Country Report

Philippines upstream fiscal summary

25 May 2023

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25 May 2023

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.

Basis
Licence terms
Government equity participation
Fiscal terms
- Bonuses, rentals and fees
- Indirect taxes
- Filipino participation incentive allowance
- PSC production sharing
- PSC cost recovery
- 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