such, applications for tax incentives involving investment capital exceeding PHP15