MANILA - The proposed tax perks for the rehabilitation of the Hanjin shipyard in Subic Bay have been approved by the Fiscal Incentives Review Board (FIRB), the Department of Finance said on Tuesday.

The DOF said the Subic Bay Metropolitan Authority (SBMA) endorsed the tax perks for Project AGILA, which aims to redevelop and reopen the Hanjin shipyard in the Subic Bay freeport zone.

Project AGILA will get special corporate income tax (SCIT), value-added tax (VAT) exemption from importation, VAT zero-rating on local purchases, and duty exemption on importation.

US-based private equity firm Cerberus Capital Management is funding the project with a total cost of P17 billion.

• US firm Cerberus to buy Philippine shipyard in Subic for $300-M: sources

The DOF said Finance Secretary and FIRB Chairman Carlos Dominguez III supported the approval of the tax perks as the rehabilitation of the Hanjin shipyard presents economic potential, given its strategic location near the West Philippine Sea.

“We expect the project to create jobs in the adjacent communities, increase economic activity as well as support the national government’s economic recovery efforts,” said Dominguez.

The Hanjin shipyard used to employ 20,000 workers. But in 2019, the company was unable to pay around $1.3 billion owed to various banks as a global slowdown in shipping affected its operations.

He added that The resumption of operations in the shipyard will also prompt development and productivity in the area, which can attract more investment opportunities into the country.

The Philippine Navy is also expected to benefit from the project.

Chinese firms initially expressed interest in acquiring the shipyard but national security concerns were raised over the possible takeover.

• As gov’t eyes Hanjin strategic investor, ex-Navy chief frets over national security
• FIRB eyes rationalizing 'inconsistent' POGO application, renewal fees

RELATED VIDEO

Watch more News on iWantTFC