BOI, DOF and PE2 seek common ground on EE incentives in Senate COE-led pre-Bicam talks

  • Senate Committee on Energy (COE) secretariat, BOI, DOF and PE2 meet on 10 January 2019 to help the Senate COE reconcile fiscal incentive provisions of the Senate and House versions of the Energy Efficiency and Conservation bill. Seated counter-clockwise from right foreground: Juvy C. Danofrata (DOF), Theresa Acedillo-Lapuz (PE2), Ruth Yu-Owen (PE2), Nestor P. Arcansalin (BOI), Dexter S. Pajarillo (BOI), Alexander Ablaza (PE2), Senator Sherwin T. Gatchalian, Peter Paul E. Taton (COE), Ivan Mark C. Galura (CO
    Senate Committee on Energy (COE) secretariat, BOI, DOF and PE2 meet on 10 January 2019 to help the Senate COE reconcile fiscal incentive provisions of the Senate and House versions of the Energy Efficiency and Conservation bill. Seated counter-clockwise from right foreground: Juvy C. Danofrata (DOF), Theresa Acedillo-Lapuz (PE2), Ruth Yu-Owen (PE2), Nestor P. Arcansalin (BOI), Dexter S. Pajarillo (BOI), Alexander Ablaza (PE2), Senator Sherwin T. Gatchalian, Peter Paul E. Taton (COE), Ivan Mark C. Galura (COE), Teresa Ira Maris P. Guanzon (COE), and Paul Heherson Balite (COE). (PE2 photo by Luigi Eusebio)

SENATE OF THE PHILIPPINES, Pasay City, 10 January 2019 – The Senate Committee on Energy (COE) secretariat, the Philippine Energy Efficiency Alliance (PE2), the Board of Investments (BOI) and the Department of Finance (DOF) met earlier today to help the Senate COE reconcile the sections on fiscal incentives of the Energy Efficiency and Conservation (EE&C) bill in preparation for the scheduled Bicameral Conference Committee meeting for the said policy measure. The Senate version of the fiscal incentives section is brief and largely anchored on E.O. 226 or the Omnibus Investment Code of the Philippines, while the House version drops reference to E.O. 226 and enumerates specific types of tax-based fiscal incentives to be made available to both local and foreign investors for at least 15 years from the passage of the EE&C law.

The Senate COE and DOF preferred the Senate version of the fiscal incentives provision. DOF sought an incentive package that would be aligned under the incentive rationalization framework of the pending TRABAHO or TRAIN Package 2 bill. In an aggressive bid to attract long-term equity capital from both foreign and local investors, the Senate COE and PE2 were however commonly pushing for a review-free 15-year inclusion of energy efficiency in the investment priorities plan and the exemption of energy efficiency projects from Section 32(1) of E.O. 226, which still requires a minimum 60% ownership by Filipino nationals. PE2 also emphasized that long-term investors will need to hurdle 15% after-tax IRRs for a portfolio of projects, which is determined by prevailing investor comfort in mitigating country market risk across most of ASEAN markets, with the exception of Singapore. For this reason, PE2 said that a responsive incentive package will be needed to catalyze investments towards a new asset class. BOI stated that it had the flexibility of accommodating either the Senate or House versions of the fiscal incentives section, but sought additional resources under the pending bill to enable the agency to respond to the project registration and monitoring needs of this new market.

PE2 expressed support for the Senate COE’s proposal to include a new section that seeks innovative procurement and contracting mechanisms for energy efficiency projects in the public sector. The Alliance said that new language in the EE&C bill that would classify energy efficiency as infrastructure would certainly ease the process of designing public-private partnerships or similar transactions that would effectively mobilize private capital for public services or infrastructure development.

Senator Sherwin T. Gatchalian, COE director Teresa Ira Maris P. Guanzon, COE deputy director Ivan Mark C. Galura, COE legal officer Paul Heherson Balite and COE policy research associate Peter Paul E. Taton represented the Senate COE secretariat. PE2 president Alexander Ablaza, vice president for external affairs Ruth Yu-Owen, treasurer Theresa Acedillo-Lapuz, and member services and communications manager Luigi G. Eusebio represented the Alliance. BOI was represented by Resource-based Industries Service Director Nestor P. Arcansalin and energy investment specialist Dexter S. Pajarillo. Director Juvy C. Danofrata of the Domestic Finance Group represented the DOF.

The outputs of this meeting will be used by the Senate COE as it coordinates with its House counterparts in preparation for the Bicameral Conference Committee meeting for the EE&C bills.

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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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  • Philippine Energy Efficiency Alliance, Inc. (PE2)
    19/F Philippine AXA Life Centre 
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    Philippines 1200
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