Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
Eighteenth Congress 
Third Regular Session 
HOUSE BILL NO. _______ 
___________________________________________________________________________ 
Introduced by Representative Hector S. Sanchez 
___________________________________________________________________________ 
EXPLANATORY NOTE 
This bill seeks to create the Caramoran Special Economic Zone and 
Freeport in the Municipality of Caramoran, Province of Catanduanes, pursuant 
to the general policies and guidelines embodied under Republic Act No. 7916, 
otherwise known as the “Special Economic Zone Act of 1995”. 
The municipality of Caramoran is located in the northern part of the 
Province of Catanduanes and bounded by the Maqueda Channel on its west. 
Apart from wealth in agricultural lands, natural resources, rich coastal and 
marine resources, and a wealth of biodiversity, Caramoran is also renowned 
for its many unspoiled beaches and breathtaking scenic attractions. These 
attributes make Caramoran ripe for selection as a Special Economic Zone.  
The creation of a special economic zone and freeport authority is 
intended to spread development of the countryside by stimulating rural 
development and to enhance economic activity. Further, it will accelerate a 
balanced industrial and economic development. It will generate foreign 
investments, employment, expanding exports and promote transfer of 
technology that will create a positive impact on the quality of life of the 
residents. 
In view of the government’s policy to attract investments, promote rural 
development and to foster economic growth, the creation of the Caramoran 
Special Economic Zone and Freeport is earnestly recommended. 
HECTOR S. SANCHEZ 
June 8, 2021
5:38 pm
9594


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
Eighteenth Congress 
Third Regular Session 
HOUSE BILL NO. _______ 
___________________________________________________________________________ 
Introduced by Representative Hector S. Sanchez 
___________________________________________________________________________ 
AN ACT 
ESTABLISHING THE SPECIAL ECONOMIC ZONE AND FREEPORT IN THE 
MUNICIPALITY OF CARAMORAN, PROVINCE OF CATANDUANES, CREATING FOR 
THIS PURPOSE THE CARAMORAN SPECIAL ECONOMIC ZONE AND FREEPORT 
AUTHORITY, AND APPROPRIATING FUNDS THEREFOR 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
CHAPTER 1. 
GENERAL PROVISIONS 
SECTION 1. Short Title. — This Act shall be known as the “Caramoran Special 
Economic Zone and Freeport 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 
and increase productivity and individual, as well as family incomes, thereby 
enhancing the quality of life of the Filipino people. 
9594


CHAPTER 2. 
CREATION OF ECONOMIC ZONE 
 
SECTION 3. Creation of the Caramoran Special Economic Zone and Freeport. 
— In accordance with the foregoing declared policy and subject to the 
concurrence of the concerned local government unit (LGU) of the Province of 
Catanduanes affected by the zone, there is hereby established a Special 
Economic Zone and Freeport, hereinafter referred to as the Caramoran 
Ecozone. The Caramoran Ecozone shall cover the entire area embraced by 
the Municipality of Caramoran, Province of Catanduanes. 
 
SECTION 4. Governing Principles. — The Caramoran Special Economic Zone 
and Freeport shall be managed and operated by Caramoran Special 
Economic Zone and Freeport Authority (CSEZFA) under the following principles: 
a. Within the framework and limitations of the Constitution and applicable 
provisions of Republic Act No. 7160, otherwise known as the “Local 
Government Code of 1991”, the Caramoran 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 Caramoran Ecozone shall be provided with transportation, 
telecommunications, and other facilities needed to attract legitimate and 
productive investments, generate linkage industries and employment 
opportunities for the people of Caramoran and its neighboring towns and 
cities; 
c. The Caramoran 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 (DFA), the 
Philippine Economic Zone Authority (PEZA), and/or 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 enterprise in the Caramoran Zone, either by themselves 
or in a joint venture with Filipinos in any sector of industry, international trade 
and commerce within the Caramoran Ecozone; 
e. The Caramoran Ecozone shall be managed and operated as 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 
such as tax and duty-free importations of raw materials, capital and 
equipment to registered enterprises located therein. 


f. Goods manufactured by an Caramoran 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 CSEZFA together with the PEZA, the Bureau of 
Customs (BOC), and the DTI. However, in order to protect domestic industries, 
a Negative List of industries shall be drawn up and regularly updated by PEZA. 
Enterprises engaged in industries included in such Negative List shall not be 
allowed to sell their products locally; 
h. The defense of the Caramoran Ecozone and the security of its perimeter 
fence shall be the responsibility of the National Government in coordination 
with CSEZFA and the LGU. 
 
SECTION 5. Capitalization. — The CSEZFA shall have an authorized capital stock 
of Two 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 LGUs embracing the Caramoran Special 
Economic Zone and Freeport. The Board of Directors of CSEZFA may, with the 
written concurrence of the Secretary of Finance may determine. The National 
Government and the LGU shall in no case own less than sixty per centum (60%) 
of the total issued and outstanding capital of CSEZFA. 
The amount necessary to subscribe and pay for the shares of the National 
Government to the capital stock of the CSEZFA shall be included in the annual 
General Appropriations Act. For LGU, the funds shall be taken from their internal 
revenue allotment and other local funds. 
 
SECTION 6. Principal Office of the CSEZFA. — The CSEZFA shall maintain its 
principal office at Caramoran, Province of Catanduanes but it may establish 
branches within the Philippines as may be necessary for the proper conduct of 
its business. 
 
SECTION 7. Powers and Functions of the CSEZFA. — The CSEZFA shall have the 
following powers and functions: 
a. To operate, administer, manage and develop the Caramoran Ecozone 
according to the principles and provisions set forth in this Act; 
b. To register, regulate and supervise the enterprises in the Caramoran 
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 Caramoran Ecozone; 


d. To regulate and undertake the establishment and construction, operation 
and maintenance of public utilities, other services, and infrastructure in the 
Caramoran Ecozone such as light and power, shipping, barging, stevedoring, 
cargo handling, hauling, warehousing, storage and cargo, port services or 
concessions, piers, wharves, bulkheads, bulk terminals, mooring areas, storage 
areas, roads, telecommunications, transport, bridges, terminals, conveyors, 
water supply and storage, sewage, drainage, airport operations in 
coordination with the Civil Aviation Authority of the Philippines (CAAP), port 
operations in coordination with the Philippine Ports Authority (PPA) and such 
other services and 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. 6597, otherwise 
known as the “Built-Operate-Transfer Law” as amended, or joint venture, 
adequate facilities and infrastructure required or needed for the operation 
and development of the Caramoran Ecozone, in coordination with the 
appropriate national and local government authorities and in conformity with 
applicable laws thereon; 
f. To approve plans, programs and projects of the Caramoran Ecozone to be 
submitted to the Regional Development Council for inclusion and input to the 
overall 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 (PAGCOR); 
h. To raise or borrow, within the limitation provided by law, and subject to the 
approval or opinion 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, coral and 
coral reefs, and maintain ecological balance within the Caramoran Ecozone. 
Notwithstanding the authority of the CSEZFA to create rules for such purpose, 
the rules and regulations of the Department of Environment and Natural 
Resources (DENR) and other government agencies involved in the above 
functions shall be implemented by the CSEZFA; 
j. To create, operate and/or contract to operate such functional units or offices 
of the CSEZFA as it may deem necessary; 


j. To adopt, alter and use a corporate seal; contract, lease, buy, acquire, own 
or otherwise dispose of personal and/or real property of whatever nature; sue 
and be sued; and otherwise carry out its functions and duties as provided for 
in this Act; 
k. To issue certificates of origin for products manufactured or processed in the 
Caramoran Ecozone in accordance with prevailing rules of origin and the 
pertinent regulations of the PEZA, the DTI, and/or the Department of Finance 
(DOF); 
l. 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 Caramoran 
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 Caramoran Ecozone 
in the establishment of such one-stop shops; 
m. To provide internal security to the Caramoran Ecozone in coordination with 
the National Government and affected LGU. For this purpose, the CSEZFA shall 
provide and establish its own internal security and fire fighting forces or hire 
others to provide the same. Military forces sent by the National Government 
for the purpose of defense shall not interfere in the internal affairs of the 
Caramoran Ecozone and expenditures for these military forces shall be borne 
by the National Government; 
n. To recommend to the President of the Philippines the issuance of a 
proclamation to fix and delimit the site of Caramoran Ecozone; 
o. To exercise such powers as may be essential, necessary or incidental to the 
powers granted to it hereunder, as well as those that shall enable to carry out, 
implement and accomplish the purposes, objectives and policies of 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 8. Board of Directors of the CSEZFA. — The powers of the CSEZFA 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. The Chairperson, who shall at the same time be the administrator of the 
CSEZFA; 
b. A Vice Chairperson who shall come from among the members of the Board; 


c. The Governor of the Province of Catanduanes or a duly-authorized 
representative; 
d. One (1) representative from the domestic investor’s group;  
e. One (1) representative from the foreign investor’s group; and 
f. One (1) representative from labor sector chosen from the workers in the 
Caramoran Ecozone. 
The Congressional Representative of the Province of Catanduanes and the 
Mayor of Caramoran, Province of Catanduanes shall serve as ex-officio 
members of the Board, whose terms in the Board correspond to their terms as 
elected officials. 
The Chairperson and members of the Board, except 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. 
The Chairperson of the Board must be 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 at rates to be determined by the Department of Budget and 
Management (DBM) in accordance with existing rules and regulations: 
Provided, however, That the total per diem collected each month shall not 
exceed the equivalent per diem for four (4) meetings. Unless and until the 
President of the Philippines has fixed for a higher per diem for the members of 
the Board, such per diem shall not be more than Ten thousand pesos 
(PhP10,000.00) for every Board meeting. 
 
SECTION 9. Organization and Personnel. — The Board of Directors of CSEZFA 
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 CSEZFA, any provision of existing law to the 
contrary notwithstanding. The Chairperson-Administrator shall carry out the 
decisions of the Board. 
The officers and employees of CSEZFA, 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 CSEZFA, subject to civil service laws and 
regulations, shall be removed or suspended except for cause, as provided by 
law. 
 
SECTION 10. 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 CSEZFA in accordance with the 
polices of the Board; 
b. To establish the internal organization of the CSEZFA 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 and 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 Caramoran 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; 
g. 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 Caramoran 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 11. Legal Counsel. — The CSEZFA shall have its own legal counsel 
under the supervision of the government corporate counsel. When the 
exigencies of its businesses and operations demand it, the CSEZFA may 
engage the services of an outside counsel either on a case to case or on a 
fixed retainer basis. 
 
Chapter 3. 
INCENTIVES TO ECOZONE ENTERPRISES/INVESTORS 
 
SECTION 12. Investors Visa. — Any foreign national who invests an amount of 
Two hundred thousand US dollars (US$200,000.00), either in cash and/or 
equipment, in a registered enterprise 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 loathsome, dangerous or contagious disease; 
d. Must not have been institutionalized for any mental disorder or disability; and 
e. Must establish financial capability and capacity through verifiable and 
credible evidence. 
A foreign national may reside in the Philippines while the investment herein 
required subsists. To prove this, the foreign national should submit an annual 
report, in the form duly prescribed for the purpose. Should said investments be 
withdrawn from the Philippines, then the investor’s visa issued to said foreign 
national shall automatically expire and/or 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 Caramoran 
Ecozone and coordinate with the CSEZFA for the purpose of improving ease of 
doing business. 
 
SECTION 13. Fiscal Incentives. — Registered enterprises operating within the 
Caramoran Ecozone may be entitled to the pre-existing pertinent fiscal 
incentives as provided for under Republic Act No. 7916, as amended by 
Republic Act No. 8748, also known as the Special Economic Zone Act of 1995, 
or those provided under Executive Order No. 226, as amended, otherwise 
known as the Omnibus Investment Code of 1987, and/or those that may be 
further granted as the need and necessity arises by appropriate government 
department, agency, or office: Provided, That in the administration, 
implementation and monitoring of incentives, the CSEZFA may impose its own 
conditions not otherwise prohibited by this Act: Provided, further, That the 
CSEZFA shall not be limited to the conditions provided under Republic Act No. 
7916, Republic Act No. 8748 or any other related issuance, rule or regulation. 
 
SECTION 14. Imposition of a Tax Rate of Five Percent (5%) on Gross Income 
Earned. — No taxes, local and national, shall be imposed on business 
establishments operating within the Caramoran Ecozone, including income 
tax, withholding tax, donor’s tax, percentage tax, and documentary stamp 
tax. 
In lieu thereof and subject to Section 17 of this Act, said business establishments 
shall pay a five percent (5%) final tax on their gross income earned: Provided, 


That the proceeds from such final tax shall be shared by instrumentalities of the 
government in accordance with the following schedule: 
a. Three per centum (3%) to the National Government; 
b. Two per centum (2%) shall be directly remitted by the business 
establishments to the treasurer’s office of the municipality where the enterprise 
is located. 
The CSEZFA shall have the authority to grant income tax holiday and net 
operating loss carry over subject to Section 17 of this Act and conditions as it 
may have imposed pursuant to Section 14 of this Act. 
 
SECTION 15. Administration Implementation and Monitoring of Incentives. — In 
the interest of enhancing transparency in the management and accounting 
of tax incentives in the Caramoran Ecozone, the CSEZFA shall comply with the 
provisions of Republic Act No. 10708, otherwise known as “The Tax Incentives 
Management and Transparency Act (TIMTA)” and its implementing rules and 
regulations 
for 
proper 
administration, 
management, 
enforcement, 
implementation and monitoring of tax incentives under this law. 
The BOC shall set up and establish a customs-controlled area outside the gate 
of the Caramoran Ecozone to facilitate payment of taxes on goods entering 
the Philippine customs territory: Provided, That notwithstanding the limitations 
in this Act, the CSEZFA and BOC may coordinate and jointly implement 
measures on border protection. 
 
SECTION 16. Duration and Incentives. — Fiscal incentives under this Act shall be 
terminated after a cumulative period of twenty (20) years from date of 
registration or start of commercial operation, whichever is applicable, except 
that it could be extended with regard to industries deemed indispensable to 
national development and interest. The industries exempted from this provision 
shall be determined by the CSEZFA, in consultation with other government 
agencies. 
 
SECTION 17. Sequential Availment of Incentives. — Registered enterprises may 
enjoy the income tax holiday (ITH) granted by CSEZFA prior to the availment of 
the five percent (5%) final tax on gross income earned incentive: Provided, 
That in the event a registered enterprise elects to avail of the final tax incentive, 
such registered enterprise shall be barred from availing the ITH incentive. 
Registered enterprises, if eligible, may register for incentives with other 
investment promotion agencies: Provided, That registered enterprises electing 
to avail of the incentives of other promotion agencies shall not be able to avail 


of the incentives of the Caramoran Ecozone until the expiration of the 
incentives with such other investment promotion agencies. 
 
SECTION 18. Extension of Period of Availment. — The CSEZFA may extend 
period of the validity of the incentives extended to a registered enterprise in 
the event that it suffers, due to force majeure, a cessation or suspension of 
operations that impairs its viability or profitability. 
 
SECTION 19. Banking Rules and Regulations. — Banks and financial institutions 
to be established in the Caramoran Ecozone shall be under the supervision of 
the BSP and subject to existing banking laws, rules and regulations. 
 
SECTION 20. Remittances. — In the case of foreign investments, a duly 
registered entity or enterprise within the Caramoran Ecozone shall have the 
right to remit earnings from the investment 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”. 
 
CHAPTER 4. 
NATIONAL GOVERNMENT AND OTHER ENTITIES 
 
SECTION 21. Supervision and Control. — For purposes of policy direction and 
coordination, the CSEZFA shall be under the direct control and supervision of 
the Office of the President of the Philippines. 
 
SECTION 22. Development Goals of the Caramoran Ecozone. — The CSEZFA 
shall determine the development goals for the Caramoran Ecozone within the 
framework of national development plans, policies, and goals. The 
Chairperson and Administrator shall, upon approval by the Board, submit the 
Caramoran Ecozone plans, programs and projects to the Regional 
Development Council for inclusion and inputs to the overall regional 
development plant. 
 
SECTION 23. Relationship with Local Government Units. — Except as herein 
provided, the LGU comprising the Caramoran Ecozone shall retain their basic 
autonomy and identity. The Municipalities of Caramoran shall operate and 


function in accordance with the framework of the 1987 Constitution, Local 
Government Code of 1991, and this Act. 
In case of any conflict among the CSEZFA, the LGUs, and the National 
Government on matters affecting the Caramoran Ecozone, other than 
national defense and security matters, the decision of the CSEZFA shall prevail. 
SECTION 24. Audit. — The Commission on Audit shall appoint a full-time editor 
in the CSEZFA or may assign such number of personnel as may be necessary in 
the performance of their functions. 
Chapter 5. 
MISCELLANEOUS PROVISIONS 
SECTION 25. Interpretation/Construction. — The powers, authorities and 
functions that are vested in the CSEZFA 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 
government functions and authority, and promote an efficient and effective 
working relationship among the CSEZFA, the National Government and the 
LGU. Any interpretation of this Act shall consider such intentions. In the event 
of conflict of interpretation and provided by the intentions cannot be 
harmonized, the provisions of this Act shall be construed in favour of an 
interpretation that would tend to protect national security. 
SECTION 26. Applicability Clause. — Insofar as they are inconsistent with the 
provisions of this Act, the provisions of Section 30 to 41 of Republic Act No. 7916, 
otherwise known as “The Special Economic Zone Act of 1995”, as amended, 
shall likewise apply to the Caramoran Ecozone. 
SECTION 27. Implementing Rules and Regulations. — The National Economic 
and Development Authority (NEDA), in coordination with the DTI and DOF, shall 
formulate the implementing rules and regulations of this Act within ninety (90) 
days after its approval. 
SECTION 28. Separability Clause. — If 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 29. Repealing Clause. — All laws, executive orders or issuances or any 
part thereof, which are inconsistent herewith, are hereby repealed or 
amended accordingly. 
SECTION 30. Effectivity Clause - This Act shall take effect fifteen (15) days after 
its publication in the Official Gazette or in a newspaper of general circulation. 
Approved,