The House Committee on Ways and Means has approved the tax provision of the substitute bill allowing the construction of a domestic and international airport in Bulacan by top conglomerate San Miguel Corp. (SMC).

Panel chairman Albay Rep. Joey Salceda carried the motion to approve the tax provision of the measure after the participating House members in the virtual hearing voted 25-2 (yes-no).

With this, the measure, originally designated as House Bill (HB) No. 7241 with the title, "An Act granting San Miguel Corp. a franchise to construct, develop, establish, operate, and maintain a domestic and international airport in Bulakan, Bulacan," is now up for plenary consideration.

DUMPER PTDA party-list Rep. Claudine Diana Bautista and Bulacan Rep. Jose Antonio Sy-Alvarado penned the bill which earlier hurdled the Committee on Legislative Franchises.

Palawan Rep. Franz Alvarez, Legislative Franchises panel chair, presented the substitute bill to Salceda's committee.

Egdar Dona of SMC Infrastructure said the Ramon S. Ang-led company will invest P735 billion for the construction of the proposed "New Manila International Airport," which will cover an area of 2,500 hectares. It will be capable of having up to six runways and accommodating 100 million passengers annually, based on pre-COVID projections.

SMC head of government relations and public relations lawyer Melissa Encanto-Tagarda underscored before the Ways and Means panel the importance of the big-ticket project once the country has conquered COVID-19.

"I would just like to emphasize that the Philippines needs this airport to increase the investments and visitors, post-COVID especially. We need investors, we need to revitalize the economy. It's been proven that there is at least seven times trickle down effect for infrastructure projects. So if we put in P750 billion for example in this airport project, at least seven times po 'yung benefit (to the government)," she said.

Salceda described the airport, which has a construction period of 10 years, as "probably the biggest single-item investment" in the country’s history. "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.

"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," he said.

“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,” Salceda added, referring to the profit-sharing agreement in the franchise, where, above a 12 percent profit margin, SMC’s subsidiary in charge of operating the airport will share half of its profits to the government, and all profits above 14 percent.

The Bicolano said it is critical for all other income derived outside airport operations should be taxed regularly. “There will be hotels and restaurants in the surrounding ‘Airport City,’ so we want to make sure that the franchise’s tax privileges only extend to the airport operations,” he explained.