Thirteenth Congress of the Republic 
} 
’11P 
SI 30 
; I , { .  
If\ ‘1 
Of the Philippines 
1 
First Regular Session 
) 
Introduced by Senator Edgardo J. Angara 
EXPLANATORY NOTE 
There is a need to expedite the rehabilitation and development of the 
Mindanao Region (the “Region”) given the lack of development in certain areas 
on the Region as well as the debilitating effects of the recent conflicts. 
Unfortunately, the public sector cannot provide enough funds for the total 
development and rehabilitation of Mindanao. 
The recent hostilities have also 
scared away numerous private investors fearful of the peace and order in the 
Region. There is, therefore, a crucial need to attract private investors to invest 
in Mindanao. 
The approach to developing Mindanao should therefore be two-pronged - 
by providing the Executive enough powers to expedite the development and 
rehabilitation of the Region, and by attracting private investors through a series of 
incentives over and above the existing incentives provided to other areas of the 
country and under existing laws. 
The proposed Mindanao Development Incentives Act will provide the 
following incentives and powers: 
I, Fiscal Incentives 
1.1 
1.2 
I 
.3 
Duty-free importation of raw materials and capital equipment, as 
well as exemption from value added tax; 
5% tax in lieu of all taxes except real property tax; 
Tax credit of 200% of value of labor training expenses, and 300% in 
the case of labor training expenses for Muslims and other ethnic 
minorities; 
Tax credit of 200% of research and development expense; 
Allowance to carry over net operating loss for ten ( I  0) years; 
Reimbursement of cost for feasibility studies in areas deemed in 
critical need of investments; 
Interest assistance by line departments for all loans availed of by 
registered investing enterprise. 
1.4 
1.5 
1.6 
1.7 
2. 
Non-Fiscal Incentives 
2. I Nationality requirements shall not be required except those 
provided under the Constitution; 
2.2 
Labor disputes must be referred to a labor center for amicable 
settlement; 
2.3 
Infrastructure development and construction may be on build- 
operate-transfer basis, or other contractual arrangement, with the 
registered investor allowed to charge tolls and other fees; 
Government financial assistance through Land Bank and DBP; 
2.4 


. 
2.5 
Incentives to expatriates such as multiple entry visas, final tax of 
15% of gross income, tax and duty free importation of personal and 
household effects, travel tax exemptions; 
2.6 
Exemption of private agricultural lands used by registered 
enterprises from CARL coverage under certain conditions; 
2.7 
Basic rights and guarantees on repatriation of investments, 
remittance of earnings and freedom from expropriation. 
3. 
Powers of the President 
3.1 
Authority to set in place such policies which will ensure that 
Mindanao becomes competitive and investor-friendly; 
3.2 
Authority 
to 
realign funds from 
dormant 
or 
non-moving 
infrastructure projects to projects of immediate necessity; 
3.3 
Authority to revoke or terminate existing contracts whenever it 
appears that the contractor is unreasonably delayed; 
3.4 
Authority to resort to simplified public bidding in contracts for 
infrastructure development, construction and repair; 
3.5 
Authority to declare economic zones with appropriate incentives; 
3.6 
Authority to declare specific areas in the Region as underdeveloped 
and thus entitled to additional incentives and support; 
3.7 
Authority to declare tax holidays over and above those presently 
enjoyed by existing economic zones; 
3.8 
Authority to contract with private firms and entities for the latter to 
construct, build or rehabilitate public rural infrastructure and to be 
reimbursed in such manner and under such terms and conditions 
as the President may determine. 
The foregoing incentives and powers are sufficient to encourage 
investment in Mindanao and ensure growth in the region. 
For the above-mentioned reasons, approval of this bill is earnestly urged. 
EDGARDO J. ANGARA 


THIRTEENTH CONGRESS OF THE REPUBLIC 
1 
OF THE PHILIPPINES 
1 
First Regular Session 
) 
"04 I u"; 30 
;?;f"t 
s! 
Introduced by Senator Edgardo J. Angara 
AN ACT 
PROVIDING 
FOR 
INVESTMENT 
INCENTIVES 
TO 
ACCELERATE 
DEVELOPMENT IN MINDANAO, CREATING THE MINDANAO INCENTIVES 
DEVELOPMENT AUTHORITY FOR THIS PURPOSE, AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the 
Philippines in Congress Assembled: 
Section 1.' 
Shod Title. - This Act shall be known as the "Mindanao 
Development Incentives Act." 
Section 2. Declaration of Policy. - The State recognizes the need to 
promote and accelerate the growth and development of the Mindanao Region, 
hereinafter referred to as the Region, in order to make it, at the least, at par with 
the other regions of the country and promote the overall growth of the Region in 
particular and national economy in general. 
The State takes note of the 
centuries-old conflict between the government and Muslim Mindanao, ad of the 
need to find a lasting solution rooted in the social, economic and cultural realities. 
The State further recognizes the vast potential of the Region, including its 
immense natural resources, which remain largely untapped, and the need for 
public and private investment in infrastructure and spending to ensure the 
development of the Region. 
Pursuant thereto, and in order to address effectively the conflict between 
government and Muslim Mindanao, it is the declared policy of government to 
actively encourage, promote, induce and accelerate a sound and balanced 
agricultural, industrial, economic and social development in the Region in order 
to alleviate poverty therein, 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 and hence secure 
peace and stability I the Region through the provision of economic and fiscal 
incentives and through measures that shall effectively attract legitimate and 
productive local and foreign investments. The government shall furthermore 
undertake efforts to promote the development of the Region into the hub of 
investment, trade and commerce in the East Asian region through private capital 
and investment which shall serve as the engines of growth and development of 
the Region, creating jobs, providing increased income and productivity, and 
bringing new technology. 
Section 3. Creation of the Mindanao Incentives Development Authority.- 
There is hereby created a body corporate to be known as the Mindanao 
Incentives Development Authority, hereinafter referred to as MIDA. The MIDA 
shall have a Director-General with the rank of a department undersecretary who 
shall be appointed by the President. The director-general shall be at least forty 
(40) years 


of age, of proven probity and integrity, and have a strong knowledge or 
background 
in 
ag ricu I t ure , 
invest men ts , 
economics, 
business, 
pu bl i c 
administration, law or their equivalent. 
The Director General shall be assisted by three (3) deputy directors general 
each for policy and planning, administration and operations, who shall be 
appointed by the MlDA Board, upon the recommendation of the Director General. 
The deputy directors shall be at least thirty-five (35) years old, with proven probity 
and integrity and with a degree in agriculture, economics, business, public 
administration, law, management or their equivalent. 
The Board shall be composed of the Secretary of Agriculture who shall 
serve as ex officio chairman, the Director General who shall serve as Vice 
Chairman, with four (4) members as follows: the Secretaries of the Department of 
Environment and Natural Resources, Department of Finance, Department of Trade 
and Industry and one (I 
) representative from the investors/business sector in 
Mindanao. 
Members of the Board shall receive a per diem of not more than Five 
Thousand Pesos (P5,OOO) for every board meeting: Provided, however, that the 
per diem collected per month does not exceed the equivalent of four (4) meetings. 
Provided, further, that the amount of per diem for every board meeting may be 
increased by the President but such amount shall not be increased within two (2) 
years after its last increase. [BCDA law] 
Section 4. Functions and Powers of the Board. - The Board shall have the 
following functions and powers: 
(a) 
Set the general policies on the establishment of the enterprises that 
will register with MIDA; 
(b) 
Review proposals for the establishment of MlDA registered 
enterprises, and to facilitate and assist in the organization of said entities; 
(c) 
Provide assistance to registered enterprises to ensure that 
sufficient agro-industrial activities within the Region are undertaken, including 
agro-industrial processing, high-end technology production of high value crops, 
high-technology aquaculture farming, direct agriculture and biotech industries, in 
coordination with the Department of Agriculture. The MIDA, in coordination with 
the Department of Agriculture and the Department of Trade and Industry, shall 
periodically furnish a list of agro-industrial activities which may be undertaken 
within the Region. 
(d) . 
Approve the annual budget of MlDA and its development plans; 
(e) 
Issue rules and regulations to implement the provisions of this Act 
insofar as its powers and functions are concerned; 
(f) 
Exercise its powers and functions as provided for in this Act; and 
(9) 
Render annual reports to the President and the Congress. 
Section 5. 
General Powers and Funcfions of.fhe MlDA. - The MlDA 
shall have the following powers and functions: 
(a) 
To administer and supervise the incentive schemes of the Region 
according to the principles set forth in this Act; 
2 


(b) 
To register the enterprises in the Region in an efficient and 
expeditious manner; 
(c) 
To caordinate with regional development councils and other 
development bodies in the identification and preparation of development programs 
and projects in the Region; 
(d) 
To recommend to the President and Congress such other incentives, 
concessions or preference necessary to fully implement the letter and spirit of this 
Act; 
(e) 
To adopt, alter and use a corporate seal; make contract.s, lease, own 
or otherwise dispose of personal or real property; sue and be sued; and otherwise 
carry out its duties and functions as provided for in this Act; 
(f) 
To consult on a regular basis with the local government units, private 
sector and civil society on plans and policies to be formulated and promulgated; 
(9) 
To monitor and evaluate the development and requirements of 
entities within the Region and recommend to the local government units or other 
appropriate authorities the location, incentives, basic services, utilities and 
infrastructure required or to be made available for said entities; and 
(h) To accept any local or foreign investment, business or enterprise, 
subject only to such rules and regulations to be promulgated by the MlDA in 
conformity with the policies of the MlDA without prejudice to the nationalization 
requirements provided for in the Constitution. 
Within thirty (30) days from its constitution, the MlDA shall promulgate a 
priority investment plan over the Region in order to accomplish the intent of this 
Act. 
Section 6. Powers and Functions of the Director General. - The Director 
General shall provide overall supervision over the operations of the MIDA. He shall 
recommend to the Board the structure and the staffing pattern and personnel 
complement of the MlDA and establish regional offices, when necessary, subject 
to the approval of the MlDA Board. 
In addition, he shall have the following specific powers and responsibilities: 
(a) 
To safeguard all the lands, buildings, records, monies, credits and 
other properties and rights of the,MIDA; 
(b) 
To ensure that all revenues of the MlDA are collected and applied in 
accordance with its budget; 
(c) 
To ensure that the employees of the MlDA are properly discharging 
their respective duties; 
(d) 
To give such information and recommend such measures to the 
Board, as he shall deem advantageous to the Region; 
(e) 
To submit to the.Board, the ongoing and proposed projects, work 
and financial program, annual budget or receipts, and expenditures of MIDA; 
3 


(f) 
To represent the MIDA in all its business matters and sign on its 
behalf after approval of the Board, all its contracts, agreements and obligations 
made in accordance with this Act; 
(9) 
To perform such other duties and exercise such powers as may be 
prescribed by the Board, and to implement the policies, rules and regulations set 
by the MIDA. 
Secti.on 7. 
Autonomy: of Local Government Unifs. Except as herein 
provided, the local government units comprising the Region shall retain their basic 
autonomy and identity. The cities shall be governed by their respective charters 
and the municipalities shall operate and function in accordance with the Local 
Government Code. 
Section 8. 
Qualifications of a Registered Enferprise. - To be entitled to 
registration under this Act, an applicant must satisfy to the Board that: 
He is a citizen of the Philippines, if an individual, or in case of a corpora.tion, 
partnership or association, it is organized under Philippine laws and that at 
least sixty percent (60%) of the capital stock outstanding and entitled to 
vote is owned and held. by Philippine nationals as defined in Republic Act 
No. 7042. If it does not possess the required degree of ownership as 
mentioned above, It will engage in an activity that is not within the activities 
reserved by the Constitution to Philippine citizens or corporation owned and 
controlled by Philippine citizens; 
It shall make an initial investment in tpe Re.gion in an amount.not less than 
the equivalent of Two Hundred Fifty Thousand Dollars (US$250,000), 
United States currency, unless a higher amount of investment is required 
under existing laws; 
The applicant will engage in an activity which will necessitate the 
employment of at least fifty (50) local employees; 
The applicant is capable of operating on a sou.nd and efficient basis and of 
contributing to the development of the Region in particular and of the 
national economy in general; and 
If the applicant is engaged in undertakings or activities outside the Region, 
it has installed or undertakes to install an accounting system adequate to 
identify the investments, revenues, costs, and profits or losses of the project 
to be undertaken in the Region from the aggregate investment, revenues, 
costs, and profits or losses of the whole. enterprise or to establish a 
separate corporation for the project to be undertaken in the Region if the 
Board so requires. 
Section 9. Basic Rights and Guaranfee. - All investors and registered 
enterprises are entitled to the basic rights and guarantees provided in the 
Constitution. Among the other rights recognized by the Government of the 
Philippines are the following: 
(a) 
Repafriafion of Investments. In the case of foreign investments, the 
right to repatriate the entire proceeds of the liquidation of the investment in the 
currency in which the investment was originally made and at the exchange rate 
prevailing at the time of repatriation. 
4 


(b) 
Remittance of Earnings. In the case of foreign investments, 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. 
(c) 
foreign Loans and Confracts. The right to remit at the exchange 
rate prevailing at the time of remittance such sums as may be necessary to meet 
the payments of interest and principal on foreign loans and foreign obligations 
arising from technological assistance contracts. 
(d) 
Freedom from Expropriation. Except as provided in Section 9 (e) 
below, there shall be no expropriation by the government of the property 
represented by investments or of the property of the registered enterprise. 
(e) 
Requisition of Investment. There shall be no requisition of the 
property represented by the investment or of the property of the registered 
enterprise, except in the event of war. 
Section I O .  Policies. - The Region shall be subject to the following 
policies: 
(a) 
Within the framework and subject to the mandate and limitations of 
the Constitution and the pertinent provisions of the Local Government Code, the 
Region shall be developed into a self-sustaining agricultural, agro-industrial, 
industrial, commercial, financial and investment center to generate employment 
opportunities in and around the Region and to attract and promote productive 
investments; 
(b) 
Merchandise, raw materials, supplies, equipment, machinery, spare 
parts and wares of.every description, agricultural and fisheries inputs brought into 
the Region by a registered enterprise to be sold within the Region, stored, broken 
up, repacked, assembled, installed, sorted, cleaned, graded or otherwise 
processed, manipulated, manufactured, mixed with foreign or domestic 
merchandise whether directly or indirectly related in such activity and brought out 
of the Philippines, shall not be subject to customs and internal revenue laws and 
regulations of the Philippines, including value added tax, nor to local tax 
ordinances; 
(c) 
The prwision of existing laws, rules and regulations to the contrary 
notwithstanding, no taxes, national and local except real property tax, shall be 
imposed upon registered enterprises located within the Region. In lieu of paying 
taxes, three percent (3%) of the gross income earned by all registered enterprises 
within the Region shall be remitted to the National Government, one percent (I 
%) 
each to the local government unit having jurisdiction over the particular registered 
enterprise. In addition, there is hereby established a development fund of one 
percent (I 
%) of the gross income earned by all registered enterprises within the 
Region to be utilized for the development of the Region. 
In case of conflict between national and local laws with respect to tax 
exemption privileges in the Region, the same shall be resolved in favor of the 
I a tte r; 
(d) 
Registered enterprises establishing their production, processing or 
manufacturing plants in an area within the Region which the Board designates as 
necessary for the proper dispersal of the industry or in an area which the Board 
finds deficient in infrastructure, public utilities, and other facilities, such as 
irrigation, drainage and other similar waterworks infrastructure may apply in 
payment of taxes due from it to the government an amount equivalent to 100% of 
5 


the necessary and major infrastructure works it may have undertaken with the prior 
approval of the Board under such terms and conditions as the Board may 
determine and in consultation with other government agencies concerned, 
provided that: 
(i) 
the title to all such infrastructure works shall, upon completion, be 
transferred to the Philippine Government; and 
(ii) 
should the registered enterprise undertake necessary and major 
maintenance work on such infrastructure works with the prior 
approval of the Board, a similar incentive shall be given to it in an 
amount equivalent to the cost of such necessary maintenance. 
Provided, that in cases where the Board may certify that infrastructure or 
the rehabilitation thereof is urgently needed in specific areas, the registered 
enterprise undertaking the construction of infrastructure or rehabilitation thereof 
may apply in payment of taxes due from it to the government an amount 
equivalent to 200% of the necessary and major infrastructure works it may have 
undertaken with the prior approval of the Board. 
Provided, further, that a registered enterprise shall be encaraged to 
undertake infrastructure and development projects, including but not limited to, 
power plants, highways, ports, airports, canals, dams, hydropower projects, water 
supply, irrigation, telecommunications, railroads and railways, transport systems, 
land reclamation projects, markets, slaughterhouses, warehouses, solid waste 
management, information technology networks and database infrastructure, 
education and development projects as may be authorized by the appropriate 
agency pursuant to this Act. Such projects shall be undertaken through 
contractual arrangements as defined hereunder and under Republic Act No. 
6957, as amended, and such other variations as may be approved by the 
President of the Philippines. 
For the construction stage of these infrastructure projects, the project 
proponents may obtain financing from foreign and/or domestic sources andlor 
engage the services of a foreign and/or Filipino contractor: Provided, That in 
case an infrastructure or a development facility’s operation requires a public 
utility franchise, the facility operator must be Filipino or if a corporation, it must 
be duly registered with the Securities and Exchange Commission and owned up 
to at least sixty percent (60%) by Filipinos: Provided, further, That in the case of 
foreign contractors, Filipino labor shall be employed or hired in the different 
phases of the construction where Filipino skills are available: Provided, finally, 
That subjects which would have difficulty in sourcing funds may be financed 
partly from direct government appropriations and/or from Official Development 
Assistance (ODA) of foreign governments or institutions not exceeding fifty 
percent (50%) of the project cost, and the balance to be provided by the project 
proponent. 
All government infrastructure agencies, including government-owned and - 
controlled corporations and local government units are hereby authorized to 
enter into contracts with any duly prequalified project proponent for the financing, 
construction, operation and maintenance of any financially viable infrastructure 
or development facility through any of the projects authorized in this Act and 
other laws. Said agencies, when entering into such contracts, are enjoined to 
solicit the expertise of individuals, groups, or corporations in the private sector 
who have extensive experience in undertaking infrastructure or development 
projects. 
6 


(e) 
For the first ten (1 0) years from registration, a registered enterprise 
shall be allowed to deduct from its gross income earned two hundred percent 
(200%) of the value of the labor training expenses incurred for upgrading the 
productivity and efficiency of unskilled labor and of apprentices, provided that: 
1. 
2. 
3. 
the training program is duly approved by the Board; 
the deduction shall not exceed twenty percent (20%) of direct labor 
wage; and 
the apprentices shall be paid the minimum wage. 
Provided, that in case at least ten percent (10%) of the trainees or 
apprentices shall be Muslim or belong to other ethnic minorities, a registered 
enterprise shall be allowed to deduct from its gross income earned three hundred 
percent (300%) of the value of the labor training expenses incurred for upgrading 
the productivity and efficiency of the unskilled labor and apprentices belonging to 
the Muslim or other ethnic minorities. 
(f) 
For the first ten (IO) years from registration, a registered enterprise 
shall be allowed to deduct from its gross income earned two hundred percent 
(200%) of the value of the research and development expenses incurred relating 
to the business undertaken by the registered enterprise, provided that:' 
the research and development program is duly approved by the 
Board; and 
the deduction shall not exceed ten percent (I 0%) of gross income of 
the registered enterprise. 
I. 
2. 
(9) 
For the first ten (I 
0) years from registration, a registered enterprise 
shall be entitled to reimbursement for expenses incurred in undertaking feasibility 
studies of projects deemed by the Board to be critical to development objectives. 
Such reimbursement shall be given by the Department with authority over the 
specific project. 
(h) 
For the first ten (IO) years from registration, a registered enterprise 
may carry over its net operating loss as a deduction from its gross income earned 
for the next three (3) consecutive years immediately following the year of such 
loss. 
(i) 
Private agricultural lands that have not been distributed and upon 
which no Certificates of Land Ownership Award have been issued shall be exempt 
from the coverage of Republic Act No. 6657, known as the Comprehensive 
Agrarian Reform Law ("CARL"); Provided, that such lands shall be directly and 
exclusively used by registered enterprises within the Region. 
In cases where the lands have been subjected to the CARL, by voluntary 
offer to sell, or commercial farms deferment or notices of compulsory acquisition, a 
simple and absolute majority of the actual regular workers or tenants must consent 
to the exemption within one (1) year from the effectivity of this Act. Should the 
workers or tenants not agree to this exemption, the lands shall be distributed 
collectively to the worker-beneficiaries or tenants who shall form a cooperative or 
association to manage the same. 
The provisions of Republic Act No. 6657 to the contrary notwithstanding, 
land subjected to CARL may be mortgaged, leased, sold or otherwise disposed of 
in favor of a registered enterprise. 
7 


In cases where the lands have not been subjected to the CARL, the 
consent of the farm workers shall no longer be necessary. However, the provision 
of Section 32-A of Republic Act No. 7881 on incentives shall apply. 
Section 11. Labor Relations. The Region shall uphold industrial peace, 
harmony and productivity to establish a sound and peaceful investment climate 
and simultaneously promotes and enhances the lives and dignity of all workers. 
Unless otherwise provided by law, all Philippine law and social security laws 
shall apply within the Region pursuant to the above-stated policy, all laws on 
strikes and lockouts will be strictly enforced. 
MlDA shall establish a Labor Center which 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 Region. 
Subject to existing labor laws, as may be specified in employment contracts 
or collective bargaining agreements, all labor disputes must be brought before the 
Labor Center which will attempt to amicably settle the case. In case the Labor 
Center cannot settle the dispute amicably, it will certify the dispute for mediation or 
arbitration before the proper office of the Department of Labor and Employment or 
the Secretary of Labor and Employment for compulsory arbitration or assumption 
of jurisdiction . 
Section 12. Government Assistance. Upon the recommendation of the 
MlDA Board and subject to the qualifications under its relevant charters, the 
Development Bank of the Philippines, Land Bank of the Philippines and similar 
government financial institutions are mandated to render financial assistance to 
registered enterprises in the Region which may be secured by an undertaking from 
the Government, through the Department of Finance, to issue a guarantee in favor 
of the aforementioned registered enterprise whenever warranted by the 
ci rcum stances. 
Depending on the nature of the registered enterprise, line departments shall 
be required to extend interest assistance to the extent determined by the 
appropriate Secretary for loans availed of by the registered enterprise pursuant to 
this Act. 
Section 1 3. Other lncenfives. The expatriates employed by the registered 
enterprises shall be entitled to the following incentives: 
(a) 
Upon submission of all necessary documents, the Bureau of 
Immigration shall issue the multiple entry special visa to foreign personnel of 
registered enterprises, their respective spouses and unmarried children under 21 
years of age, if accompanying them or if following to join them after their admission 
into the Philippines as non-immigrant within seventy-two (72) hours upon 
submission of all required documents. This is without prejudice to the authority of 
the Department of Foreign Affairs to issue visas. 
The visa shall be valid for a period of five (5) years to enter the Philippines. 
The admission and stay shall be co-terminus with the validity of the multiple entry 
visa. The stay, however, is extendible to five (5) years upon submission to the 
Bureau of Immigration of a sworn certification by a responsible officer of the 
registered enterprise that is licensed to operate or registration remains valid and 
subsisting and that the registered enterprise has withheld tax due on 
compensation and the same has been paid to the Bureau of Internal Revenue. 
8 


Non-immigrants who have been admitted under the multiple entry special 
visa, as well as their respective spouses and dependents, shall be exempt from: 
the payment of all fees due under immigration and alien registration laws; securing 
alien certificates of registration; and obtaining emigration clearance certificates, 
except reasonable administrative cots. They are also exempt from all types of 
clearances required by any government department or agency, except that upon 
final departure from the Philippines the employer of the said non-immigrants shall 
so advise in writing the Bureau of Immigration at least five (5) working days prior to 
the immigrant's departure and the finally departing non-immigrant employee shall 
be required to submit to the said office a tax clearance from the Bureau of Internal 
Revenue. 
(b) 
Alien executives occupying managerial and technical positions 
employed by the registered enterprise shall be subject for each taxable year upon 
their gross income received as salaries, wages, annuities, compensations, 
remuneration and emoluments to a final tax equal to fifteen percent (1 5%) of such 
gross income. 
The same tax treatment is applicable to Filipinos employed and occupying 
the same positions as those aliens employed by registered enterprises, r-?gardless 
of whether or not there is an alien executive occupying the same position. 
Qualified Filipino employees shall have the option to be taxed at either 15% of 
gross income or at the regular tax rate on their taxable income in accordance with 
the National Internal Revenue Code of 1997. 
(c) 
An alien executive of the registered enterprise shall enjoy tax and 
duty free importation of personal and household effects as provided for under 
Section +l05(h) of the Tariff and Customs Code as amended, and Section 109 ( I )  of 
the National Internal Revenue Code, as amended; Provided, That the personal 
and household effects shall arrive in the Philippines within ninety (90) days before 
or after conversion of the alien executive's admission category to multiple entry 
visa issued under this Act. 
(d) 
Foreign personnel of registered enterprises and the dependents of 
such foreign personnel if joining them during the period of their assignment in the 
Philippines shall be exempted from the payment of travel tax imposed under 
Section 1 of Presidential Decree No. 1183, as amended. 
Section 14. Simplified Public Bidding. As a general rule, contracts for 
infrastructure development, construction, repair, rehabilitation, improvement or 
maintenance should be conducted through public bidding pursuant to Republic Act 
No. 6957, as amended. However, in the exigency of public service and national 
interest as may be determined by the President, and in order to achieve the 
objectives of this Act, simplified bidding through sealed canvass of at least three 
(3) pre-qualified investors may be resorted to. The process of selecting the 
prospective lessees and private investors shall be transparent, where procedures 
and selection process adapted are made public through newspaper 
advertisements and similar other means. 
Section 15. Aufhorify to Declare Economic Zones. The President is 
authorized to declare certain areas within the Region as economic, free trade, 
agro-industrial, agricultural, agri-tourism, or industrial zones qualified and eligible 
for all incentives provided for under this Act and other existing laws. The President 
is further authorized to declare areas within the Region as underdeveloped and 


therefore entitled to incentives and support over and above those provided in this 
Act. 
Section 16. Applicability to Existing Enterprises in the Region. The basic 
rights incentives granted under this Act may be availed of existing business 
enterprises within the Region provided that these enterprises possess the 
minimum qualification as set forth in Section 8 and they register with the MlDA 
within six (6) months from the effectivity of the rules implementing this Act. 
Section I 
7. Coordination with Various Government Organizations. - The 
Board shall consult and coordinate with existing government organizations 
including the Autonomous Region of Muslim Mindanao, Mindanao Economic 
Development Council, Southern Mindanao Development Authority, Special Zone 
of Peace and Development in formulating policies and programs. 
Section 18. lmplemenfing Rules and Regulations. - To implement the 
provisions of this Act, the Department of Agriculture, the Department of Trade and 
Industry and the Department of Finance shall formulate the implementing rules 
and regulations of this Act within thirty (30) days after its approval. Such rules and 
regulations shall take effect fifteen (1 5) days after their publication in a newspaper 
of general circulation in the Philippines. 
Section 21. 
Separability Clause. - If any part or section of this Act is 
declared unconstitutional for any reason or whatsoever, such parts not so declared 
shall remain in full force and effect. 
Section 22. 
Repealing Clause. - All laws, decrees, orders, rules and 
regulations or issuances or parts thereof inconsistent with the provisions of this Act 
are hereby repealed or modified accordingly. 
Section 23. 
Effectivity Clause. -This Act shall take effect after fifteen (15) 
days following its full publication in at least two (2) newspapers of general 
circulation in the Philippines. 
I O