BoI mulls fiscal incentives to steel industry under IPP

By Ayen Infante

03/27/2008

The Board of Investments (BoI) may grant fiscal incentives to other manufacturing areas related to the steel industry under the 2008 Investment Priorities Plan (IPP) to encourage competition resulting in lower prices in domestic market.

According to a top government official who requested anonymity, during public hearings on the draft IPP, other agencies raised the possibility that steel projects might, after all, enjoy income tax holidays.

The incentives were also seen as part to invite more investors in the steel sector and support major infrastructure projects by the government, the official noted.

Under the draft 2008 IPP, the government limits the granting of fiscal incentives to modernization projects covering activities in hot-rolled coils and cold-rolled coils production integrated with iron and steel production facilities.

Projects which may be entitled to enjoy incentives are companies venturing in flat steel production including billets. But manufacturing of long steel products like rebars, which are considered further downstream, are not included in the IPP.

BoI has included new rolling mills in the new IPP to encourage new players in the steel industry.

Currently, the BoI is studying how to apply the proposed scheme to ensure that prices of rebars would remain competitive amid the expected increase in demand this coming construction season.

It was noted that prices of steel products are up in the world market was due to the boom of the construction activities in China and India.

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