Finance Secretary Carlos G. Dominguez III INQUIRER File Photo
MANILA, Philippines—The Cabinet-level, interagency Fiscal Incentives Review Board (FIRB) has granted tax and other perks to a P10-billion cement manufacturing project to be rolled out by a unit of conglomerate San Miguel Corp. (SMC) this year.
Finance Secretary Carlos Dominguez III on Monday said the FIRB, which he chairs, approved the application of Oro Cemento Industries Corp. for fiscal incentives during the FIRB meeting on Dec. 15, 2021.
Oro Cemento Industries is a wholly owned subsidiary of San Miguel Equity Investments Inc. which, in turn, is 100 percent owned by SMC. SMC said Oro Cemento would be renamed as Southern Concrete Industries Inc.
According to SMC documents, Oro Cemento was building a cement grinding plant in Santa Cruz town, Davao del Sur province.
Once completed, the facility can produce 2 million metric tons of cement per year, SMC said, adding that its world-class equipment can minimize environmental impact.
In a statement, the Department of Finance (DOF) said Oro Cemento was expected to churn out 50.4 million cement bags yearly, “to help meet the growing infrastructure requirements in Mindanao.”
Commercial operations will begin in July 2022.
The project will enjoy two years of income tax holiday (ITH). Once ITH lapses, it will have five years of enhanced deductions, plus duty-free importations of capital equipment, raw materials, parts and accessories.
The Department of Trade and Industry (DTI)-attached investment promotion agency (IPA) Board of Investments (BOI) recommended the grant of tax perks to Oro Cemento.
The DOF quoted Trade Secretary Ramon Lopez, FIRB co-chair, as saying that the project would “help achieve the country’s goal of reducing dependence on cement imports and stabilizing the price and supply of the product, on top of the economic benefits of more jobs and business activity generated by the project.”
Assistant Finance Secretary Juvy Danofrata, FIRB secretariat head, said the project’s benefits would exceed costs, including the potential revenues that the government will forego in the form of the tax exemptions.
“The project is expected to stimulate forward linkages, promote the use of energy-efficient equipment that can lead to a transfer of knowledge and improvement in productivity, especially in the underdeveloped area where the project is located,” the DOF said.
TSB