FIRB approves tax perks for P29-B projects

Published August 3, 2021, 2:18 PM

by Chino S. Leyco

The Fiscal Incentives Review Board (FIRB) has approved the grant of tax incentives for a mass housing project and two cement manufacturing plants all located outside Metro Manila.

Chaired by Finance Secretary Carlos G. Dominguez III, the FIRB during its third meeting last August 2 approved the tax incentives for a mass housing project in Iloilo as well as proposed cement plants in Pampanga and Batangas worth P29.4 billion combined.

Breaking down, the mass housing project has an estimated investment value of P1.4 billion, while the proposed cement plants in Porac, Pampanga, and Calatagan, Batangas will cost around P3.1 billion and P24.9 billion, respectively.

The FIRB approved the grant of a four-year income tax holiday (ITH) plus duty exemptions on importations of capital equipment and raw materials to the Iloilo housing project.

Meanwhile, the Pampanga cement plant was given a two-year ITH, five years of enhanced deductions and duty-free exemptions on importations.

Lastly, the Batangas cement plant, which will include the installation of clinkering facilities, was granted a six-year ITH, along with five-years of enhanced deductions and duty exemptions on importations.

Socioeconomic Planning Secretary Karl Kendrick Chua underscored the importance of introducing new technologies in cement manufacturing to lower costs and increase the competitiveness of local production when the Board approved these two projects.

Trade and Industry Secretary Ramon Lopez said the grant of tax incentives to the Iloilo project encourages the private sector to help the government fill the gap in affordable or low-cost housing for Filipinos.

Finance Assistant Secretary and FIRB Secretariat Head Juvy Danofrata said the Iloilo project covers over 3,000 units classified as “economic” and “low-cost” housing.

The project is also intended to address one-percent of the housing backlog in Western Visayas, based on data from the Philippine Statistics Authority, she added.

Citing estimates from the Board of Investments (BOI), Danofrata said the proposed cement manufacturing plant in Pampanga is expected to save the country P866 million annually in import expenses.

Moreover, the northern cement facility would help fill the cement needs of the infrastructure sector by producing the material locally using new cost-effective technologies, Danofrata said.

“The projected net benefits of the investment are driven by the locally sourced capital equipment and raw materials as well as the income taxes that the government will potentially collect from the estimated job creation of the project,” Danofrata said.

The Pampanga project is expected to expand the proponent’s existing production line of 687,473 metric tons of cement per year by another 898,560 metric tons.

The two-phase project proposed in Batangas would entail higher project costs because it would start from the production of clinkers, which are the most expensive aspect of cement manufacturing, according to Trade Undersecretary Ceferino Rodolfo.

Citing BOI figures, Danofrata said the project’s two phases will be capable of producing a combined total of 2.5 million metric tons of cement per year.

Lopez said the approval of the cement manufacturing projects will help “lessen the country’s import dependence, increase our local capacity, and encourage competitiveness in the industry.”