Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
EIGHTEENTH CONGRESS 
Third Regular Session 
HOUSE BILL NO. ____ 
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Introduced by Representative Hector S. Sanchez 
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EXPLANATORY NOTE 
This bill seeks to establish the Catanduanes State University landholdings in 
the municipalities of Virac, Bato, and Panganiban, in the province of Catanduanes 
as an “Agro-Industrial Economic and Processing Zone”.  
The spatial strategy for agro-industrial development in the Bicol Region now 
incorporates the Legaspi-Iriga-Naga Corridor (LINC) and the Bicol Regional Agro-
Industrial Growth Center (BRAIC) in Legaspi City has been established as early as 
1997.  This strategy however, left behind the island province of Catanduanes in the 
development concept of the Bicol region. 
As the only government-run institution of higher learning in the province, the 
Catanduanes State University, as mandated by Republic Act No. 10229, is obliged 
to primarily provide advanced education, higher technological, professional 
instruction and training in trade, commerce, fishery, agriculture, arts and sciences, 
industrial technology, nursing, midwifery, education, engineering, public 
administration, information technology, and other relevant fields of study. It shall 
also undertake research and extension services, and provide progressive leadership 
in its areas of specialization. 
In furtherance of this mandate, the University through its Board of Regents 
(BOR), as provided for under Republic Act 8292, the Higher Education 
Modernization Act, and reiterated under Section 7 of RA 10229,  is empowered to 
enter into joint ventures with business and industry for the profitable development 
and management of the economic assets of the University, the proceeds from which 
shall be used for the development and strengthening of the University. 
Likewise, the University is encouraged to develop consortia and other 
economic forms of linkages with local government units (LGUs), institutions and 
agencies, both public and private, local and foreign, in the furtherance of the 
purposes and objectives of the University.  
To uphold the purposes and objectives of the University, a complementary 
provision under RA 10229 empowers the University to develop academic 
arrangements for institutional capability building with appropriate public and private 
as well as local and foreign institutions and agencies. And to privatize, where most 
advantageous to the University, the management of non-academic services such as 
health, food, building or grounds or property maintenance and such other similar 
activities. 
September 9, 2021
9:31 am
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The proposed establishment of an Economic and Processing Zone within 
CatSU’s landholdings is in line with the definition provided for in the the Rules and 
Regulations to Implement Republic Act No. 7916, otherwise known as “the Special 
Economic Zone Act of 1995.  
The landholdings of the Catanduanes State University, both in the CatSU 
Main campus as well as the Panganiban campus have the potential to be developed 
into agro-industrial economic and processing zone in consonance with the provisions 
of the Implementing Rules and Regulations of RA 7916. 
Section 2 of Republic Act No. 108571, An Act establishing mangrove crab 
seed banks, nurseries, and grow-out production farms in the municipalities of Virac, 
Bato, Baras, Gigmoto, Viga, Panganiban, Bagamanoc, San Andres, Caramoran, and 
Pandan, Province of Catanduanes, orders the University to place priority to the 
utilization of abandoned, undeveloped, or underutilized fishponds covered by 
fishpond lease agreement. Section 3 of the same law put into the University the 
responsibility to issue guidelines and provide technical assistance to fishermen and 
their association, in the establishment, operation, maintenance, supervision, and 
monitoring of mangrove crab seed banks, nurseries, and grow-out production farms. 
House Bill No. 6149 on the other hand, a bill put forward by this 
representation as the Representative of the Lone District of Catanduanes and TGP 
Partylist Jose “Bong” Teves, declares Catanduanes as Abaca Capital of the 
Philippines. Declaring the province as abaca capital puts responsibilities to the 
Catanduanes State University to undertake research and development activities 
intended to enhance the great potential for different industrial applications of abaca 
fiber. Currently, abaca is produced mainly by smallholders in the province, who have 
neither access to high-yielding and disease resistant varieties nor have the machinery 
needed for proper processing of the raw material in which, the establishment of the 
proposed Economic and Processing Zone of the University will be highly relevant. 
The establishment of the Catanduanes State University Agro-Industrial 
Economic and Processing Zone is in line with the government’s policy to encourage, 
promote, induce, and accelerate a sound and balanced industrial, economic, and 
social development of the country and therefore is earnestly recommended. 
In view thereof, early consideration and approval of this bill is earnestly 
sought. 
HECTOR S. SANCHEZ 
Representative 
      Lone District of Catanduanes 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
EIGHTEENTH CONGRESS 
Third Regular Session 
HOUSE BILL NO. ____ 
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Introduced by Representative Hector S. Sanchez 
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AN ACT 
ESTABLISHING THE CATANDUANES STATE UNIVERSITY MAIN AND 
PANGANIBAN CAMPUSES, AND OTHER UNIVERSITY LANDHOLDINGS, 
AS AGRO-INDUSTRIAL ECONOMIC AND PROCESSING ZONE IN THE 
PROVINCE OF CATANDUANES, TO BE KNOWN AS CATANDUANES 
STATE UNIVERSITY AGRO-INDUSTRIAL ECONOMIC AND 
PROCESSING ZONE, APPROPRIATING FUNDS THEREFOR AND FOR 
OTHER PURPOSES” 
Section 1. Short Title. - This Act shall be known as the “Catanduanes State 
University Agri-Industrial Economic and Processing Zone Act of 2021”. 
Section 2. Declaration of Policy. - It is hereby declared the policy of the State 
to actively encourage, promote, induce and accelerate the sound and balanced 
industrial, economic and social development of the country in order to provide jobs 
to the people, especially those in rural areas, increase their productivity and their 
individual and family income, and thereby improve the level and quality of their 
living conditions though the establishment, among others, of agri-industrial 
economic and processing zones in suitable and strategic locations in the country and 
through measures that shall effectively attract legitimate and productive foreign 
investments. 
Section 3. Creation of the Catanduanes State University (CatSU) Agri-
Industrial Economic and Processing Zone. - In pursuit of the foregoing declared 
policy and subject to the concurrence of the concerned local government units 
(LGUs) of Catanduanes affected by the zone, there is hereby established an agri-
industrial economic and processing zone, hereinafter referred to as the CatSU 
Ecozone. The CatSU Ecozone shall cover the entire area embraced by Barangays 
Calatagan, Tibang, San Isidro Village, Danicop, and Palnab, in the Municipality of 
Virac, Barangay Cabugao, in the Municipality of Bato, and Barangay Sta. Ana in the 
Municipality of Panganiban.The specific metes and bounds of the CatSU Ecozone 
shall be more particularly described as follows:  
Portions of an agricultural lands in the CatSU Main Campus, Barangay 
Calatagan, Virac, Catanduanes embraced by: Lot Nos. 4223-B, 4225P, 4226, 4233-
B-2-A, 4233-B-2-C, 4233-B-2-E-5, 4233-B-2-E-8, 4238, 4240, 4246, 4250, 4251, 
4255, 4257, 4258, 4259, 4351, 4676, 4678, 4679, 4693, 4696-A, 4701, 4702, 4708, 
4709, 4711, 4714, 4715, 4716, 4720, 4721, 4725, 4727, 4732, 4734, 4743, 4745,
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4747, 4749, 4753, 4756, 4757, 4759, 4762, 4763, 4764, 4768, 4771, 4775, 4776, 
4781, 4782, 4784, 4785, 4786, 4787, 4788, 4790, 4792, 4797, 4799, 4808, 4814, 
10742, 10750, 10754, 10757, 10756, 10760-E, 10760-G, 10760-H, 10760-I, Lot2-
B, 10763, 10764, 10828, 10761, 10765, 10766, 12377, 13571, 13572, 4755, 4778, 
4779, 4795, 4810, 13098, 4224, 4237, 4254, 4260, 4707, 4717, 4724, 4733, 4742, 
4746, 4748, 4772, 4791, 10751, 10753, 4252, 4700, 4713, 4703, 4718, 4712, 4728, 
4751, 4769, 10747, 4299p, 4710, 4770p, 4777, 4244, 4256, 4697, 4698, 4706, 4719, 
4737, 4750, 4758, 4773, 12724, 4253, 4677p, 4680, 4699, 4726, 4735, 4793, 
10749p, 10752, 10758, 10755, 10759p, 10762, and 12378 covering a total land area 
of sixty for and 91/100 (64.91) hectares; 
 
- and - 
 
Portions of agricultural land in the CatSU - Palnab Mangrove and Fishery 
Research Laboratory Facility and Eco-Tourism Park, Barangay Palnab, Virac, 
Catanduanes, embraced by: Lot Nos. 11500P, 12192p, 12193p, 11478, and 11490 
covering a total land area of forty five and 08/100 (45.08) hectares;  
 
- and - 
 
Portions of agricultural land property of Catanduanes State University at 
Barangay Cabugao, Bato, Catanduanes embraced by Lot Nos. 1333, 1334, and 1335 
covering a total land area of 0.6417 hectares; 
 
- and - 
 
Portions of agricultural land in the CatSU – Panganiban Campus, Barangay Sta. 
Ana, Panganiban, Catanduanes, embraced by: Lot Nos. 2072, 2085,2057, 2089, 
2083, 6361, 2068, 2075, 2074, 338, 739, 2119, 2094, 2961, 2274, 2122, 6360, 2089, 
2058 P1, 2931, and 2058 P2 covering a total area of two hundred twenty five and 
21/100 (225.21) hectares. 
 
Section 4. Governing Principles. - The Catanduanes State University Agro-
Industrial Economic and Processing Zone shall be managed and operated by the 
Catanduanes State University Estate Management Authority, hereinafter referred to 
as the CatSU-EMA, created under Section 10 of this Act, under the following 
principles: 
 
(a) Within the framework and limitations of the Constitution and applicable 
provisions of the Republic Act No. 10229, the CatSU Ecozone shall be 
developed into and operated as a decentralized, self- reliant and self-
sustaining industrial, commercial trading, agro-industrial, tourist, banking, 
financial and investment center with suitable residential areas.  
(b) The 
CatSU 
Ecozone 
shall 
be 
provided 
with 
transportation, 
telecommunications and other facilities needed to attract legitimate and 
productive investments, generate linkage industries and employment 
opportunities for the people of the Province of Catanduanes and its 
neighboring towns and cities.  
 
 


(c) The CatSU Ecozone may establish mutually beneficial economic relations 
with other entities or enterprises within the country or, subject to the 
administrative guidance of the Department of Foreign Affairs (DFA), the 
Philippine Economic Zone Authority (PEZA) and/or the Department of 
Trade and Industry (DTI), with foreign entities or enterprises.  
(d) Foreign citizens and companies owned by non-Filipinos in whatever 
proportion may set up enterprises in the CatSU Ecozone, either by themselves 
or in joint venture with Filipinos in any sector of industry, international trade 
and commerce within the CatSU Ecozone.  
(e) The areas comprising the CatSU Ecozone may be expanded or reduced when 
necessary. For this purpose, the CatSU-EMA, in consultation with the LGUs, 
shall have the power to acquire either by purchase, negotiation or 
condemnation proceedings, any private land within or adjacent to the CatSU 
Ecozone for the following purposes: (1) consolidation of lands for CatSU 
Ecozone development; (2) acquisition of right of way to the CatSU Ecozone; 
and (3) the protection of watershed areas and natural assets valuable to the 
prosperity of the CatSU Ecozone.  
(f) Goods manufactured by a CatSU Ecozone enterprise shall be made available 
for immediate retail sale in the domestic market, subject to the payment of 
corresponding taxes on raw materials and other regulations that may be 
formulated by the CatSU-EMA, together with the PEZA, the Bureau of 
Customs and the DTI However, in order to protect domestic industries, a 
negative list of industries shall be drawn up and regularly updated by the 
PEZA Enterprises engaged in industries included in such negative list shall 
not be allowed to sell their products locally.  
(g) The national government shall maintain its ability to coordinate with the 
CatSU Ecozone and the local government units.  
Section 5. Incentives to Registered Enterprises. - The Catanduanes State 
University Estate Management Authority (CatSU-EMA) may administer the 
following incentives to the registered enterprises located therein to the extent of the 
activity/project: 
  
(A) Income Tax Holiday (ITH). - Registered enterprises shall be entitled to an 
income tax holiday from the start of their commercial operations to the extent 
of their activity under the following categories:  
 
Category A - Registered domestic enterprise located in highly developed 
areas, as determined by the Board of Investments (BOI), shall be entitled to a 
four-year income tax holiday. 
  
Category B - Registered domestic enterprise on the following shall be entitled 
to a six-year income tax holiday:  
 
(1) Located in less developed areas as defined by the BOI; or  
(2) Producing/rendering new products/services or having strong backward or 
forward linkages. 
 
  
 


Category C - Registered export enterprise shall be entitled to a six-year 
income tax holiday: Provided, however, That lithe export enterprise complies 
with the following: (1) large capital investments or sizeable employment 
generation; or (2) use high level of technology; or (3) located outside Metro 
Manila, it shall be entitled to an eight-year income tax holiday. 
  
Registered enterprises embarking on new investments that are listed in the 
current Investment Priorities Plan (IPP) shall be entitled to incentives 
provided herein pertaining to the new investments and subject to such terms 
and conditions as the BOI may determine.  
 
For this purpose, a registered enterprise shall be defined as any person, natural 
or juridical, licensed to do business in the Philippines and registered with the 
Catanduanes State University Estate Management Authority (CatSU-EMA) 
to transact business within the CatSU Special Economic and Processing Zone. 
A registered export enterprise shall be defined as any registered enterprise 
engaged directly or indirectly in the production, manufacture or trade of 
products or services which earns at least seventy percent (70%) of its normal 
operating revenues from the sale of its products or services abroad for foreign 
currency. A registered domestic enterprise, meanwhile, shall be defined as any 
registered enterprise not falling under the definition of a registered export 
enterprise. 
 
Additional investments in the project shall be entitled to the income tax 
holidays corresponding to such investments as may be determined by the BOI. 
Additional income tax holiday may be granted for as long as the investment 
is made on the same project: Provided, That the project is listed in the IPP at 
the same time the additional investment in the project is made: Provided, 
further, That the entitlement period for additional investments shall not exceed 
three times the period provided under this subsection: “Provided, however, 
That the total ITH period for an export enterprise availing of an eight-year 
ITH shall not exceed twenty (20) years. Any unused incentives shall therefore 
be deemed forfeited if not used during the incentive period.  
 
Enterprises registered with the CatSU-EMA are required to share in the 
special development fund of the BOI for investment promotion projects of the 
government equivalent to one percent (1%) of the ITH granted for every 
application.  
 
The Bureau of Internal Revenue (EIR) shall require a registered enterprise 
availing of ITH or Net Operating Loss Carryover (NOLCO) to secure a 
certificate of eligibility from the CatSU-EMA before submitting its income 
tax return (ITR) with the CatSU-EMA for validation.  
 
Failure to secure certification and/or to file the ITH or NOLCO availment for 
validation by the CatSU-EMA within forty-five (45) days from the last day of 
each statutory filing date for ITR shall cause the forfeiture of the availment 
for the taxable period.  
 
 
 


(B) Net Operating Loss Carryover (NOLCO). - Net operating loss of the business 
or enterprise during the first three years from the start of commercial 
operations which have not been previously offset as deduction from gross 
income shall be carried over as a deduction from gross income for the next 
five consecutive years immediately following the year of such loss: Provided, 
however, That operating loss resulting from availment of incentives provided 
in this Act shall not be entitled to NOLCO.  
 
Registered enterprises availing of the ITH as herein provided shall not be 
entitled to avail of the NOLCO. 
 
(C) Imposition of a tax rate of five percent (5%) on Gross Income Earned (GIE) 
- Except for real property tax on land, no local and national taxes as 
prescribed under Republic Act No. 8424, also known as “The National 
Internal Revenue Code of 1997, as Amended” such as income tax, excise tax 
and franchise taxes, shall be imposed on registered enterprises operating 
within the CatSU Ecozone. In lieu thereof, five percent (5%) of the gross 
income earned shall be paid as follows: 
  
(a) Three percent (3%) to the national government; and 
(b) Two percent (2%) shall be remitted by the business establishments to the 
treasurer's office of the municipality or city where the enterprise is located. 
 
All persons and service establishments in the CatSU Ecozone shall be subject 
to national and local taxes under the National Internal Revenue Code of 1997, 
as amended, and the Local Government Code. 
 
(D) Accelerated Depreciation. - Accelerated depreciation of plant, machinery 
and equipment that are reasonably needed and actually used for the 
production and transport of goods and services may be allowed using a rate 
not exceeding twice the rate which would have been used had the annual 
allowance been computed in accordance with the rules and regulations 
prescribed by the Secretary of Finance and the provisions of the National 
Internal Revenue Code of 1997, as amended.  
 
(E) Capital Equipment Incentives. –  
 
(1) Importations of capital equipment, spare parts, tools and dye, or those 
required for pollution abatement and control, cleaner production and waste 
reduction including consignment thereof by registered enterprises upon the 
effectivity of this law, shall be exempted to the extent of one hundred 
percent (100%) of the taxes and customs duties: Provided, That the 
imported items thereof shall be used exclusively by the registered 
enterprise in its registered activity: Provided, further, That the importation 
of machinery and equipment and accompanying parts shall comply with 
the following conditions: 
 
(i) 
They are not manufactured domestically in sufficient quantity, of 
comparable quality and at reasonable prices; 
 
 


(ii) 
They are reasonably needed and will be used exclusively by the 
registered enterprise in the manufacture of its products, unless prior 
approval of the CatSU-EMA is secured for the part time utilization 
of said equipment in a non-registered activity to maximize usage 
thereof Or the proportionate taxes and duties are paid on a specific 
equipment and machinery being permanently used for non-registered 
activities; and  
(iii) 
Approval of the CatSU-EMA was obtained by the registered 
enterprise for the importation of such machinery, equipment and 
spare parts.  
 
Approval of the CatSU-EMA must be secured before any sale, transfer or 
disposition of the imported capital equipment, machinery or spare parts is 
made: Provided, That if such sale, transfer or disposition is made within 
the first five years from date of importation, any of the following 
conditions must be present:  
 
(1) the same is made to another enterprise enjoying tax and duty 
exemption on imported capital equipment;  
(2) the same is made to another enterprise, upon the payment of any taxes 
and duties on the net book value of the capital equipment to be sold;  
(3) the exportation of the capital equipment, machinery, spare parts or 
source documents or those required for pollution abatement and 
control; or  
(4) proven technical obsolescence of the said equipment, machinery or 
spare parts. 
 
When the aforementioned sale, transfer or disposition is made under any 
of the conditions provided for in the foregoing paragraphs other than 
paragraph (2) herein, the registered firm shall not pay the taxes and duties 
waived all such items: Provided, further, That if the registered enterprises 
sell, transfer or dispose the aforementioned imported items without prior 
approval within five years from the date of importation, the registered 
enterprise and the vendee, transferee or assignee shall be solidarily liable 
to pay twice the amount of the tax and duty exemption given it: Provided, 
finally, That even if the sale, transfer or disposition of the capital 
equipment, machinery or spare parts is approved after five years from the 
date of importation, the registered enterprises are still liable to pay the taxes 
and duties based on the net book value of the capital equipment, machinery 
or spare parts if any of the registration terms and conditions has been 
violated. Otherwise, they shall no longer be subject to the payment of the 
taxes and duties waived thereon.  
 
(2) The purchase of machinery, capital equipment, raw materials, supplies, 
parts and semi-finished products to be used in the fabrication of machinery 
and capital equipment by a registered export-oriented enterprise from a 
domestic manufacturer shall be subject to zero percent (0%) value-added 
tax.  
 
 
 


The registered export-oriented enterprise shall be granted a tax credit 
equivalent to the amount of duties that would have been waived on the 
machinery, capital equipment, raw materials, supplies, parts and semi-
finished products used in the fabrication of machinery and capital 
equipment, had these items been imported, upon its submission to the 
Department of Finance (DOF) of the bill of materials evidencing the 
transaction value of such and other pertinent documents, for verification 
and proper endorsement.  
 
The availment by a registered export enterprise of the incentive stated 
under the immediately preceding two paragraphs shall be subject to the 
following conditions: (a) that said capital equipment, machinery and spare 
parts will be used exclusively by the registered enterprise in its registered 
activity; (b) that the capital equipment or machinery where the raw 
materials, supplies, parts and semi-finished products were used would have 
qualified for tax and duty-free importation; and (c) that the approval of the 
CatSU-EMA is obtained by the registered enterprise. If the registered 
enterprise sells, transfers or disposes of these machineries, capital 
equipment and spare parts, the provision in the preceding paragraphs for 
such disposition shall apply.  
 
This incentive shall he deemed waived if application for tax credit under 
this subsection was not filed within one year from the date of delivery, 
  
(F) The importation of source documents by information technology-registered 
enterprises shall be eligible for tax and duty free importation.  
 
(G) Raw Materials Incentives. - Every registered export-oriented enterprise shall 
enjoy a tax credit equivalent to the internal revenue taxes and customs duties 
'Paid on the supplies, raw materials and semi-manufactured products 
provided the same are not sufficient in quantity, quality or are not 
competitively priced in the Philippines and which are used in the 
manufacture, processing or production of its export products forming part 
thereof, exported directly and indirectly by the registered export-oriented 
enterprise, based on the actual taxes and duties paid for such 
materials/supplies/semi-manufactured products by the registered enterprise. 
 
This incentive shall be deemed waived if application for tax credit under this 
subsection was not med within one year from the date of exportation of the 
final product. 
  
(H) Incentives on Breeding Stocks and Genetic Materials. - Importation of 
breeding stocks and genetic materials within ten (10) years from the date of 
registration of commercial operation of the enterprise shall be exempt from 
all taxes and duties: Provided, That such breeding stocks and genetic 
materials are reasonably needed in the registered activity, and approved by 
the CatSU-EMA. 
 
 
 
 


The availment of the incentives by the registered enterprise shall be subject 
to the following: (a) that said breeding stocks and genetic materials would 
have been qualified for tax and duty-free importation under the preceding 
paragraph; (b) that the breeding stocks and genetic materials are reasonably 
needed in the registered activity; (c) that approval of the CatSU-EMA has 
been obtained by the registered enterprise; and (d) that the purchase is made 
within ten (10) years from the date of registration of commercial operation 
of the registered enterprise.  
 
This incentive shall be deemed waived if application for tax credit under this 
subsection is not filed within one year from the date of delivery. 
  
(I) Exemption from Wharfage Dues. - The provisions of law to the contrary 
notwithstanding, exports by a registered enterprise shall be exempted from 
wharfage dues.  
 
(J) Deferred Imposition of the Minimum Corporate Income Tax. - The Minimum 
Corporate Income Tax (MCIT) of two percent (2%) of the gross income as of 
the end of the taxable year shall be imposed when the MCIT is greater than 
the income tax computed under the NIRC of 1997, as amended, for the taxable 
year: Provided, however, That said MCIT shall be imposed only after the 
enterprise's entitlement period to the income tax. - based incentives has 
expired. 
 
(K) Tax Treatment of Merchandise in the CatSU Ecozone. - (a) Domestic 
merchandise sent from the CatSU Ecozone to areas outside the said ecozone 
shall, whether or not combined with or made part of other articles likewise 
of local origin or manufactured in the Philippines while in the export 
processing zone, be subject to internal revenue laws of the Philippines as 
domestic goods sold, transferred or disposed-off or local consumption.  
 
(b) Merchandise sent from the CatSU Ecozone to areas outside the said 
ecozone shall, whether or not combined with or made part of other articles 
while in the zone, be subject to rules and regulations governing imported 
merchandise. The duties and taxes shall be based on the value of said 
imported materials (except when the final product is exempt).  
(c) Articles produced or manufactured in the CatSU Ecozone and exported 
therefrom shall, on subsequent importation into the customs territory, be 
subject to the import laws applicable to like articles manufactured in a 
foreign country.  
(d) Unless the contrary is shown, merchandise taken out of the CatSU Ecozone 
shall be considered for tax purposes to have been sent to customs territory. 
(L) Tax Treatment of Raw Materials and Capital Equipment in the CatSU 
Ecozone. - Importations of raw materials and capital equipment shall be 
treated as in the Omnibus Investments Code.  
 
 
 
 
 


(M) Importations of raw materials and capital equipment shall be treated as in 
the Omnibus Investment Code. Registered export-oriented enterprise shall 
have access to the utilization of the bonded warehousing system in 
accordance with the rules and regulations of the Bureau of Customs.  
 
(N) Employment of Foreign Nationals. - Subject to the provisions of Section 29 
of Commonwealth Act No. 613, as amended, a registered enterprise may 
employ foreign nationals in supervisory or technical positions for a period 
not exceeding ten (10) years from its registration: Provided, That when the 
majority of the capital stock of a registered enterprise is owned by foreign 
investors, the positions of the president, treasurer and general manager or 
their equivalents may be retained by foreign nationals beyond the period set 
forth herein and such officer is the owner or a stockholder owning at least 
ten percent (10%) of the outstanding capital stock of the registered 
enterprise and he remains the owner or maintains his stockholdings therein. 
 
Foreign nationals under employment contract within the purview of this 
incentive, their spouses and unmarried children under twenty-one (21) years 
of age, who are not excluded by Section 29 of Commonwealth Act No. 613, 
as amended, shall be permitted to enter and reside in the Philippines during 
the period of employment of such foreign nationals. They shall be entitled 
to a multiple entry visa, valid for a period of three years, and shall be 
allowed to enter and leave the Philippines without further documentary 
requirements other than valid passports or other travel documents in the 
nature of passports. The validity of the multiple entry visa shall be 
extendible yearly. 
  
The said foreign nationals admitted under this provision, as well as their 
respective spouses and dependents shall be exempt from: (a) obtaining alien 
certificates of registration and immigration clearance certificates; and (b) 
securing the Alien Employment Permit (AEP) and all types of clearances, 
permits, licenses or their equivalents required by any government 
department or agency. 
  
Section 6. Incentive to Investors. - Any foreign national covered under 
subsection (M) of Section 5 of this Act, who invests an amount of US$150,000.00, 
either in cash and/or equipment, in a registered enterprise shall be entitled to an 
investor's visa: Provided, That: 
 
(1) He is at least eighteen (18) years of age;  
(2) He has not been convicted of a crime involving moral turpitude;  
(3) He is not afflicted with any loathsome, dangerous or contagious disease; and  
(4) He has not been institutionalized for any mental disorder or disability: 
 
Provided, further, That in securing the investor's visa, the alien-applicant shall 
be entitled to the same privileges provided for under subsection (M), Section 5 
hereof.  
 
 
 


As a holder of investor's visa, an alien shall be entitled to reside in the 
Philippines while his investment subsists. For this purpose, he should submit an 
annual report, in the form duly prescribed for the purpose, to prove that he has 
maintained his investment in the country. Should said alien withdraw his 
investments from the Philippines, then the investor's visa issued to him shall 
automatically expire.  
 
Section 7. Administration, Implementation and Monitoring of Incentives. - 
The CatSU-EMA shall be responsible for the administration and implementation of 
the incentives granted to its respective registered enterprises: Provided, That any 
incentive administration policy adopted by the BOI for registered enterprises shall 
be uniformly applied by the CatSU-EMA. 
 
The following are the duties and responsibilities of the CatSU-EMA in the 
administration of incentives:  
 
(A) To adopt consistent procedures of administering incentives in accordance 
with the guidelines established by the BOI;  
(B)To adopt and implement systems and procedures affecting trade and customs 
policies in accordance with the requirements established by the Department 
of Finance (DOF) and the BOI;  
(C)To submit information on registered enterprises to the DOF and the BOI as 
required by any of these agencies to ascertain consistency of investment 
policies and incentives, inc1uding their implementation as provided in 
paragraph (A) herein, and to ensure proper implementation of systems and 
procedures affecting trade and customs policies as provided in paragraph (B) 
herein; and  
(D) To perform all other duties and responsibilities as may be required by the 
President of the Philippines. 
  
For proper monitoring, the BOI shall create a single database of all incentives 
provided by all incentives granting agencies, including the CatSU-EMA, and all 
information thereto. Double entry accounting shall be done by the BOI in recording 
all incentives granted by the government for transparency purposes. 
 
 Section 8. Extension of Period of Availment. - The availment period of the 
incentives provided herein may be extended by the CatSU-EMA, in the event that 
the registered enterprise suffers operational force majeure or any event equivalent 
thereto, impairing its viability: Provided, That the availment period shall not exceed 
the duration of the said force majeure or equivalent event.  
 
Section 9. Duration of Incentives. - Enterprises registered with the CatSU-
EMA may enjoy ITH or NOLCQ granted by the latter prior to the availment of the 
five percent (5%) GIE.  
 
Fiscal incentives under this Act shall be terminated after a cumulative period of 
twenty (20) years from the date of registration or start of commercial operation, 
whichever is applicable, except that it could be extended with regard to industries 
deemed indispensable to national development.  
 


The industries exempted from this provision shall be recommended by the BOI, 
with the concurrence of the Secretaries of the Departments of Finance and Trade and 
Industry.  
 
Section 10. Creation of the Catanduanes State University Estate 
Management Authority. - There is hereby created a body corporate to be known as 
the Catanduanes State University Estate Management Authority, hereinafter referred 
to as the CatSU-EMA, which shall manage and operate, in accordance with the 
provisions of this Act, the Catanduanes State University Special Economic and 
Processing Zone. This corporate franchise shall expire in fifty (50) years counted 
from the first day of the fifth (5th) calendar year after the effectivity of this Act, 
unless otherwise extended by Congress. It shall be organized within one hundred 
eighty (180) days after the effectivity of this Act.  
 
Section 11. Principal Office of the CatSU-EMA. - The Catanduanes State 
University Estate Management Authority shall maintain its principal office in the 
Municipality of Virac in the province of Catanduanes, but it may establish branches 
within the Philippines as may be necessary for the proper conduct of its business.  
 
Section 12. Powers and Functions of the Catanduanes State University 
Estate Management Authority (CatSU-EMA). - The Catanduanes State 
University Estate Management Authority shall have the following powers and 
functions:  
 
(a) To operate, administer, manage and develop the CatSU Ecozone according to 
the principles and provisions set forth in this Act;  
(b) To register, regulate and supervise the enterprises in the CatSU Ecozone in an 
efficient and decentralized manner, subject to existing laws; 
(c) To coordinate with local government units and exercise general supervision 
over the development plans, activities and operations of the CatSU Ecozone;  
(d) To regulate and undertake the establishment, operation and maintenance of 
utilities, other services and infrastructure in the CatSU Ecozone such as but 
not limited to heat, light and power, water supply, telecommunications, 
transport, toll roads and bridges, port services, etc. and to fix just, reasonable 
and competitive rates, fares, charges and prices thereof;  
(e) To construct, acquire, own, lease, operate and maintain on its own or through 
contracts, franchise, licenses, bulk purchase from the private sector or permits 
under any of the schemes allowed in Republic Act No. 6957 (the Build-
Operate-Transfer Law, as amended by R.A. No. 7718), or joint venture, 
adequate facilities and infrastructures required or needed for the operation and 
development of the CatSU Ecozone, in coordination with appropriate national 
and local government authorities and in conformity with applicable laws 
thereon;  
(f) To operate on its own, either directly or through a license to other tourism-
related activities, including games, amusements, recreational and sports 
facilities; 
 
  


(g) Subject to the approval of the President of the Philippines and the Monetary 
Board of the Bangko Sentral ng Pilipinas and upon the recommendation of the 
Department of Finance, to raise or borrow adequate and necessary funds from 
local or foreign sources to finance its projects and programs under this Act, 
and for that purpose to issue bonds, promissory notes, and other forms of 
securities, and to secure the same by a guarantee, pledge, mortgage, deed of 
trust, or an assignment of all or part of its property or assets;  
(h) To protect, preserve, maintain and develop the virgin forests, beaches, coral 
and coral reefs and maintain ecological balance within the CatSU Ecozone;  
(i) To create, operate and/or contract to operate such functional units of offices 
of the CatSU-EMA as it may deem necessary;  
(j) To adopt, alter and use a corporate seal; make contracts, leases, own, or 
otherwise dispose of personal or real property; sue and be sued; and otherwise 
carry out its functions and duties as provided for in this Act;  
(k) To issue certificates of origin for products manufactured or processed in the 
CatSU Ecozone in accordance with prevailing rules of origin, and the 
pertinent regulations of the PEZA, the DTI and/or the Department of Finance 
(DOF); 
(l) To issue working visas renewable every two (2) years to foreign executives 
and foreign technicians with highly specialized skills which no Filipinos 
possesses, as certified by the Department of Labor and Employment;  
(m) To report to the Bureau of Immigration the names of the foreigners who have 
been granted permanent resident status and working visas within thirty (30) 
days after issuance of such grant;  
(n) To exercise such powers as may be essential, necessary or incidental to the 
powers granted to it hereunder as well as those that shall enable it to carry out, 
implement and accomplish the purposes, objectives and policies of this Act; 
and  
(o) To issue rules and regulations consistent with the provisions of this Act as 
may be necessary to accomplish and implement the purposes, objectives and 
policies provided herein. 
 
Section 13. Banking Rules and Regulations. -Existing laws and 
rules/regulations of the Bangko Sentral ng Pilipinas (BSP) shall apply to banks and 
financial institutions to be established in the CatSU Ecozone, such as those 
governing foreign exchange and other concurrent account transactions (trade and 
non-trade), local and foreign borrowings, foreign investments, establishment and 
operation of local and foreign banks, foreign currency deposit units, offshore 
banking units and other financial institutions under the supervision of the BSP. 
 
Section 14. Remittance of Earnings. - In the case of foreign investments, a 
registered enterprise in the CatSU-EMA shall have the right to remit earnings from 
the investment in the currency in which the investment was originally made and at 
the exchange rate prevailing at the time of remittance, subject to the provisions of 
Section 74 of Republic Act No. 265, as amended.  
 
 
 


Section 15. Board of Directors of the Catanduanes State University Estate 
Management Authority. - The powers of the Catanduanes State University Estate 
Management Authority shall be vested in and exercised by a Board of Directors, 
hereinafter referred to as the Board, which shall be composed of the following;  
 
(a) The Chairman who shall be the concurrent SUC President of the Catanduanes 
State University or his representative, at the same time be the Administrator 
of the CatSU-EMA;  
(b) A Vice Chairman who shall come from among the members of the Board;  
(c) Members consisting of:  
(1) The Governor of the Province of Catanduanes;  
(2) The Congressional Representative of the Lone District of Catanduanes; 
(3) The mayors of the Municipalities of Virac and Panganiban in the Province 
of Catanduanes;  
(4) One representative from the domestic investors;  
(5) One representative from the foreign investors; and  
(6) Two representatives from the workers working in the CatSU Ecozone. 
 
The Governor, the Congressional Representative and the mayors of the 
Municipalities of Virac and Bato in the Province of Catanduanes shall serve as ex 
officio members of the Board, whose term in the Board corresponds to their terms 
as elected officials. 
 
The Chairman and the members of the Board, except the ex officio members, 
shall be appointed by the President of the Philippines to serve for a term of six (6) 
years, unless sooner separated from service due to death, voluntary resignation or 
removal for cause. In case of death, resignation or removal for cause, the replacement 
shall serve only the unexpired portion of the term.  
 
Except for the representatives of the business and labor sectors, no person shall 
be appointed by the President of the Philippines as a member of the Board unless he 
is a Filipino citizen, of good moral character, of proven probity and integrity, and a 
degree-holder in any of the following fields: economics, business, public 
administration, law, management or their equivalent, and with at least ten (10) years 
relevant working experience preferably in the field of management or public 
administration.  
 
The members of the Board shall each receive per diem at a rate to be determined 
by the Department of Budget and Management in accordance with existing rules and 
regulations: Provided, however, That the total per diem collected each month shall 
not exceed the equivalent per diem for four (4) meetings. Unless and until the 
President of the Philippines has fixed a higher per diem for the members of the 
Board, such per diem shall not be more than Twenty thousand pesos (PhP20,000.00) 
for every Board meeting.  
 
 
 
 


Section 16. Powers and Duties of the Chairman-Administrator. - The 
Chairman-Administrator shall have the following powers and duties:  
 
(a) To direct and manage the affairs of the CatSU-EMA in accordance with the 
policies of the Board;  
(b) To establish the internal organization of the CatSU-EMA under such 
conditions that the Board may prescribe;  
(c) To submit an annual budget and necessary supplemental budget to the 
Board for its approval;  
(d) To submit within thirty (30) days after the close of each fiscal year an annual 
report to the Board and such other reports as may be required;  
(e) To submit to the Board for its approval policies, systems, procedures, rules 
and regulations that are essential to the operation of the CatSU Ecozone;  
(f) To create a mechanism in coordination with relevant agencies for the 
promotion of industrial peace, the protection of the environment, and the 
advancement of the quality of life in the CatSU Ecozone; and 
(g) To perform such other duties as may be assigned to him by the Board or 
which are necessary or incidental to his office.  
Section 17. Organization and Human Resources - The board of directors of 
the CatSU-EMA shall provide for an organization and staff of its officers and 
employees. Upon recommendation of the Chairman-Administrator, the Board shall 
appoint and fix the remuneration and other emoluments of its officers and employees 
in accordance with existing laws on compensation and position classification: 
Provided, That the Board shall have exclusive and final authority to promote, 
transfer, assign or reassign officers of the CatSU-EMA, any provision of existing 
law to the contrary notwithstanding: Provided, further, That the Chairman-
Administrator may carry out removal of such officers and employees. 
 
The officers and employees of the CatSU-EMA, including all members of the 
Board, shall not engage directly or indirectly in partisan activities nor take part in 
any election, except to vote.  
 
No officer or employee of the CatSU-EMA, subject to Department of Labor and 
Employment laws and regulations, shall be removed or suspended except for cause, 
as provided by law.  
 
Section 18. Ipso Facto Clause. - Sections 30-41 of Republic Act No. 7916, 
shall ipso facto apply to the Catanduanes State University Agri-Industrial Economic 
and Processing Zone.  
 
Section 19. Capitalization. - The Catanduanes State University Estate 
Management Authority shall have an authorized capital stock of one billion 
(1,000,000,000) no par shares with a minimum issue of Ten pesos (P10.00) each, the 
majority shares of which shall be subscribed and paid for by the Catanduanes State 
University, the national Government and the local government units (LGUs) 
embracing the Catanduanes State University Economic and Processing Zone. The  
 
 
 


board of directors of the CatSU-EMA may, with the written concurrence of the 
Secretary of Finance, sell shares, representing not more than forty per centum (40%) 
of the capital stock of the CatSU-EMA to the general public under such policy as the 
Board and the Secretary of Finance may determine. The Catanduanes State 
University, the National Government, and the LGUs shall, in no case, own less than 
sixty per centum (60%) of the total issued and outstanding capital of the Catanduanes 
State University Estate Management Authority.  
 
The amount necessary to subscribe and pay for the shares of the national 
government to the capital stock of the CatSU-EMA shall be included in the annual 
General Appropriations Act. For LGUs, the funds shall be taken from their internal 
revenue allotment and other local funds.  
 
Section 20. Supervision. - The Catanduanes State University Agro-Industrial 
Economic and Processing Zone shall be under the direct control and supervision of 
the Philippine Economic Zone Authority (PEZA) for purposes of policy direction 
and coordination.  
 
Section 21. Relationship with the Regional Development Council. - The 
Catanduanes State University  Estate Management Authority shall determine the 
development goals for the CatSU Ecozone within the framework of national 
development plans, policies and goals. The Administrator shall, upon approval by 
the Board, submit the CatSU Ecozone plans, programs and projects to the Regional 
Development Council for inclusion and inputs to the overall regional development 
plan.  
 
Section 22. Relationship with Local Government Units. - Except as herein 
provided, the local government units comprising the Catanduanes State University 
Economic and Processing Zone shall retain their basic autonomy and identity. The 
barangays covered by the CatSU Ecozone in the municipalities of Virac, Bato, and 
Panganiban, in the province of Catanduanes shall operate and function in accordance 
with the Local Government Code of 1991. In case of any conflict between the 
CatSU-EMA and, the Province of Catanduanes on matters affecting the CatSU 
Ecozone other than defense and security matters, the decision of the CatSU-EMA 
shall prevail.  
 
Section 23. Interpretation/Construction. - The powers, authorities and 
functions that are vested in the CatSU-EMA are intended to decentralize 
governmental functions and authority and promote an efficient and effective 
working relationship between the CatSU Ecozone, the national government, and the 
local government units.  
 
Section 24. Auditing. - The Commission on Audit shall appoint a 
representative who shall be a full time auditor of the CatSU-EMA and assign such 
number of personnel as may be necessary to assist said representative in the 
performance of his/her duties. The salaries and emoluments of the assigned auditor 
and personnel shall be in accordance with pertinent laws, rules and regulations.  
 
 
 


Section 25. Separability Clause. - If any provision of this Act shall be held 
unconstitutional or invalid, the other provisions not otherwise affected shall remain 
in full force and effect. 
 
 Section 26. Repealing Clause. - All laws, executive orders and issuances, or 
any part thereof, which are inconsistent herewith are hereby repealed or amended 
accordingly.  
 
Section 27. Effectivity Clause. - This Act shall take effect upon its publication 
in the Official Gazette or in at least one newspaper of general circulation. 
 
Approved