SEVENTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )
Pirst Regular Session )

HOUSE OF REPRESENTATIVES
7
House Bill NAS TS

Introduced by Representative Victor A. Yap

EXPLANATORY NOTE

The Philippines exercises sovereign rights to explore and to exploit, as well as to conserve

and to manage its natural resources, This is embodied in Article XII, Section 2, parageaph 2 of the

1987 Constitution which provides:

‘The State shall protect the nation’s marine wealth in its archipelagic waters, tertitorial
sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to

Filipino citizens.

This principle is likewise embodied in Paragraph 1(a) of Article 56 of the United Nations
Convention on the Law of the Sea (UNCLOS) which defines the rights of Coastal States over theit
Exclusive Economic Zones, providing its sovereign rights for the purpose of exploring and
exploiting, conserving and managing the natural resources, whether living or non-living, of the
waters superjacent to the seabed and of the seabed and its subsoil, and with regard to other activities
for the economic exploitation and exploration of the zone, such as the production of energy fiom

the water, currents and winds.

In light of the 12 July 2016 United Nations Permanent Court of Arbitration (PCA) Ruling in
PCA Case No. 2013-19 entitled In the Matter of ‘The South China Sea Arbitration between ‘The
Republic of Philippines and ‘The People’s Republic of China, it is high time for our country to
implement measures aimed at protecting the natural resources within our Exclusive Economic Zone

in the West Philippine Sea

Aside from its abundant aquatic and fishery resources, the West Philippine Sea is believed to

have a number of natural gas fields. There is thus the potential of harnessing environmental benefits

from the development of the West Philippine Sea as one of the country’s natural gas resource

Moreover, this re

wurce would have significant impact on foreign exchange savings because the



country would be spending less dollars to import coal and oil. The area has shown great potential to

provide cheaper electricity, which could ultimately resolve energy

secusity concerns of the country.

Aside from this, the West Philippine Sea may also be further developed for coastal and

marine tourism.

This bill seeks to protect the area’s great potential for the exclusive use and enjoyment of

Filipino citizens, Our country

should be able to develop and harness the revenue-generating
potential of the area arising from the capture of fish and fishery products, processing and marketing,

of all fisheries and aquatic products, marine energy exploration and development, as well as coastal

and marine tourism,

Hence, there is an imperative and urgent need to create a central body to do all these, As

such, approval of this measure is earnestly sought:



20

12
13
14

16
cd
18
19
20
21
2
23
24
25

SEVENTEENTH CONGRESS )

OF THE REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRI

NTATIVES

A975

House Bill No:

Introduced by Representative Victor A.

AN ACT.
TING THE WEST PHILIPPINE SEA AUTHORITY, PRESCRIBING ITS
3RS AND FUNCTIONS, AND APPROPRIATING FUNDS THEREFOR,

Be it enauted by the Senate and House of Representatives of the Philippines in Congress assembled

SECTION 1, Title ~ This Act shall be known as the “West Philippine Sea Development

Authority Act of 2016”.

SECTION 2, Declaration of Policy ~ 11 is hereby declared « national policy to protect the
nation’s maritime wealth within its Exclusive Economie Zone, and reserve its use and enjoyment

exchusively 10 Lilipino citizens, particularly within the West Philippine Sea

SECTION 3. Creation - In pursuance of said policy, there is hereby created a body
corporate to be known as the West Philippine Sea Development Authority which shall be attached
to the Office of the President

Uhe Authority shall be governed by the provisions of Republic Ace No. 10149, othenwise
known as the “GOCC Governance Act of 2011”, and be subject to the regulatory jurisdiction of the

Governance Commission for GOCCs (GCG).

SECTION 4. Jurisdiction ~ ‘The Authority shall have primary jurisdiction over the
development, management, conservation, protection, and wilization of all resources within dhe West
Philippine Sea Exclusive Heonomic Zone of the Philippines, as defined by Administrative Order
No. 29, s. 2012, and as enunciated in the United Nations Permanent Court of Arbitration Ruling in

PCA Case No. 2013-19 In the Matter of The South China Sea Ai

tion between ‘The Republic of
Philippines and ‘The People’s Republic of China dated 12 July 2016, except for municipal waters,

which shall remain under the jurisdiction of Local Government Units (LGU)

For purposes of this Act, the Philippines’ Exclusive Economic Zone in the West Philippine

Sea pertains to the maritime areas within 200 nautical miles from the baselines on the western side


i

10
u
1
13,
14
15
16
W
18
19
20
a
22
23
24

26
ar
28
29
30
at
32
33
34
35
36
37
38
39

of the Philippine archipelago, including the Luzon Sea as well as the waters around, within and

adjacent to the Kalayaan Island Group and Bajo De Masinlog, a

Iso known as Scarborough Shoal.
‘The Authority shall exercise revenue-generating functions arising from, but not limited to,

capture of fish and fishery products, processing and marketing of all fisheries and aquatic products,

marine energy exploration and development, coastal and marine tour

om within its jurisdiction,

The Authority shall supervise and regulate the production and capture of fish and fishery
products within its jurisdiction, as well as the processing and marketing of all fisheries and aquatic

produets within its jurisdiction

‘The Authority shall partake in rationalizing all ocean sector initiatives within its jurisdiction
which impact fish and marine resources or theit habitat, including, but not limited to marine energy
exploration and development, coastal and marine tourism, designation of shipping lanes and

protected areas

SECTION 5, Capi

capital stock of Two Billion Pesos (Php 2,000,000,000,00) divided into two billion (2,000,000,000)

alization and Funding, — ‘The Authority shall have an authorized

shares having a par value of One Peso (Php 1.00)

h, co be fully subscribed and paid by the

Nanional Government

SECTION 6, Powers and functions of the Authority. ‘The Authority shall have the

following powers and functions:

a) ‘To act as central administrative and coordinating body, particularly of other national

government agencies

and local government units that ate responsible for fisheries, ecological
protection, marine life and species, energy and other envicoamental issues within its

jurisdictions

b) ‘Yo administer, manage and develop the area covered by its jurisdiction;

©) ‘To enhance economic development opportunities that will provide sustainable financial

improvements benefiting the local environment and the economic quality of life for Local

Government Units (LGUs) bordering the area,

4) ‘To accept any local or foreign investment, busir

or enterprises and to raise revenues from

among, bur not limited co the following:

1) fees, tolls, charges, rentals and the like for the use of the waters for all beneficial

purposes, including bue not limited to, fishery, reereation, industrial, agricultural

2


on we

19
20
an
2
23
24

26
a
28
29
30
31
32
33
34
35,
36
a7
38
39

s, facilities

navigation and irrigation, as well as for the use of Authority propestis

‘equipment;

2) fees, tolls, charges, rentals and the like arising from marine energy exploration
development, coastal and marine tourism;

3) periodic license fees and/or applications;

4) proceeds from administrative fines and penalties which may be imposed pursuant to
rules and regulations to be promulgated by the Board;

5) donations, grants, assistance and contributions of all kinds from the National

Government, LGUs, and foreign governments and privately-owned entities and wtilize

the same;

Te

adopt and implement measure and standards for environmental pollution contiol of all

areas with its territory and 10 enforce the sams

Yo protect marine life and species, improve water quality in the area by

1) Permanently protecting marine life that are dependent on the area's ecosystem:

2) Restoring

the long-term stable aquatic and shoreline habitat for marine life that depend

on the surea

3) Protecting water quality by minimizing pollutants and other sources of water quality
problems; and

1) Making, altering or modifying orders requiring the discontinuance of pollution,

specilying the conditions and the time within which such discontinuance must be

accomplished

‘To undertake and rep tenance of utilities, other

te the establishment, operation and ma

services and infrastructure in the area

Vo exercise exclusive jurisdiction to issue permits for the use of all surface water for any

projects or activities in or affecting the said area including navigation, constiuetion, and

operation of fishpens, fish enclosures, fish corrals and the likes

‘Vo exercise exclusive jurisdiction to issue permits and licenses for use in marine energy

exploration and development, as well as coastal and marine tourism;

Fo issue licenses for the operation of commercial fishing vessels and permits for the conduct
of fishery activities subject to the specific carrying capacities of the resource as determined
by studies or other reliable evidence, with preference being given to the local communities

living within bordering municipalities;


kwon

12
B
14
15
16
7
18
19
20
2

23
24
25
26

37
38
39

k) To adopt, prescribe, and promulgate rules and regulations governing the procedures of the

Authority with the respect to the issuance of permits, procedures and guidelines concerning,

the classification, establishment, construction, maintenance and operation of all fishing ports
and the operation of businesses therein, except those which are owned and operated by

LGUs;

}) "Vo issue, renew, or deny permits, under such conditions as it may determine to be

reasonable fe

the prevention and abatement of pollution;

m) ‘To collect fees, tolls, charges, rentals and the like for the use of the waters for all beneficial
purposes, including but not limited 10, fishery, recreation, industrial, agricultural navigation

and int

ion, as well as for the use of Authority properties, facilities and equipment
Provided, that the rates of the fees to be collected, and the sharing with other government

agencies arid LGUs bordering the a

as

2) ‘To adopt, alter and use a corporate seal; make contracts, leases, own, oF otherwise dispose of
personal or real property; sue and be sued; to form, establish, organize and maintain
subsidiary corporation; and, otherwise, catty out its functions and ducies as provided for in

this Aes and

0) ‘To exercise such other powers and functions asm

ay necessary and proper for the effective

implementation of this Act

SECTION 7. Power to Issue Bonds.

i) ‘The Authority may be authorized to issue bonds and other securitivs and enter into any form

of indebtedness to finance its projects and programs: Pronidedk ‘That only: so much of such

bonds and securities as the anaual project implementation would require shall be issued ancl

sold: Provided, further, ‘Vhac no bonds and securities shall he issued unless eighty percent (80Y

of those already issued have been sold: Provided, furthermore, That the total amount of the

honds ot securities and long-term debts issued shall in no ease exceed wenty (20) times the

paid-up capital and surplus of the Authority: Provided, finally, ‘That in no instance sball the

sovereign guarantee of the Republic of the Philippines be required or allowed

b) ‘The Authority, in consultation with the Secretary of Finance and the Monetary Board, shall

preseribe the form, the rate of interest and denomination, maturities, negotiabilities, call or
redemption features and all other terms and conditions for the bonds and secusities 10 be

issued.


ervNounone

26
7
28
29
30
31
32
33
34
35
36
a7

©) ‘The bonds and securities

sued under this Act, including the income thereof shall be
exempted from all kinds of local taxes and from attachment, execution and seizure which

facts shall be stated on the face thereof.

SECTION 8. Board of Directors

a) ‘The Authority shall be governed and its activities be directed, controlled and managed by a

Board of Directors composed of seven (7) full-time Members, headed by « Chairman, who
shall be appointed by the President of the Philippines from a shortlist submited by the
GCG and in accordance with the Fit and Proper Rule as determined by the GCG in

cordance with the provisions of Republic Act No. 10149.

b) ‘The Chairman shall have a term of five (5) years bue may be renewed for a non- extendible
period of one (1) year; Provided, that the term of the initial appointees shall be staggered
such that the Chairman shall hold office for a term of five (5) years; the next three (3)

members for three (3) years and the other three (3) members for two (2) years
©) Upon the expiration of their respective terms, they shall continue to serve until their
successor shall have been appointed and qualified. In ease a member fails co complete his

term, his successor shall only serve the unexpired portion of the term of his predecessor

d) A member may be removed from office by the President for cause in accordance with the

Civil Service nutes and regulations.

©) ‘The members of the board may receive per diews, allowances, and inceatives in accordance

with the guidelines promulgated by the GCG.

The Board shall meet regularly at least once a month, but special meetings may be called

either by the Chairperson or by four (4) members of the Board, when necessary. Four (4)
members of the Board shall constitute a quorum and any approval of business shall require

the coneurrence of at least four (4) members.

SECTION 9, Powers, Functions and Duties of the Board of Directors. ‘The Board

shall bave the following powers, functions and duties:

a) ‘To ditect the management, operations, and administration of the Authority;


ii b) ‘To approve the organizational steucture of the Authority, define the duties and
2 responsibilities of all officials and employees and approve a compensation and benefit
3 scheme;

4

5 ©) To formulate, revise or adjust periodically all policies, and co promulgate the necessary rules
6 and regulations and manuals of procedures for the effective implementation off this Acts

fi

8 d) ‘To approve the annual and/or supplemental budgets of the Authority and authorize such
9 expenditures by the Authority as are in the interest of its effective administration and
10 operations;
a
12 ©) ‘Yo submit an annual report of the operation of the Authority to the President of the
13 Philippines, President of the Senate and Speaker of the House of Representatives; and
4
15 1) ‘To exercise such other powers as may necessary and proper for the effective enforcement of
16 this Acc and ro accomplish the purposes for which the Authority was organized; and to do
v7 and to perform any and all acts and incidental to the attainment of all the purposes of the
18 Authority
19
20 SECTION 10, The Executive Director
21
2 4) ‘The Authority shall have an Hxeeutive Director who shall be appointed by the Chairman:
23
2a b) No person shall be appointed Executive Director unless he is at least thirty five (35) years of
25 aye at the time of his appointment, and who has at least ten (10) yeats experience in the fi
26 of administration, management, and area development prior to the date of his appointment
27 He must not have been a candidate for any elective position in the elections immediately
28 preceding his appointment.

29

30 SECTION 11. Powers, Functions and Duties of the Executive Director = ‘The
31 Executive Director shall have the following powers, duties and responsibilities:

32;

33 a) ‘To submit to the Board for consideration policies, plans and programs which, in his
34 judgment, are necessary to carry out the purposes and provisions of this Aets

35

36 b) ‘Vo prepare the budget of the Authority for approval of the Board:

37

38 Vo execute, administer and implement the policies and measures approved by the Board



10
at
2
2B
14

16
vv
18
19
20
aa
2
23
24

26
7
28
29
30

32
33
34
35
36
7
38
39

4) ‘To direct and supervise the operations and internal administration of the Authority. He may
delegate certain administrative responsibilities to other officers of the Authority subject to

the rules and regulations of the Board;

©) To appoint all ei

ploy

cs of the Authority except the heads of the departments and divisions

whose appointments shall be made by the Board of Directors upon his recommendation;

Recommend the number and salaries of, appoint the subordinate officers and personnel of
the Authority, and remove or otherwise discipline for cause any officer ot
employee: Pronided, That in all cases the Authority shall be covered by Republic Act No.
6758,

as amended by Joint Resolution Nos. 1, series of 1994, and 4, seties of 2009, the

Compensation and Position Classification System for GOCCs under Republic Act No.
10149, as approved by the President of the Philippines: Provided, further, That prior approval

from the GCG shall be obtained therefor;

g) ‘To represent the Authority in all dealings with other offices, agencies and instrumentalities

of the Government and with all persons and entities, public or privates and

h) ‘To exercise sueh other powers as may be vested in him by the Board.

SE

“TION 12. Organizational Structure of the Authority
i) ‘The Executive Director shall prepare the organizational steucture of the Authority that
would best carry out its powers and functions, and attain the objectives of this Act and shall

present the same to the Board for its approval

b) Subject to approval of the Board, the Executive Director shall likewise determine the rates

of allowances, Joxoruria and other additional compensation, which the Authority is hereby

authorized 1o grant its officers, technical staff, consultants and personnel detaited to it

SECTION 13. Applicability of the Corporation Law. — ‘The provisions of the

Corporation Law, as amended, insofar as they are not inconsistent with this Act sha

II be applicable

to the operations of the Authority

SECTION M. By Laws and Rules and Regulations. The Board of Directors shall
adopt its By-Laws promulgate the rules and regulations to implement the provisions of this Act

which shall take effect upon approval by the President of the Philippines.


10

11
2
2B

SECTION 15. Separability Clause. — If, for any reason, any provisions of this Act is

declared invalid or unconstitutional, the other part or parts thereof which are not affected thereby

shall continue to be in full force and effect.

SECTION 16. Repealing Clause. ~ All laws, decrees, executive orders, issuances, or rules

and regulations, or portions thereof, that are inconsistent with this Act or any provision or

provisions, thereof, are repealed or modified accordingly

~ This Act shall take effect fifteen (15) days after its publication

SECTION 17. Effectivity

in ovo 2) newspapers of general cireulation,

Approved