PE2 asks Congress to decouple EE&C and TRABAHO bills

  • Senate Committee on Energy Chairman Sherwin T. Gatchalian presenting the EE&C bill during a recent PE2 general membership meeting (Photo: PE2)
    Senate Committee on Energy Chairman Sherwin T. Gatchalian presenting the EE&C bill during a recent PE2 general membership meeting (Photo: PE2)
  • House Committee on Energy, led by Rep. Lord Allan Jay Q. Velasco (center, with red tie) meets PE2 and joint foreign chambers on 18 September 2018 to identify the energy bills, which include the EE&C bill, expected to be passed by the 17th Congress. (Photo: PE2)
    House Committee on Energy, led by Rep. Lord Allan Jay Q. Velasco (center, with red tie) meets PE2 and joint foreign chambers on 18 September 2018 to identify the energy bills, which include the EE&C bill, expected to be passed by the 17th Congress. (Photo: PE2)

MAKATI CITY – 6 December 2018. The Philippine Energy Efficiency Alliance (PE2) formally requested the 17th Congress today, through two separate letters to relevant standing committees in both chambers, to decouple the fiscal incentives provision of the pending Energy Efficiency and Conservation (EE&C) bill from that of the Tax Reform for Attracting Better and Higher- Quality Opportunities (TRABAHO, fka TRAIN Package 2) bill. 

In a PE2 letter to the Senate and House Committees on Energy dated 6 December 2018, the Alliance explained that when the House Committee on Energy adopted modified language for Section 20 on Fiscal Incentives of the EE&C bill on 13 August 2018, the fundamental assumption at that point in time was that the TRABAHO bill (HB 8083 and SBN 1906) would be passed into law ahead of the EE&C bill. For this reason, there was a need then to remove reference to EO 226 and anchor some language on features of the anticipated TRABAHO law. Now that the EE&C bills are now both approved on 3rd and final reading by both the Senate and the House of Representatives, PE2 believes that the Bi-cameral Conference created for the EE&C bill under the 17th Congress may need to cause minor adjustments in Section 20 to ensure that provision on fiscal incentives are enforceable, regardless of the timing of the passage of the TRABAHO bill.

PE2 president Alexander Ablaza explained, “We will need to make sure that fiscal incentive provision of the EE&C bill would work, regardless of which between the EE&C and TRABAHO bills would be passed ahead. We can achieve this by ensuring that neither the existing law EO 226, nor the proposed creations of the TRABAHO bill, are referred to in the EE&C bill.”

On the same date, PE2 also sent a letter to the Senate Committee on Ways & Means, recommending that the TRABAHO bill include additional explicit language which clearly excludes energy efficiency and conservation in the scope of rationalization and standardization of fiscal incentives. Such exclusion would allow the minimum 15-year availability of six-year income tax holiday, zero-rate value added tax and tax/duty-free importation of capital equipment to energy efficiency project proponents, whether Filipino or foreign-owned, as provided for under the pending EE&C bill, to give the economy the unimpeded opportunity to mobilize adequate third-party capital toward EE&C projects on the 22-year pathway toward the 2040 roadmap targets. PE2 forwarded its position to the Senate Committee on Ways & Means in case the latter decides to resume deliberations on the TRABAHO bill.

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

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R.A. 11285 - An Act Institutionalizing Energy Efficiency and Conservation, Enhancing the Efficient Use of Energy, and Granting Incentives to Energy Efficiency and Conservation Projects

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