BAGUIO CITY – Major tax incentives can be granted by the Board of Investments (BOI) to vegetable processors in the region provided an industry roadmap is completed by the stakeholders. These tax incentives include income tax holidays, exemption from taxes and duties on imported equipment, tax credits and additional deductions from taxable income.
Aside from these fiscal incentives, the BOI can also provide non-fiscal incentives such as the assignment of foreign experts / consultants and streamlining of administrative processes related to the industry.
Francis M. Peñaflor of the BOI has underscored the importance of crafting a processed vegetable industry roadmap which is seen to benefit the agri-business sector of the Cordillera Administrative Region (CAR). He encouraged regional leaders to help the BOI and the Department of Trade and Industry (DTI) in crafting a processed vegetable roadmap which will enable the BOI to better support vegetable processors in the region.
The BOI representative said that regional line agencies have identified the processed food and vegetable industry as one of the major industries in the region. Aside from being the top producer of quality high-value semi-temperate crops, the Cordillera is also home to several support facilities which includes the Benguet Agri-Pinoy Trading Center, several food terminals and post-harvest facilities of the Department of Agriculture. These, according to Peñaflor, makes it but natural for regional leaders to support the vegetable processing industry.
Peñaflor, who is the BOI focal person for the country’s food processing industry, was in the city to talk about the industry in a forum organized by the Cordillera office of the DTI held last Thursday at the Baguio Country Club.
“There is a significant number of vegetable processors in CAR which we can support” Peñaflor said in his talk. He further added that “CAR is a very ideal location for the establishment of vegetable processing facilities,” which he said will also help vegetable farmers who provide the raw materials required by the industry.
He noted that there is still no national sectoral roadmap for vegetable processing and he encouraged local vegetable processors to approach the DTI or BOI so that initial plans can be made towards crafting the roadmap. According to the data from the DTI and BOI, there are only seven food processing industries that have complete or ongoing roadmaps.
Peñaflor is adamant in pushing for a vegetable processing roadmap because of the economic potential of the industry which can help improve inclusive growth in the countryside.
He noted that of the more than 12,000 manufacturers in the country only 195 are into vegetable food processing and yet it is able to employ 30,000 people and has contributed P18.95 billion in the country’s GDP. Most of these 195 vegetable processors are large export-oriented corporations. However, there are also many small processors in the region particularly in Benguet, where most of the processors produce ‘veggie noodles’.
“When you compare this to the other sectors of the processed food industry, the contribution is not that significant. But there’s a lot of room for developing this industry,” he said.
Processed vegetables include glazed/crystalized vegetables, dried vegetables, chilled/frozen vegetables, and prepared/preserved vegetables.
The BOI website states that these sectoral roadmaps will serve as inputs to the development of a more strategic investment promotions plan, ensure rational and focused promotional activities, provide policy coherence, build capacity of government and industry associations, and support long-term sustainable inclusive growth with quality jobs.
The DTI and BOI launched the Industry Roadmapping Project in January 2012. The project aims to forge strategic partnership with industry stakeholders, particularly the private sector, in the development of industry roadmaps.