PE2 wants nationality restrictions relaxed for incentives under EE&C bill

HOUSE OF REPRESENTATIVES, QUEZON CITY, 2 May 2018 — The Philippine Energy Efficiency Alliance (PE2) issued today a policy position letter to the Committee on Ways and Means (CWM) of the House of Representatives, seeking modified language in Section 20 of the Energy Efficiency and Conservation (EE&C) bill that would relax ownership nationality restrictions for project developers and owners applying for fiscal incentives under E.O. 226, otherwise known as the Omnibus Investment Code of 1987.

In the PE2 letter dated 27 April 2018 and addressed to CWM Chairman Dakila Carlo Enriquez Cua, PE2 said that its continuous review of the EE&C bill reveals that there is a huge disconnect between what the present constitution and policy framework currently allow in terms of Filipino and foreign ownership of energy efficiency projects and what E.O. 226 qualifies as eligible registrant in terms of ownership nationality.

PE2 stated: “Unlike ‘public utility’ projects which the present constitution and policy framework still require sixty percent (60%) ownership by Philippine nationals, energy efficiency projects, generally, have no ownership nationality restrictions. This means that energy efficiency projects, especially because they are not public utilities, can be owned by either Philippine or foreign nationals by up to 100% in terms of capital ownership control, voting rights or Board composition, as the case requires.”

PE2 however declared that since 1987, E.O. 226, through its Article 32, limits applicants for Board of Investments (BOI) registration to entities that have at least sixty percent of shareholding or voting rights held by Filipino nationals.  Article 32 states: “…in case the applicant is a natural person, or in case of a partnership or any other association, it is organized under Philippine laws and that at least sixty percent (60%) of its capital is owned and controlled by citizens of the Philippines; or in case of a corporation or a cooperative, it is organized under Philippine laws and that at least sixty per cent (60%) of the capital stock outstanding and entitled to vote is owned and held by Philippine nationals as defined under Article 15 of this Code, and at least sixty per cent (60%) of the members of the Board of Directors are citizens of the Philippines.”

Through its latest position letter, PE2 recommended the following modified language for Section 20 on Fiscal Incentives of the EE&C bill:

“Sec. 20. Fiscal Incentives – As an exemption to the qualifications provided in Article 32 (1) of Executive Order No. 226, otherwise known as the “Omnibus Investment Code of 1987,” as amended, upon the certification by the DOE, Energy Efficiency Projects as defined in this Act shall be included in the annual investment priorities plan of the BOI, and the application for registration of a Filipino natural person or partnership or any other association, corporation, or cooperative organized under Philippine law, whether Filipino or up to 100% foreign-owned, which is an applicant for an Energy Efficiency Project shall be positively acted upon by the BOI. Upon registration, the Energy Efficiency Project shall be entitled to the incentives provided under Executive Order No. 226, as amended, or any other applicable laws.”

The Alliance also recommended the insertion of a repeal clause, similar to that already approved under Senate Bill no. 1531 by the Senate of the Philippines.

PE2 President Alexander Ablaza offered to serve as resource person during the upcoming second and third deliberations on Section 20 of the EE&C bill by the House Committee on Ways and Means.

PE2 copied the Senate Committee on Energy, the House Committee on Energy, the Department of Energy, the Board of Investments and other key staff of the House CWM with the position letter.

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The Philippine Energy Efficiency Alliance, Inc. (PE2) is a non-stock, non-profit organization of energy efficiency market stakeholders.

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PE2 Secretariat

  • Philippine Energy Efficiency Alliance, Inc. (PE2)
    19/F Philippine AXA Life Centre 
    Senator Gil Puyat Avenue 
    corner Tindalo Street 
    Makati City, Metro Manila 
    Philippines 1200
  • +63 2 759 6680 (ext 231)
  • secretariat@pe2.org
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