NINFTEENTH CONGRESS OF THE   )
REPUBLIC OFTHE PHILIPPINES      )
Second Regular session                  )
HOUSE OF REPRESENTATIVES
House Bill No.
8717
RECEIVED
DATE  0  2  AUG
Introduced by Representative Ralph G. Recto
AN ACT
LOWERING  THE  COST OF  DOING  BUSINESS  IN  THE  SPECIAL  ECONOMIC
zONEs AND FREEroRT zONEs By GRANTING A TWENTy PERCENT (ZOO;0)
DlscouNT  ON  THE  SALE  oF  ELEerRIclTy  TO  REGlsTERED  BuslNEss
ENTERPRISES
EXPLANATORY NOTE
This proposed  measure seeks to lower the cost of doing  business within the
special economic zones and freeport zones.
The surge in demand for electricity indicates recovery from the crisis brought
about by the COVID-19 pandemic. However, the increase in its price will have an effect
on  inflation.  Electricity  is an  important component in  the  production  of basic goods
and services. Therefore, any increase in the price of electricity has the effect of adding
to  the  production  cost  of  businesses,  particularly  the  manufacturing  and  IT-BPO
sectors within the special economic zones and freeport zones.
The purpose and intent of this proposed measure is to help industries recover
from  the  crisis  brought  about  by various  global  and  domestic  challenges,  enhance
competitiveness, and maximize their time, effort and resources in expanding business
operations,   thereby   stimulating   economic   growth   and   generating    more   jobs
throughout the country.  Thus,  this  bill  mandates the generation,  transmission,  and
distribution  companies,  including  electric cooperatives,  to grant a  20% discount on
their sale of electricity to registered business enterprises within the special economic
zones and freeport zones. The discounts to be granted shall be considered as allowable
1


deductions  from  gross  income  for  purposes  of  computing  the  taxable  income  in
accordance with the National Internal Revenue Code of 1997, as amended.
2
/jiao


NINETEENTH CONGRESS OF THE   )
REPUBLIC OFTHE PHILIPPINES      )
Second Regular session                   )
HOUSE OF REPRESENTATIVES
House Bill No.
8717
Introduced by Representative Ralph G. Recto
AN ACT
LOWERING  THE  COST  OF  DOING   BUSINESS  IN  THE  SPECIAL  ECONOMIC
zONEs  AND  FREEroFRT  zONEs  By  GRANTING  A  I+wENTy  PERCENT  (ZOO;a)
DISCouNT   oN   THE   SALE   oF   ELECTRIclrv   To   REGISTERED   BuSINESS
ENTERPRISES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:
1                   Section.  1.  5»orf 77H/e.  -This Act shall  be  known as the "Ecozone and  Freeport
2      Competitiveness Act".
3                   Sec. 2. Ogc/araf/oH ofpz}/M.cy. -Under section 20, Article Il of the 1987 Constitution,
4      the  State  recognizes  the  indispensable  role  of the  private  sector,  encourages  private
5      enterprise,  and  provides  incentives  to  needed  investments.  It  is  hereby  declared  the
6      poliey  of  the  State  to  develop  the  national  economy  by  promoting  investments  and
7      enhancing the competitiveness in the global  market.  For this purpose, the government
8      shall institute a poliey to lower the cost of doing business, enhance competitiveness, and
9      attract investments in the special economic zones and freeport zones, thereby stimulating
io      economic growth and creating more jobs in the country.
11                    Sec. 3. All generation, transmission, and distribution companies, including electric
12      cooperatives,  shall  grant a twenty percent (20%) discount on the sale of electricity to
13      registered  business enterprises within  the  special  economic zones and  freeport zones.
14      The discount granted shall  be considered as allowable deduction from gross income for
15      purposes  of  computing  the  taxable  income  in  accordance  with  the  provisions  of the
16      National Internal Revenue code of 1997, as amended.
1


1                   Sifgc. 4. Implementing Rules and Regulations (IRR). -W.rNhim Thi!hirty (3/I in days frcfin
2      the effectivity of this Act, the Department of Energy (DOE), Department of Finance (DOE),
3      Department of Trade and Industry (DTI), and the Energy Regulatory commission (ERC),
4      after due consultation with the Bureau of Internal Revenue (BIR), Board of Investments
5      (801),  and  other  Investment  Promotion  Agencies  (IPAs),  shall  jointly  promulgate  the
6      necessary rules and regulations for its effective implementation.
7                  Sec.  5.  A€pea/I.ng C/ac/se,  -All  laws, acts,  decrees,  executive orders,  issuances,
8      and  rules and  regulations or parts thereof which are contrary to and  inconsistent with
9      this Act are hereby repealed, amended or modified accordingly.
io                   Sec. 6.   £7rE]cl7.v]ify. -This Act shall take eifect fifteen (15) days after its complete
11      publication in the offlcxa/GaLzi€ffeor in at least two (2) newspapers of general circulation.
Approved,
2