MANILA, Philippines — The Senate on Monday approved on second reading a measure granting a 50-year franchise to a subsidiary of San Miguel Corp. (SMC), which seeks to construct a new airport in Bulacan.
Senators approved on second reading the franchise bill of San Miguel Aerocity Inc., allowing it to build and operate a domestic and international airport seen to decongest Ninoy Aquino International Airport (NAIA), the country’s main gateway.
Once the franchise bill is enacted, the airport’s construction will commence within a year and be completed in 12 years at no cost to the government. After the 50-year lifetime of the franchise, the airport will be turned over to the government.
The franchise bill also exempts San Miguel Aerocity Inc. from all direct and indirect taxes and fees during its construction period.
After the construction period and during its franchise’s remaining term, it shall be exempt only from income and property taxes until it has recouped its investments. After this, it shall be subjected to all taxes from thereon.
Aside from taxes post-recovery of investment, the government also stands to share in its revenues more than its profit margin of 12 percent, the bill added.
San Miguel Aerocity Inc. franchise received support from senators who underscored that a new airport would spur employment and tourism.
But a private think tank earlier cautioned senators from awarding such tax incentives to San Miguel Aerocity Inc., saying this would set a dangerous precedent and “opens the floodgates for more corporate lobbying.”
The Senate is set to approve the franchise on third reading later this week. [ac]