The Board of Investments (BOI) is enhancing incentives for registered projects that generate their own electricity by establishing dedicated renewable energy (RE) facilities.
Trade Undersecretary and BOI Managing Head Ceferino Rodolfo conveyed during a virtual briefing on Thursday that Memorandum Circular (MC) 2023-006, enacted on October 16, has revised the guidelines governing incentives for energy efficiency and conservation (EE&C) projects listed in the 2022 Strategic Investment Priority Plan (SIPP) under special laws.
Rodolfo highlighted that the modifications to BOI MC 2022-008 align with President Ferdinand R. Marcos Jr.’s commitment, made during his visit to Tokyo in February, to support Japanese firms and other investors in the Philippines undertaking the construction of their renewable energy facilities to fulfill their electricity requirements.
The latest MC outlines that self-financed energy efficiency projects (EEP) are eligible for the income tax holiday (ITH) incentive and duty exemption on imported capital equipment, raw materials, and spare parts or accessories.
“The ITH incentive shall be limited to the prescribed ITH entitlement period under the CREATE (Corporate Recovery and Tax Incentives for Enterprises) Act or until the recovery of 50 percent of its capital investment, excluding the cost of land and working capital of the registered EEP, whichever comes first,” stated the MC.
In a notable development, MinebeaMitsumi, Inc., a Japanese manufacturer of mechanical components and electronic devices, recently inaugurated its self-owned solar power system at its Danao City, Cebu factory. MinebeaMitsumi President and CEO Tatsuya Mori, in the same online briefing, expressed the company’s satisfaction in being the initial beneficiary of these incentives for its solar power project in Danao, involving an investment of approximately PHP500 million and boasting a capacity of 7.9 megawatt hours (MWh).
During the briefing, Sharp Energy Solutions Corporation (SESJ), the provider of the solar power system, disclosed that the solar farm is projected to generate around 12,806 MWh of clean energy annually, marking it as the largest self-financed renewables project for internal consumption among Japanese companies in the Philippines. SESJ further emphasized that this translates to an annual reduction of approximately 6,833 tons of carbon dioxide emissions.
Caesar Augusto, the director of MinebeaMitsumi Cebu Plant, affirmed that the energy generated from their renewables will cover 8 percent of the factory’s total electricity consumption. Mori also outlined the company’s plan to replicate the initiative in its two Luzon-based factories, potentially adopting rooftop solar farms.
Facilitating the Clean Energy Transition
Rodolfo urged registered BOI firms to capitalize on the updated incentives outlined in the new MC, emphasizing the nation’s commitment to transitioning towards clean energy. He stated, “The shift towards RE has been imperative,” underscoring the Marcos administration’s dedication to formulating policies, executing projects, and advocating for incentives that prioritize sustainability.
Is Assistance Available?
Yes. If you’d like your registered business in the Philippines to take advantage of these incentives, contact us through any of the following channels: