Presidential Decree No. 1068






WHEREAS, it is imperative to accelerate the development not only of indigenous conventional energy resources but also of those non-conventional alternatives which have great potential for immediate and future applications such as but not limited to solar, wind, tidal and bio-mass energy;

WHEREAS, it is essential in the interest of efficiency, economy and effectiveness to integrate in a single governmental entity the planning, coordination and control of the research, development and utilization efforts and programs in non-conventional forms of energy resources of the various government agencies and instrumentalities, including government owned and controlled corporations;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers and functions vested in me by the Constitution, do hereby order and decree the following as part of the law of the land:

Section 1. Declaration of Policy

It is the declared policy of the State to achieve self-reliance in the country's energy requirements primarily through the intensified exploration, development, exploitation and utilization of indigenous conventional energy resources such as petroleum, coal, natural gas and liquids, water and geothermal resources and nuclear fuel resources; and non-conventional alternatives such as solar, wind, tidal and bio-mass energy which have great potential for immediate and future applications. In furtherance of this policy there is an urgent need to coordinate, integrate and control the pursuit of research, development and utilization efforts of all government agencies and instrumentalities pursuant to and in accordance with a comprehensive national energy program.

Sec. 2. Definition of Terms

As used in this Decree, the following words and phrases shall have the following respective meanings:

(a) Non-Conventional Energy Resources refers to those energy resources in which the conversion or utilization technology for large-scale (megawatt level) applications are not as well-developed and/or widely use as those for fossil fuels, hydrogeothermal and conventional nuclear. In general, these resources would include the direct and indirect forms of solar, tidal nuclear converter and breeder reactors and fusion.

(b) Direct Solar Energy means the energy content of solar radiation harnessed by collecting sunlight in man-made devices such as flat-plate or focusing solar collectors.

(c) Indirect Solar Energy means the energy content of solar radiation harnessed by initially collecting sunlight in a natural manner such as absorption by land, atmosphere, ocean surface and plants. This natural collection mode gives rise to winds (by thermal gradients in the atmosphere), produces organic matter or bio-mass and creates ocean thermal gradients between the surface and its depths.

(d) Bio-mass refers to organic matter, whether living or not. This would include, among others, trees, algae, animal and agricultural wastes and decaying plants in swamps.

(e) Bio-conversion to Fuels refer to the various processes, natural or synthetic, by which a solid, liquid or gaseous fuel is produced by utilizing bio-mass feedstock, e.g. anaerobic fermentation of animal manure to yield bio-gas; combustion of firewood to yield heat, steam or power, fermentation of agricultural crops or by-products to yield substitute fuels such as alcohol.

(f) Bio-gas is a fuel gas consisting of 50-70% methane and the rest non-combustible gases produced by the anaerobic fermentation of organic waste.

(g) Energy Plantation is a scheme whereby fast-growing crops or trees such as ipil-ipil are deliberately and systematically planted in order to continuously provide fuel to a power generating station located at the site.

(h) Comprehensive national energy program for purposes of this Decree is a program of research, development or utilization of non-conventional energy resources duly approved by the Energy Development Board.

Sec. 3. Powers and Functions of The Energy Development Board

In addition to its powers and functions enumerated in Presidential Decree No. 910 and other laws, rules and regulations, the Energy Development Board shall exercise the following powers and functions:

1. Formulate and direct the implementation of a comprehensive national energy program, subject to periodic review and revisions on non-conventional energy research, development and utilization.

2. Integrate, coordinate, direct and control all research, development and utilization efforts, programs and projects in non-conventional energy resources of all government agencies and instrumentalities including government owned and controlled corporations.

3. Review and approve all on-going or planned research, development and utilization projects on non-conventional energy whether basic or applied in nature, supported or planned to be supported by government funds or funds obtainable elsewhere through government intercession or assistance.

4. Formulate criteria for determining priority for proposed research, development and utilization projects on non-conventional energy resources and accordingly identify and select execution, financing and funding schemes.

5. Designate project implementors, coordinate and monitor the progress of all projects and activities, on-going or planned projects, in the implementation of the comprehensive national energy program.

6. Provide necessary and appropriate supportive efforts to the non-conventional energy research, development and utilization program such as the launching of a vigorous information and promotions drive assistance and entry of suitable foreign expertise in order to accelerate the pace of local research, development and utilization and the training of qualified Filipino personnel in the various aspects of non-conventional energy, proliferation of those applications in which technologies have proven viable, such as bio-gas generation, windmills for water, pumping and power generation from agricultural and industrial wastes, establishment of demonstration systems like solar water heaters, solar air-conditioning and energy plantations.

7. Develop and implement specific programs requiring the participation not only of government agencies and instrumentalities but also the private sector.

8. Grant incentives provided for herein and propose and recommend the grant of such other incentives as shall be necessary and appropriate to enterprises, industries and individuals who shall conduct their own or participate in research and development or apply currently available non-conventional energy technology to their industrial processes or homes.

9. Promulgate such rules and regulations as may be necessary to implement the objectives and provisions of this Decree.

Sec. 4. Incentives

The provisions of any law to the contrary notwithstanding any person, whether natural or juridical, who will directly participate in the national program to accelerate research, development and utilization of non-conventional energy sources shall have the following privileges:

(a) Costs incurred in the establishment and construction of non-conventional energy conversion facilities or equipment duly certified by the Energy Development Board may, at the option of the taxpayer, be directly chargeable to expense and shall fully deductible as such from gross income in the year wherein such expenses were incurred.

(b) Exemption from payment of tariff duties and compensating tax on the importation of machinery and equipment, and spare parts and all materials required in the establishment and construction of non-conventional energy facilities or equipment subject to the conditions that said machinery, equipment, spare parts and materials of comparable price and quality are not manufactured domestically; are directly and actually needed and will be used exclusively by the taxpayer in the establishment and construction of non-conventional facilities or equipment; are covered by shipping documents in the name of the taxpayer to whom the shipment will be delivered direct by the customs authorities; and prior approval of the Energy Development Board was obtained by the taxpayer before the importation of such machinery, equipment spare parts and materials which approval shall not be unreasonably withheld: Provided, however, that the taxpayer may not sell, transfer or dispose of these machinery, equipment, spare parts or materials without the prior approval of the Energy Development Board and payment of taxes due the government: Provided, further, that should the taxpayer sell, transfer, or dispose of these machinery, equipment, spare parts or materials without the prior consent of the Energy Development Board, it shall be twice the amount of the Tax exemption granted: Provided, finally that the Energy Development Board shall allow and approve the sale, transfer, or disposition of the said items without tax, if made: (1) to another taxpayer who will establish and construct non-conventional energy conversion facilities or equipment; (2) for reason of technical obsofescence; or (3) for purposes of replacement to improve and/or expand the operations of the taxpayer.

(c) Government financial institutions such as the Development Bank of the Philippines, the Philippine National Bank, the Government Service Insurance System, the Land Bank of the Philippines and such other government institutions as are now engaged or may hereafter engage in financing of investment operations shall, in accordance with and to the extent allowed by the enabling provisions of their respective charters or applicable laws, accord high priority to applications for financial assistance by individuals/enterprises/industries participating in the national program to accelerate the research, development and utilization of non-conventional energy sources, as duly recommended and endorsed by the Energy Development Board.

Sec. 5. Assistance By Other Government Agencies/Offices and Corporations

All government agencies and instrumentalities including government owned or controlled corporations in addition to being implementors of the comprehensive national energy program when so designated, shall extend whatever assistance that may be required by the Energy Development Board, including but not limited to the detail to the Board of such of their employees, scientists and technical personnel.

Sec. 6. Appropriations

The sum of TEN MILLION PESOS (P10,000,000.00) is hereby appropriated out of any available funds in the National Treasury not otherwise appropriated as operating funds of the Energy Development Board to fully carry out and implement the functions and objectives provided in this Decree for the period from the effective date of this Decree up to and including the fiscal year ending December 31, 1977. Thereafter, amounts required by the Energy Development Board shall be included annually in the general Appropriation Decree.

Sec. 7. Repealing Clause

All laws, decrees, orders, rules and regulations or parts thereof which are inconsistent with any of the provisions of this Decree are hereby repealed or modified accordingly.

Sec. 8. Effectivity

This Decree shall take effect immediately.

Done in the City of Manila, this 13th day of January, in the year of Our Lord, nineteen hundred, and seventy-seven.

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