Cebu Pacific pushes extension of Travel Tax exemption for BIMP-EAGA air routes

The Philippines’ leading airline, Cebu Pacific (PSE: CEB), has asked government to extend the tax exemption for all air and sea travel from the Philippines to any destination within the Brunei-Indonesia-Malaysia-Philippines-East ASEAN Growth Area (BIMP-EAGA), in line with the carrier’s newest international route between Zamboanga City and Sandakan, Malaysia.

The BIMP-EAGA Travel Tax exemption covers all international travel in airports and seaports in Mindanao and Palawan to Brunei, Indonesia and Malaysia. Former Presidents Fidel Ramos and Gloria Macapagal-Arroyo had granted the tax exemption. The exemption from payment of Philippine Travel Tax of PHP1,620.00 (approximately US$32.00) was most recently reinstated through Executive Order (EO) 72 on October 24, 2014, covering a three-year period. The EO is set to expire in October 2017.

“We have made representations with the Mindanao Development Authority to request for the extension of the Travel Tax exemption for travel from the Philippines to destinations within the BIMP-EAGA. We believe that this would provide relief to the Filipino travelers and accelerate trade and tourism between the member countries, in accordance with the spirit and intent behind the creation of BIMP-EAGA,” said Atty JR Mantaring, Vice President for Corporate Affairs of Cebu Pacific.

The Mindanao Development Authority (MINDA) serves as the Coordinating Office of the Philippines for BIMP-EAGA.

In addition to the extension of the Travel Tax exemption, Cebu Pacific has also been working with the Bureau of Customs, Bureau of Quarantine and Bureau of Immigration to ensure that customs, immigration and quarantine (CIQ) mechanisms in Zamboanga are prepared for commercial international air passenger operations.

“We are also coordinating with local government officials in Zamboanga and Sandakan to make sure all systems are in place for the launch of our new route.”

Cebu Pacific, through its wholly-owned subsidiary, Cebgo, will begin operation of its Zamboanga-Sandakan route October 29, 2017. Cebgo will fly between Zamboanga City and Sandakan, Malaysia four times weekly (Tuesdays, Thursdays, Saturdays, and Sundays). CEB’s new Sandakan route, the carrier’s 27th international destination, was finalized after BIMP-EAGA ministers approved the Protocol to Amend the Memorandum of Understanding on Expansion of Air Linkages in October 2016. This allows for the facilitation of air services on existing BIMP-EAGA routes, as well as encourages the opening of new routes.

Created in 1994, BIMP-EAGA is a growth sub-region comprised of Brunei Darussalam; the Indonesia provinces of Kalimantan, Sulawesi, Maluku, and Irian Jaya; Sabah, Sarawak and the Federal Territory Labuan in Malaysia; and Mindanao and Palawan in the Philippines. The sub-region has a combined market of over 55 million consumers. A brainchild of former President Ramos, BIMP-EAGA was created to accelerate social and economic development of less developed areas in Southeast Asia, by harnessing private sector leadership in initiatives to promote cross-border investments, trade and tourism; as well as improve connectivity.

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