PRESIDENT Duterte has signed into law a measure that will encourage energy-efficient projects by providing 10-year fiscal incentives.
Prior to passing the law, the Philippines was the only Southeast Asian country which does not have a law encouraging efficient utilization of energy while providing tax incentives.
The new law signed on April 12 is aimed at institutionalizing energy efficiency and conservation practices and enhancing the efficient use of energy.
The law mandates the creation of a National Energy Efficiency and Conservation Plan that defines national targets, details feasible strategies and imposes a regular monitoring and evaluation system.
A National Energy Efficiency and Conservation Database will also be developed and maintained. This is where relevant information about energy consumption as well as the application of energy-efficient and renewable technologies shall be stored.
The measure also enables the creation of an Inter-Agency Energy Efficiency and Conservation Committee tasked to provide strategic direction in the implementation of the Government Energy Management Program, and aimed to reduce monthly consumption of electricity and petroleum products by the government.
Under Republic Act 11285, energy-efficient projects shall be included in the investments priorities plan of the Board of Investments (BOI), and “shall be entitled to the incentives provided under Executives Order No. 226 or the Omnibus Investment Code of 1987 as amended, any other applicable laws for 10 years from effectivity of the Act.”
After that period, the inclusion of energy efficiency projects in the annual investment priorities plan shall be reviewed and may be extended by the BOI.
Fiscal incentives can include an income tax holiday, among others.
The energy-efficient projects shall also be exempt from Article 32 (1) of the Executive Order No. 226 or the requirement that the applicant for registration of enterprises must be a Philippine citizen, or in case of a partnership, association or corporation or cooperative, it is organized under the Philippine laws and that its capital is at least 60 percent Filipino owned and controlled.
Aside from fiscal incentives, establishments that will implement or are implementing energy efficiency projects shall also be entitled to non-fiscal incentives such as provision of awards and recognition for best practices and technical assistance from government agencies in the development and promotion of energy-efficient technologies.
They are also entitled to financial assistance like concessional financial packages for the development, utilization and commercialization of renewable energy and energy efficiency projects as endorsed by the Department of Energy.