Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

HOUSE BILLNO._517

Introduced by HONORABLE RAMON JOLO B. REVILLA IIL

EXPLANATORY NOTE

This bill seeks to convert the very promising facility of Sangley Point into a special
economic zone to facilitate further economic growth and social development of the Province of

Cavite, its first district, and the rest of the Philippines

In line with the concerted effort to promote economic reforms, it has become an
undeclared policy of the government to exhaust all possible means to support the country’s
continued search for genuine sustainability. To achieve this end, there is a need, among others, to
provide self-sustaining commercial, financial, industrial, and investment centers. Although with
minimal supervision, such self-sustaining centers are nonetheless supported by the government.

This end can be achieved with the provision of Sangley Point Special Economic Zone
Authority which will manage and operate the Sangley Point Ecozone.

Sangley Point was a major ship-repair and supply facility of the United States Navy. It
occupied the northern portion of the Cavite City peninsula and is surrounded by Manila Bay. It is
approximately eight miles southwest of Manila

Until World War I the station was the headquarters of the U.S. Asiatic Fleet. The naval
station was turned over to the Philippine government in 1971. At present, Sangley Point is being
used by the Philippine Navy for ship repair and dry docking purposes.

Sangley Point has the comparative advantages and potentials for growth. It has a bay
location that provides potential for sea transport. It has existing air and port facilities which could
be upgraded and improved. It has a military airport which has a concrete runway of 229 x 22


meters. It also has road links, which provide access to Manila and CALABARZON growth

corridors.
The economic opportunity that Sangley Point offers to the country must not be put to
waste, especially now that the country is in continuous search of possible springboards for

economic take-off.

In view of this, the passage of this bill is earnestly sought.

RAMON oi Sern i


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL’NO. 517

Introduced by HONORABLE RAMON JOLO B, REVILLA HI

AN ACT
ESTABLISHING A SPECIAL ECONOMIC ZONE IN THE CITY OF CAVITE,
PROVINCE OF CAVITE, CREATING FOR THE PURPOSE THE SANGLEY POIN
SPECIAL ECONOMIC ZONE AUTHORITY, AND APPROPRIATING FUNDS.
THEREFOR

Be wt enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

CHAPTERI
GENERAL PROVISIONS

SECTION 1, Short Title. — This Act shall be known as the ~Sangley Point Special

Economic Zone Act."

SECTION, 2, Declaration of Policy. ~ It is declared the policy of the State to encourage,
promote, and accelerate the sound and balanced industrial, economic, and social development of
the country. The establishment of special economic zones shall attract legitimate and productive
foreign investments in strategic locations in the country. It shall generate employment, enhance
productivity, and increase individual and family incomes, thereby enhancing the quality of life of

the Filipino people.

CHAPTER IL
CREATION OF THE ECONOMIC ZONE

SECTION 3. Creation of the Sangley Point Special Heonomie Zone. ~ \n accordance
with the foregoing declared policy and subject to the concurrence of the concerned local
government units (LGUs) of the Province of Cavite, there is hereby established a special
economic zone, hereinafter referred to as the Sangley Point Special Economic Zone or the


Sangley Point Ecozone. The Sangley Point Ecozone shall cover a particular area located in the
City of Cavite, Province of Cavite, the specific metes and bounds of which shall be more
particularly defined in a presidential proclamation that shall be issued for this purpose: Provided.

‘That the lands embraced therein shall be contiguous to one another

SECTION 4. Creation of the Sangley Point Special Heonomic Zone Authority, ~ There is
hereby created a body corporate to be known as the Sangley Point Special Economic Zone
Authority, hereinafter referred to as the SPSEZA, which shall manage and operate the Sangley
Point Ecozone in accordance with the provisions of this Act. The corporate life of the SPSEZA
shall expire in fifty (50) years, counted from the first 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 5. Governing Principles. — The SPSEZA shall manage and operate the

Sangley Point Ecozone, under the following principles:

a) Within the framework and limitations of the Constitution and applicable
provisions of Republic Act No. 7160, or the Local Government Code, as
amended, the Sangley Point 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 Sangley Point Ecozone shall be equipped with transportation,
telecommunications, and other facilities needed to attract legitimate and
productive investments, generate linkage industries and employment
opportunities for the people of the Cavite City and those in neighboring towns

and cities;

c) The Sangley Point 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, the Philippine
Economie Zone Authority (PEZA), and 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 Sangley Point Ecozone, either by themselves or


in a joint venture with Filipinos in any sector of industry, international trade

and commerce within the Sangley Point Ecozone,

©) The Sangley Point Ecozone shall be managed and operated as a separate
customs territory thereby ensuring the free flow or movement of goods and
capital within, into and out of its territory, and shall likewise provide
incentives subject to Title XIII of the National Internal Revenue Code, as
amended. However, exportation or removal of goods from the territory of the
Sangley Point Ecozone to the other parts of the Philippine territory shall be
subject to customs duties and taxes under Republic Act No. 10863, otherwise
known as the “Customs Modernization and Tariff Act” and other relevant tax

laws of the Philippines:

f) The areas comprising the Sangley Point Ecozone may be expanded or reduced
when necessary through a presidential proclamation issued for the said
purpose. For this purpose, the SPSEZA, 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 Sangley Point Ecozone
for the following purposes: (1) consolidation of lands for zone development:
(2) acquisition of right of way to the Sangley Point Ecozone: and (3) the
protection of watershed areas and natural assets valuable to the prosperity of
the Sangley Point Ecozone:

g) Goods manufactured by a Sangley Point 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 SPSEZA together with the PEZA, the Bureau of
Customs, the Bureau of Internal Revenue, 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: and

h) The defense of the Sangley Point Ecozone and the security of its perimeter
fence shall be the responsibility of the national government in coordination
With the SPSEZA and the concerned LGUs.

SECTION 6. Development Goals of the Sanglev Point Ecozone. ~ The SPSEZA shall

determine the development goals of the Sangley Point Ecozone within the framework of national


development plans, policies, and goals. The Chairperson-Administrator shall, upon approval by
the Board of the SPSEZA, submit the Sangley Point Ecozone plans, programs, and projects to

the Regional Development Council for inclusion in the regional development plan.

SECTION 7. Capitalization. ~ The SPSEZA shall have an authorized capital stock of
twwo billion (2,000,000,000) no par shares with a minimum issue of Ten pesos (Php10.00) each
the majority shares of which shall be subscribed and paid for by the national government and the
LGUs embracing the Sangley Point Ecozone. The Board of Directors of the SPSEZA 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 SPSEZA to the general public under such policy as
the Board and the Secretary of Finance may determine. 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 SPSEZA,

‘The amount necessary to subscribe and pay for the shares of the national government to
the capital stock of the SPSEZA shall be included in the General Appropriations Act, For the
LGUs concerned, the funds shall be taken from their internal revenue allotment and other local
funds.

SECTION 8. Principal Office of the SPS
office in the City of Cavite, Province of Cavite, but it may establish liaison offices within the

ZA, ~ The SPSEZA shall maintain its principal

Philippines as may be necessary for the proper conduct of its business

SECTION 9, Powers und Functions of the SPSEZA, - The SPSEZA shall have the

following powers and functions

a) To operate, administer, manage, and develop the Sangley Point Ecozone

according to the principles and provisions set forth in this Act:

b) To register, regulate, and supervise the enterprises in the Sangley Point

Ecozone in an efficient and decentralized manner, subject to existing laws:

c) To coordinate with LGUs and exercise general supervision over the

development plans, activities, and operations of the Sangley Point Ecozone:

d) To regulate and undertake the establishment, construction, operation, and
maintenance of public utilities, other services, and infrastructure in the

Sangley Point Ecozone such as light and power, shipping, barging,


stevedoring, cargo handling, hauling, warehousing, storage of cargo, port
services or concessions, piers, wharves, bulkheads, bulk terminals, mooring
areas, storage areas, roads, telecommunications, transport, bridges, terminals,
conveyors, water supply and storage, sewerage, drainage, airport operations in
coordination with the Civil Aviation Authority of the Philippines, and such
other services or concessions or infrastructure necessary or incidental to the

accomplishment of the objectives of this Act:

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, otherwise known
as the “Build Operate-Transfer Law”, as amended, or joint venture, adequate
facilities and infrastructure required or needed for the operation and
development of the Sangley Point Ecozone, in coordination with appropriate
national and local government authorities and in conformity with applicable
laws thereon:

f) To approve plans, programs, and projects of the Sangley Point Ecozone to be
submitted to the Regional Development Council for inclusion in the regional

development plan;

g) To operate on its own, either directly or through licenses to others, tourism-
related activities, including games, amusements, recreational and sports
facilities, subject to the approval and supervision of the Philippine

Amusement and Gaming Corporation;

h) To raise or borrow, within the limitation provided by law, and subject to the
approval of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP), as
the case may be, adequate and necessary funds from local or foreign sources.
to finance its projects and programs under this Act and for this 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;

i) To protect, preserve, maintain, and develop the forests, beaches, corals and
coral reefs, and maintain ecological balance within the Sangley Point
Ecozone. Notwithstanding the power of the SPSEZA to create rules for such

purpose, the rules and regulations of the Department of Environment and


Natural Resources and other government agencies involved in the above

functions shall be implemented by the SPSEZA,

j) To create, operate or contract to operate such functional units or offices of the

SPSEZA as it may deem necessary:

k) To adopt, alter, and use a corporate seal; contract, lease, buy, acquire, own or
otherwise dispose of personal or real property of whatever nature; sue and be
sued; and otherwise carry out its functions and duties as provided for in this

Act;

1) To issue certificates of origin for products manufactured or processed in the
Sangley Point Ecozone in accordance with prevailing rules of origin and the
pertinent regulations of the PEZA, the DTI, and the Department of Finance
(DOF).

m) To establish one-stop shops for the issuance of all necessary permits,
clearances, licenses, and other similar certifications to conduct such activities
intended to improve the ease of doing business within the Sangley Point
Ecozone, in coordination with government agencies having jurisdiction over
activities therein: Provided, That all government agencies are directed to
provide and extend utmost and full cooperation to the SPSEZA in the

establishment of such one-stop shops;

n) To ensure that the area covered by the Sangley Point Ecozone is secure at all
times: Provided, That the Armed Forces of the Philippines (AFP) or the
Philippine National Police (PNP) shall not interfere in the internal affairs of
the SPSEZA except to provide the necessary security and defense. or law

enforcement assistance, as the case may be: Provided, finally, That expenses

of the AFP or the PNP in the Sangley Point Ecozone shall be borne by the

national government;

0) To exercise such powers as may be essential, necessary or incidental to the
powers granted to it by this Act, as well as those that shall enable it to carry
out, implement and accomplish the purposes. objectives, and policies set forth

in this Act, and,


p) 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 10. Board of Directors of the SPSEZA. - The powers of the SPSEZA 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) A Chairperson, who shall at the same time be the administrator of the SPSEZA;

b) A Vice-Chairperson who shall be elected from among the members of the

Board of Directors,
c) Members consisting of:
1) The Governor of the Province of Cavite or a duly-authorized
representative from the Provincial Government of Cavite:
2) The member of the House of Representatives of the district
covered by the ecozone:
3) One (1) of the mayors of the municipalities covered by the
ecozone,
4) One (1) representative from the investors’ group: and
5) One (1) representative from among the workers in the Sanglev
Point Ecozone.
The Governor or the Governor’s duly authorized representative, the member of the House of
Representatives, and the mayors of the municipalities within the ecozone shall serve as ex officio
members of the Board, whose terms in the Board shall correspond to their terms as elected

officials.

The Chairperson-Administrator and the members of the Board, except for the
representatives of the investors and workers groups and 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, their replacements shall serve only the unexpired portion of the
respective terms. No person shall be appointed as a member of the Board unless the person 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, except the ex officio members, shall each receive per diem
allowance at rates to be determined by the Department of Budget and Management in accordance


with existing rules and regulations: Provided, however, That the total per diem allowance
collected each month shall not exceed the equivalent of four (4) meetings. unless and until the
President of the Philippines has fixed a higher rate for the per diem allowance for the members
of the Board, such allowance shall not be more than Ten thousand pesos (Php10,000.00) for

every Board meeting

SECTION 11. Organization and Personnel. — The Board of Directors of the SPSEZA.
shall provide for its organization and staff. 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. The Board shall have exclusive and final authority to
promote, transfer, assign, reassign, or remove officers of the SPSEZA, any provision of existing
law to the contrary notwithstanding. The Chairperson Administrator shall execute the decisions
of the Board.

The officers and employees of the SPSEZA, 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 SPSEZA, shall be removed or suspended except for cause,

as provided by civil service rules and regulations.

SECTION 12. Powers and Duties of the Chairperson-Administrator. - The Chairperson-

Administrator shall have the following powers and duties:

a) To direct and manage the affairs of the SPSEZA in accordance with the
policies of the Board:

b) To establish the internal organization of the SPSEZA 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 Sangley Point
Ecozone;

f) To recommend to the Board the remuneration and other emoluments of its
officers and employees in accordance with existing laws on compensation and

position classification;


2) 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 Sangley Point Ecozone; and,

h) To perform such other duties as may be assigned by the Board or which are

necessary or incidental to the office

SECTION. 13. /.egal Counsel, ~ The SPSEZA shall have its own internal legal counsel
who shall be under the supervision of the Government Corporate Counsel. When the exigencies
of business and operations demand it, the SPSEZA may engage the services of an outside

counsel either on a case to case or on a fixed retainer basis.

CHAPTER HI
INCENTIVES TO ECOZONE ENTERPRISES AND INVESTORS.

SECTION 14. /nvestors Visa. ~ Any foreign national who invests an amount of Two
hundred thousand US dollars (US$200,000.00) in a registered enterprise, either in cash or
equipment, shall be entitled to an investor's visa: Provided, That the foreign national has the

following qualifications

a) Must be at least eighteen (18) years of age,
b) Must not have been convicted by final judgment of a crime involving moral
turpitude;

c) Must not be afflicted with any dangerous or contagious disease:

d) Must not have been confined in an institution for any mental disorder or

disability; and,
e) Must be financially capable as borne out by credible and verifiable evidence.

With an investor's visa, an alien shall be entitled to reside in the Philippines while the
investment subsists. The alien investor shall submit an annual report, in the form duly prescribed
for the purpose, to prove that the investment in the country subsists. Should said alien investor
withdraw the investments from the Philippines, then the investor's visa issued to said alien shall
automatically expire and be withdrawn, The authority to issue visas and work permits shall
remain with the Bureau of Immigration (BI) and the Department of Labor and Employment
(DOLE), respectively: Provided, That the BI and the DOLE shall implement measures to
expedite the processing of such visas and permits for workers in the Sangley Point Ecozone and

coordinate closely with the SPSEZA to facilitate the conduct of business operations.


SECTION 15, Fiscal Incentives. — Registered enterprises of the Sangley Point Ecozone
may be entitled to pertinent fiscal incentives granted under Title XIII (Tax Incentives) of the
National Internal Revenue Code, as amended,

SECTION 16. Banking Rules and Regulations Governing Banks and Other Financial
Institutions. — Banks and other BSP-supervised financial institutions to be established in the
Sangley Point Ecozone shal] be under the supervision of the BSP and subject to existing banking

laws, rules and regulations

SECTION 17. Remitiances. ~ In the case of foreign investments, a duly registered entity
or enterprise within the Sangley Point Ecozone shall have the right to remit earnings to its
investors 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 Republic Act No. 7653,

otherwise known as the “New Central Bank Act” as amended.

CHAPTER IV
NATIONAL GOVERNMENT AND OTHER ENTITIES

SECTION 18. Supervision and Control. ~ For purposes of policy direction and
coordination, the SPSEZA shall be under the direct control and supervision of the Office of the

President of the Philippines.

SECTION 19, Relationship with Local Government Units. — Except as herein provided,
the LGUs comprising the Sangley Point Ecozone shall retain their basic autonomy and identity.
The City of Cavite, Province of Cavite, shall operate and function in accordance with the
framework of the Constitution, the Local Government Code of 1991, as amended, and this Act

In case of any conflict among the SPSEZA, the LGUs and the national government on
matters affecting the Sangley Point Ecozone, other than national defense and security matters,

the decision of the SPSEZA shall prevail

SECTION 20. Audit. ~ The Commission on Audit shall appoint a full-time auditor for
the SPSEZA and may assign such number of personnel as may be necessary to assist the auditor

in the performance of the auditor’s functions.

CHAPTER V
MISCELLANEOUS


SECTION 21. Interpretation and Construction, ~ The powers, authorities and functions
that are vested in the SPSEZA are intended to establish national self-sufficiency and self-reliance
in the advancement of and protection of the national integrity, enhancement of national security,
decentralization of governmenial functions and authority, and promotion of an efficient and
effective working relationship among the SPSEZA, the national government and the LGUs. Any
interpretation of this Act shall consider such intentions. In the event of conflict of interpretation
and provided the intentions cannot be harmonized, the provisions of this Act shall be construed

in favor of an interpretation that shall protect national security.

SECTION 22. Applicabiliiy Clause. ~ Insofar as they are consistent with the provisions
Of this Act, the provisions of Sections 30 to 41 of Republic Act No. 7916, otherwise known as
"The Special Economic Zone Act of 1995", as amended, shail likewise apply to the Sangley

Point Ecozone.

SECTION 23. Implementing Rules and Regulations. ~ Within sixty (60) days from
effectivity of this Act, the DTI shall, in coordination with the DOF and the National Economic
and Development Authority, formulate rules and regulations for the effective implementation of

the provisions of this Act.

SECTION 24. Separabilityv Clause. — \f 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 25, Repealing Clause. ~ All laws, executive orders or issuances or any part

thereof, which are inconsistent herewith, are hereby repealed or amended accordingly

SECTION 26. /:ffecrivity. — This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation.

“d,

Appro