FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
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) 
) 
SENATE 
S.B. No.1421 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
10 JlJl 13 PLI:13 
This bill mandates the establishment of an economic zone and free port 
in Jolo, Sulu to promote and hasten the industrial, economic and social 
development in the area. 
Republic Act No. 7916, also known as the "Special Economic Zone of 
1995", encourages economic growth through the creation of special economic 
zones or Ecozones. Each ecozone is developed into an independent community 
with minimum government supervision. There are four types of ecozones: 
industrial estates (lEs), export processing zones (EPZs), free trade zones and 
tourist and recreational centers. The Bases Conversion and Development Act of 
1992 created several areas such as the Subic Naval Base, Clark Air Base and 
Camp John Hay into special economic zones. These areas drew in investors 
that allowed them to be self-sustaining and developing communities. 
Jolo is located in the island of Sulu. It is geographically situated and can 
be utilized to as a dock for local and international vessels. The center of the 
Royal Sultanate of Sulu, it was once a thriving city even before Manila was 
declared a city. It is a, third class municipality made up of eight barangays. In 
the 2000 Philippine Census, the municipality had a population of 87,988 
people from 12,814 households, Because of the increasing military operations 
in the area, an increasing number of people are leaving the area. In 2005, an 
estimated 12,000 people fled, affecting the economic and social conditions of 
the area. Clearly, necessary measures are needed to promote the economic 
and industrial advancements hi. the area. 
This bill answers the need for development in the area through the 
creation of a special economic zone and free port. It shall be managed and 
operated by the Sulu Special Economic Zone and Free Port Authority (SSEZA) 
headed by a board of director~. The Secretary of the Department Trade and 
Industry, the Director General of the National Economic Development 
Authority or their respective representatives will serve as ex-officio members 
of the board. 


This measure allows foreign individuals and organizations to invest in 
the zone. Investors shall be granted incentives such as resident status and 
visa, fiscal incentives and tax exemptions. 
Finally, the bill provides the SSEZA an authorized stock of two billion 
(P2,000,000,000) no par sharei' with a minimum value of ten pesos (PIO.OO) 
each. The National Government shall own no less than 60 percent of the said 
capital stock. 
For these reasons, the passage of this bill is earnestly sought. 
~ 
Senator 
2 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S.B. No.14 21 
;1 
" , 
1 0 JUl 13 P 4 :13 
.. ,''". ""F 
Introduced by Senator Loren Legarda 
AN ACT 
CREATING A SPECIAL ECONOMIC ZONE AND FREEPORT IN JOLO, SULU, 
CREATING FOR THIS PURPOSE THE SULU SPECIAL ECONOMIC ZONE 
AND FREE PORT AUTHORITY, APPROPRIATING FUNDS THEREFOR, 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. Title. This Act shall be known as the "Sulu Special Economic 
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Zone and Free Port Act of 2010". 
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Sec 2. Declaration of State Policy and Principles. It is hereby declared the 
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policy of the State to actively encourage, promote and accelerate a sound and 
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balanced industrial, economic and social development of the country in order to 
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provide jobs to people, increase productivity and income, and improve the quality 
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of living condition through the establishment of special economic zones and free 
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ports in suitable and strategic locations in the country and through measures that 
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shall effectively attract legitimate and productive foreign investments. 
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It is likewise the policy of the State to enhance regional economic cooperation 
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as a means of bolstering the cou~try's own industrial development, and to establish 
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facilities with such cooperation can materialize. 
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Sec 3. Creation of SlIlu Special Economic Zone and Free Port. In pursuit of 
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the foregoing declared policy, there is hereby established a special economic zone 
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and free port in Jolo, Sulu, to be known as the Sulu Economic Zone and Free Port 
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herein referred to as the Zone. 
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Sec 4. Government Principles. The Sulu Economic Zone and Free Port shall be 
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managed and operated by the Sulu Special Economic Zone and Free Port AUThority, 
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herein created and referred to as the SSEZA, under the following principles: 
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(a) Under the framework and limitations of the constitution and applicable 
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provision of the local Government Code, the Zone Shall be developed into 
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and operated as a decentralized, self-reliant and self-sustaining industrial, 
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commercial-trading, agro-industrial, tourist-recreational, banking, financial 
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and investment center with corresponding residential areas in order to create 
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employment opportunities in and around and to effectively encourage and 
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attract legitimate and productive foreign investment; 
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(b) Except as otherwise provided herein, the local government units totally or 
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partially embraced within the Zone shall retain and maintain their basic 
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autonomy and identity. The Municipality of Jolo shall operate and function in 
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accordance with Republic act 7160, otherwise known as the Local 
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Government Code of 1991, insofar as the areas within its jurisdiction covered 
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in this Act are concerned. 
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(c) The Zone shall be managed and operated as a separate customs territory 
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outside the customs territory of the Philippines to ensure and facilitate the 
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free flow or movement of machinery, goods, articles and capital within, into 
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and exported out of the Zone. However, exportation or removal of goods, 
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articles and capital from the Zone to other parts of the Philippines territory 
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shall be subject to customs duties and taxes under the Customs and Tariff 
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code and other relevant tax laws of the Philippines. 
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(d) The areas comprising the Zone may be expanded or reduced when necessary. 
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For this purpose, the SSEZA, in consultation with the local government units, 
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shall have the power to power to acquire either by purchase, negotiation or 
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condemnation proceedings, any private lands within or adjacent to the Zone 
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for the following purpose: 
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(1) consolidation of lands for zone development; 
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(2) acquisition of right of way the Zone; and 
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(3) the protection of watershed areas and natural assets valuable to the 
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prosperity of the Zone. 
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(e) The Zone shall be provided with transportation, telecommunication, and 
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other facilities needed' to attract legitimate and productive foreign 
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investments, generate linkage with industries and create employment 
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opportunities for the people of the province of Sulu. 
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(f) The Zone may establish mutually beneficial economic relations with other 
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entities or enterprises within the country or, subject to the administrative 
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guidance of the Department of Foreign Affairs (DFA), the Philippines 
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Economic Zone Authority (PEZA) and/ or the Department of Trade and 
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Industry (DTI), with foreign entities or enterprises. 
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(g) Foreign citizens and c[)mpan.ies owned by non-Filipinos may set up 
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enterprises in the Zone either by themselves or in joint venture with Filipinos 
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in whatever proportion in any sector of industry, international trade and 
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commerce within the Zone. 
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(h) Goods manufacture by a Zone enterprise shall be made available for 
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immediate retail sale in the domestic market, subject to the payment of 
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corresponding taxes on raw materials and other regulations that may be 
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formulated by the SSEZA together with PEZA, the Bureau of Customs and 
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the DTI. However, in order to protect the domestic industry, there shall be a 
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negative list of industries that will be drawn up and regularly updated by the 
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PEZA. Enterprises engaged to industries included in such negative list shall 
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not be allowed to sell their products locally. 
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(i) The defense of the Zone, and Security of its perimeter fence shall be the 
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responsibility of the national government in coordination with the SSEZA 
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and local government units. 
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SEC 5. Incentives. Investors and business enterprise within the Zone shall be 
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entitled to the following incentives: 
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(a) Resident Status and Visa - Any Foreign investor who establishes a business 
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enterprise within the Zone and who maintains capital investment of not less 
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than One Hundred Fifty Thousand United States Dollars (US$150,OOO.OO) 
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shall be granted, along with his or her spouse, dependents, and unmarried 
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children below twenty-one (21) years of age, permanent resident status 
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within the Zone and freedom of ingress and egress to and from the Zone 
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without any need of any special authorization from the Bureau of 
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Immigration. Working visas renewable every two (2) years shall be issued to 
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foreign executives and foreign technicians with highly specialized skills 
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which no Filipino possesses, as certified by the Department of Labor and 
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Employment. 
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The foregoing is without prejudice to a foreigner acquiring permanent 
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resident status in the Philippines in accordance with applicable immigration, 
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retirement, and other related laws. 
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(b) Fiscal Incentives - Business establishments within the Zone shall be entitled 
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to the existing fiscal incentives as provided for under Presidential Decree No. 
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66, the law creating the Export Processing Zone Authority (EPZA), or those 
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provided under Book VI of Executive Order No. 226, otherwise known as the 
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"Omnibus Investments Code of 1987", and Republic act No. 7916, otherwise 
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known as the "Special Economic Zone Act of 1995", as amended by KA. 8748. 
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(c) Taxation - Except for real property taxes on land owned by the developers, 
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no taxes, local and national including final withholding taxes on dividend to 
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a business establishment's parent company and branch profits remittance to a 
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business establishment's head office, shall be imposed on business 
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establishments operating within the Zone. In lieu thereof, said business 
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establishments shall pay to the national government a final tax of eight 
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percent (8%) of the net taxable income as determined in accordance with the 
provisions of the National Internal Revenue Code, as amended, to be divided 
as follows: 
(1) Four percent (4%) shall be paid immediately to the National Government; 
(2) One percent (1 %) to the Province of Sulu; 
(3) One percent (1 %) to the Municipality of Jolo; 
(4) Two percent (2%) to the Sulu Special Economic Zone and Free Port 
Authority which shall be created under this Act; Provided, however, That 
the preferential tax herein granted shall not apply to offshore banking, 
financial services, trust and trading institutions which shall enjoy total 
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exemption from payment of income tax for purely offshore transactions as 
well as transaction within the Zone itself with SSEZA investors and 
residents; Provided, further, That domestic manufacturing firms or foreign 
firms and their local subsidiaries that export more than thirty percent 
(30%) of their total production in terms of volume per year to the customs 
territory of the Philippines shall be allowed to enjoy the income tax 
incentives herein granted; Provided, furthermore, That the final tax of eight 
percent (8%) of net taxable income be increased by Congress after ten (10) 
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years from effectivity of the amended tax and fiscal incentives of this Act 
and; and Provided, finally, That in no case shall the tax be imposed exceed 
fifteen percent (15%) of net taxable income as determined in accordance 
with the provisions of the National Internal Revenue Code, as amended. 
In cases of conflict between the local and national tax laws on one hand, 
and the tax incentives herein granted on the other, the same shall be 
resolved in favor of the latter. 
(d) Banking Rules and Regulations -
Existing banking laws, specifically 
Presidential Decree No. 1034 and Republic Act No. 6426 and their 
implementing rules and regulations as amended, and pertinent Bangko 
Sentral ng Pilipinas (BSP) circulation, rules and regulations shall apply on 
foreign exchange transactions in the current account transactions (trade and 
non-trade), local and foreign borrowings foreigu banks, foreign currency 
deposit units (FCDUs), offshore banking units (OBUs) and other financial 
institutions under the supervision of the BSP; Provided, That FCDUs of local 
commercial banks and OBUs of foreign banks shall enjoy minimum 
regulation by the BSP. 
(e) Profit Remittance - Without prior BSP approval, after tax profits and other 
earnings or foreign investments in enterprises in the Zone may be remitted 
outward in the equivalent foreign exchange through any of the banks 
licensed by the BSP in the Zone; Provided, however, That such foreign 
investment in said enterprises has been previously registered with the BSP. 
Sec 6. Ipso Facto Clause. Sections 30 to 42 of Republic Act No. 7916 shall ipso 
facto apply to the Sulu special Economic Zone and Free Port. 
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Sec 7. Creation of the Sulu Special Economic Zone and Free Port Authority. A 
body corporate to be known as the Sulu Special Economic Zone to manage and 
operate the Sulu Economic Zone and Free Port, is hereby created in accordance with 
the provisions of this Act This corporate franchise shall expire in fifty (50) years 
counted from the first day of the fifth year after the effectivity of this Act, unless 
otherwise extended by Congress. It shall be organized within one hundred eighty 
(ISO) days after the effectivity of this Act 
SEC 8. Principal Office. 'The Sulu Special Economic Zone and Free Port 
Authority shall maintain its principal office in Jolo, Sulu but it may establish 
branches and agencies within the Philippines and abroad as may be necessary for 
the proper conduct of its business. 
Sec 9. Powers and Functions of the Sulu Special Economic Zone and Free 
Port Authority. The Sulu Special Economic Zone and Free Port Authority shall have 
the following powers and functions: 
a) To operate, administer, and manage the Zone according to the principles and 
provisions set forth in this Act; 
b) To adopt, alter and use a corporate seal; to contract, lease, buy, sell, <lcquire, 
own and / or otherwise dispose of movable or immovable as well as personal 
or real property of whatever nature (induding but not limited to shares of 
stock or participation in private corporations or in limited partnerships, or in 
joint ventures with limited liability), bonds, precious metals in bullions, 
ingots, and easily convertible foreign exchange; 
c) To sue and be sued in order to carry out its duties, responsibilities, privileges, 
powers and functions as granted and provided for in this Act; and to exercise 
the power of eminent domain for public use and public purpose; 
d) To raise or borrow adequate and necessary funds from local or foreign 
sources within the limitatipn provided by the law, to finance its projects and 
programs under this Act, and for that purpose to issue bonds, promissory 
notes, and other forms of securities, and to secure by a guarantee, pledge, 
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mortgage, deed of h'ust or an assignment of all or part of its property or 
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assets; 
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e) To recommend to the President the Issuance of a proclamation to fix or 
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delimit of the site of the Zbne; 
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f) To issue certifications of origin for products manufactured or processed in the 
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Zone in accordance with prevailing rules, and the pertinent regulations of 
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PEZA, DTI and! or the Department of finance (DOF); 
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g) To approve, accept, accredit and allow any local or foreign business, 
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enterprise or inveshnent. in the Zone subject only to such rules and 
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regulations as SSEZA may promulgate from time to time in conformity with 
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the provisions of this Act and the limitations provided in the Constitution; 
IS 
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h) To authorize or undertake on its own or through others, and regulate the 
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establishment, operation and maintenance of public utilities, services and 
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infrastructure in the Zone such as shipping, shipbuilding, ship registry and 
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every matter related or, attendant thereto, barging, stevedoring, cargo 
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handling, hauling, warehousing, storage of cargo, port services or 
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concessions, pier, wharves, bulkheads, bulk terminals, conveyors, water 
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supply and storage, sewerage, drainage, airport operations, such other 
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services or concessions or infrastructure necessary or incidental to the 
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accomplishment of the objectives of this Act; Provided, however, that the 
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private investors in the Zone shall be given priority in the awarding of 
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contracts, franchises, licenses or permits for the establishment, operation and 
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maintenance of utilities, services and infrastructure in the Zone; 
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i) To construct, acquire, own, lease, operate and maintain on its own or through 
• 
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others by virtue of contracts, franchises, licenses, or permits under the build-
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operate-transfer scheme or under a joint venture with the private sector, any 
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or all of the public utilities and infrastructure required or needed in the Zone, 
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in coordination with appropriate national and local government authorities 
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and in conformity with applicable laws thereon; 
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j) To operate on its own, either directly or through a subsidiary entity or license 
to 
other, 
tourism-related 
activities, 
including 
games, 
amusements, 
3 
recreational and sports facilities such as golf courses, and others, under 
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priorities and standard by the SSEZA; 
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k) To maintain ecological balance, and promote sustainable development in 
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Sulu while preserving, developing and maintaining marine resources, 
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beaches, minerals and mineral deposits including precious metals, coral and 
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coral reefs within the Zone. The virgin forests within the Zone shall be 
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proclaimed as a national park and shall be covered by a permanent total log 
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ban. For this purpose, the rules and regulations of the Department of 
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Environment and Natural Resources and other government agencies 
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involved in the above functions shall be implemented by the SSEZA, 
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including the issuance of environmental certificates, free patents and 
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leasehold rights over government lands and mining, drilling and timber 
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licenses; Provided, that all legal restrictions imposed for the conveyance, use, 
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lease or other disposition of free patents issued prior to the effectivity of this 
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Act may be lifted should the SSEZA deem it necessary to carry out its 
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mandate under this Act; 
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I) To adopt, implement and enforce reasonable measures and standards to 
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control pollution within the Zone; 
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m) To establish and maintain a security force and firefighting capability or hire 
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others to provide the same for the defense and security of the Zone; 
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n) To form, establish, organize and maintain subsidiary corporations, as its 
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business and operations may require, whether under the laws of the 
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Philippines or not; 
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0) To report to the Bureau of Immigration the names of foreigners who have 
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been granted permanent resident status and working visas within thirty (30) 
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days after issuance of such grant; 
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p) To formulate and approve the organization and budget as submitted by the 
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Chairman-Administrator; 
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q) To regulate and undertake the establishment, operation and maintenance of 
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public utilities services and infrastructure in the Zone such as heat, light and 
power, water supply, telecommunications, transport, toll roads and bridges, 
port services, and to fix just, reasonable and competitive rates, fares, charges 
and prices therefor; 
r) To directly negotiate with and grant foreign andlor international airlines and 
landing rights into the port; 
s) To provide, in cooperation with Department of Tourism, non-fiscal incentives 
to tourism-related businesses operating within the Zone; 
t) To charge reasonable fees for the provision of other services and the 
maintenance of infrastructure and utilities; 
u) To impose reasonable fines and penalties for violations of the provisions of 
this Act, the rules and regulations to be established by the SSEZA or any 
other law that the SSEZA is tasked to enforce; and 
v) To issue rules and regulations consistent with the provisions of this purpose, 
objectives and policies provided. 
Sec 10. Non- Profit Character of the Sulu Special Economic Zone Authority. 
The Sulu Special Economic Zone and Free Port Authority shall be a non-profit 
institution and shall devote the use of its returns from capital investment as well as 
excess revenues from its operetions, for the development, improvement and 
maintenance and other related expenditures of the SSEZA to pay its indebtedness 
and obligations and in furtherance and effective implementation of the policies 
provided for in this Act. In consonance with this, the SSEZA is hereby declared 
exempt from the payment of all taxes, duties, fees, imposts, charges, costs and 
service fees in any court or administrative proceeding in which it may be a party. 
The foregoing exemptions may, however, be entirely or partially lifted by the 
President of the Philippines upon the recommendation of the Secretary of Finance, 
not earlier than five (5) years from the effectivity of this Act, if the President shall 
find the SSEZA to be self-sustaining and financially capable by then to pay such 
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taxes, customs, duties, fees and other charges after providing for debt service 
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requirements of the SSEZA and of its projected capital and operating expendihlres. 
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Sec 11. Board of Directors of the Sulu Special Economic Zone and Free Port 
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Authority. The powers of the SSEZA shall be vested in and shall be composed of the 
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following: 
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(a) The Secretary of the Department of Trade and Industry or his duly 
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authorized representative, as ex-officio member of the board of Directors; 
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(b) The Director General of the National Economic Development Authority or his 
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duly authorized representative, as ex-officio member of the Board; 
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(c) Two (2) other representatives of the National Government, as ex-officio 
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members; 
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(d) The Administrator of SSEZA who shall serve as ex-officio chairman of the 
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Board; 
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(e) The mayors of the municipality of Jolo as ex-officio member; 
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(f) Two (2) representatives from the labor sector from among the workers in the 
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Zone; 
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(g) Two (2) representatives from the business and investments sectors; 
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(h) Three (3) representatives from the private sector coming from the residents of 
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Jolo, preferably Moslem. 
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The Chairman-Administrator and members of the Board, except the ex-officio 
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member, shall be appointed by the President of the Philippines to serve for a term of 
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six (6) years, unless sooner removed for cause or dies or resigns voluntarily. In case 
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of the death, resignation or removal for cause, the replacement shall serve only the 
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unexpired portion of the term. The Vice-Chairman shall be elected form among 
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members of the Board. 
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Except for the representatives of the business and investment sector, no 
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person shall be appointed by the President of the Philippines as member of the 
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Board unless he is a Filipino citizen, of good moral character, of proven probity and 
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integrity and a degree-holder in any of the following fields: economics, business, 
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public administration, law, management, or their equivalent, and with at least ten 
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(10) years relevant working experience preferably in the field of management or 
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public administration. 
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Each member of the Board, except the Chairman-Administrator whose 
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compensation shall be determined by the Board, shall each receive a per diem of not 
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more than Ten Thousand Pesos (PIO,OOO.OO) for every Board meeting actually 
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attended, unless and until the President of the Philippines fixes a higher per diem 
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for the members of the Board: Provided, however, That the fixed per diem collected 
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each month shall not exceed the equivalent per diem for four (4) meetings. 
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Sec 12. SSEZA Administrator and Chief Executive Officer. The President of 
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the Philippines shall appoint a full-time professional and competent administrator 
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and chief executive officer of the Sulu Special Economic Zone and Free Port 
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Authority who shall serve for a term of six (6) years, unless sooner removed for a 
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cause or dies or resigns voluntarily. In case of death, resignation, or removal for 
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cause, the replacement shall serve the unexpired portion of the term. The 
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compensation of the Administrator and Chief Executive Officer shall be determined 
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by the Board of Directors. 
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Sec 13. Powers and duties of the Chairman-Administrator. The Chairman 
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Administrator shall have the following powers and duties: 
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a) To direct and manage the affairs of the SSEZA in accordance with the policies 
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of the Board; 
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b) To establish the internal organization of the SSEZA under conditions that the 
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Board may prescribe; 
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c) To submit an annual budget and necessary supplement budget to the Board 
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for its approval; 
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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; 
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e) To submit to the Board for its approval policies, systems, and procedures; 
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f) To create a mechanism in coordination with relevant agencies for the 
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promotion of industrial peace, the protection of the environment, and the 
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advancement of the quality of life in the Zone; and 
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g) To perform such other duties as may be aSSigned to him by the Board or 
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which are necessary or incidental to his office. 
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Sec 14. Personnel. The Board Directors of the SSEZA shall provide for an 
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organization and staff of its officers and employees corresponding to the 
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qualification standards of Civil Service Laws and other pertinent laws. Upon 
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recommendation of the Chairman-Administrator, the Board shall appoint and fix the 
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remuneration and other emoluments in accordance with R.A. 6758, otherwise 
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known as the Salary Standardization Law; Provided, That the Board shall have 
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exclusive and final authority to promote, transfer, assign or reassign officeru of the 
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SSEZA in accordance with Civil Service Law and Rules; Provided, further, that the 
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Chairman-Administrator may carry out the removal of such officers and employees 
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as authorized by the Board. 
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The officers and employees of the SSEZA, including all members of the 
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Board, shall not engage directly or indirectly in partisan activities nor take part in 
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any election, except to vote. 
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No officer or employee of the SSEZA, subject to Civil Service laws and 
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regulations, shall be removed or suspended except for cause, as provided by law. 
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Sec 15. Capitalization. The Sulu Special Economic Zone Free Port Authority 
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shall have an authorized capital stock of Two Billion (2,000,000,000) no par shares 
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with a minimum value of Ten Pesos (PlO.OO) each. 
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The Board of Directors of SSEZA may, from time to time, and with the 
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written concurrence of the Secretary of Finance, increase the issue value of the 
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shares representing the capital stock of the SSEZA. The Board of Directors of SSEZA, 
with the written concurrence of the Secretary of Finance, may sell shares 
representing not more than forty percent (40%) of the capital stock of the SSEZA to 
the general public with an annual dividend policy as the Board and Secretary of 
Finance may determine. The National government shall, in no case, own less than 
sixty percent (60%) of the total issued and outstanding capital stock of SSEZA. 
All unoccupied government-owned lands as of the creation of the Sulu 
, 
Economic Zone Port, falling within its jurisdiction, shall also be included as part of 
the equity of the national government in SSEZA and may be disposed as part of the 
equity of the national government in SSEZA and disposed of by the SSEZA; 
Provided, That in case of an absolute sale or conveyance, the SSEZA shall seek the 
approval of the Office of the President; Provided, further, That all lands owned by 
SSEZA should not be included in the land reform. 
Sec 16. Supervision and Coordination of Development Plans. For purpose of 
policy direction and coordination, the Sulu Special Economic Zone and free Port 
shall be under the direct control and supervision of the Office of the President. 
Sec 17. Legal Counsel. The provisions of existing laws, orders or issuances, 
particularly Republic Act No. 2327, as amended, Executive Order No. 29, series of 
1987, and Administrative Order No. 130, series of 1994, to the contrary 
notwithstanding, the SSEZA shall have its own internal legal counsel completely 
independent from the Office of the Government Corporate Counsel as the legal 
adviser of SSEZA and its subsidiaries who shall be solely responsible for reviewing 
contracts entered into by SSEZA and its subsidiaries. The internal legal counsel shall 
represent SSEZA and its subsidiaries in all judicial and administrative proceedings. 
When the exigencies of its business and operations demand it, the SSEZA may 
engage the services of an outside counsel either on a case to case basis or on a fixed 
retainer. 
Sec 18. Relationship with the Regional Development Council. The SSEZA 
shall determine the developmeJ;lt goals for the Zone within the framework of 
national development plans, policies and goals. The Administrator shall, upon 
approval by the Board, submit Zone plans, programs and projects to the Regional 
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Development Council for inclusion and input to the overall regional development 
plan. 
Sec 19. Relationship with Local Government Units. Except as herein 
provided, the local government' units comprising the Zone shall retain their basic 
autonomy and identity. The Municipality of Jolo shall operate and function in 
accordance with Local Government Code of 1991. In case of any conflict between the 
Authority and the Province of Sulu on matters affecting the Zone, other than defense 
and security matters, the decision of the SSEZA shall prevail. 
Sec 20. Audit. The Commission on Audit shall appoint a representative who 
shall be a full-time auditor of the SSEZA and its subsidiaries where it controls a 
majority of the shares of stock therein, and assign such number of personnel as may 
be necessary to assist said representative in the performance of his/her duties. The 
salaries and emoluments of the assigned auditor and personnel of the Commission 
on Audit shall be in accordance with pertinent laws, rules and regulations. The 
Commission on Audit shall render an annual report to the President of the 
Philippines and to Congress on the business activities, transactions and operations 
of the SSEZA 
To ensure the expeditious implementation of the economic policy and 
purpose embodied in this Act, the Commission on Audit, in cooperation with 
SSEZA, shall formulate special !ules on audit, disbursement of funds, bidding, 
procurement of goods and services, accounting, use of government equipment and 
resources and the like, towards the aforesaid needs. 
Sec 21. Retention of all Earnings. The SSEZA shall retain all earnings from all 
its activities, regulatory or propriety, and need not remit the same to the National 
Treasury. Such earning shall be considered as corporate income, which SSEZA may 
, 
invest in its various infrastructure or special projects, and corporate undertakings 
Sec 22. Injunctions, Restraining Orders and other Interlocutory Orders. The 
development of the Sulu Special Economic Zone and Free Port is a national 
government priority and, therefore, no injunctions, restraining orders and other 
interlocutory orders against a project undertaken by SSEZA may be issued by any 
court of law or quaSi-judicial body, except by the Supreme Court of the Philippines. 
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Sec 23. Interpretation and Constrnction. The powers, authorities and 
functions vested in the SSEZA are intended to establish decentralization of 
government functions and authority and promote an efficient and effective working 
relationship among the Zone, the national government, and the local government 
units. 
Sec 24. Implementing Rules and Regulations. The Philippine Economic Zone 
Authority (PEZA); the Department of Trade and industry (DTI), Finance (DOF), 
Foreign Affairs (DFA), Labor .and Employment (DOLE), Interior and Local 
Government (DILG), Agriculture (DA), Agrarian Reform (DAR), Public Works and 
Highways (DPWH), Science and Technology (DOST) and Energy (DoE); the Bureau 
of Immigration; Bureau of Customs; National Economic and Development 
Authority (NED A); Bangko Sentral ng Pilipinas (BSP), and a representative from the 
technical staff of the Committee in Economic Affairs of both Houses of Congress and 
other concerned agencies, shall fprmulate the implementing rules and regulations of 
this Act within ninety (90) days after its approval. Such rules and regulations shall 
take effect fifteen (15) days after publication in a newspaper of general circulation. 
Sec 25. Separability Clause. If any provision of this Act is declared 
unconstitutional or invalid, the other provisions of this Act not otherwise affected 
thereby shall remain in full force and effect. 
Sec 26. Repealing Clause. All laws, decrees, executive orders, rules and 
regulations and other issuances or parts thereof inconsistent with this Act are hereby 
repealed, amended or modified accordingly. 
Sec 27. Effectivity Clause. This Act shall take effect upon its publication in at 
least one (1) newspaper of general circulation. 
Approved, 
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