Philippine modernizes fuel marking program vs smuggling

The modernization of the Philippines’ Fuel Marking Program (FMP) was established as a comprehensive anti-smuggling measure pursuant to the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

Its objective is to detect and prevent the illicit entry and distribution of petroleum products while protecting government revenues.

The proposed public-private partnership (PPP) to sustain and modernize the program has taken a major step forward following the provisional approval of technical and transaction advisory support by the Project Development and Monitoring Facility (PDMF) Committee.

The committee approved P19.16 million, inclusive of taxes, in PDMF support for transaction advisory services for the proposed PPP covering the country’s FMP.

The approval was made during committee meetings held on 12 July and 12 August 2026.

The proposed PPP is particularly significant for SICPA Société Anonyme (SA), whose unsolicited proposal is the basis for the Department of Finance’s planned continuation of the FMP under a PPP arrangement.

SICPA is currently implementing the government’s FMP under the Department of Finance (DOF) as the technology provider.

The program is a key component of the government’s campaign against petroleum smuggling and fuel tax leakage.

The government intends to build on the existing program through technological upgrades, operational enhancements, additional field-testing units and expanded training for the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR).

SICPA said the PDMF assistance will cover the preparation of a due diligence report and tender documents, assistance throughout the PPP bidding process, and post-contract signing transaction advisory services until financial close.

"The development signals that the proposed continuation of the Fuel Marking Program is moving into a more formal project-development and procurement stage, with the PPP Center providing support to the DOF in preparing the transaction," it said.

The development represents an important opportunity for SICPA to continue its role in one of the government’s most significant revenue-protection programs, subject to the applicable PPP process and competitive requirements.

Observers view the proposed modernization as also intended to strengthen the government’s ability to independently and sustainably manage fuel marking operations by improving field-testing capabilities, technology and the technical capacity of enforcement agencies.

The PDMF is a revolving fund managed by the PPP Center that provides financial support to implementing agencies for the preparation of business cases, pre-feasibility and feasibility studies, tender documents, transaction advisory services and other activities required to develop and implement PPP projects.

The Fuel Marking Program is one of three projects recently approved for PDMF support. The other projects are the Pylon (Bunker II) Project of the Provincial Government of Bataan and the Rehabilitation, Expansion, and Modernization of the Iligan City Waterworks System (ICWS) Project.