‘SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIV!

EXPLANATORY NOTE

This bill seeks to establish a special economic zone in Barangay Balubal,
Cagayan de Oro City, Province of Misamis Oriental, pursuant to the general
Policies and guidelines set forth under Republic Act No. 7916, otherwise known as
the “Special Economic Zone Act of 1995.”

Cagayan de Oro City is the gateway to the island of Mindanao. It is the
focal point of domestic and foreign trade as well as the export outlet of the vast
agricultural products of Mindanao. The city is rich in agricultural and forest lands,
mineral resources and scenic tourist spots. It has a typhoon-free climate,
favorable peace and order condition and good infrastructures and utilities. These
factors are conducive to sustainable growth and development.

Balubal is one of the fast-growing barangays in the eastern side of
Cagayan de Oro City. Its strategic location is an ideal site for industrial,
commercial and recreational centers. It can also serve as a major entry and exit
point of trade considering that its neighboring barangays have numerous
seaports

The establishment of a special economic zone will alleviate and improve
the economic condition of the City and the nearby provinces. The residents will be
assured of local employment opportunities which will hasten the economic growth
not only in the area but in the nearby provinces as well.

In line with the government's policy to encourage, promote, induce and
accelerate a sound and balanced industrial, economic and social development of

the country, the establishment of Cagayan de Oro Special Economic Zone is
earnestly recommended

RUFYS B. RODRIGUEZ

soy JR.


SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES. )
First Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

House Bill No. 2527

AN ACT
ESTABLISHING THE CAGAYAN DE ORO SPECIAL ECONOMIC ZONE IN
BARANGAY BALUBAL, CAGAYAN DE ORO CITY, PROVINCE OF MISAMIS.
ORIENTAL AND APPROPRIATING FUNDS THEREFOR
Be it enacted by the Senate and House of Representatives of the Philippines in
Congress Assembled:

SECTION 1. Short Title. - This Act shall be known as the “Cagayan de Oro
Special Economic Zone Act’.

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the State to
actively encourage, promote, induce and accelerate a sound and balanced
industrial, economic and social development in the country, in order to provide
jobs to the people especially those in the rural areas, increase their productivity
and their individual and family income, and thereby improve the level and quality
Of their living condition through the establishment, among others, of special
economic zones in suitable and strategic locations in the country and through
measures that will attract legitimate and productive foreign investments.

SEC. 3. Cagayan de Oro Special Economic Zone. - There shall be established
in Barangay Balubal, Cagayan de Oro City. A special economic zone under the
supervision of the Philippines Economic Zone Authority (PEZA), to be known as
the Cagayan de Oro Special Economic Zone, hereinafter referred to as the
“Cagayan de Oro ECOZONE.”

SEC. 4. Board of Directors. — The powers of the Cagayan de Oro ECOZONE
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 chairman who shall, at the same time, be the Administrator of the
Cagayan de Oro ECOZONE;
b) A vice chairman who shall come from among the members of the Board;
c) The congressman of the 2™ District of Cagayan de Oro City;
d) The Mayor of Cagayan de Oro City;
e) The Barangay Captain of Barangay Balubal, Cagayan de Oro City;
f) Arepresentative from local or domestic investors:
g) A representative from foreign investors; and
h) A representative from the workers in the Cagayan de Oro ECOZONE, as
members.


The Congressman of the 2™ District of Cagayan de Oro City, city mayor
and barangay captain of Barangay Balubal of Cagayan de Oro City shall serve as
ex-officio members of the Board whose term of office shall correspond to their
terms as elected officials.

The chairman and the members of the Board, except the ex-officio
members, shall be appointed by the President of the Philippines to serve for a
term of six (6) years, unless sooner removed for cause, dies or resigns voluntarily.
In case of death, resignation or removal for cause, the replacement shall serve
only the remaining portion of the term.

Except for the representative of the business and labor sectors, no person
shall be appointed by the President of the Philippines as a members of the Board
unless he 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 shall each receive per diem at a ratio to be
determined by the Department of Budget and Management in accordance with
existing rules and regulations

SEC. 5. Powers and Functions. — The Board shall exercise the following powers
and functions:

a) Operate, administer, manage and develop the Cagayan de Oro ECOZONE
according to the principles and provisions of this Act;

b) Recommend to the President the issuance of a proclamation to fix and
delimit the site of the Cagayan de Oro ECOZONE.

©) Register, regulate and supervise enterprises in the Cagayan de Oro
ECOZONE in an efficient manner, subject to existing laws;

d) Coordinate with the local government units concerned and exercise general
jurisdiction over the Cagayan de Oro ECOZONE;

e) Construct, acquire, own, lease, operate and maintain on its own or through
contracts or joint venture, adequate facilities and infrastructure required or
needed for the operation and development of the Cagayan de Oro
ECOZONE, in connection with appropriate national or local government
authorities and in conformity with applicable laws;

f) Exercise such powers as may be essential, necessary or incidental to the
powers granted under this Act; and

g) Issue rules and regulations consistent with the provisions of this Act as may
be necessary to accomplish and implement the purposes of this Act.

SEC. 6. Powers and Duties of the Chairman-Administrator. — The Chairman-
Administrator shall exercise the following powers and duties:
a) Direct and manage the affairs of the Cagayan de Oro ECOZONE in
accordance with the policies of the Board;
b) Establish the internal organization of the Cagayan de Oro ECOZONE
under the conditions that the Board may prescribe;
c) Submit an annual budget and necessary supplemental budget to the Board
for its approval;
d) 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;


€) Submit to the Board for its approval policies, systems, procedures, rules
and regulations that are essential to the operation of the Cagayan de Oro
ECOZONE;

f) 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 Cagayan de Oro ECOZONE; and

Perform such other duties as may be assigned by the Board or which are

necessary or incidental to his office

9)

SEC. 7. Personnel. - The Board shall provide for an organization and staff of the
Cagayan de Oro ECOZONE. Upon the recommendation of the Chairman-
Administrator, the Board shall appoint and fix the remuneration and other
emoluments of its officers and employees in accordance with existing laws and
regulations

No officer or employee of the Cagayan de Oro ECOZONE shall be
removed or suspended except for a cause in accordance with civil service rules
and regulations.

SEC. 8. Capitalization. - The Cagayan de Oro ECOZONE shall have an
authorized capital stock of Two Hundred Million Pesos (Php20,000,000.00), the
majority shares of which shall be subscribed and paid for by the national
government and the local government of Cagayan de Oro City with the national
government contributing 80% of the majority shares and the LGU of Cagayan de
Oro City contributing 20%.

The Board of Directors of Cagayan de Oro ECOZONE, with the
concurrence of the Secretary of Finance, may sell shares of not more than forty
per centum (40%) of the capital stock of the Cagayan de Or ECOZONE to the
general public under such policy as the Board and 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 the Cagayan
de Oro ECOZONE

The amount necessary to subscribe and pay for the shares of the national
government to the capital stock of the Cagayan de Oro ECOZONE shall be
included in the annual General Appropriations Act. For the local government unit
of Cagayan de Oro City, the funds shall be taken from its internal revenue
allotment and other local funds,

SEC. 9. Supervision and Control. - For purposes of policy direction and
coordination, the Cagayan de Oro ECOZONE shall be under the direct control and
supervision of the Office of the President

SEC. 10. Regional Development Council. — The Board of Directors shall
determine the development goals for the Cagayan de Oro ECOZONE within the
framework of national development plans, policies and goals. The Chairman-
Administrator shall, upon approval by the Board, submit the Cagayan de Oro
ECOZONE plans, programs and projects to the Regional Development Council for
inclusion and inputs to the overall regional development plan.

SEC. 11. Tax Exemption. - The Cagayan de Oro ECOZONE is hereby declared
tax exempt from the payment of all taxes, import duties, charges and costs,


including service fees in any court or administrative proceedings in which it may
be 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 Cagayan de Oro ECOZONE to be self-sustaining and
financially capable by then to pay such taxes, custom duties, fees and other
charges after providing for debt service requirements of the Cagayan de Oro
ECOZONE and of its projected capital and operating expenditures.

SEC. 12. Audit. - The Commission on Audit shall appoint a representative who
shall be full time auditor of the Cagayan de Oro ECOZONE and assign such
number of personnel as may be necessary to assist said representative in the
performance of his duties. The salaries and emoluments of the assigned auditor
and personnel shall be in accordance with pertinent laws, rules and regulations,

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

SEC. 14. Separability Clause. — If any part or provision of this Act is declared
unconstitutional, or other parts or provisions hereof which are not affected thereby
shall continue to be in full force and effect.

SEC. 15. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in at least one (1) national newspaper of general circulation.

Approved