Senate Oks franchise for Bulacan airport

MANILA, Philippines — The Senate yesterday approved on third and final reading the franchise application for the construction of a domestic and international airport in Bulacan.

The application obtained 22 “yes” votes and zero “no” votes, with the senators stressing the need for the San Miguel Aerocity Inc. to immediately start the construction of the 2,500-hectare airport complex at no cost to the government.

The project is expected to generate at least one million jobs and boost the economy, according to the project proponents in the Senate.

The franchise included the authority to build and operate an adjacent airport city.

“This was an idea born 17 years ago, in November 2003,” Senate President Vicente Sotto III, one of the proponents of the P735-billion airport project, said.

Sotto said he had discussed the project with the late San Miguel Corp. chairman Eduardo “Danding” Cojuangco, SMC president Ramon Ang, former senator Gregorio Honasan, the late senator Tessie Aquino-Oreta and the late movie actor Fernando Poe Jr., who was considering running as president at the time.

The franchise application was sponsored on the floor by Sen. Grace Poe, chair of the Senate committee on public services, last month.

Poe said the government would neither guarantee the SMC project’s profits nor subsidize its operations.

She said the San Miguel Aerocity would be pouring in as much as P1.5 trillion into the Bulacan airport project, P735 billion of which will go into the airport alone.

“There are no government guarantees here. What they are promising is, any amount in excess of the 12-percent rate of return will go to the government. If they do not make the 12 percent, they will still be responsible for the airport even if they have to operate at a loss,” Poe said.

If the SMC loses money from the Bulacan airport project, the government is not obliged to give it funding, she said.

The proposed franchise exempts San Miguel Aerocity from paying all direct and indirect taxes and fees for the 10 years that the airport is under construction.

The company will be required to submit annual reports to Congress, which will be a requisite in securing permits and certificates from the Civil Aviation Authority of the Philippines.

Failure to submit reports on time, on or before April 30, will result in payment of fines amounting to P1 million for every working day that it is not submitted.

The SMC will start paying taxes once the Bureau of Internal Revenue determined that it has recovered its investments in the project.

Sen. Bong Go, who co-sponsored the franchise bill, said the Bulacan airport would help decongest Metro Manila’s traffic and provide employment to Filipinos, especially now with the COVID-19 pandemic.

Public policy think-tank Infrawatch PH urged the government to ensure that the P3.341-billion, 10-year development commitment from San Miguel Aerocity Inc. must be complied with to balance the tax perks granted to the proposed Bulacan airport.