Country Report

Philippines upstream fiscal summary

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28 June 2018

Philippines upstream fiscal summary

Report summary

Upstream licences are awarded via licensing rounds under what is effectively a simple Production Sharing Contract (PSC), despite being referred to as a Service Contract (SC).The fiscal terms include a fixed cost recovery ceiling and fixed production share. Depending on the level of participation of Filipino companies, contractors can recover up to an additional 7.5% of gross revenues as an incentive. The fiscal terms are fixed and agreed before each licensing round is launched.Corporate income tax is paid on behalf of the contractor by the Government.

Table of contents

  • Executive summary
    • Basis
    • Licence terms
    • Government equity participation
    • Fiscal terms
      • Ring fencing
      • Bonuses, rentals and fees
      • Indirect taxes
      • Royalty
        • Filipino participation incentive allowance
      • PSC cost recovery
        • Depreciation schedule
      • PSC profit sharing
      • Corporate income tax
      • Fiscal treatment of decommissioning
      • Product pricing
      • Summary of modelled terms
    • Recent history of fiscal changes
    • Stability provisions
    • Split of the barrel and share of profit
    • Effective royalty rate and maximum government share
    • Progressivity
    • Fiscal deterrence

Tables and charts

This report includes 18 images and tables including:

  • Revenue flowchart: Philippines PSC
  • Fiscal stability: Image 1
  • Fiscal stability: Table 1
  • Split of Barrel - oil
  • Split of barrel - gas
  • Share of profit - oil
  • Share of profit - gas
  • Effective royalty rate and minimum state share, oil and gas
  • Maximum government share and maximum state share, oil and gas
  • State share versus Pre-Share IRR - oil
  • State share versus Pre-Share IRR - gas
  • Investor IRR versus Pre-Share IRR - oil
  • Investor IRR versus Pre-Share IRR - gas
  • Bonuses, rentals and fees
  • Indirect taxes
  • Assumed terms by location - oil and gas
  • Filipino participation incentive allowance
  • Current licence, equity and fiscal terms: Table 4

What's included

This report contains:

  • Document

    Philippines upstream fiscal summary

    PDF 257.13 KB