FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
SENATE 
) 
) 
) 
S.No. 2916 
Introduced by Senator Ralph G. Recto 
EXPLANATORY NOTE 
It is in the best interest of the state that a Government-owned or Controlled 
Corporation be allowed to operate at a profit and provide substantial revenues for the 
Government and thereafter contribute to the government's thrusts of poverty alleviation, 
employment generation and sustained economic growth and recovery. 
It is under the same objective that Presidential Decree No. (PD) 949, as amended by 
PD 1803, vested on the Philippine National Oil Company (PNOC) the administration and 
ownership of an industrial estate located in the municipalities of Limay and Mariveles in 
Bataan with the end in view of creating an industrial park (the "Park") that is fully integrated 
and where a homogeneous group of petrochemical-related plants shall be located. It was 
aimed at providing the country with key polymers (or plastic resins) such as polypropylene, 
polyethylene, polyvinyl chloride, and polystyrene. 
However, PD 949, as amended, limited the use of the Park to petrochemical-related 
enterprises/purposes only. This has rendered the Park unavailable to potential investors who 
are engaged in businesses other than petrochemicals. 
Actual development of the Park began in 1995. However, the PNOC, through a 
subsidiary, has developed an area of 170 hectares only out of the total land area of 530 
hectares. Furthermore, since its inception, the Park never achieved financial and commercial 
viability and has incurred losses totaling p.1.3 billion (1997-2010). At present, there are only 
three (3) locators in the 170 hectare developed portion when it can accommodate at least ten 
(10). With the low turnout of locators, most of the landholdings remain idle or underutilized. 
Also, losses can be attributed to the high cost in the administration, operation and 
maintenance of the Park. Meanwhile, revenues remain low owing to the fact that they come 
only in the form of throughout fees, administrative dues from the locators, water and payment 
of right of way. 
The low turnout of locators or investors in the Park mirrors the current state of the 
petrochemical industry in the country in which financial viability is adversely affected by 
various factors, among which are as follows: a) Low domestic demand - among ASEAN 
countries, the Philippines is one of the lowest in terms of per capita consumption of plastics 
in the region (Le. Singapore: 105 kgs./capita; Thailand: 32 kgs./capita; Philippines: II 


kgs./capita); b) Competition - the petrochemical industry is facing intense competition with 
imports from fully integrated sources due to low tariffs. Moreover, other petrochemical parks 
in the region do not only have modern and superior facilities but also provide more attractive 
fiscal and other incentives.; c) Capital intensive - Petrochemical companies are highly capital 
intensive and therefore require huge financial investment. As of December 31, 2010, the 
total capital expenditure investments of the Park amounted to P. 400 million. On the other 
hand, operating expenses as of December 31, 2010 amounted to ll-1.3 billion, specifically, 
labor cost (Jl430 million), impairment loss (Jl245 million), purchased services and utilities 
(P-150 million), and other business/miscellaneous expenses (Jl475 million); d) Smuggling; 
and e) Free Trade Agreements between China and ASEAN which will eliminate barriers to 
tariffs on petrochemicals trade between China and ASEAN states. 
With the low turnout of locators and huge losses incurred since the inception of the 
project, the original vision of establishing a fully integrated homogeneous petrochemical park 
proved to be unsound and unattainable. Instead of totally scrapping the project, one solution 
that can be adopted is to maximize the economic potential of the Park by implementing a 
mUltipurpose or mixed utilization thereof. 
Towards this end, the bill will lift the restriction imposed by PD 949 on the use of the 
industrial park for petrochemical-related enterprises and allow the possible entry of a wider 
array of enterprises and reinvigorate the business environment at the Parle 
In view of the foregoing, the passage of this bill is earnestly sought. 


SPtlUlf' 
FIFTEENTH CONGRESS OF THE REPUBLIC) 
,r}It." "f III' 'i',crrb,u 
OF THE PHILIPPINES 
) 
Second Regular Session 
) 
SENATE 
S.No. 2916 
Introduced by Senator Ralph G. Recto 
AN ACT 
'11 
JUL 26 P 2 :30 
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FURTHER AMENDING PRESIDENTIAL DECREE NO. 949 ENTITLED, 
"VESTING THE ADMINISTRATION IN FAVOR OF THE PHILIPPINE 
NATIONAL OIL COMPANY OF THAT PARCEL OF LAND OF THE 
PUBLIC DOMAIN LOCATED AT LAMAO, LIMAY, BATAAN WHICH WAS 
RESERVED 
FOR 
INDUSTRIAL 
PURPOSES 
PURSUANT 
TO 
PROCLAMATION NO. 361 DATED MARCH 6, 1968 AS AMENDED BY 
PROCLAMATION NO. 630 DATED NOVEMBER 29,1969 AND FOR OTHER 
PURPOSES" 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
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Section 1. Section 1 of P.D. 949 is hereby further amended to read as follows: 
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"Section 1. 
ASSIGNMENT OF DUTY. -
The 
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administration, management, and ownership of that parcel of land 
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of the ,public domain located at Lamao, Limay, Bataan which is 
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reserved for industrial estate purposes and more particularly 
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described in Presidential Proclamation No. 361 dated March 6, 
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1968 as amended by Proclamation No. 630 dated November 29, 
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1969, subject to private rights, if any, which shall be the subject of 
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expropriation, is hereby transferred to the Philippine National Oil 
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Company (PNOC) in full and absolute ownership for the nominal 
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sum of One Peso; Provided, that, ALL LOCATORS, LESSEES 
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AND SUB-LESSEES, [the Philippine Explosives Corporations] 


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Sec, 2, 
now operating therein shaH be aHowed to continue with its usual 
business operations, transactions and activities as authorized by 
law subject to such rules and regulations as PNOC may prescribe, 
x x x." 
Section 2 ofP,D, 949 is hereby further amended to read as follows: 
"Section 2, PURPOSE OF LAND USE. -
The [Philippine 
National Oil Company] PNOC shall manage, operate and develop 
the said parcel of land as AN [a petrochemical] industrial zone and 
will establish, develop and operate or cause the establishment, 
development and operation thereat of petrochemical and related 
industries, AS WELL AS OF BUSINESSES ENGAGED IN 
ENERGY AND ENERGY-ALLIED ACTIVITIES OR ENERGY-
RELATED INFRASTRUCTURE PROJECTS, OR OF SUCH 
OTHER BUSINESS ACTIVITIES THAT WILL PROMOTE ITS 
BEST ECONOMIC USE, AS DETERMINED BY PNOC 
BOARD OF DIRECTORS, by itself or its subsidiaries or by any 
other entity or person it may deem competent alone or in joint 
adventure; Provided, that, where any petrochemical industry OR 
ENERGY-RELATED INDUSTRY OR ANY SUCH OTHER 
BUSINESS AS DETERMINED BY PNOC is operated by private 
entities or persons, whether or not in joint venture with the PNOC 
or its subsidiaries, the PNOC may lease, sell, and/or convey such 
portions of the [petrochemical] industrial zone to such private 
entities or persons, 
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Sec. 3. Authority to Prescribe Rules. -
Within thirty (30) days from the effectivity of 
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this Act, the Department of Energy (DOE) and the PNOC shall prescribe such rules and 
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regulations necessary for the effective implementation of this Act. 
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Sec. 4. Separability Clause. -
Should any clause, sentence, paragraph, section or 
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provision of this Act be held unconstitutional or invalid, such declaration shall not affect, 
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impair or invalidate the remainder of this Act. 
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Sec. 5. Repealing Clause. -
All other laws, decrees, orders, or regulations or parts 
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thereof that are inconsistent with this Act are hereby repealed, modified or amended 
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accordingly. 
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Sec. 6. Effectivity. -
This Act shall take effect fifteen (15) days upon its publication 
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in at least two (2) newspapers of general circulation. 
Approved, 
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