SEVENTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES )
Second Regular Session ) SE PRY. GSE
SENATE .
s.No.__1747 “ /| —-

Introduced by Senator Richard “Dick” J. Gordon

AN ACT
FURTHER STRENGTHENING THE POWERS AND FUNCTIONS OF THE
AUTHORITY OF THE FREEPORT AREA OF BATAAN (AFAB), AMENDING FOR
THIS PURPOSE REPUBLIC ACT NO. 9728, OTHERWISE KNOWN AS THE
“FREEPORT AREA OF BATAAN (FAB) ACT OF 2009”

EXPLANATORY NOTE

The 1987 Philippine Constitution declares that the State shall develop a self-
reliant and independent national economy. Further, it is the policy of the State to
encourage and promote the establishment and development of economic areas in the
country as a means to achieve and enjoy a sound and balanced industrial, economic,
and social development, so that territorial and political subdivisions of the State can
attain meaningful local autonomy. It also recognizes the indispensable role of the
private sector, encourages private enterprise, and provides incentives to prioritized
investment sectors.

Republic Act 9728 or the Freeport Area of Bataan Act was enacted on October
23, 2009. Since its enactment, the Authority of the Freeport of Bataan (AFAB) became
the fastest growing Freeport in the country, meeting the demands of a highly
competitive local, regional and global environment. It prides itself in its highly skilled
manpower pool, capable of supporting operations in manufacturing, logistics, energy,
semiconductors and electronics, shipbuilding, BPO, and tourism. However, although
economic gains have been achieved with RA 9728, there is a need to update such law
in order to maximize the investments in the Freeport Area and result in more significant
gains for the people of Bataan and the country at large.

This bill seeks to amend Republic Act 9728 in order to intensify and strengthen
the AFAB by providing the following: (1) strengthen the powers and functions of the
authority to be more pro-active and responsive to the demands of the local and
international business market; (2) establishment of a globally competitive investment
climate and facility; (3) a venue to attract more qualified domestic and foreign investors
with appropriate and appealing incentives; (4) creation of opportunities for more
investment portfolios; (5) increased financial capability of thy ignated authority.

—~

RD “DICK” J. GORDON

Senator



20

SEVENTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES ) .
Second Regular Session ) 18 MAR 14
SENATE
S.No._1747_ bt

L

5:00

Introduced by Senator Richard “Dick” J. Gordon

AN ACT
FURTHER STRENGTHENING THE POWERS AND FUNCTIONS OF THE

AUTHORITY OF THE FREEPORT AREA OF BATAAN (AFAB), AMENDING FOR

THIS PURPOSE REPUBLIC ACT NO. 9728, OTHERWISE KNOWN AS THE
“FREEPORT AREA OF BATAAN (FAB) ACT OF 2009”

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

SECTION 1. Section 3 of Republic Act No. 9728 is hereby amended to read

as follows:

“SEC. 3. Conversion of the Bataan Economic Zone (BEZ) into the
Freeport Area of Bataan. The existing Bataan Economic Zone located in the
Municipality of Mariveles, Province of Bataan, is hereby converted into a
special economic zone and freeport, AND, ALONG WITH OTHER
TERRITORIES INDICATED IN THIS ACT, [to] SHALL be known as the
Freeport Area of Bataan (FAB).

The FAB shall cover the (A) LAND TERRITORIES IN THE
Municipality of Mariveles, Province of Bataan FORMERLY PART OF THE
BEZ COMPRISING AN AREA OF APPROXIMATELY ONE THOUSAND
SEVEN HUNDRED FORTY TWO AND 48/100 (1,742.48) HECTARES
(THE "FAB MAIN ZONE"), AND (B) THE REST OF THE MUNICIPALITY
OF MARIVELES, PROVINCE OF BATAAN NOT COVERED UNDER THE
FAB MAIN ZONE, ALL OTHER EXPANSION AREAS WHICH MAY BE
DECLARED AS PART OF FAB IN COMPLIANCE WITH SECTION 4(G)
OF THE ACT, AND ALL MUNICIPAL WATERS WITHIN THE FAB MAIN
ZONE INCLUDING MUNICIPAL WATERS OF UP TO FIFTEEN (15)
KILOMETERS FROM THE LOW WATER MARK OF THE EDGE OF THE
SHORELINE OF THE MUNICIPALITY OF MARIVELES AND



1 EXPANSION AREAS LOCATED AT THE COASTLINE OF THE PROVINCE

2 OF BATAAN (THE "OTHER FAB ZONES");

3 THE METES AND BOUNDS OF THE FAB MAIN ZONE, AND THE
4 OTHER FAB ZONES SHALL BE DETERMINED BASED ON THE
5 TECHNICAL DESCRIPTION AND COORDINATES VERIFIED AND
6 APPROVED BY THE LAND MANAGEMENT BUREAU, THE NATIONAL
7 MAPPING AND RESOURCE INFORMATION AUTHORITY AND
8 OTHER GOVERNMENT AGENCIES AS MAY BE PROVIDED BY

9 PERTINENT LAW;

ll "IN THE EVENT THAT THE OTHER FAB ZONES COVER

12 ECONOMIC ZONES OF OTHER INVESTMENT PROMOTION
13 AGENCIES, REGISTERED ENTERPRISES IN SUCH ECONOMIC
4 ZONES MAY SELECT TO REGISTER WITH THE AFAB OR TO REMAIN
15 WITH SUCH OTHER INVESTMENT PROMOTION AGENCY;
16 PROVIDED THAT, IN NO CASE SHALL A REGISTERED ENTERPRISE
17 ENJOY INCENTIVES FROM BOTH INVESTMENT PROMOTION
18 AGENCIES.”

19 SEC.2. Section 4 of Republic Act No. 9728 is hereby amended to read as
20 follows:

“SEC. 4. Governing Principles. The FAB shall be managed and operated

under the following principles:

24 (a) Within the framework and limitations of the Constitution and
25 applicable provisions of the Local Government Code, the FAB shall be
26 developed into and operated as a decentralized, self-reliant and self-
27 sustaining industrial, commercial-trading, RESEARCH, DEVELOPMENT,
28 ENGINEERING, MEDICAL, EDUCATION, agro-industrial, tourist,
29 banking, financial and investment center with PROVISION FOR suitable

30 residential areas;

31 (b) NOTWITHSTANDING THE AUTONOMY PROVIDED IN
32 SECTION 4 (a) OF THIS ACT, [T]the FAB shall continue to be provided



BY THE NATIONAL GOVERNMENT AND/OR LOCAL GOVERNMENT
with transportation, telecommunications and other facilities needed to
attract legitimate and productive investments, generate linkage WITH
industries and employment opportunities for the people of the Province of
Bataan and its neighboring towns and cities. THE FAB SHALL ALSO HAVE
PRIORITY AND PREFERENTIAL ACCESS TO SUCH NATIONAL
GOVERNMENT AND/OR LOCAL GOVERNMENT TRANSPORTATION
AND TELECOMMUNICATIONS INFRASTRUCTURE AND OTHER
FACILITIES THAT IN THE PLANNING, CONSTRUCTION AND
OPERATION OF SUCH INFRASTRUCTURE OR EXPANSIONS
THEREOF, ACCESS TO FAB SHALL BE INCORPORATED AND
IMPLEMENTED ACCORDINGLY; PROVIDED THAT, THE AUTONOMY
AND SELF-RELIANCE OF THE AFAB SHALL NOT BE A HINDRANCE
TO ASSISTANCE AND/OR PARTNERSHIPS WITH OTHER UNITS
AND INSTRUMENTALITIES OF THE GOVERNMENT; PROVIDED
FURTHER, THAT, NO ASSISTANCE OR PARTNERSHIP BE
CONSTRUED AS A WAIVER OF THE AUTONOMY OF THE AFAB;

(c) xxx;

(d) Foreign citizens and companies owned by non- Filipinos in
whatever proportion may set up enterprises in the FAB, either by
themselves or in joint venture with Filipinos in any sector of industry,
international trade, and commerce within the TERRITORIAL
JURISDICTION OF FAB AS PROVIDED IN SECTION 3 OF THIS ACT;
PROVIDED THAT, THE AFAB MAY REQUIRE A MINIMUM
INVESTMENT IN FREELY CONVERTIBLE CURRENCIES FROM ANY
ENTERPRISE SEEKING REGISTRATION AS A FAB ENTERPRISE;

(e) The FAB shall be managed and operated as a separate customs
territory ensuring free flow or movement of goods and capital within, into
and out of its territory; PROVIDED THAT, SUBJECT TO SECTION 6 OF
THIS ACT, THE FAB AND ALL ACTIVITIES CONDUCTED THEREIN
SHALL BE EXEMPT FROM PAYMENT OF ALL NATIONAL AND LOCAL
TAXES; PROVIDED FURTHER THAT, IN ACCORDANCE WITH
SECTIONS 301 AND 817 OF REPUBLIC ACT NO. 10863, THE



BUREAU OF CUSTOMS (BOC) SHALL CONTINUE TO EXERCISE
BORDER PROTECTION AND CUSTOMS CONTROL AUTHORITY OVER
THE CUSTOMS TERRITORY ADJACENT TO FAB AND TO THIS END
SHALL CONSULT, COORDINATE, COOPERATE WITH THE AFAB TO
ENHANCE ITS PROTECTION AND CONTROL CAPACITY AND
ENSURE COMPLIANCE WITH CUSTOMS LAWS AND REGULATIONS;

“(f) FAB ENTERPRISES DOING BUSINESS WITHIN [T]the FAB
shall [provide] ENJOY incentives such as tax and duty-free [importations]
ADMISSIONS of raw materials, capital and equipment [to] INTO THE
FREEPORT; [registered enterprises located therein.] [However]
PROVIDED THAT, exportation or removal of goods from the territory of
the FAB to the other parts of the Philippine territory shall be subject to
customs duties and taxes under the Tariff and Customs Code of the
Philippines, as amended, and the National Internal Revenue Code (NIRC) of
1997, as amended; PROVIDED FURTHER THAT, SUBJECT TO
COORDINATION WITH THE BOC, LOCAL TRANSHIPMENTS TO FAB,
AND EXPORTATIONS FROM THE FAB, THRU OTHER PORTS, SHALL
ALSO BE CONSIDERED TAX AND DUTY-FREE;

“(g) The areas comprising the FAB may be expanded or reduced
when necessary. For this purpose, the AFAB [FAB Authority which will be
created under this Act], with the concurrence of the APPROPRIATE AND
AFFECTED |ocal government units (LGUs) AND APPROVAL OF THE
AFAB BOARD in accordance AND IN COMPLIANCE with existing laws
and local ordinances shall have the power to acquire, PROCURE, AND/OR
INCREASE, EXPAND either by purchase, negotiation or condemnation
proceedings, any private OR PUBLIC lands AND/OR THEIR
RESPECTIVE WATER TERRITORIES WITHIN THE TERRITORIAL
JURISDICTION OF THE PROVINCE OF BATAAN, IF ANY, [within or
adjacent to the FAB] for the following purposes: (1) consolidation of lands
for FAB development; (2) acquisition of right of way to the FAB; and (3) the
protection, AND SAFEGUARD of watershed areas and the maintenance
and improvement of its water yield and natural assets valuable to the
prosperity of the FAB AND THE LGU, the EFFECTIVE management of
solid and water waste IN COMPLIANCE WITH EXISTING NATIONAL



LAWS AND LOCAL ORDINANCES, and its impact to adjacent areas
within the local government concerned; PROVIDED THAT [T]the AFAB
and the RELEVANT LGUs [FAB] shall provide for [a] IMMEDIATE AND
RESPONSIVE mechanismS, BEST MANAGEMENT PRACTICES AND
SUITABLE ENVIRONMENTAL PROTECTION PROGRAMS FOR LAND
AND COASTAL MANAGEMENT to address ANY ABUSE AND/OR
[inappropriate] exploitation of the natural environment [and disruptive land
use] within the TERRITORIAL jurisdiction of the FAB AS PROVIDED IN
SECTION 3 OF THIS ACT;

“(h) Goods manufactured by [the] FAB enterprises 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 [FAB Authority] AFAB, together with the
Philippine Economic Zone Authority (PEZA), the Bangko Sentral ng Pilipinas
(BSP), the Department of Finance (DOF), the Bureau of Customs (BOC) and
the Department of Trade and Industry (DTI) in accordance with the NIRC
of 1997, as amended, and the Tariff and Customs Code of the Philippines,
as amended; PROVIDED THAT, IN COOPERATION WITH THE AFAB,
THE FOREGOING AGENCIES SHALL PROVIDE AND IMPLEMENT
MEASURES TO SUPPORT THE IMPROVEMENT OF EASE AND COST
OF DOING BUSINESS WITHIN FAB AND THE ENHANCEMENT OF
THE INVESTMENT PROMOTION CAPACITY OF THE AFAB. [However]
In order to protect the domestic industries, a negative list of industries shall
be drawn up and regularly updated by the [PEZA] AFAB. Enterprises
engaged in industries included in such negative list shall not be allowed to
sell their products locally NOTWITHSTANDING THE REGISTRATION
OF SUCH ENTERPRISES IN THE FAB; and

“(i) The defense of the FAB and the security of its perimeter fence
shall be the responsibility of the National Government in coordination with
the [FAB Authority] AFAB and the LGUs. THE AFAB SHALL PROVIDE
ITS OWN INTERNAL SECURITY AND FIREFIGHTING FORCES.”

SEC. 3. Section 5 of Republic Act No. 9728 is hereby amended to read as
follows:



1 “SEC. 5. Fiscal Incentives. The registered enterprises operating
2 within the FAB may be entitled to the existing pertinent fiscal incentives as
3 provided for under Republic Act No. 7916, as amended by Republic Act No.

4 8748, also known as the Special Economic Zone Act of 1995, or those
5 provided under Executive Order No. 226, as amended, otherwise known as
6 the Omnibus Investment Code of 1987; PROVIDED THAT, IN THE
7 ADMINISTRATION, IMPLEMENTATION AND MONITORING OF
8 INCENTIVES, THE AFAB MAY IMPOSE ITS OWN CONDITIONS NOT
9 OTHERWISE PROHIBITED BY THIS ACT; PROVIDED FURTHER
10 THAT, THE AFAB SHALL NOT BE LIMITED TO THE CONDITIONS
in PROVIDED UNDER REPUBLIC ACT NO. 7916, REPUBLIC ACT NO.
12 8748 OR ANY OTHER RELATED ISSUANCE, RULE OR
13 REGULATION.”

4 SEC. 4. Section 6 of Republic Act No. 9728 is hereby amended to read as
15 follows:

16

17 “SEC. 6. Imposition of a Tax Rate of Five Percent (5%) on Gross
18 Income Earned. THE PROVISION OF EXISTING LAWS, RULES AND
19 REGULATIONS TO THE CONTRARY NOTWITHSTANDING, no taxes,
20 local and national, shall be imposed on REGISTERED business
21 establishments operating within the FAB, INCLUDING BUT NOT
22 LIMITED TO ALL TAXES COVERED IN TITLES II, III, IV, V, VI, AND
23 VII OF REPUBLIC ACT NO. 8424 OTHERWISE KNOWN AS THE
24 NATIONAL INTERNAL REVENUE CODE (NIRC) AND ALL
25 AMENDMENTS AND SUCCESORS THERETO, AND ALL TAXES
26 COVERED UNDER TITLES I AND II OF BOOK II OF REPUBLIC ACT
27 NO. 7160 OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE
28 AND ALL AMENDMENTS AND SUCCESSORS THERETO. In licu
29 thereof, AND SUBJECT TO SECTION 10 OF THIS ACT, said business

30 establishments shall pay a five percent (5%) final tax on their gross income
31 earned in the following percentages:

3 (a) One per centum (1%) to the National Government;
34 (b) One per centum (1%) to the Province of Bataan;



(c) One per centum (1%) to the [Treasurer's office of the]
HOST CITY/MUNICIPALITY [Municipality of Mariveles]; and,
(d) Two per centum (2%) to the Authority of the Freeport
Area of Bataan”.

THE AFAB SHALL HAVE THE AUTHORITY TO GRANT INCOME
TAX HOLIDAY (ITH) AND NET OPERATING LOSS CARRY OVER
(NOLCO) SUBJECT TO SECTION 10 OF THIS ACT AND CONDITIONS
AS IT MAY HAVE IMPOSED PURSUANT TO SECTION 5 OF THIS
ACT.

FAB ENTERPRISES DEEMED AS PRIORITY INVESTMENTS AS
MAY BE DETERMINED BY THE AFAB, WITH THE EXCEPTION OF
THOSE INDUSTRIES INCLUDED IN THE NEGATIVE LIST DRAWN
UP AS PROVIDED IN SECTION 4(H) OF THIS ACT, MAY GENERATE
UP TO ONE HUNDRED PERCENT (100%) OF ITS INCOME FROM
SOURCES WITHIN THE CUSTOMS TERRITORY BUT WITHOUT LOSS
OF ELIGIBILITY TO AVAIL OF THE INCENTIVES IN THIS ACT
SUBJECT TO SECTION 4(F) OF THIS ACT.

THE AFAB ITSELF SHALL BE EXEMPT FROM PAYMENT OF ALL
NATIONAL AND LOCAL TAXES.”

SEC. 5. Section 10 of Republic Act No. 9728 is hereby amended to read as
follows:

“SEC. 10. Duration of Incentives. Enterprises registered with AFAB
may enjoy the [income tax holiday] ITH [or] AND the [net operating loss
carryover] NOLCO granted by the AFAB [authority prior] SEQUENTIALLY
[to] WITH the availment of the five percent (5%) FINAL TAX ON gross
income earned (GIE).

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] PROVIDED that,
SUCH 20-YEAR PERIOD [it could) MAY be extended [with] to industries



1 deemed indispensable to national development. THE DETERMINATION
OF AN INDUSTRY AS INDISPENSIBLE TO NATIONAL

3 DEVELOPMENT SHALL BE SOLELY DETERMINED BY THE AFAB
4 AFTER CONSULTATION WITH OTHER GOVERNMENT AGENCIES.
5 THERE SHALL BE NO LIMIT TO THE ENJOYMENT OF ITH AND
6 NOLCO EXCEPT FOR THE SEQUENTIAL AVAILMENT AND THE 20-
7 YEAR PERIOD AS PROVIDED IN THIS SECTION.”

8 [The industries exempted from this provision shall be determined by
9 the AFAB.]

10 SEC. 6. Section 13 of Republic Act No. 9728 is hereby amended to read as
11 follows:

12

13 “SEC. 13. Powers and Functions of AFAB. The AFAB shall have the
14 following functions:

15 (a) xxx;

16 (b) xxx;

17 (c) To operate, administer, manage, AND develop, in accordance
18 with Executive Order No. 525, as amended, the FAB according to the
19 principles and provisions set forth in this Act and to coordinate with the
20 LGUs for the development plans, activities and operation of the FAB;

21 [(d) To recommend to the President the issuance of a proclamation
22 to fix and delimit the site of the FAB;]

23 [(e)] (D) To register, regulate and supervise the enterprises in the
24 FAB in an efficient and decentralized manner, subject to existing laws;

25 [(] (E) To coordinate with the LGUs and exercise general
26 supervision over the development plans, activities and operations of the

27 FAB;



[(g)] (F) To authorize or undertake, on its own or through others,
and to regulate the establishment, construction, operation and
maintenance of public utilities, services, and infrastructure in the FAB such
as shipping, barging, stevedoring, cargo, handling, hauling, warehousing,
storage of cargo, port services or concessions, piers, wharves, bulkheads,
bulk terminals, mooring areas, storage areas, roads, bridges, reclamation
Projects, terminals, conveyors, water supply and storage, sewerage,
drainage, airport operations in coordination with the [Civil Aeronautics
Board] 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; Provided, however,
That the private investors in the FAB shall be given priority in the awarding
of contracts, franchises, licenses, or permits for the establishment,
operation and maintenance of utilities, services and infrastructure in the
FAB;

[(h)] (G) To license, set fees, regulate and undertake the
establishment, operation and maintenance of utilities, other services,
educational and medical institutions and infrastructure in the FAB such as,
but not limited to, heat, light and power, water supply,
telecommunications, mobile, internet and other data facilities, transport,
toll roads and bridges, port services, etc. and to fix just, reasonable and
Competitive rates, fares, charges and prices thereof;

[()] (H) To construct, acquire, own, lease, operate and maintain on
its own or through contracts, franchises, licenses, bulk purchase from the
private sector and build-operate-transfer scheme, or under a joint venture
with the private sectors, any or all of the public utilities and infrastructure
required or needed for the operation and development of the FAB,
INCLUDING TRANSPORTATION, ACCESS AND CONNECTION TO,
AND OUT OF THE FAB, in coordination with appropriate national and
local government authorities and in conformity with applicable laws
thereon. FOR THIS PURPOSE, THE AFAB SHALL EXERCISE THE
POWER OF EMINENT DOMAIN GRANTED IN PARAGRAPH (B) OF
THIS SECTION INSOFAR AS IT MAY BE REASONABLY NECESSARY,
SUBJECT TO THE LIMITATIONS PRESCRIBED THEREIN AND THE

10



OBSERVANCE OF THE PREREQUISITES OF TAKING OF
POSSESSION AND THE DETERMINATION AND PAYMENT OF JUST
COMPENSATION;

[@)] () To operate on its own, either directly or through a
SUBSIDIARY OR PRIVATE ENTITY, OR CONCESSION, OR license [to
other] tourism-related activities, including games, amusements, NATURE
PARKS, AND recreational and sports facilities, SUCH AS OFFSHORE
ONLINE GAMING FACILITIES AND OTHER RELATED ACTIVITIES
UNDER THE PRIORITIES AND STANDARDS SET BY THE AFAB
{subject to the approval and supervision of the Philippine Amusement and
Gaming Corporation (PAGCOR)];

NO DULY LICENSED ONLINE GAMING OPERATOR, OR
PROVIDER OF ACTIVITIES AND SERVICES RELATED TO OR IN
SUPPORT OF ONLINE GAMING ACTIVITIES, SHALL DIRECTLY OR
INDIRECTLY ALLOW PERSONS WHO ARE RESIDING OUTSIDE THE
TERRITORIAL JURISDICTION OF THE FAB, BUT WITHIN THE
PHILIPPINE TERRITORY TO PLACE BETS, OR IN ANY WAY
PARTICIPATE, IN THE GAMES CONDUCTED BY SUCH OPERATOR,
WHETHER THROUGH AN ONLINE PORTAL OR SIMILAR MEANS.

NOTHING HEREIN SHALL PROHIBIT DULY LICENSED
ONLINE GAMING OPERATORS FROM ALLOWING THE
PARTICIPATION OF PERSONS RESIDING OUTSIDE THE
PHILIPPINE TERRITORY;

“[(k)] (3) 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 that 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;



(K) TO EXCLUSIVELY ENFORCE AND ADMINISTER THE
PROVISIONS OF THE NATIONAL BUILDING CODE OF THE
PHILIPPINES AND THE FIRE CODE OF THE PHILIPPINES WITHIN
THE TERRITORIAL JURISDICTION OF THE FAB;

THE AFAB CHAIRMAN AND ADMINISTRATOR, OR HIS
OFFICIAL DESIGNATE, SHALL FUNCTION AS THE AFAB BUILDING
OFFICIAL, WHO SHALL ISSUE ALL BUILDING PERMITS AND
OTHER RELATED PERMITS SUBJECT TO THE COLLECTION BY
AFAB OF THE CORRESPONDING PERMIT FEES; PROVIDED, THAT
THE AFAB BUILDING OFFICIAL SHALL ALSO BE AUTHORIZED TO
REQUIRE OWNERS OF HOUSES, BUILDINGS, OR OTHER
STRUCTURES CONSTRUCTED WITHOUT THE NECESSARY AFAB
PERMIT/S, OR CONDEMNED AND/OR ABATED BY THE AFAB IN
ACCORDANCE WITH THE CONDITIONS SET FORTH IN THE
NATIONAL BUILDING CODE OR CIVIL CODE, AS THE CASE MAY
BE, WHETHER OWNED BY OR CONSTRUCTED ON PUBLIC OR
PRIVATE LANDS, TO REMOVE OR DEMOLISH SUCH HOUSES,
BUILDINGS, STRUCTURES WITHIN FIFTEEN (15) DAYS FROM
RECEIPT OF NOTICE. UPON FAILURE OF SUCH OWNER TO
REMOVE OR DEMOLISH SUCH HOUSE, BUILDING, OR STRUCTURE
WITHIN SUCH PERIOD, THE AFAB MAY SUMMARILY CAUSE ITS
REMOVAL OR DEMOLITION AT THE EXPENSE OF THE OWNER AND
THE OCCUPANTS.

THE AFAB MAY SUMMARILY EVICT ANY PERSON WHO
REFUSES TO VACATE SUCH PREMISES WITHOUT NEED OF ANY
COURT ORDER. A TEMPORARY OR PERMANENT RELOCATION
SITE SHALL BE MADE AVAILABLE FOR QUALIFIED INDIVIDUALS
OR FAMILIES.

(1) To provide security for the FAB in coordination with the national
and local governments. For this purpose, the AFAB may establish and
maintain its security forces and firefighting capability or hire others to
provide the same. In the event that an assistance of the military force is
necessary, it shall not interfere in the internal affairs of the FAB except to



provide the necessary security and defense, and their expenses shall be
borne by the National Government. THE AFAB POLICE FORCE AGENTS
CREATED HEREUNDER SHALL HAVE POLICE AUTHORITY AND
MAINTAIN LAW AND ORDER WITHIN THE BOUNDARIES OF THE
FAB, INCLUDING CONDUCTING POLICE INVESTIGATIONS,
ARREST, SEARCH AND SEIZURES FOR VIOLATIONS OF PENAL
LAWS AND TARIFF AND CUSTOMS LAWS INSIDE THE FAB. THE
AFAB SHALL ALSO BE AUTHORIZED TO INSTALL CONTROL GATES
AT STRATEGIC POINTS OF THE NATIONAL ROADS WITHIN THE
FAB, THROUGH WHICH ACCESS INTO AND DEPARTURE FROM
THE FAB SHALL BE FULLY CONTROLLED BY THE AFAB POLICE
AGENTS;

(m) To protect, preserve, maintain and develop the [virgin] forests,
beaches, coral and coral reefs, and maintain ecological balance within the
FAB. For this 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
AFAB; PROVIDED THAT, THE ISSUANCE, ENFORCEMENT AND
MONITORING OF ENVIRONMENTAL CLEARANCE CERTIFICATES
(ECCs), TREE CUTTING PERMITS, FORESHORE LEASES AND ALL
OTHER RELATED PERMITS AND CLEARANCES ISSUED BY THE
DENR AND OTHER GOVERNMENT AGENCIES SHALL BE UNDER
THE EXCLUSIVE CONTROL AND JURISDICTIO OF THE AFAB;

(n) 2x;
(0) XXX;
(p) XXX;
(q) 20OG,

(R) TO ISSUE WORKING VISAS RENEWABLE EVERY
THREE (3) YEARS TO FOREIGN EXECUTIVES AND FOREIGN
TECHNICIANS WITH HIGHLY SPECIALIZED SKILLS WHICH NO
FILIPINO POSSESS, AS CERTIFIED BY THE DEPARTMENT OF
LABOR AND EMPLOYMENT (DOLE);



(S) | SUBJECT TO REPUBLIC ACT NO. 7653, OTHERWISE
KNOWN AS THE NEW CENTRAL BANK ACT, OTHER ISSUANCES
OF THE BANGKO SENTRAL NG PILIPINAS, EXISTING
APPLICABLE LAWS, AND SUCH OTHER LAWS AS MAY BE
REQUIRED THAT ARE CONSISTENT WITH THE OBJECTIVES OF
THE AFAB, TO ACT AS AN OFFSHORE FINANCIAL CENTRE THAT
ENGAGE IN, OR ALLOW, ANY OR ALL INTERNATIONAL
FINANCIAL AND BUSINESS SERVICES, INCLUDING BANKING,
OFFSHORE FUND MANAGEMENT AND COLLECTIVE INVESTMENT
SCHEMES, PROVIDE THE NECESSARY AND 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, AND/OR THOSE
PROVIDED UNDER EXECUTIVE ORDER NO. 226, AS AMENDED,
OTHERWISE KNOWN AS THE OMNIBUS INVESTMENT CODE OF
1987. BANKS AND FINANCIAL INSTITUTIONS TO BE
ESTABLISHED IN THE FAB SHALL BE UNDER THE SUPERVISION
OF THE BANGKO SENTRAL NG PILIPINAS AND SHALL BE
SUBJECT TO EXISTING BANKING LAWS, RULES AND
REGULATIONS.

(T) TO ESTABLISH AND INSTITUTE MUTUALLY
SUPPORTIVE AND ALL-INCLUSIVE INTERNATIONAL ECONOMIC
RELATIONS TO ALLOW THE ESTABLISHMENT AND OPERATION
OF REGIONAL OR AREA HEADQUARTERS, REGIONAL
OPERATING HEADQUARTERS AND REGIONAL WAREHOUSES OF
MULTINATIONAL COMPANIES WITHIN THE TERRITORIAL
JURISDICTION OF FAB, AS PROVIDED FOR IN REPUBLIC ACT
NO. 8756, OTHERWISE KNOWN AS “AN ACT PROVIDING FOR
THE TERMS, CONDITIONS AND LICENSING REQUIREMENTS OF
REGIONAL AREA HEADQUARTERS, REGIONAL OPERATING
HEADQUARTERS AND REGIONAL WAREHOUSES OF MULTI-
NATIONAL COMPANIES, AMENDING FOR THE PURPOSE
CERTAIN PROVISIONS OF EXECUTIVE ORDER NO. 226,
OTHERWISE KNOWN AS THE OMNIBUS INVESTMENT CODE OF
1987";



(U) TO ISSUE SPECIAL REGULATIONS FOR THE BENEFIT
OF PARTICULAR INDUSTRIES, DESIGNED TO IMPROVE EASE OF
DOING BUSINESS, DECREASE COST OF DOING BUSINESS AND
LOWER BUREAUCRATIC BURDENS OF INVESTING AND DOING
BUSINESS WITHIN THE FAB; PROVIDED THAT, SUCH SPECIAL
REGULATIONS SHALL NOT BE CONTRARY TO EXISTING LAWS;

(V) TO ISSUE SPECIAL RESIDENT RETIREE'S VISAS
(SRRVs) FOR RETIREES THAT INTEND TO RESIDE IN FAB, IN
COLLABORATION WITH THE PHILIPPINE RETIREMENT
AUTHORITY (PRA); PROVIDED THAT, PRA AND FAB SHALL
ISSUE JOINT ISSUANCES ON THE PROCESSING OF SRRVs
UNDER REQUIREMENTS LESS BURDENSOME THAN AS
REQUIRED UNDER EXISTING LAWS IN THE CUSTOMS
TERRITORY;

(W) ESTABLISHMENT, OPERATION AND MAINTENANCE OF
UTILITIES, FACILITIES, INFRASTRUCTURE, SERVICES,
BUSINESSES, ACTIVITIES AND CONCESSIONS IN THE FAB
PERTAINING TO SHIPPING AND MARITIME BUSINESS AND
ACTIVITIES INCLUDING STEVEDORING AND PORT TERMINAL
SERVICES OR CONCESSIONS; PROVIDED THAT, THE MARITIME
INDUSTRY AUTHORITY (MARINA) SHALL CONTINUE TO
EXERCISE ITS POWER TO REGULATE AND SUPERVISE THE
SHIPBUILDING AND SHIP REPAIR OF ANY MERCHANT MARINE
VESSEL OEPRATED OR TO BE OPERATED IN THE DOMESTIC
TRADE AND THE DOMESTIC SHIPPING INDUSTRY WITHIN THE
FAB;

(0) TO ESTABLISH ONE-STOP SHOPS FOR THE ISSUANCE
OF ALL NECESSARY PERMITS, CLEARANCES, LICENSES, AND
OTHER SIMILAR CERTIFICATIONS TO CONDUCT ACTIVITIES
TO IMPROVE THE EASE OF DOING BUSINESS WITHIN THE FAB,
IN COORDINATION WITH GOVERNMENT AGENCIES HAVING
JURISDICTION OVER ACTIVITIES IN THE FAB NOT OTHERWISE



SOLELY RESERVED TO THE AFAB IN THIS ACT; PROVIDED,
THAT ALL GOVERNMENT AGENCIES ARE DIRECTED TO
PROVIDE AND EXTEND UTMOST AND FULL COOPERATION TO
THE AFAB IN THE ESTABLISHMENT OF SUCH ONE-STOP SHOPS;

[1] (Y) To be vested with other powers enjoyed or exercised by

other free port zone authorities.

SEC. 7. Section 17 of R.A. 9728 is hereby amended to read as follows:

“SEC. 17. Labor Center. A labor center shall be established within
the FAB. This center shall be responsible for studying and amicably
settling professional and labor relations and disputes, interpretation of
employment contracts, and monitoring work, hygiene and_ safety
standards within the FAB. The labor center shall comprise a labor office,
an industrial health and safety office, and an inspection and disputes
office.

EXCEPT AS OTHERWISE PROVIDED IN THIS ACT, LABOR
AND MANAGEMENT RELATIONS IN THE FAB SHALL BE
GOVERNED BY APPLICABLE RULES AND REGULATIONS UNDER
THE LABOR CODE OF THE PHILIPPINES, AS AMENDED.
EMPLOYEES AND PERSONNEL IN THE REGISTERED
ENTERPRISES SHALL RECEIVE SALARIES AND BENEFITS AND
SHALL ENJOY WORKING CONDITIONS PROVIDED UNDER THE
LABOR CODE AND OTHER RELEVANT LAWS AND ISSUANCES OF
THE PHILIPPINE GOVERNMENT AND THE DOLE, THE AFAB
SHALL ALLOW THE VISITORIAL POWER OF THE SECRETARY OF
THE DOLE OR HIS DULY AUTHORIZED REPRESENTATIVE
AND/OR MAY ASSIGN ITS PERSONNEL TO JOIN THE DOLE
REGIONAL OFFICE III IN THE CONDUCT OF LABOR
INSPECTION."

SEC. 8. Section 21 of R.A. 9728 is hereby amended to read as follows:

16



“SEC. 21. Capitalization. The [AFAB shall have an authorized] capital
stock [of] TO BE CONTRIBUTED BY THE GOVERNMENT, SHALL BE
(A) Two billion FIVE HUNDRED MILLION Pesos
(Php2,500,000,000.00) with option to increase capitalization upon the
discretion of the AFAB, [divided into twenty thousand (20,000) no-par
shares fully subscribed and paid up by the Republic of the Philippines
with:] [a] (B) All lands embraced and covered by the FAB, INCLUDING
THOSE PROPERTIES CONVEYED TO THE GOVERNMENT SERVICE
INSURANCE SYSTEM (GSIS) AND/OR THE SOCIAL SECURITY
SYSTEM (SSS) UNDER PROCLAMATION NO. 740, AS AMENDED
BY PROCLAMATION NO. 900, as well as permanent improvements and
fixtures upon proper inventory not otherwise alienated, conveyed or
transferred to another government agency; [(b)] (C) all other assets
which the president may transfer to the AFAB as part of the equity
contribution of the government; [(c) cash contribution by the government
in the amount of five hundred million pesos (Php500,000,000.00) a year
for the next five (5) years, which is hereby appropriated out of any fund
in the National Treasury not otherwise appropriated].

SEC. 9. Section 19 of R.A. 9728 is hereby amended to read as follows:

“SEC. 19. Remittances. - In the case of foreign investments, a
registered enterprise in the FAB [Bataan 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 Section 74] of
Republic Act No. 7653, OTHERWISE KNOWN AS THE “NEW
CENTRAL BANK ACT (265, as amended)".

SEC. 10. Non-Impairment of Contract/Permits/Licenses. ~ A\\ existing
contracts, permits and licenses duly granted by the AFAB before the date of effectivity
of this Act, shall remain valid, and unimpaired, shall be cured, and shall be recognized
by the Government.

SEC. 12. Retroactivity Clause. - This Act shall have retroactive effect insofar
as it does not prejudice or impair vested or acquired rights.



SEC. 13. Repealing Clause. - All laws, decrees, executive orders, rules and
regulations or parts thereof, inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

SEC. 14. Separability Clause. - Any portion or provision of this Act that may
be declared unconstitutional shall not have the effect of nullifying other portions or
Provisions hereof as such remaining provisions can still subsist and be given effect.

SEC. 15. _Effectivity. - This Act shall take effect after fifteen (15) days
following its complete publication in the Official Gazette or in two (2) newspapers of

general circulation whichever is earlier.

Approved.