CABINET  APPROVES  2007  INVESTMENT  PRIORITIES  PLAN

MANILA, MAY 23, 2007
(BULLETIN) By BERNIE CAHILES–MAGKILAT - The Cabinet yesterday approved the 2007 Investment Priorities Plan (IPP), a list of priority areas of economic activities eligible for juicy package of government incentives, with the new inclusion of agribusiness in the preferred areas.

Trade Undersecretary Elmer C. Hernandez said the IPP would now be endorsed to Malacañang for approval by President Gloria Macapagal Arroyo.

The IPP, however, has yet to wait till the arrival of the President from her trips to Japan, Australia and New Zealand.

Except for the inclusion of agribusiness in the Agriculture and Fishery listing, the Cabinet approved the 2007 IPP in its entirety.

Under the 2007 IPP, this sector is listed as Agriculture/Agribusiness and Fishery.

"Except with the revision in the Agriculture and Fishery listing, all the others were carried," added Hernandez.

The inclusion of agribusiness in the listing is meant to encourage agricultural enterprises to integrate with manufacturing to be able to produce high value products.

Its inclusion may also be in anticipation of the government’s plan to develop agricultural economic zones in the country that will integrate production and processing.

Approval of the proposed 2007 IPP has been delayed for over a month now as government officials were caught in the middle of an election fever. It was submitted to Malacañang by the inter-agency committee on IPP last March 30.

The IPP is crucial because the BoI has pinned its hopes on the realization of the targeted 12 percent growth in investments this year.

An IPP serves as investors’ guide on the selected areas that have been identified for priority promotion and development and therefore eligible for government tax and fiscal incentives and any delay would impact on businessmen, who are making plans and projections with the help of the IPP.

One controversial inclusion in this year’s IPP is cement projects that are integrated with mining operations. The grant of incentives to cement projects was also endorsed by the Department of Finance despite opposition by the existing cement players.

Telecommunications projects for unserved areas are also entitled to incentives.

The mining sector has been removed from the 12 preferred priority sectors but Republic Act 7942 or the Mining Act is listed in the Mandatory Inclusions of the IPP.

The proposed 2007 IPP has also maintained the RED (Retention, Expansion and Diversification) program to cover the activities of existing investors either considered as global players or engaged in strategic industries that are encouraged for retention, expansion or diversifications of their operations in the country.

The following is the complete list of the 12 preferred areas of the draft 2007 IPP: agriculture, fishery and support services; healthcare and wellness products and services; information and communications technology; electronics; motor vehicle products; energy; infrastructure; tourism; shipbuilding/shipping; iron and steel; R & D/training institutions and; machinery and equipment, raw materials and intermediate inputs in support of the activities listed in the IPP.

The R & D listing covers in-house R & D activities of any manufacturing/producing firm and commercial R & D activities of private firms and research institutions.

This also covers Centers of Excellence and training institutions specializing in developing skills for manufacturing, agriculture, fishery, mining, tourism, infrastructure, and service sectors.

The BoI has carefully crafted this year’s proposed IPP in light of criticisms that its penchant for granting incentives triggered a huge government revenue loss.

Incentives registered with the BoI are granted as long as eight years of income tax holiday, preferential duty rate, among other incentives.(BCM)

Bush wants an American to head WB (BULLETIN)

WASHINGTON (AP) — President George W. Bush wants an American to run the World Bank, the White House said, dismissing speculation that Bush might drop the tradition of having a US citizen lead the poverty-fighting institution.

US officials, consulting with other countries, are looking for candidates to succeed Paul Wolfowitz and hope to soon send some recommendations to Bush, the White House said Monday. "The president expects to put forth an American," White House deputy press secretary Tony Fratto said.

Wolfowitz said last week he will step down June 30, his leadership undermined after he broke bank rules in his handling of a generous compensation package for his girlfriend, bank employee Shaha Riza, in 2005.

Treasury Secretary Henry Paulson is leading the effort to find a replacement.

"We expect that he’ll have some recommendations for the president," said White House spokesman Tony Fratto.

"He’s consulting with other major shareholders at the bank and other interested groups that are interested in the leadership of the bank and how the bank will do its business going forward," Fratto added. "So, he’s starting that process."

That suggests a more consultative approach to finding a new head of the bank. Bush’s selection of Wolfowitz in 2005 stunned many overseas, especially Europeans who were upset that the president would tap his No. 2 official at the Pentagon and a key architect of the Iraq war to run the bank.

The bank’s senior management on Monday said the Wolfowitz episode of the past weeks has been "an extremely difficult and painful time" and called on the everyone at the institution to "begin the necessary rebuilding phase." The goal is to make the bank stronger and more effective, the senior managers said.

The senior managers plan to meet twice a week until Wolfowitz’s June 30 departure to take care of bank business, said bank spokesman Marwan Muasher.

Wolfowitz, in a letter to the bank’s board on Friday, said he would leave the day-to-day operations and other policies and personnel matters to other bank officials in his remaining time at the bank.

By tradition, the World Bank has been run by an American, and the U.S., the bank’s biggest financial contributor, wants to keep that practice intact. But it’s not a rule, and the United States could pick someone who is not an American to lead the institution.

Outgoing British Prime Minister Tony Blair has been mentioned as a possibility. So have Ashraf Ghani, former Afghan finance minister, who also once worked at the World Bank; Ngozi OkonjoIweala, former Nigerian finance minister and former bank official; and South African Finance Minister Trevor Manuel.

Other names mentioned for the post include: former Deputy Secretary of State Robert Zoellick, who was Bush’s former trade chief; Robert Kimmitt, No. 2 at the Treasury Department; Stanley Fischer, who once worked at the International Monetary Fund and is now with the Bank of Israel; former Federal Reserve Chairman Paul Volcker; former Rep. Jim Leach, R-Iowa; and Sen. Richard Lugar, R-Ind.

Paulson’s name also has been floated.

Bush’s selection must be approved by the World Bank’s board. An announcement, however, was not imminent, meaning it would not come within the next several days, Fratto said.

Some aid groups and other critics say the decades-old practice of the United States selecting the World Bank chief and Europeans picking the head of the International Monetary Fund should be scrapped.

Bush talked to Wolfowitz by telephone on Friday _ one day after he and the bank’s board announced his resignation, a White House official said. The president told Wolfowitz that he regretted the situation and that he appreciated Wolfowitz’s anti-poverty work in Africa and his anti-corruption crusade, the official said.


Chief News Editor: Sol Jose Vanzi

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