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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

NINETEENTH CONGRESS
First Regular Session

439

HOUSE BILL NO.

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Introduced by REP. JOHNNY T. PIMENTEL

EXPLANATORY NOTE

‘The City of Bislig stands as the first city of Surigao del Sur. As the seat
of Paper Industries Corporation (PICOP), one of the then major industries of
the Philippines, it was both a national center for trade and commerce.
Nevertheless, with the cessation of the PICOP operations in Surigao del Sur in
the 1990s, so did the decline of the steady economic growth in the province.

Special economic zones were created to lay alternative areas of
investment across the Philippines. They are intended to disperse economic
development which has been confined in the main metropolitan areas. By
introducing industrialization, rural communities are given equitable access to
the said growth giving its people employment opportunities and growth. The
same also contributes to the overall economic development of the country in
establishing competitive centers.

This Bill seeks to reintroduce decentralization, self-reliance and self-
sustenance to a geographic periphery of Surigao del Sur. This proposed
creation of the Bislig City Special Economic Zone shall again harness Bislig
City and the contiguous areas within and around their immediate vicinities
maximizing them as an engine of socio-economic development in Caraga
Region.

The approval of this Bill is earnestly sought.



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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 439 _

Introduced by REP. JOHNNY T. PIMENTEL

AN ACT
ESTABLISHING A SPECIAL ECONOMIC ZONE IN THE CITY OF BISLIG,
PROVINCE OF SURIGAO DEL SUR, CREATING FOR THE PURPOSE THE BISLIG
SPECIAL ECONOMIC ZONE AUTHORITY, AND APPROPRIATING FUNDS
THEREFOR

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

CHAPTER 1
GENERAL PROVISIONS.

SECTION 1. Short Title. - This Act shall be known as the “Bislig Special

Economic Zone Act."

SEC. 2. Declaration of Policy. — Itis 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 Ii
CREATION OF THE ECONOMIC ZONE

SEC. 3. Creation of the Bislig Special Economic Zone. — In accordance with
the foregoing declared policy and subject to the concurrence of the concerned local
government units (LGUs) of Surigao de! Sur, there is hereby established a special



economic zone, hereinafter referred to as the Bislig Special Economic Zone or Bislig
Ecozone. The Bislig Ecozone shall cover a particular area in the City of Bislig, Province
of Surigao del Sur, 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.

SEC. 4. Creation of the Bislig Special Economic Zone Authority. - There is
hereby created a body corporate to be known as the Bislig Special Economic Zone
Authority, hereinafter referred to as the BISSEZA, which shall manage and operate the
Bislig Ecozone; in accordance with the provisions of this Act. The corporate life of the
BISSEZA 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.

SEC. 5. Governing Principles. - The BISSEZA shall manage and operate the
Bislig 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 Bislig
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 Bislig 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 Bislig
City and those in neighboring towns and cities;

¢) The Bislig 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 Economic Zone
Authority (PEZA), and the Department of Trade and Industry (DTI), with foreign

entities or enterprises;

4) Foreign citizens and companies owned by non-Filipinos in whatever proportion
may set up enterprises in the Bislig Ecozone, either by themselves or in a joint


venture with Filipinos in any sector of industry, international trade and commerce

within the Bislig Ecozone:

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

9) Goods manufactured by a Bislig 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 BISSEZA together with the PEZA, the Bureau of Customs,
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 Bislig Ecozone and the security of its perimeter fence shall be
the responsibility of the national government in coordination with the BISSEZA and
the concemed LGUs.

SEC. 6. Development Goals of the Bislig Ecozone. - The BISSEZA shall
determine the development goals of the Bislig Ecozone within the framework of national

development plans, policies, and goals. The Chairperson-Administrator shall, upon


approval by the Board of the BISSEZA, submit the Bislig Ecozone plans, programs,
and projects to the Regional Development Council for inclusion IN the regional

development plan

SEC. 7. Capitalization. - The BISSEZA 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 the LGUs embracing the Bislig Ecozone. The Board of
Directors of the BISSEZA 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 BISSEZA 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
BISSEZA.

The amount necessary to subscribe and pay for the shares of the national
government to the capital stock of the BISSEZA 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.

SEC. 8. Principal Office of the BISSEZA. — The BISSEZA shall maintain its
principal office in the City of Bislig, Province of Surigao de! Sur, but it may establish
liaison offices within the Philippines as may be necessary for the proper conduct of its

business.

SEC. 9. Powers and Functions of the BISSEZA. — The BISSEZA shail have the

following powers and functions:

a) To operate, administer, manage, and develop the Bislig Ecozone according to the
principles and provisions set forth in this Act;

») To register, regulate, and supervise the enterprises in the Bislig Ecozone in an
efficient and decentralized manner, subject to existing laws;

©) To coordinate with LGUs and exercise general supervision over the development
plans, activities, and operations of the Bislig Ecozone;


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

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 “BuildOperate-Transfer Law", as amended, or joint venture, adequate facilities
and infrastructure required or needed for the operation and development of the
Bislig Ecozone, in coordination with appropriate national and local government
authorities and in conformity with applicable laws thereon;

To approve plans, programs, and projects of the Bislig Ecozone to be submitted
to the Regional Development Council for inclusion in the regional development

plan;

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;

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;

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To protect, preserve, maintain, and develop the forests, beaches, corals and coral
reefs, and maintain ecological balance within the Bislig Ecozone. Notwithstanding
the power of the BISSEZA 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
BISSEZA;

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

BISSEZA as it may deem necessary;

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;

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

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 Bislig 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 BISSEZA in the establishment of such one-stop shops;

To ensure that the area covered by the Bislig 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 BISSEZA
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 Bislig Ecozone shall be borne by the national government;

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.

SEC. 10. Board of Directors of the BISSEZA. - The powers of the BISSEZA _ 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 BISSEZA;

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

Directors;
©) Members consisting of:
1) The Governor of the Province of Surigao del Sur or a duly-authorized
representative from the Provincial Government of Surigao del Sur;
2) One (1) of the mayors of the municipalities covered by the ecozone;
3) One (1) representative from the investors’ group; and
4) One (1) representative from among the workers in the Bislig Ecozone.

The Governor or the Governor's duly authorized representative 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,


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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.

SEC. 11. Organization and Personnel. — The Board of Directors of the BISSEZA
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
BISSEZA, any provision of existing law to the contrary notwithstanding. The
ChairpersonAdministrator shall execute the decisions of the Board.

The officers and employees of the BISSEZA, 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 BISSEZA, shail be removed or suspended except

for cause, as provided by civil service rules and regulations.

SEC. 12. Powers and Duties of the Chairperson-Administrator. — The
Chairperson-Administrator shall have the following powers and duties:

a)  Todirect and manage the affairs of the BISSEZA in accordance with the policies
of the Board;

») To establish the internal organization of the BISSEZA under such conditions that
the Board may prescribe;

©) 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;


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e) To submit to the Board for its approval, policies, systems, procedures, rules, and

regulations that are essential to the operation of the Bislig 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;

9) 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 Bislig Ecozone; and

h) To perform such other duties as may be assigned by the Board or which are
necessary or incidental to the office.

SEC. 13. Legal Counsel. - The BISSEZA 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 BISSEZA may engage
the services of an outside counsel either on a case to case or on a fixed retainer basis.

CHAPTER III INCENTIVES TO ECOZONE ENTERPRISES AND INVESTORS

SEC. 14. Investors 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;

©) Must not be afflicted with any dangerous or contagious disease;
4) Must not have been confined in an institution for any mental disorder or disability;
and

) 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 should 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 Bislig Ecozone and coordinate
closely with the BISSEZA to facilitate the conduct of business operations.

SEC. 15. Fiscal Incentives. - Registered enterprises of the Bislig Ecozone may
be entitled to pertinent fiscal incentives granted under Title XIil (Tax Incentives) of the

National Internal Revenue Code, as amended.

SEC. 16. Banking Rules and Regulations. - Banks and financial institutions to
be established in the Bislig Ecozone shall be under the supervision of the BSP and
subject to existing banking laws, rules and regulations.

SEC. 17. Remittances. ~ In the case of foreign investments, a duly registered
entity or enterprise within the Bislig 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

SEC. 18. Supervision and Control. - For purposes of policy direction and
coordination, the BISSEZA shall be under the direct control and supervision of the
Office of the President of the Philippines.

SEC. 19. Relationship with Local Government Units. - Except as herein
provided, the LGUs comprising the Bislig Ecozone shall retain their basic autonomy and
identity. The City of Bislig, Province of Surigao del Sur, shall operate and function in
accordance with the framework of the Constitution, the Local Government Code of
1991, as amended, and this Act.

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In case of any conflict among the BISSEZA, the LGUs and the national
government on matters affecting the Bislig Ecozone, other than national defense and
security matters, the decision of the BISSEZA shall prevail.

SEC. 20. Audit. - The Commission on Audit shall appoint a full-time auditor for
the BISSEZA 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

SEC. 21. Interpretation and Construction. - The powers, authorities and
functions that are vested in the BISSEZA 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 governmental functions
and authority, and promotion of an efficient and effective working relationship among
the BISSEZA, 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 shail be construed in favor

of an interpretation that shall protect national security.

SEC. 22. Applicability Clause. - \nsofar 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 Bislig Ecozone.

SEC. 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.

SEC. 24. 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.

SEC. 25. Repealing Clause. - All laws, executive orders or issuances or any
part thereof, which are inconsistent herewith, are hereby repealed or amended
accordingly.



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SEC. 26. Effectivity. - This Act shall take effect fifteen (15) days after its

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

Approved,