Proposed pioneer incentives for Php65 billion worth of liquefied natural gas (LNG) import terminal projects under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Bill are currently being deliberated in Congress.
Sen. Sherwin Gatchalian pointed out at last week’s Philippine Energy Transition Forum that energy was placed as a priority industry in the bill, which means that LNG projects can be entitled to tax incentives.
The Department of Energy (DOE) has greenlighted four companies to proceed with the construction of their respective LNG terminal projects, namely Lopez-owned First Gen Corporation, Excelerate Energy L.P., Batangas Clean Energy, and Energy World Corporation.
First Gen is set to begin construction of its facility this March with initial investment costing Php13.3 billion, based on DOE figures. Texas-based Excelerate will be building the country’s first open access LNG import terminal, with the installation of its floating storage regasification unit worth Php6.39 billion.
Batangas Clean Energy — a joint venture of tycoon Lucio Tan and another American firm Gen X Energy — eyes selling electricity to customers of the Manila Electric Company (MERALCO) through its proposed Php37.6 billion onshore facility. Meanwhile, Energy World’s investment costs Php7.41 billion.
Gatchalian, chairman of the Senate Committee on Energy, noted that Congress is pushing for LNG facilities and other major energy projects to be treated “priority investments,” so they can avail of pioneer tax incentives upon appraisal by the Fiscal Incentives Review Board (FIRB) to be led by the Department of Finance.
Once the power ventures are tagged as priority and highly desirable projects, they may also be entitled to income tax holiday on pioneer status that may be granted by the Pres. Rodrigo Duterte, based on the FIRB’s recommendation.