Senator Grace Poe said on Tuesday that the government stands to lose nothing on the planned construction of the new Manila International Airport (MIA).
Poe made the assurance as the Senate approved on third and final reading on Monday House Bill No. 7507, which seeks to grant a 50-year franchise to San Miguel Corporation (SMC) subsidiary, San Miguel Aerocity, Inc., for the construction of the 2,500-hectare domestic and international airport and an adjacent "airport city" in Bulakan, Bulacan.
The chairperson of the Senate public services said San Miguel will be spending as much as P1.5 trillion into the Bulacan airport project, P734 billion of which will be for the construction of the airport.
"There are no government guarantees here. What they are promising is, any amount in excess of the 12-percent rate of return will go to the government. If they do not make the 12 percent, they will still be responsible for the airport even if they have to operate at a loss,” Poe, who sponsored the franchise bill, said in a statement.
She added that if San Miguel loses money from the Bulacan airport project, the government is not obliged to give it funding.
"There is no provision here whatsoever that says the government will step in to bail them out,” she said.
The SMC had earlier committed to build the new MIA at no cost to the government.
The proposed franchise grants San Miguel Aerocity an exemption from all direct and indirect taxes and fees for the 10 years that it is under construction, including exemption from permit fees collected by local and national government agencies.
The firm, however, will be required to submit an annual report to Congress. This report will be a prerequisite for any of its applications for permits and certificates from the Civil Aviation Authority of the Philippines.
Failure to submit the annual report on or before April 30 of every year will be penalized with a fine of P1 million for every working day that it is not submitted.
Under the franchise, the tax exemptions for the proposed Bulacan airport will take effect until the Bureau of Internal Revenue (BIR) determines that San Miguel Aerocity has recovered its investment in the development.
San Miguel Aerocity will then be subjected to all taxes under the National Internal Revenue Code of 1997 and the amended Customs Modernization and Tariff Act.
And once investments have been recovered, San Miguel will be allowed to earn an internal rate of return of 12 percent per annum, with anything in excess to be remitted to the national government. The internal rate of return shall be computed within three months after the BIR’s determination that the investments have been recouped.
San Miguel will also be required to sell at least 20 percent of San Miguel Aerocity in the stock market within five years after the BIR’s determination.
Poe had said that the airport project will provide 450,000 during the construction phase and is expected to create up to a million upon its completion.
She also said that San Miguel has spent P98 million to compensate 364 residents with P100,000 each for them to build concrete houses and P250,000 in cash plus additional aid of P3,000 to P20,000.
House Bill No. 7507 will be deliberated upon by lawmakers in the bicameral conference committee before its ratification in both house of Congress and enrollment for President Duterte's signature.