Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Constitution Hills, Quezon City
NINETEENTH CONGRESS
First Regular Session
HOUSE BILL NO. ______
Introduced by
REPRESENTATIVE BERNADETTE HERRERA-DY
AN ACT MANDATING THE CREATION OF A PHILIPPINE EXCLUSIVE
INTERNATIONAL GATEWAY, PRESCRIBING THE MANNER OF CREATION,
CONTROL AND TAXATION THEREOF
EXPLANATORY NOTE
The 1987 Constitution (Article 2, Section 24) fully recognizes the vital role of
communications
in
nation
building
and
provides
for
the
emergence
of
communications structures suitable to the needs and aspirations of the nation.
This bill seeks to mandate the creation of a Philippine Exclusive International
Gateway. Such gateway shall act as the single transit point of all communications,
including data, voice, messages, SMS, among others, inward to the Philippines or
outward to other countries.
The use of exclusive international gateways have been successful in other countries,
specifically Australia, the United States, Pakistan, Zambia, Bangladesh, Kenya,
among many others. Such gateways have enabled efficient use and management of
international
communications,
provided
higher
levels
of
security
of
communications, supplied a higher quality of international calls to and from the
Philippines, and served as a venue for substantial revenue generation for the
government.
The costs of establishing, maintaining and operating such gateways entail
significantly high costs and require a specialized degree of technical know-how and
expertise. Following the example of other countries, this bill seeks to mandate the
creation of the Philippine Exclusive International Gateway through a Public-Private
Partnership with a private partner that is knowledgeable and experienced in the
establishment, maintenance and operation of such gateways.
Considering the pursuant to its charter, Executive Order No. 546, the National
Telecommunications Commission is empowered to regulate the telecommunications
industry. One of its powers, under Section 15, paragraph k of the said Executive
Order, permits the Commission to perform such other functions as may be provided
for by law. Hence, this bill mandates the National
1
Telecommunications Commission (NTC), the primary governmental agency in
charge of the regulation of the telecommunications industry, to seek the proper
partner through the bidding procedures already established by law. The NTC would
also empowered by this bill to exercise supervisory powers over the gateway,
July 6, 2022
8:52 am
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specifically as to the technical aspects of use, traffic management, and data security.
Finally, the N TC is also empowered, pursuant to its charter, to establish the
benchmark rates by which the license fees, tariffs and termination fees shall be
based.
As a revenue generator, this bill recognizes the significant role of priority industries
in the provision of employment and influx of foreign direct investments. In
reverence thereto, this bill provides a tariff exemption for all industries listed in the
annual Investments Priority Plan with regards to their usage, if any, of the exclusive
international gateway.
Hence this bill seeks to mandate the establishment of the Philippine Exclusive
International Gateway, to be implemented by the NTC accordingly.
In view of the foregoing considerations, approval of this bill is highly and earnestly
recommended.
BERNADETTE HERRERA-DY


Republic of the Philippines
HOUSE OF THE REPRESENTATIVES
Constitution Hills, Quezon City
NINETEENTH CONGRESS
First Regular Session
HOUSE BILL NO.________
Introduced by
REPRESENTATIVE BERNADETTE HERRERA-DY
AN ACT MANDATING THE CREATION OF A PHILIPPINE EXCLUSIVE
INTERNATIONAL GATEWAY, PRESCRIBING THE MANNER OF CREATION,
CONTROL AND TAXATION THEREOF
Be it enacted in the Senate and House of Representatives of the Philippines in the
Congress assembled:
SECTION 1 Short Title. This Act shall be known as the "Exclusive International
Gateway Act of 2022”
SECTION 2. Declaration of Policy. The State recognizes the vital role of the
telecommunications industry in national growth and development.
The state likewise recognizes taxation provides the lifeblood of the nation, through
which the agencies of the government continue to operate and with which the state
effects its functions for the benefit of its constituents.
Towards this end, the State shall protect the mutual interests of consumers and
service providers through a provision of a modernization of communication systems
through an exclusive international gateway for all incoming and outgoing
international communications.
SECTION 3, Definition of Terms. - For purposes of this Act, the following terms
are hereby defined:
a) "BIR" - refers to the Bureau of Internal Revenue.
b) "Call" — refers to a call (including any message conveyed by means of a
telecommunication system) which originates in the telecommunication
system of any service provider in the Philippines, conveyed by the license via
the exclusive international gateway facility and which terminates in a
telecommunication system in a country other than the Philippines, or vice
versa.
c) "Exclusive International Gateway or EIG" — refers to the exclusive
telecommunications transit portal through which all incoming and outgoing
international calls and data transmissions will pass.
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d) "Exclusive
International
Gateway
(EIG)
Facility"
refers
to
the
telecommunication
systems
and
telecommunication
facilities
owned,
installed, maintained, operated and used by the Licensee for the purposes of
providing international telecommunications services.
e) "License" — refers to the authority issued by the NTC to a private
corporation to establish, operate and maintain the exclusive international
gateway.
f)
"Licensee" - refers to the private corporation selected to establish, operate
and maintain the exclusive international gateway, following the issuance of a
license by the NTC.
g) "License Fee Income" — refers to the total annual invoiced revenue of the
Licensee (less discounts, value added taxes and other indirect taxes) derived
from telecommunications service providers.
h) "Message" — refers to any sound, signal, sign or image conveyed by means
of the exclusive international gateway.
i)
"NEDA" - refers to the National Economic and Development Authority.
j)
"NTC" - refers to the National Telecommunications Commission.
k) "Telecommunications Service Providers" — refers to any public switched
telecommunication service licensee or any entity licensed to provide similar
services, mobile cellular telecommunication service licensee or any entity
licensed to provide similar services under the laws of the Philippines. These
shall include fixed line operators, cellular service operators, etc.
SECTION 4. Establishment of Exclusive International Gateway. An exclusive
international gateway shall be established pursuant to the provisions of this Act.
Such gateway shall serve as the exclusive telecommunications transit portal through
which
all
incoming
and
outgoing
international
calls,
messages
and
data
transmissions will pass, either from sources overseas towards the Philippines, or
from sources within the Philippines directed overseas.
The exclusive international gateway shall be created through a public-private
partnership, joint venture or build-operate-transfer agreement between a qualified
private corporation and the Philippine government, subject to the procedures and
processes under existing laws.
The selection of the qualified private corporation shall be accomplished through a
public bidding process in accordance with the Build-Operate-Transfer Law, its
implementing rules and regulations, the Joint Venture Guidelines, and the
Procurement Law.
SECTION 4. Pre-qualification, Bids and Awards Committee. For purposes of
solicitation, bidding and pre-qualification of bidders to the Exclusive International
Gateway, the N TC shall create a Pre-qualification, Bids and Awards Committee
(PBAC) composed of the following:
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1 . The commissioner of the NTC;
2. One
technical
officer
knowledgeable
with
the
technical
aspects
or
requirements of the project, assigned by the NTC;
3. One technical finance officer, assigned by the NTC;
4. One management or operation officer, assigned by the NTC;
5. The Administrator of the NEDA or his representative;
6. Two
representatives
from
the
private
sector
involved
in
the
telecommunications industry.
7. One representative from the PPP Center of the Philippines (formerly the BOT
Center).
8. One representative from the Commission on Audit.
Those enumerated under numbers six to eight above shall be deemed nonvoting
observers of the PBAC.
The PBAC shall be responsible for all aspects of the pre-bidding and bidding
process in the case of solicited proposals, and for the comparative bidding
process, in the case of Unsolicited Proposals, including, among others, the
preparation of the bidding/tender documents, publication of the invitation to pre
qualify and bid, pre-qualification of prospective bidders, conduct of pre-bid
conferences and issuance of supplemental notices, interpretation of the rules
regarding the bidding, the conduct of bidding, evaluation of bids, resolution of
disputes between bidders, and recommendation for the acceptance of the bid
and/or for the award of the project.
The PBAC shall, following all processes and procedures mandated by existing
laws on public bidding, shall render an award to one private entity, who shall be
responsible for the establishment and operation of the exclusive international
gateway.
The NTC shall, pursuant to the award, issue a license to the private partner
authorizing the latter to establish and operate the exclusive international gateway
for a period of time as will be determined by the implementing rules and
regulations of this Act. Provided, that the initial term of the license shall be for a
period of twenty-five years (25 years) from the issuance of such license.
SECTION 5. Responsibilities of the Private Partner. Subject to the provisions of this
Act and its implementing rules and regulations, the licensed private entity to which
the establishment and operation of the exclusive international gateway is awarded,
shall:
1. Establish the complete international gateway infrastructure, including all the
investment required to set up the equipment and earth stations.
2. Establish the interconnection with the telecommunications service providers
and
in
the
Philippines
and
international
telecommunications
service
providers.
3. Operate and maintain the exclusive international gateway at its own cost
subject to the period provided for in the award to the private entity and the
implementing rules and regulations of this Act.
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4. Maintain a database of communications that have utilized the exclusive
international gateway.
5. Provide the NTC, the BIR, and this Congress of periodic reports regarding
the use of and traffic within the gateway, and other pertinent data.
6. Train selected Filipino nationals in the technical aspects of the operation,
maintenance and processes of the exclusive international gateway.
SECTION 6. Responsibilities of the NTC The NTC shall be the focal agency in the
initiative provided for in this Act, pursuant to its mandate under Executive Order
No. 546, Section 15. The responsibilities of the NTC pursuant to this Act shall
include:
1 Supervise the technical aspects of the operations and maintenance of the
exclusive international gateway, specifically as to the manner of use, flow of
traffic of communication, and security of data and communication.
2. Establish benchmark figures for tariff purposes, such as inbound and outbound
monthly minutes and termination fees.
3, Select Filipino nationals for training through on-the-job training programs
with the private partner.
4. Assess and critique the efficiency of the private partner in its operations and
maintenance.
SECTION 7. License Fees. In consideration for the grant of the license, the Licensee
shall pay to the N TC a fixed license fee in respect to the initial term of the license in
an amount to be determined by the NTC as determined in the Implementing Rules
and Regulations of this Act.
An annual variable license fee shall also be paid by the licensee to the NTC in an
amount equal to 0.5% or one-half of one percent of the audited license fee income as
defined in this Act.
SECTION 8. Tariffs on use of the Exclusive International Gateway. The use of the
exclusive international gateway shall be taxed at established rates per minute of use,
regardless of whether the communications originate through fixed lines, cellular
phones, data or computer systems, etc., and termination fee charges at rates to be
established by the BIR and the NTC.
The BIR and the NTC shall jointly prepare a report to be submitted to the Congress
on the tariff generation of the exclusive international gateway.
SECTION 8. Tariff-Exempt Industries. In recognition of the business and
investment generation of certain industries, the industries listed in the annual
Investments Priority Plan OPP) shall enjoy tariff exemption on the usage of the
exclusive international gateway for the duration of such priority on such industries
as provided for in the annual IPP.
SECTION 8. Executive Officers Charged with Execution of this Act. The
Commissioner of the National Telecommunication Commission shall be the
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executive officer charged with carrying out the provisions of this Act, with authority
to assign the direct executive control of the enforcement of its provisions and the
rules and regulations that may hereafter be promulgated in accordance therewith to
such representatives, bureau, office or service as said Commissioner may designate.
SECTION 9. Separability Clause. In the event that any provision of this Act is
declared unconstitutional, invalid, or illegal, the constitutionality, validity, or
legality of the remainder of the provisions of this Act shall not be affected thereby.
SECTION 10. Repealing Clause. All laws, presidential decrees, letters of
instructions, executive orders, administrative orders, rules, regulations, and other
issuances or parts thereof which are contrary to or inconsistent with the provisions
of this Act are hereby revoked, repealed or modified accordingly.
SECTION 11. Effectivity. This Act shall take effect fifteen (15) days following the
completion of its publication in any two (2) national newspapers of general
circulation.
Approved,
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