The inter-agency Fiscal Incentives Review Board (FIRB) has approved the grant of tax incentives to a P10-billion cement manufacturing project of San Miguel Equity Investments, Inc., the Department of Finance (DOF) announced.
In a statement, the DOF said on Monday, Jan. 17, that the FIRB, upon the recommendation of the Board of Investments, approved the tax incentives for a proposed P10-billion project of the Oro Cemento Industries Corp. in Davao del Sur.
Oro Cemento, now named Southern Concrete Industries Inc., is a wholly-owned subsidiary of San Miguel Equity Investments, which in turn is 100 percent owned by the diversified conglomerate San Miguel Corp.
“The project is estimated to produce around 50.4 million cement bags per year to help meet the growing infrastructure requirements in Mindanao,” the DOF said.
According to the DOF, the grant of tax perks was passed by unanimous vote of the FIRB board chaired by Finance Secretary Carlos G. Dominguez III
The cement manufacturing project was granted a two-year income tax holiday, followed by five years of enhanced deductions, and duty exemption on importations of capital equipment, raw materials, spare parts, or accessories for the project.
The project is set to start commercial operations in July this year in Sta. Cruz, Davao del Sur.
Trade Secretary and FIRB Co-chair Ramon Lopez said that approving the grant of incentives will “help achieve the country’s goal of reducing dependence on cement imports and stabilizing the price and supply of the product.”
In deciding on the application, the FIRB took into consideration the costs and benefits of granting incentives to the project, the DOF said.
Finance Assistant Secretary and FIRB Secretariat Head Juvy Danofrata said that the projected direct and indirect benefits from the project outweighs its projected costs, which include the foregone revenues from the tax incentives.
The project is expected to stimulate forward linkages, promote the use of energy-efficient equipment that can lead to a transfer of knowledge and improvement in productivity, especially in the underdeveloped area where the project is located.