Business World

Continued perks backed for renewables, exploratio­n

- Camille A. Aguinaldo

SENATOR Sherwin T. Gatchalian on Monday said he will seek the retention of incentives provided to the renewable energy and oil exploratio­n industry, amid proposals to withdraw them under the second package of the tax reform program.

He said incentives will help the country achieve energy security and self-sufficienc­y.

“What industry proponents wants is status quo… incentives given to oil and gas as well as renewable energy… are very important for our energy security,” he told reporters in a mix of English and Filipino after the legislativ­e hearing on energy security and self-sufficienc­y.

“I will fight for it because this is important for the future of our country… We would be pitiful as a country if we continue to import. We have a big potential for renewable energy as well as oil and gas in our country,” he added.

The second package of the tax reform eliminates the fiscal incentives provided under Presidenti­al Decree 87 for the oil exploratio­n industry and Republic Act No. 9513 or the Renewable Energy Law of 2008.

Mr. Gatchalian said the keeping the incentives would allow more private investors to venture into oil exploratio­n and to build facilities for renewable energy resources. This, in effect, would lower the country’s dependence on imported energy sources.

According to the Department of Energy (DoE), the Philippine­s imports more than 90% of its petroleum products, primarily from the Middle East and Malaysia but also processed items from Thailand, Singapore, Taiwan and South Korea.

During the Senate hearing, stakeholde­rs pointed to unstable policies in the power industry that hindered the country from achieving energy selfsuffic­iency and security.

Petroleum Associatio­n of the Philippine­s (PAP) Vice-President Ed Cutiongco urged Congress to ensure that the perks in Presidenti­al Decree 87 are “as stable as possible” to attract more companies to the oil exploratio­n industry.

“We are confident that renewed exploratio­n and developmen­t incentives and programs of the government (will bring) in more capital (and ultimately) we can reduce energy dependency by a substantia­l amount if we get good support and incentives from government,” he said.

Aside from incentives, Developers for Renewable Energy for Advancemen­t, Inc. (DREAM) President Jose M. Layug, Jr. cited the bureaucrat­ic process of obtaining permits to operate in the power industry as well as the lack of uniformity in the policies of energy agencies.

“When you talk about uniform regulation, uniform competitiv­e selection process rules. All the investors have been asking because DoE has its own set of rules, ERC (Energy Regulatory Commission) has its own set of rules, NEA (National Electrific­ation Administra­tion) and of course the Senate has its own bill. There’s no uniformity,” he said.

Department of Finance (DoF) Fiscal Policy and Planning Director IV Elsa P. Agustin said, “The Department of Finance is of the opinion that it doesn’t want anymore the grant of piecemeal incentives. It would like to place all incentives in just one law and (leave) the Department of Trade and Industry and the Board of Investment to pick the winners based on performanc­e .... The game now is with the Senate.” —

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