Navigating the Strategic Investment Priority Plan (SIPP) Under CREATE
Understanding Sector Prioritization, Incentive Tiers, and Compliance Expectations for Investors
With the implementation of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, the Philippine government introduced the Strategic Investment Priority Plan (SIPP) to direct private capital toward sectors aligned with national development goals. For both local and foreign investors, understanding how to qualify and optimize incentives under the SIPP framework is now essential.
This article outlines the structure, benefits, and practical considerations of engaging with the SIPP. Particularly in the context of finance, tax compliance, and industry positioning.
A stylized mosaic of inclusive economic growth in the Philippines. Capturing the balance between urban expansion and countryside development under the SIPP framework.
Understanding the SIPP Structure
The SIPP categorizes activities into three tiers, each aligned with national policy directions:
Tier I
Activities that address basic needs, generate jobs, and expand value-added production.
Tier II
Activities that advance the digital economy, promote innovation, or improve industry competitiveness.
Tier III
Critical and emerging industries, including research-driven sectors, sustainable investments, and green technologies.
Investments aligned with these tiers may qualify for enhanced incentives, depending on location and impact.
Key Incentives Under the SIPP + CREATE
Businesses that qualify under SIPP and are registered with the Board of Investments (BOI) or Investment Promotion Agencies (IPAs) may access:
Income Tax Holiday (ITH)
Ranges from 4 to 7 years, depending on tier and location.
Special Corporate Income Tax (SCIT)
or Enhanced Deductions : Available post-ITH period.
Duty Exemptions
On importation of capital equipment, raw materials, and supplies.
VAT Exemptions
For select transactions linked to the registered activity.
Location-Based Incentive Strategy
A significant feature of the SIPP is the incentive differentiation based on location:
Projects Outside Metro Manila or in Less-Developed Areas
may receive longer ITH periods and greater flexibility under the CREATE law.
Aligns with the Government’s Goal
to encourage decentralized economic development
Tip: Investors can strategically choose project sites to maximize incentives and align with Tier II or Tier III classifications.
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Eligibility & Application Flow
To benefit from the SIPP, enterprises must:
Align
business activity with SIPP-listed sectors and tiers
Register
with BOI or relevant IPA with full documentation
Undergo Evaluation
to confirm the project’s impact, innovation, and location viability
Comply
with ongoing reporting and performance targets during the incentive period
Financial & Compliance Considerations
Engaging with SIPP entails both opportunity and obligation. Companies should ensure:
Accurate Financial Forecasting
Especially for tax holiday expiry and post-ITH scenarios
Readiness for BIR and COA
Audits linked to incentive use
Internal Controls
To track qualified activities vs non-registered operations
Timely & Accurate Reporting
To BOI/IPAs including cost-benefit compliance reports
Strategic Benefits for Enterprises
Understanding and leveraging the SIPP offers more than tax savings:
Positions Your Business
Within future-forward sectors supported by government policy
Improves Bankability
For project financing due to predictable incentive coverage
Increases access
To partnerships, local grants, and sectoral support
The Strategic Investment Priority Plan (SIPP) is a roadmap for how the country aims to build inclusive, innovation-led, and regionally balanced economic growth.
Exploring BOI registration or expanding outside Metro Manila?
