All service contractors may avail of the incentives or privileges under Presidential Decree (P.D.) 87 otherwise known as the " Oil Exploration and Development Act of 1972:

• Service fee of up to 40% of net production
  
• Cost reimbursement of up to 70% gross production with carry-forward of unrecovered costs
  
• FPIA grants of up to 7.5% of the gross proceeds for service contract with minimum Filipino company participation of 15%
  
• Exemption from all taxes except income tax
  
• Income tax obligation paid out of government's share
  
• Exemption from all taxes and duties for importation of materials and equipment for petroleum operations
  
• Easy repatriation of investments and profits
  
• Free market determination of crude oil prices, i.e., prices realized in a transaction between independent persons
  dealing at arms-length
  
• Special income tax of 8% of gross Philippine income for subcontractors
  
• Special income tax of 15% of Philippine income for foreign employees of service contractors and subcontractors

Coal

P.D. 1174 amending P.D. 972, otherwise known as "The Coal Development Act of 1976" provides for the following incentives to prospective coal operators:

• Recovery of operating expenses not exceeding 90.0 percent of the gross proceeds from production in any year with carry forward of unrecovered cost;
  
• Special allowance of up to 40.0 percent of the net proceeds;
  
• Exemption from all taxes except income tax;
  
• Exemption from payment of tariff duties and compensating tax on the importation of machinery, equipment, spare parts and all materials for coal operations;
  
• Entry of alien technical and specialized personnel; and,
  
• Right of ingress to and egress from the COC area.