Fiscal Terms for PCECP

Governing Laws and Regulations PD 972 Provides for the award of Coal Operating Contracts through direct negotiation or public bidding
PD 1174 Act granting additional incentives to Coal Operators
DOE Circular No. DC2017-09-0010 Existing circular through PCECP which intends to implement a simpler and faster public contracting program by nomination through publication to facilitate the acceptance of applications for COC from interested applicants at any given time
Contract Area Onshore Maximum of 15,000 hectares per coal region
Nationality of Operator Local (at least 60% Filipino capitalization, maximum of 40% Foreign capitalization)
Contract Duration Exploration 2 years (extendible up to 2 years)
Development & Production 10 years (extendible for another 10 years and renewable for a series of 3-year periods, not exceeding 12 years)
Production Sharing Government 30% of net proceeds
Contractor 70% of net proceeds
Financial Obligations Signature Bonus Php 150,000.00
  Development Assistance Minimum of Php 250,000.00
  Training Assistance Exploration Phase Minimum of Php 75,000.00/year
    Development and Production Phase Php 200,000.00/year
  Training & Development Assistance (for host communities) Php 250,000.00/year
Fiscal Incentives Taxes Exempted from all taxes except income tax
  Importation Tax exemption for equipment, machinery, spare parts and materials to be imported
  Cost Recovery 90% of gross income  from coal production in any calendar year with the unrecovered costs for recovery in succeeding calendar year(s); capital expenditures depreciated over 5-10 years