THE FISCAL Incentives Review Board (FIRB) has approved the grant of tax incentives for the rail operations of the P81-billion subway project in Makati City.

According to a Finance department statement, the Makati subway project will be given four years of income tax holiday followed by five years of duty exemptions for imports of goods related to building and maintaining the project.

Rail operations set to start in January 2026 could increase economic productivity by P24.4 billion each year.

“This will be monitored, along with the other projected benefits, in accordance with the principle of granting incentives based on merit or performance embodied in the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law,” the Department of Finance (DoF) said.

Trade Secretary and FIRB Co-Chair Ramon M. Lopez said the productivity boost would offset foregone revenues.

The CREATE Law or Republic Act No. 11534, overhauls the tax incentives system to make them more performance-based and timebound.

Finance Secretary Carlos G. Dominguez III, who co-chairs the FIRB, said the incentives only apply to the Makati subway’s rail operations.

Other business activities related to the subway, such as the leasing of retail areas and advertising, will be subject to the regular income tax rate.

Philippine Infradev Holdings, Inc. is developing the Makati subway under a joint venture agreement with the Makati City government. Philippine Infradev is led by President and Chief Executive Officer Antonio L. Tiu and Chairman Ren Jinhua.

Mr. Dominguez also said that the Makati City government and the Department of Transportation (DoTr) should “work out the details” of connecting the proposed subway to the National Government’s Metro Manila Subway Project.

Excavation work for the Metro Manila Subway Project is expected to start in the first quarter next year, the DoTr said in September.

Shares in Philippine Infradev rose 1.72% to P1.18 each on Monday. — Jenina P. Ibañez