Philippines adds SAF production to strategic investment priority plan

The Philippines has identified sustainable aviation fuel production as a strategic investment priority, positioning the biofuel sector to receive government incentives aimed at developing domestic manufacturing capacity and reducing reliance on imports.

President Ferdinand Marcos Jr. approved the 2026 Strategic Investment Priority Plan on May 21, which places SAF production under Tier II priority activities alongside electric vehicle infrastructure and critical minerals processing, according to a memorandum order released June 3.

The three-tier framework determines which industries qualify for tax incentives under the Corporate Recovery and Tax Incentives for Enterprises Act, with higher tiers receiving longer incentive periods ranging from 14 to 27 years, depending on location and priority classification, the Philippine Information Agency said on June 4.

Strategic push

The inclusion of SAF reflects the government's push to develop domestic biofuel production capabilities as the aviation sector faces mounting pressure to reduce carbon emissions.

Tier II classification signals that SAF production addresses strategic industrial gaps and import substitution priorities, placing it alongside defense services, desalination plants and food security initiatives.

"By listing activities eligible for incentives, the government is signaling where we want to attract high-value capital and translate these into new jobs, upskilling of workforce and improved lives for Filipinos," Trade Secretary Cristina Roque said in a statement.

The 2026 plan replaces the 2022 framework and aligns with the administration's long-term economic transformation agenda through 2028. Qualified businesses under Tier II can access income tax holidays, special corporate income tax rates and enhanced deductions administered by investment promotion agencies including the Board of Investments.

The Board of Investments will finalize general policies and specific guidelines for the 2026 plan by the third quarter, with existing 2022 guidelines remaining in effect until then, according to Sandra Recolizado, director of the BOI's Investment Policy and Planning Service.

The memorandum order takes effect 15 days after publication in a newspaper of general circulation or the Official Gazette.

The plan also prioritizes renewable energy projects, energy storage systems and green manufacturing under Tier I, while Tier III covers advanced technologies including hydrogen energy and modern biotechnology. All government agencies must coordinate implementation and cannot adopt policies inconsistent with the plan.

Platts, part of S&P Global Energy, assessed sustainable aviation fuel HEFA-SPK FOB Straits at $2,610/mt June 4, up $50/mt from June 3, and FOB China at $2,585/mt June 4, up $50/mt from June 3.

The SAF FOB Straits premium was assessed at $1,463.75/mt over the Platts Jet Kero FOB Mean of Platts Singapore price, up $59.75/mt from June 3, while the FOB China premium was at $1,438.75/mt over the Platts Jet Kero FOB MOPS price.