The Philippine Biofuel Act of 2006 gives a lot of incentives via tax breaks and priority loan packages to biofuel producers and directly related industries. Specific Tax on the biofuel is zero while it is also exempted from the imposition of a 12% Value Added Tax. Waste from distilleries has been classified as “reuse” and will therefore not be required to pay wastewater charges.
These incentives are great to getting the biofuel industry of the Philippines on its feet, what has been said to be overlooked however are incentives to the consumers of these biofuels. These are through the means of cheap cars which are highly compatible to run on an even higher mixture of biofuels.
President of Eastern Petroleum and Chairman of the Independent Philippine Petroleum Companies Association (IPPCA), Fernando L. Martinez, was quoted as saying: that by giving also incentives to Car Manufacturers we can encourage them to produce and sell flexi-fuel vehicles in the country.
Any amount given as tax breaks to Car Manufacturers to produce more flexi-fuel vehicles has the effect of much needed cashflow returning to the country because by increasing the consumption of biofuels made in the country it offsets the need to purchase fossil fuels from abroad. Currently, only Ford Philippines is selling an E20 capable flexi fuel vehichle in the Country. That is their Ford Focus.
Mr. Martinez does raise a good point. What better way to hasten the end of foreign fuel dependence than by increasing our consumption of locally produced biofuel? I think that that is still a couple years down, when we will actually be able to see B20 fuel in the pumps, given that the biofuel production capacity in the country is still trying to ramp up. Great foresight from Mr. Martinez to highlight that issue to the Philippine public.
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Category: Automotive, Law, Biofuel
