Which Investments Qualify for Tax Incentives Under the Philippines’ 2026–2028 SIPP?

Investments in activities covered by the Philippines’ 2026–2028 Strategic Investment Priority Plan (SIPP) may qualify for fiscal incentives under the CREATE MORE framework. The SIPP divides priority investments into Tier I, Tier II, and Tier III, with classification and location affecting the duration of available tax incentives.

Which investments qualify under Tier I?

Tier I covers industries addressing basic needs and sustainability, including agriculture, manufacturing, healthcare, infrastructure, and other priority activities.

Find Business Support

Planning an investment in the Philippines? Contact Dezan Shira & Associates to assess your SIPP eligibility

The 2026–2028 SIPP expands Tier I to activities such as modern agriculture, state-of-the-art construction, mobile healthcare, ecological zones, carbon capture, waste-to-value projects, and circular economy activities.

Cement manufacturing continues to be identified as a Tier I activity, although incentive treatment can differ according to the type of production facility.

Infrastructure and logistics activities can include qualifying transport, connectivity, construction, and logistics investments.

Tier I also covers priority activities in healthcare, energy, environmental services, and sustainability, including forest management for carbon credits.

Which investments qualify under Tier II and Tier III?

Tier II targets strategic activities that strengthen national resilience, food security, and Philippine industrial value chains.

The 2026–2028 SIPP includes defense services, desalination, electric vehicle infrastructure, sustainable aviation fuel, and critical-mineral processing among its Tier II priorities.

Tier III focuses on advanced science, technology, and innovation. Priority activities include artificial intelligence, quantum computing, cybersecurity, hydrogen and nuclear energy, and advanced research and development.

The SIPP also covers export-oriented activities and projects supported under certain special laws, alongside the priority activities identified across the three tiers.

What incentives can qualifying investments receive?

Registered projects can receive an Income Tax Holiday (ITH) of four to seven years, depending on the project’s tier and location.

For an export project in the National Capital Region, the ITH can run for four years under Tier I, five years under Tier II, and six years under Tier III. Projects in other qualifying locations can receive up to seven years.

After the ITH, a qualifying export enterprise can receive 10 years under either the 5 percent Special Corporate Income Tax (SCIT) regime or the Enhanced Deductions Regime (EDR).

Qualifying domestic-market enterprises can receive five years under the EDR after their ITH period.

Find Business Support

Make the most of available Philippine tax incentives with support from our investment specialists

Under CREATE MORE, registered business enterprises using the EDR are subject to a preferential 20 percent corporate income tax rate and can claim enhanced deductions for qualifying expenses. These include labor, research and development, training, domestic inputs, and power expenses, as well as additional depreciation allowances for buildings, machinery, and equipment.

Registered enterprises can also qualify for customs duty exemptions on eligible imports. VAT incentives can include VAT exemption on qualifying imports and VAT zero-rating on qualifying local purchases, subject to the applicable requirements.

How does a foreign investor obtain SIPP incentives?

A project must fall within an eligible SIPP activity and be registered with the appropriate Investment Promotion Agency (IPA). This can include the Board of Investments (BOI), Philippine Economic Zone Authority (PEZA), or another IPA responsible for the relevant economic zone or investment regime.

Incentives apply to the registered project or activity rather than automatically to all of the company’s Philippine operations.

Existing businesses can also register qualifying expansion projects where the new investment meets the applicable SIPP and IPA requirements.

Assess your Philippines investment with Dezan Shira & Associates

Dezan Shira & Associates assists foreign investors with SIPP eligibility, investment structuring, BOI and PEZA registration, tax incentives, and ongoing compliance in the Philippines. Investors can contact our professionals for support.

• Previous Article GEO Marketing Is Rising Across ASEAN
• Next Article How Are Dividends Paid to Foreign Shareholders Taxed in the Philippines?