Board of Investments mulls incentives for importation of power generators

MANILA, Philippines - The government is now looking at fast tracking the 2010 investments priorities plan (IPP) in order to mitigate the power crisis in Mindanao by providing incentives to the importation of generators, the Board of Investments (BOI) said.

“We were thinking of how to address the power problem in Mindanao and the importation of generation sets can qualify in the IPP because Mindanao is already under the state of calamity,” BOI managing head Elmer C. Hernandez said.

According to Hernandez, under the proposed IPP the government can give incentives under the disaster prevention and mitigation program. The IPP is set to be discussed in Malacañang by Tuesday. Hernandez stressed that there is a need to fast track the approval of the incentives for generator importation because in less than 45 days the power supply in Mindanao will be depleted.

Currently, Hernandez said that the six hydroelectric plants are generating 150 megawatts. He said this is not enough and the deficiency has now reached 700 megawatts.

He said that under the IPP, the manufacturers and industrial users can import generators tax free. This would then deload the power cooperatives in Mindanao. As such, the power cooperatives will have more power for households.

“To deload the cooperatives, we will give incentives to industry and commercial users,” Hernandez explained. He said the problem with this is financing but the two state run banks, the Development Bank of the Philippines and the Land bank of the Philippines have already committed to helping with the financing.

Hernandez said that allowing duty free importation of generator sets have already been done before. During the power crisis of 1991 to 1993, the government approved an auxillary program wherein all industrial users were allowed tax ad duty free importation of generator sets in 1991.

The year after, people from Mindanao, asked for an extension that is why in 1992 only Mindanao based importation were given perks. “There is precedence,” Hernandez said. He cleared however, that only duty free importation will be given and not income tax holidays (ITH).

The Disaster Prevention, Mitigation and Recovery Projects under the IPP are projects that will prevent or mitigate the adverse impacts of calamities and disasters. This also covers projects to rehabilitate areas affected by calamities and disasters.