The Maritime Industry Authority (MARINA) kicks off its “proactive and very aggressive” strategy to lobby before Congress to promptly pass a tax incentive package for investors in the country’s shipyard, shipbuilding, and repair industry, as key part of the agency’s priority legislative bills designed to maximize the Philippines’ maritime sector’s potential, create jobs, and stimulate growth in logistics, supply chains, ports, and related industries — or risk further erosion of global competitiveness.
During the Stakeholders’ Forum on August 14, 2024, MARINA Administrator Sonia B. Malaluan led the presentation of the agency’s priority legislative bills. These include the Shipyard Industry Fiscal Incentives Bill, Shipbuilding and Ship Repair (SBSR) Development Bill, Philippine International Ship Registration Bill, Philippine International Shipping Fiscal Incentives Bill, and a potential bill on Shipyard Fund. While these bills are at different stages and versions, MARINA aligns with the bill authored by Cong. Angelo Barba on ship registry-related legislation.
The Shipyard Industry Fiscal Incentives Bill outlines tax perks the government could grant to local shipyard investors. These include value-added tax exemption by removing VAT costs on SBSR investments; an income tax holiday to encourage facility expansion and upgrading by temporarily lifting income tax obligations; green project incentives for environmentally friendly and sustainable shipyard practices aligned with global standards. The incentives also ensure accountability and proper use of government support.
With this incentive package, MARINA expects to unlock investments and modernize shipyards through targeted fiscal measures.
Malaluan said this particular incentive package, which could be availed within a period of 10 years, is solely for the maritime sector and meant to reduce investment barriers. The benefits include ripple effects through linked industries such as steel manufacturing, logistics, and maritime training, multiplying the economic impact and generating quality jobs nationwide.
With reduced investment barriers, shipyards can upgrade and modernize more quickly, adopt greener, eco-friendly technologies, and compete more effectively in the global market.
Malaluan said the long term benefits of this bill would far outweigh the expected foregone revenue from the grant of tax incentives.
Meanwhile, the SBSR bill, once enacted into law, is expected to generate 100,000 jobs nationwide. Its key provisions include fast-tracking permits and foreshore lease agreements; financing programs for shipyard upgrades and steel industry development; coordinated agency support; shipbuilding for the country’s national defense; and establishing Maritime Industrial Parks as centers for SBSR, ports, maritime training, tourism, and commerce.
Malaluan, a MARINA veteran, lamented that the agency has been unsuccessful in pushing for the passage of their priority bills, including the ship registry bills, which have been filed in the past four Congresses.
Thus, under her leadership, Malaluan has adopted a different strategy to be “more proactive and aggressive” in pushing for the passage of MARINA’s priority bills. MARINA has adopted the tagline “Isang Layag Sa Bagong Pilipinas” and hopefully will be designated as priority bills by the President.
Malaluan explained that the bills once enacted into law are enablers for MARINA to move initiatives for the development of the industry’s full potential.
MARINA is also harnessing the support of stakeholders to support the passage of the bills. At the forum, a Manifesto of Support and Statement Support were signed by more than 23 stakeholders.
Part of the manifesto and statement of support includes fostering a viable shipbuilding, boatbuilding and ship recycling sector, to attract capital and increase investment, to provide adequate fiscal and non-fiscal incentives that will stimulate the industry’s growth, to establish a strong maritime nation, to provide adequate protection to the international merchant marine fleet, generate employment opportunities for Filipino seafarers by encouraging the registration of ships, among others.
