INCENTIVES TO BOOST TOURISM PROJECTS

Manila, May 27, 2003 -- The Board of Investments (BoI) has decided to lower 
the required minimum investments for roll-on/roll-off (RO-RO) type of 
vessels and set minimum standards for hotel projects for availment of tax 
incentives in an effort to boost the development of the country's nautical 
highway and tourism.

Elmer Hernandez, BoI executive director, said that for the RO-RO vessels, 
the BoI has agreed to reduce the existing required minimum gross tonnage of 
500 tons to 250 tons for RO-RO vessels serving the primary and secondary 
routes.

For RO-RO vessels serving the tertiary or developmental routes, Hernandez 
said the gross tonnage has been reduced to 100 tons to reach the smaller 
islands.

"This is aimed at supporting the government's effort to connect the islands 
of the country," Hernandez said.

This policy innovation means that when shipping firms register this project 
with the BoI, they would be entitled to income tax holiday incentives.

RO-RO terminal system operation and passenger cargo and vessel operations 
are listed in the 2003 Investments Priorities Plan, an annual list of 
preferred economic activity that is eligible for government incentives.

In April this year, President Gloria Arrouo inaugurated the 919 kilometer 
RO-RO shipping lane dubbed "Strong Republic Nautical Highway" (SNRH) The 
SNRH covers 17 cities, towns and islands. By using the RO-RO type of 
inter-island shipping, travel time and cost of sea travel will be reduced 
to the benefit of traders.

Sea transport is the cheapest form of transport in the country being an 
archipelago with over 1,700 islands.

The RO-RO transport system is expected to bridge the islands, open new 
markets in these areas and thereby increasing trade and tourism.

Another innovation of the BoI policy involves investments in the tourism 
sector.

Hernandez said that in support of the government's tourism promotion 
efforts, the BOI has set minimum standards for standard hotel investments 
at $20,000 per room for non-pioneer projects.

The move is aimed at supporting upgrades of existing tourist accommodation 
facilities.
A non-pioneer hotel project is entitled to four-year ITH.

Reported by: Sol Jose Vanzi

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