Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH (17TH) CONGRESS
st Regular Se:

House Bill Nod 771

AN ACT
ESTABLISHING AN INFORMATION AND COMMUNICATIONS TECHNOLOGY
(ICT) HUB IN EVERY LEGISLATIVE DISTRICT OF THE PHILIPPINES AND
FOR OTHER PURPOSES

xplanatory Note

According to the European Commission, information and communication technology
creates greater access to information and communication in underserved populations.’ In 1987,
the Philippines turned to information technology as a tool to attain social, economic, and
political development with a particular emphasis on helping the poor and the marginalized.*
However, the state of information and communication technology in the Philippines has not
been enough to achieve significant positive outcomes. The country’s geography and various
cultures were seen as some of the causes that stifled development, and it still remains to be
seen whether information technology can be regarded as a significant growth driver and vehicle
for reducing inequality among the rich and poor,

One potential solution for development and reducing inequality would be for the
government to act affirmatively by spreading out and democratizing access to information
technology. This bill hopes to achieve this through the establishment of Information and
Technology (ICT) Hubs in each legislative district. The hubs will serve as key drivers for
improving the country’s information infrastructure, and educational and economic prospects;
they will serve as a powerful instrument in reducing poverty and inequality; and they will lay
the foundation for sustained economic growth.’ A concrete example of their impact is the
proliferation of Business Process Outsourcing (BPO) industries in the country's major cities
that created employment and boosted the economy. Before thriving BPO industries settled in
those areas, those areas were potential ~ or were already in fact ~ ICT hubs equipped with the
necessary infrastructure, human resources, and access to technology and innovation.

This bill is designed to be a counterpart to Senate Bill No. 877

‘ https://ec.europa.eu/programmes/horizon2020/en/area ict
? Section 3 (b), Executive Order No. 128; Jantiary 30, 1987
* Close-the-ap.org; The role of ICT in the UN sustainable development goals

fesearch-innovation


The establishment of ICT hubs will be cost effective over time. It opens up local
economies to the global, interconnected economy and accelerates human progress by bridging,
the digital divide.

In view of the foregoing, the immediate passage of this bill is, earnestly sought.

BERNADETTE ERA-DY


wawds Fen e

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH (17"") CONGRE:

fa} Q2I2 A. Regular Session

S

AN ACT

ABLISHING AN INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT) HUB
JN EVERY LEGISLATIVE DISTRICT OF THE PHILIPPINES AND FOR OTHER PURPOSES.

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

“TION 1. Title. — This Act shall be known as the “ICT Hub Act of 2016",
SECTION 2, Declaration of Policy. — It is hereby declared the policy of the State:

a To recognize the vital role of communication and information in nation-building
Toward this end, the State shall provide for the creation and establishment of information
communications Technology Hub, hereinafter referred to as ICT Hub, in every legislative district
of the country:

b, To promote and encourage investment in the countryside by providing the
infiastructure necessary for the growth of information and communications technology; and

© To ensure the adequate supply of power and electricity in the countryside in
support of the development of information and communications technology.

SECTION 3. Information Communications Technology Plan. — The provincial or city board,
consistent with the medium Term Philippine Development Plan (MTPDP) and in coordination with the
Department on Information and Communications Technology (DICT), shall formulate and approve an
information Communications Technology (ICT) Plan for the legislative districts of each province or city,
taking into consideration its comparative advantage, funding mix, private sector involvement, incentives
to locators, local tax incentives, among others.



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SECTION 4, Location of ICT Hub. —Pursuant to the provincial or city development plan, the
provincial or city board shall identity the area where the ICT Hub shat! be established: Provided, That, the
areas shall not be in the capital or urban center of the province: Provided, further that, the area is owned
by the provincial or city government,

For the purpose of this Act, Information Communication Technology (ICT) is the totality of
electronic means to collect, process and present information to end-users in support of their activities. It
consists among others, of computer systems, office systems and consumer electronics, as well as
networked information infrastructure, the components of which include the telephone system, the internet,
fax machines and computers

An ICT Hub refers to a center or location where services may be provided through the use of
ICT. Such services may inelude tel management, ete,

ommunication services, da

SECTION 5. Digital Infrastructure Fund. — A Digital Infrastructure Fund, hereinafter referred
to as the Fund, is hereby created and lodged in the DICT. The amount of Ten Billion Pesos
Php10,000,000,000.00), or as much thereof as may be necessary, is hereby appropriated from the general
fund for the purpose of providing seed capital and as the counterpart of the national government in the
establishment of the ICT Hub in each legislative district of each province or city: Provided, That, the
Fund shall be disbursed in a pro-rata manner based on the following criteria: Telephone density, degree of
digital divide, ICT penetration ratio. presence of new alternative backbone networks, science and
technology parks and industrial estates with an ICT focus, among others.

Subsequent appropriations shall be annually provided for in the General Appropriations
Act with an annual increment of 25 percent per annum until the amount of Php 50,000,000,000.00 shalt
have been reached.

SECTION 6. Tax and Fiscal Incentives. — Any locator in the ICT Hub shall be entitled to the
fiscal and non-fiseal incentives under the Omnibus Investments Code (E.O, 226, series of 1987), as
amended, and the Special Economic Zone Act of 1995 (R.A. No. 79 16), including a 5-year tax break from
national taxes: Provided, That, they are part of the Global 0 & 0, such as, but not limited to: animation,
customer contact, back office, sotware development, medical and legal transcription, and other cyber
erviees: Provided, further that, sixty percent (60%) of its labor force shall be recruited locally and that
corporate income shall be declared and taxes shall be paid locally on the sixth (6th) year of its operations:
Provided, Finally, That locators in the top 30 poorest provinees of the country as identified by the
National Economic and Development Authority (NEDA), shall be given a pioneer status and shall be
entitled to such additional incentives as may be allowed by law. ICT Hubs already receiving such incentives
shall continue to be entitled to avail of the same,

SECTION 7. Implementing Rules and Regulations. — The Department on Information and
Communications Technology (DICT), in coordination with the Departments of Science and Technology
(DOST) and Interior and Local Government (DILG) and other concerned entities, shall formulate the
necessary implementing rules and regulations of this Act.


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SECTION 8. Separability Clause. — Any portion or provision of this Act that maybe declared
‘unconstitutional shall not have the effect of nullifying other provisions hereof, as long as such remaining
provisions and still subsist and be given effect in their entirety.

SECTION 9. Repealing Clause, — All laws, rules and regulations, other issuances or parts
thereof, which are inconsistent with the Act, are hereby repealed or modified accordingly.

SECTION 10, Effectivity. — This Act shall take effect fifteen (15) days from its publication in
the Official Gazette or two national newspapers of general circulation,

Approved.