On October 5, the Senate approved House Bill No. 7507 on second reading, granting San Miguel Aerocity Inc. a 50-year franchise to construct and operate the New Manila International Airport in the Municipality of Bulakan. Section 16 of the bill mandates the government to provide San Miguel Aerocity, Inc. exemptions from all national and local taxes for a period of up to fifty (50) years.
Action for Economic Reforms (AER) lambasts the politicians who supported and fast-tracked the franchise bill, whose tax incentives provision opens the floodgates for abuses. It sets a dangerous precedent for corporations lobbying for fiscal incentives.
By fast-tracking the bill without careful consideration of its business model or even the amount of forgone revenue the tax incentives entail, the senators have pandered towards the oligarchy.
We call out Senator Grace Poe, the principal sponsor of the bill in the Senate, for her conflict of interest: San Miguel Corporation and Ramon Ang were her campaign donors during her presidential bid in the 2016 elections. Senator Poe failed to provide an estimate of the project’s internal rate of return (IRR) during last night’s interpellations, and yet the Senate moved to pass the bill granting San Miguel Aerocity billions of pesos worth of incentives. During interpellation, Senator Poe also misrepresented the National Economic Development Authority (NEDA) when she claimed they fully supported the bill, failing to mention that NEDA did not endorse the tax incentives being proposed.
We decry the actions of the politicians to prioritize the franchise bill over the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, which has been undergoing interpellation in the Senate for the past three weeks.
Furthermore, we denounce the senators’ haste in passing the bill. In the process, they prevented Senator Pia Cayetano, Chairperson of the Committee on Ways and Means and principal sponsor of the CREATE bill, from taking the time to ensure cohesion between the franchise bill and the soon-to-be-legislated CREATE bill.
Granting tax incentives to San Miguel Aerocity, Inc. undermines the very purpose of the CREATE bill, which is to centralize and harmonize laws on fiscal incentives. Senator Cayetano deserved to be given the time to question a bill that will not only grant huge incentives to a multi-billion-peso private project, but also side-step a rigorous process that all corporations need to undergo, as per the CREATE bill.
We call on the Senate to reconsider and reject the San Miguel franchise bill, in light of the lack of transparency on the tax expenditures that this project will entail.