The Senate approved on second reading Monday the bill that would allow the construction and operation of the new Manila International Airport.
Senators finished late Monday night their debates on the House Bill No. 7507, which would grant a 50-year franchise to San Miguel Aerocity Inc., a San Miguel Corporation subsidiary, "to construct, develop, establish, operate and maintain" a 2,600-hectare domestic and international airport and an adjacent "airport city" in Barangays Taliptip and Bambang in Bulakan, Bulacan.
The SMC had committed to take on the $15-billion (P700 billion) development project at no cost to the government.
Under the bill, the construction of the airport shall begin within a year of the franchise grant and shall be completed in 10 years. After the 50-year validity of the franchise, the airport will be turned over to the government.
During its 10-year construction period, San Miguel Aerocity will be exempt from all direct and indirect taxes and fees.
For the remaining 40 years of its franchise, it shall be exempt only from income and property taxes until it has recovered its investment cost. After which, it shall be subjected to all taxes.
The bill also provides that any amount in excess of the airport developer's 12-percent profit margin shall be remitted to the government.
During their debates on the measure, Senator Grace Poe, chairperson of the Senate public services committee and sponsor of the franchise bill, expressed confidence that the economic benefits and income that will be generated from the airport project will make up for the possible foregone revenues due to the tax incentives to be given to San Miguel Aerocity.
"I believe, the majority of this body believe that the income generated from this will be able to compensate for whatever incentives and taxes will be given," Poe said when asked about the Department of Finance's reservation on the franchise.
"I believe this is a good thing to do, that we allow them some sort of incentives so that in return, they can provide more jobs and eventually decongest also our airports and our roads," she added.
Meanwhile, she echoed the SMC's assurance to respond to the needs of communities that will be affected and displaced by the construction of the airport.
Poe said SMC expects to earn at least P50 billion from the first 10 years of the airport's operations.
Senators have been supportive of the airport project which expect to help decongest the Ninoy Aquino International Airport and create job opportunities and spur tourism in the country.
Senate President Vicente Sotto III said that the project has long been a plan of late SMC chairman and chief executive officer Eduardo "Danding" Cojuangco.
The chamber is expected to approve the House bill on third and final reading on Thursday, October 8, and ratify it before Congress goes on a month long suspension on October 14.