The Board of Investments (BOI) has introduced additional incentives for registered projects that will generate their own electricity through renewable energy facilities. Undersecretary Ceferino Rodolfo announced that a recent memorandum circular updates the guidelines for incentives related to energy efficiency and conservation projects, particularly those listed in the 2022 Strategic Investment Priority Plan.
These amendments fulfil a commitment made by President Ferdinand R. Marcos Jr. to support Japanese firms and other investors in the Philippines who establish their renewable energy facilities to meet their electricity demands.
The updated memorandum circular specifies that self-financed energy efficiency projects are eligible for income tax holidays and duty exemptions on the importation of capital equipment, raw materials, and spare parts.
The income tax holiday is limited to the entitlement period specified in the CREATE (Corporate Recovery and Tax Incentives for Enterprises) Act or until 50% of the capital investment (excluding land and working capital) has been recovered, whichever comes first.
Japanese manufacturer MinebeaMitsumi recently installed a solar power system in its factory in Danao City, Cebu, making use of these incentives. The company invested approximately PHP500 million in a ground-mounted solar power system with a capacity of 7.9 megawatt hours, and it will supply 8% of the factory’s total electricity consumption. This initiative will significantly reduce greenhouse gas emissions.
The BOI encourages registered companies to take advantage of the new incentive guidelines as the country transitions toward clean energy to promote sustainability and environmental responsibility.