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Senate Bills on Natural Gas Development program

May 3, 2018
Committee on Energy
Senate of the Philippines
Pasay City
Re: SB 1371, 765, Natural Gas Development Roadmap
Attn.: Atty. Grace Ann C. Salesa
Legislative Committee Secretary
This is to confirm our statement that the consumers of Meralco should not bear any added pass on cost in the event the Malampaya developer Shell Philippines Exploration fails to deliver the contracted natural gas capacity due to the depletion of the natural gas beginning 2022 to the power plants.
We also confirm that the Natural Gas development roadmap should provide for the continuous exploration and development of indigenous natural gas beyond Malampaya. Historically, the country had discovered oil in commercial quantity in the Nido, Cadlao and Matinloc oil reserves, all located in West Palawan.
Lastly, the development of the natural gas industry and the LNG terminals thru imported liquefied natural gas should not consider tax incentives as zero duty on imported natural gas, as the current administration policy is to withdraw fiscal incentives in many industry sectors.
On Senate Bills 765 and 1371, we support the objectives of both bills. However, tax exemption and imposition of excise taxes could translate to an expensive natural gas and petroleum product retail price. A caveat must be added that the benefit of said tax incentives and exemption should be pass on to the consumers and that the business can be assured reasonable margin, as to be determined by the Energy Regulatory Commission.
Thank you
Atty. Victorio Mario A. Dimagiba, AB, LLB, LLM