By Macon Araneta
With 22 affirmative votes and no negative vote, senators gave their nod on a bill granting a 50-year franchise to a subsidiary of San Miguel Corp. (SMC) to build an airport in Bulacan.
The Senate approved on third and final reading House Bill number 7507 granting a franchise to San Miguel Aerocity Inc. to “construct, develop, establish, operate and maintain a domestic and international airport” in Bulakan, Bulacan.
The franchise will be effective for 50 years after the proposed law is passed. The term of the franchise includes the airport’s 10-year construction period.
The new airport, with a budget allocation of PHP735.6 billion for its development, is about three times larger than the current capacity of the Ninoy Aquino International Airport (NAIA).
After the franchise expires, the guarantee turns over ownership of the airport to the Department of Transportation.
After construction and in the duration of the franchise’s remaining term, it shall only be exempt from income and property taxes until recouping its investments.
The franchise bill also exempts San Miguel Aerocity Inc. from all direct and indirect taxes and fees during its construction.
Aside from taxes post-recovery of investment, the government also stands to share in revenues from more than its profit margin of 12 percent, the Bill adds.
Under the Bill, the franchisee will also have “the right to construct, acquire, lease, operate or manage such properties as are convenient or essential to efficiently carry out objectives of this Act, such as toll roads, railroads, mass transport systems, hotels, warehouses, hangars, aircraft service stations and other facilities, as well as to develop the areas adjacent to the airport into one integral and comprehensive development, hereinafter collectively referred to as the Airport City.”
“All airport properties and facilities owned, maintained, operated, or managed by the grantee, its successors or assignees, shall be operated and maintained at all times in the best, cautious, and diligent manner and in accordance with the standards, practices and procedures required by the Manual of Standards-Aerodromes,” the bill said.
Sen. Christopher “Bong” Go said the construction of the proposed Bulacan International Airport, with an expected capacity of 100 million passengers per year, will be an “economic game changer as it will bring more investments.”
“It will bring in jobs and economic opportunities outside Metro Manila and will provide livelihood to Filipinos especially those left jobless due to the pandemic,” said Go.
“This will go a long way towards providing jobs and other economic opportunities outside of Manila,” Go added.
He also pointed out the construction will eventually distribute economic opportunities outside the metropolis.
During a public hearing by the Senate Committee on Public Services chaired by Sen. Grace Poe, Go likewise said the new airport will significantly decongest traffic in the National Capital Region.
However, he reminded the proponents to ensure compliance with Labor, environmental and other applicable laws, rules, and regulations.
Meanwhile, Poe said the Philippine government will not be giving San Miguel’s airport project guarantees on profits nor will it subsidize its operations
She said San Miguel will be pouring in as much as PHP1.5 trillion into the Bulacan airport project, PHP734 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 San Miguel loses money from the Bulacan airport project, government is not obliged to give it funding. There is no provision here whatsoever that says the government will step in to bail them out,” Poe said.
“The project will provide 450,000 jobs during the construction phase alone. And then after that, upwards of a million people will be able to benefit from the undertaking; not to mention the hundreds of thousands of passengers who will fly in and out of the country every day,” Poe added.
The Senator cited that San Miguel has spent PHP98 million to 364 residents that includes PHP100,000 each for them to build concrete houses and PHP250,000 in cash plus additional aid of PHP3,000 to PHP20,000.
San Miguel will also be required to sell at least 20 percent of San Miguel Aerocity in the stock market within five years after the BIR’s determination.