House panel OKs franchise to build Bulacan international airport
THE House of Representatives’ ways and means committee has approved a draft substitute bill granting a franchise to the leading conglomerate San Miguel Corporation’s (SMC) to construct, develop, operate, and maintain an international airport in Bulacan.
The airport, which will be built in the coastal areas of Bulakan, Bulacan, will be named “New Manila International Airport.”
The bill, which was approved by the Committee on Legislative Franchises, was discussed and approved under the Ways and Means Committee for its significant tax implications.
According to tax panel Chairman Joey Salceda, the project, on its own, would be beneficial to the country through the P740-billion infrastructure investment that would entirely come from the private sector.
“That’s 4 percent of GDP (Gross Domestic Product). In return, we are being asked to provide some tax concessions. By tempering the tax provisions, we made sure that the Filipino people will get even more economic benefits for less taxpayer cost,” he said.
Salceda added that “by making the tax provisions fairer, we are making sure that the public gets more returns from this project.”
The economist-lawmaker stressed the need for stronger guarantees of returns for the public. He cited the the profit-sharing agreement in the franchise, wherein the SMC’s subsidiary in charge of operating the airport, would share half of its profits to the government above a 12 percent margin and all profits above 14 percent.
“The Bulacan airport project will make a lot of money. Anything beyond the 12 percent rate of return will be subject to 50-50 sharing,” he said.
Salceda added that it is critical that “all other income derived outside airport operations should be taxed regularly.”
As hotels and restaurants are also expected to be built around the airport, Salceda said he wants to make sure that the franchise’s tax privileges only extend to the airport operations.
During the hearing, the Private Public Partnership (PPP) Center assured the committee that the government will not have financial obligations to SMC.
“Walang ibabayad ang gobyerno (The government will not pay for anything),” PPP Center Chairman Ferdinand Pecson said.
Salceda said the committee made sure that the final version of the bill would be more financially and economically beneficial to the Filipino people.
“This is probably the biggest single-item investment in the country’s history. San Miguel is a Filipino company that has kept nearly all of its money here, to develop this country. They are doubling down on their commitment to Philippine development with this investment. I want the airport to happen on fair and equitable terms. That is why I worked with the leadership and my colleagues to come up with fairer tax provisions for the franchise. I am proud to have pushed for fairer tax benefits and an attractive profit-sharing scheme for the country. But, bottomline, I want the airport to happen,” he said.
Salceda also promised the Committee on Legislative Franchises that the committee will look into the social impact on the communities directly affected by the project; the estimated foregone revenues due to the tax exemptions to be granted under the measure; the projected employment generation; and the determination of the ‘competent authority’ that will decide when the tax exemptions for the grantee will expire.
Source: TheManila Times
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