FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
-I 
" :,'. ,('J 
1 (j 
"JUL -S I ~ 1 :,-13 
SENATE 
S. No. 120 
Introduced by Senator S. R. Osmena '" 
EXPLANATORY NOTE 
Several decades ago, Mindanao with its abundant resource and rich blend of 
ethnic culture used to be known as the Land of Promise. Today, the promise of 
Mindanao has been reduced to clicM, squandered on the ethnic conflict between 
Muslims and Christians and the pervasive poverty and deprivation that haunt its vast 
hinterlands. Amid the litter of missed opportunities and wasted resources, the 
government must finally own up to its gross neglect of Mindanao's development 
requirements that lies at the root of the past and present failures of governance in 
Mindanao. 
This bill seeks to address the massive infrastructure and investments required for 
the development of Mindanao through the creation of the Mindanao Incentives 
Development Authority (MIDA). Enterprises registered with the MIDA may pay only 
3% of gross income in lieu of national and local taxes except real property tax. Other 
privileges include: 
• 
liberal tax incentives on acquisitions of merchandise and raw materials. 
• 
special tax incentives and simplified public bidding for infrastructure and 
development projects. 
• 
Financial assistance through government financial institutions; 
• 
Exemptions from certain provisions of the Comprehensive Agrarian Reform 
Law (CARL); 
• 
the services of a Labor Center for the amicable settlement of labor disputes; 
and 
• 
liberal entry provisions for foreign personnel and their families. 
The poverty and plight of Filipinos in Mindanao pose a challenge to our national 
leadership to respond with compassion and magnanimity that will lead to a burgeoning 
of opportunities in the region, strengthen the bonds of brotherhood between Muslim 
and Christian citizens - Filipinos alike, and heal the wounds of division among us. 
In view of the foregoing, early passage of this bill is earnestly requested. 
f1.~~ 
SERGIO OSMENA '" 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
f ; .;3 
SENATE 
S. No. 120 
Introduced by Senator S. R. Osmena 11/ 
AN ACT 
PROVIDING 
FOR 
AGRO-INDUSTRIAL 
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 the House of Representatives of the Republic of the 
Philippines in Congress assembled: 
1 
SECTION 1. Short Title. - This Act shall be known as the "Mindanao 
2 
Development Incentives Act" 
3 
SEC. 2. Declaration of Policies - The State recognizes the need to 
4 
promote and accelerate the economic growth and development of the Mindanao 
5 
Region, hereinafter referred to as the Region, in order to make it, at least, at par 
6 
with the level of development of other regions of the country. The State takes 
7 
not of the centuries-old conflict between the government and Muslim Mindanao, 
8 
and of the need to find a lasting solution rooted in the social, economic and 
9 
cultural realities. The State further recognizes the vast potential of the Region, 
10 
including its immense natural resources, which remain largely untapped, and the 
11 
need for public and private investment in infrastructure and spending to ensure 
12 
the development of the Region. 
13 
Pursuant thereto, and in order to address effectively the conflict between 
14 
government and Muslim Mindanao, it is the declared policy of government to 
15 
actively encourage, promote and accelerate a sound and balanced agricultural, 
1 


industrial, economic and social development in the Region in order to alleviate 
2 
poverty therein, create jobs for the people, especially those in the rural areas, 
3 
increase their productivity and their individual and family income and thereby 
4 
improve the level and quality of their living condition and hence secure peace 
5 
and stability in the Region through the provision of economic and fiscal 
6 
incentives and through measures that shall effectively attract legitimate and 
7 
productive local and foreign investments. The government shall furthermore 
8 
undertake efforts to promote the development of the Region into the hub of 
9 
trade and commerce in the East Asian region through private capital. 
10 
SEC. 3. Creation of the Mindanao Incentives Development Authority. 
11 
-
There is hereby created a body corporate to be known as the Mindanao 
12 
Incentives Development Authority, hereinafter referred to as the MIDA. The 
13 
MIDA shall hold office within Mindanao. 
14 
The MIDA shall have a Director-General with the rank of a department 
15 
undersecretary who shall be appointed by the President. The Director-General 
16 
shall be at least forty (40) years of age, of proven probity and integrity, and have 
17 
a degree in agriculture, finance, economics, business, public administration, or 
18 
management. 
19 
The Director-General shall be assisted by three (3) Deputy Directors-
20 
General for policy and planning, administration and operations, who shall be 
21 
appointed by the MIDA Board, upon the recommendation of the Director-
22 
General. The Deputy Directors shall be at least thirty-five (35) years old, with 
23 
proven probity and integrity and with a degree in agriculture, economiCS, 
24 
business, public administration, management or finance. 
25 
The Board shall be composed of the secretary of Agriculture who shall 
26 
serve as ex-officio chairman, the Director-General who shall serve as Vice 
27 
Chairman, with four(4) members as follows: the Secretaries of the Department 
28 
of Environment and Natural Resources, Department of Finance, Department of 
29 
Trade and Industry, National Economic and Development Authority; one (1) 
2 


1 
representative from the investors/business sector in Mindanao; and the five (5) 
2 
chairmen of the Regional Development Councils and the governor of the 
3 
Autonomous Region of Muslim Mindanao. 
4 
Members of the Board shall receive a per diem of not more than Two 
5 
Thousand Pesos (P2,OOO.OO) for every board meeting: Provided, however, That 
6 
the per diem collected per month does not exceed the equivalent of four (4) 
7 
meetings. Provided, further, That the amount per diem for every board meeting 
8 
may be increased by the President but such amount shall not be increased 
9 
within two (2) years after its last increase. 
10 
SEC. 4. Functions and Powers of the Board. - The Board shall have 
11 
the following function and powers: 
12 
(a) Set the general policies and rules for the regulation and promotion of 
13 
investments in the Mindanao Region and implement the provisions of 
14 
this Act insofar as its powers and functions are concerned; 
15 
(b) Process and approve applications for registration of enterprises with 
16 
the MIDA, imposing such terms and conditions as it may deem 
17 
necessary to promote the objectives of this Act, including the refund 
18 
of incentives when appropriate, requiring performance bonds and 
19 
other 
guarantees 
and . payment 
of 
application, 
registration, 
20 
publications and other necessary fees; 
21 
(c) Provide assistance to registered enterprises to ensure that sufficient 
22 
agro-industrial activities within the Region are undertaken, including 
23 
agro-industrial processing, high-end technology production of high 
24 
value crops, high technology aquaculture farming, direct agriculture 
25 
and biotech industries, in coordination with the Department of 
26 
Agriculture. The MIDA, in coordination with the Department of 
27 
Agriculture and the Department of Trade and Industry, and the 
28 
National Economic Development Authority shall periodically furnish a 
3 


list of agro-industrial activities which may be undertaken within the 
2 
Region. 
3 
(d) Approve the annual budget of MIDA and its development plans; 
4 
(e) Exercise its powers and functions as provided for in this Act, and 
5 
(f) Render annual reports to the President and Congress. 
6 
SEC. 5. General Powers and Functions of the MIDA. - The MIDA shall 
7 
have the following powers and functions: 
8 
(a) To administer and supervise the incentive schemes of the Region in 
9 
coordination with the Board of Investments and the National 
10 
Economic Development Authority and according to the principles set 
11 
forth in this Act. 
12 
(b) To register the enterprises in the Region in an efficient and 
13 
expeditious manner; 
14 
(c) To coordinate with regional development councils and other 
15 
development bodies 
in the identification and preparation of 
16 
development programs and projects in the Region; 
17 
(d) To recommend to the President and Congress such other incentives, 
18 
concessions or preference necessary to fully implement this Act. 
19 
(e) To adopt, alter and use a corporate seal; make contracts, lease, own 
20 
or otherwise dispose of personal or real property, sue and be sued; 
21 
and otherwise carry out its duties and functions as provided for in this 
22 
Act; 
23 
(f) To consult on a regular basis with the local government units, private 
24 
sector and civil society on plans and policies to be formulated and 
25 
promulgated; 
26 
(g) To monitor and evaluate the development and requirements of 
27 
entities within the Region and recommend to the local government 
28 
units or other appropriate authorities the location, incentives, basic 
4 


services, utilities and infrastructure required or to be made available 
2 
for said entities; and 
3 
(h) Periodically check and verify compliance by registered enterprises 
4 
with the relevant provisions of this Act, with the rules and regulations 
5 
promulgated under this Act and with the terms and conditions of 
6 
registration; 
7 
(i) After due notice, cancel the registration or suspend the enjoyment of 
8 
incentives benefits of any registered enterprise and/or require refund 
9 
and incentives enjoyed by such enterprise including interests and 
10 
monetary penalties, for (a) failure to maintain the qualifications 
11 
required by this Act for registration with the Board or (b) for violation 
12 
of any provisions of this Act, of the rules and regulations issued under 
13 
this Act, of the terms and conditions of registration or of the laws for 
14 
the protection of labor or of the consuming public: Provided, That the 
15 
registration of an enterprise whose project timetable, as set by the 
16 
Board, is delayed by one (1) year, shall be considered automatically 
17 
cancelled unless other wise reinstated as a registered enterprise by 
18 
the Board. 
19 
(j) Extend the period of availment of incentives by any registered 
20 
enterprise, Provided, That the total period of availment shall not 
21 
exceed ten (10) years, subject to any of the following criteria: 
22 
(1) The registered enterprise has suffered operational force majeure 
23 
that has impaired its viability; 
24 
(2) The registered enterprise has not fully enjoyed the incentives 
25 
granted to it for reasons beyond its control; 
26 
(3) The project of the registered enterprise has a gestation period 
27 
which goes beyond the period of availment of needed incentives; 
28 
and 
5 


2 
(4) The operation of the registered enterprise has been subject to 
unforeseen 
changes 
in 
government 
policies, 
particularly 
3 
protectionism policies of importing counties, and such other 
4 
supervening factors which would affect the competitiveness of the 
5 
registered firm; 
6 
(k) Within thirty (30) days from its constitution, the MIDA shall 
7 
promulgate a priority investment plan over the Region in order to 
8 
accomplish the intent of this Act. 
9 
SEC. 6. Powers and Functions of the Director General. - The Director 
10 
General shall provide overall supervision over the operations of the MIDA He 
11 
shall recom mend to the Board the structure and the staffi ng pattern and 
12 
personnel complement of the MIDA and establish regional offices, when 
13 
necessary, subject to the approval of the MIDA Board. 
14 
In 
addition, 
he shall 
have the following 
specific powers and 
15 
responsibilities: 
16 
(a) To safeguard all the land, buildings, records, monies, credits and 
17 
other properties and rights of the MIDA; 
18 
(b) To ensure that all revenues of the MIDA are collected and applied in 
19 
accordance with its budget; 
20 
(c) To ensure that the employees of the MIDA are properly discharging 
21 
their respective duties; 
22 
(d) To give such information and recommend such measures to the 
23 
Board, as he shall deem advantageous to the Region; 
24 
(e) To submit to the Board, the ongoing and proposed projects, work ad 
25 
financial program, annual budget or receipts, and expenditures of 
26 
MIDA; 
27 
(f) To represent the MIDA in all its business matters and sign on its 
28 
behalf after approval of the Board, all its contracts, agreements and 
29 
obligations made in accordance with this Act. 
6 


(g) To perform such other duties and exercise such powers as maybe 
2 
prescribed by the Board, and to implement the policies, rules and 
3 
regulations set by the MIDA. 
4 
SEC. 7. Autonomy of Local Government Units. - Except as herein 
5 
provided, the local government units comprising the Region shall retain their 
6 
basic autonomy and identify. The cities shall be governed by their respective 
7 
charters and the municipalities shall operate and function in accordance with the 
8 
Local Government Code. 
9 
SEC. 8. Qualification of a Registered Enterprise. - to be entitled to 
10 
registration under this Act, an applicant must satisfy to the Board that he/she: 
11 
(a) is a citizen of the Philippines, if an individual, or in case of corporation, 
12 
partnership, or association, it is organized under Philippine laws and 
13 
that at least sixty percent (60%) of the capital stock outstanding and 
14 
entitled to vote is owned and held by Philippine nationals as defined in 
15 
Republic Act No. 7042. If it does not possess the required degree of 
16 
ownership as mentioned above, it will engage in an activity that is not 
17 
within the activities reserved by the Constitution to Philippine citizens 
18 
or corporation owned and controlled by Philippine citizens 
19 
(b) shall make an initial investment in the Region in an amount not less 
20 
than the equivalent of Two Hundred Fifty Thousand Dollar 
21 
(US$250,000) United State currency, unless a higher amount f 
22 
investment is required under existing laws; 
23 
(c) will engage in an activity which will necessitate the employment of at 
24 
least (50) local employees; 
25 
(d) is capable of operating on a sound and efficient basis and of 
26 
contributing to the development of the Region in particular and of the 
27 
national economy in general; and 
28 
(e) if engaged in undertakings or activities outside the Region, he/she 
29 
has installed or undertakes to install an accounting system adequate 
7 


1 
to identify the investments, revenues, costs, and profits or losses of 
2 
the project to be undertaken in the Region from the aggregate 
3 
investment, revenues, costs and profits or losses of the whole 
4 
enterprise or to establish a separate corporation for the project to be 
5 
undertaken in the Region if the Board so requires. 
6 
SEC. 9. Application. -
Applications shall be filed with the MIDA, 
7 
recorded in a registration book and the date appearing therein and stamped on 
8 
the application shall be considered the date of official acceptance. 
9 
Whenever necessary, the MIDA, through the People's Economic 
10 
Councils, shall consult the communities affected on the acceptability of locating 
11 
the registered enterprise within their community. 
12 
SEC. 10. Approval and registration procedure. -
The MIDA is 
13 
authorized to adopt rules and regulations to facilitate action on applications filed 
14 
with it; prescribe criteria for the evaluation of several applications filed on one 
15 
preferred area; devise standard forms for use of applicants and delegate to the 
16 
regional offices of the department of agriculture the authority to receive and 
17 
process applications for enterprises to be located in their respective regions. 
18 
Applications filed shall be considered automatically approved if not acted 
19 
upon by the MIDA within twenty (20) working days from official acceptance 
20 
thereof. 
21 
SEC. 11. Administrative Relief. - Any order or decision of the MIDA 
22 
shall be final and executory after thirty (30) days from its promulgation. Within 
23 
the said period of thirty (30) days, said order or decision may be appealed to the 
24 
office of the president. Where an appeal has been filed, said order or decision 
25 
shall be final and executory ninety (90) days from receipt of the decision or order 
26 
of the office of the President. 
27 
SEC. 12. Certificate of Registration. - A registered enterprise under 
28 
This Act shall be issued a certificate of registration under the seal of the MIDA 
29 
and the signature of its Chairman and/or such other officer or employee of the 
8 


MIDA as the Board may empower and designate for the purpose. The certificate 
2 
shall be in such form and style as the Board may determine and shall state, 
3 
among the other matters: 
4 
a) the name of the registered enterprise; 
5 
b) the area of investment in which the registered enterprise is proposing 
6 
to engage; 
7 
c) the nature of the activity it is undertaking or proposing to undertake; 
8 
and 
9 
d) the other terms and conditions to be observed by the registered 
10 
enterprise by virtue of the registration. 
11 
SEC. 13. Basic Rights and Guarantee. - All investors and registered 
12 
enterprises are entitled to the basic rights and guarantees provided in he 
13 
Constitution. Among the other rights recognized by the Government of the 
14 
Philippines are the following: 
15 
(a) Repatriation of Investment. In the case of foreign investments, the 
16 
right to repatriate· the entire proceeds of the liquidation of the 
17 
investment in the currency in which the investment was originally 
18 
made and at the exchange rate prevailing at the time of repatriation; 
19 
(b) Remittance of Earnings. In the case of foreign investments, the right 
20 
to remit earnings from the investment in the currency in which the 
21 
investment was originally made and at the exchange rate prevailing at 
22 
the time of remittance; and 
23 
(c) Foreign Loans and Contracts. The right to remit at the exchange rate 
24 
prevailing at the time of remittance such sums as may be necessary 
25 
to meet the payments of interest and principal on foreign loans and 
26 
foreign obligations arising from technological assistance contracts. 
27 
SEC. 14. Incentives. - Registered enterprises shall be granted any of 
28 
the following incentives as may be deemed necessary by the MIDA in the 
29 
context of the development objectives of the region. 
9 


(a) Within ten (10) years from the effectivity of this Act, importations of 
2 
raw 
materials, 
supplies, 
equipment, 
machinery, 
spare 
parts, 
3 
agricultural and fisheries inputs brought into the Region by a 
4 
registered enterprise shall not be subject to customs and internal 
5 
revenue laws and· regulations of the Philippines, including value 
6 
added tax, nor to local tax ordinances; Provided, however, That such 
7 
importation shall comply with the following conditions: 
8 
1. they are not manufactured domestically in sufficient quantity, of 
9 
comparable quality, and at reasonable prices; 
10 
2. they are reasonably needed and will be used exclusively by the 
11 
registered enterprise in the manufacture of its products, unless 
12 
prior approval of the Board is secured for the part-time 
13 
utilization of said equipment in a non-registered activity to 
14 
maximize usage thereof or the proportionate taxes and duties 
15 
are paid on the specific equipment and machinery being 
16 
permanently used for non-registered activities; 
17 
3. the approval of the board was obtained by the registered 
18 
enterprise for such importation; and 
19 
4. if the registered enterprise sells, transfers or disposes of the 
20 
goods without prior approval of the Board within five (5) years 
21 
from date of acquisition, the registered enterprise and the 
22 
vendee, transferee or assignee shall be solidarily liable to pay 
23 
twice the amount of the tax exemption given it 
24 
(b) The provision of existing laws, rules and regulations to the contrary 
25 
notwithstanding, no taxes, national an local except real property tax, 
26 
shall be imposed upon registered enterprises located within the 
27 
Region. In lieu of paying taxes, three percent (3%) of the gross 
28 
income earned by all registered enterprises within the Region shall be 
29 
remitted to the National Government, one percent (1 %) to the local 
10 


government unit having jurisdiction over the particular registered 
2 
enterprise and to be distributed in accordance with Section 150 of 
3 
Republic Act No. 7160, otherwise known as the Local Government 
4 
code. In addition, there is hereby established a development fund of 
5 
one percent (1%) of the gross income earned by all registered 
6 
enterprises within the Region to be utilized for the development of the 
7 
Region. 
8 
(c) Registered enterprises establishing their production, processing or 
9 
manufacturing plants in an area within the Region which the Board 
10 
designates as necessary for the proper dispersal of the industry or in 
11 
an area which the Board finds deficient in infrastructure, public 
12 
utilities, and other facilities, such as irrigation, drainage and other 
13 
similar waterworks infrastructure may apply in payment of taxes, due 
14 
from it to the government an amount equivalent to 100% of the 
15 
necessary and major infrastructure works it may have undertaken with 
16 
the prior approval of the Board under such terms and conditions as 
17 
the Board may determine and in consultation with other government 
18 
agencies concerned, Provided, That: 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
(i) 
(ii) 
the title to all such infrastructure works shall, upon 
completion, be transferred to the Philippine Government; 
and 
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 
certifies that 
infrastructure or the rehabilitation thereof is urgently needed in 
specified areas, the registered enterprise undertaking the construction 
11 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
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 encouraged 
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 project 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 and/or engage the services of a foreign and/or Filipino 
contractor: Provided, That in case an infrastructure or a development 
facility's operation require 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 projects which would have difficulty in sourcing 
funds may be financed partly from direct government appropriations 
and/or from Official Development Assistance (ODA) of foreign 
12 


governments or institutions not exceeding fifty percent (50%) of the 
2 
project cost, and the balance to be provided by the project proponent. 
3 
All government infrastructure agencies, including government-
4 
owned and controlled corporations and local government units are 
5 
hereby authorized to enter into contracts with any duly prequalified 
6 
project proponent for the financing, construction, operation and 
7 
maintenance of any financially viable infrastructure or development 
8 
facility through any of the projects authorized in this Act and other 
9 
laws. Said agencies, when entering into such contracts, are enjoined 
10 
to solicit the expertise of individuals, groups, or corporations in the 
11 
private sector who have extensive experience in undertaking 
12 
infrastructure or development projects. 
13 
(d) For the first ten (10) years from registration, a registered enterprise 
14 
may deduct from taxable income an amount equivalent to one 
15 
hundred percent (100%) of total expenses over and above the 
16 
allowable ordinary and necessary business deductions FOR the labor 
17 
training expenses incurred for upgrading the productivity and 
18 
efficiency of unskilled labor and of apprentices, under the national 
19 
internal revenue code, as amended provided that: 
20 
1. the training program is duly approved by the Board; 
21 
2. the deduction shall not exceed twenty percent (20%) of direct 
22 
labor wage; and 
23 
3. the apprentices shall be paid the minimum wage. 
24 
Provided, That in case at least ten percent (10%) of the trainees or 
25 
apprentices shall be Muslim or belong to other ethnic minorities, a 
26 
registered enterprise may apply in payment of taxes due from it to the 
27 
government an amount equivalent to three hundred percent (300%) of 
28 
the value of the labor training expenses incurred for upgrading the 
13 


productivity and efficiency of the unskilled labor and apprentices 
2 
belonging to the Muslim or other ethnic minorities. 
3 
(e) For the first ten (10) years from registration, expenses incurred for 
4 
research and development relating to the business shall entitle the 
5 
registered enterprise to a special deduction from taxable income 
6 
equivalent to one hundred percent (100%) of the total expenses over 
7 
and above the allowable ordinary and necessary business deductions 
8 
for said expenses under the national internal revenue code, as 
9 
amended. The incentive shall be availed of by registered firms for a 
10 
period of ten (10) years from the start of commercial operation but 
11 
should be claimed within five (5) years from the date when the 
12 
expenditure was made. After the tenth year; the expenditure can be 
13 
claimed as a deductible item as provided for under Republic Act No. 
14 
8424. 
15 
For purposes of this act "research and development cost" means 
16 
research and experimental expenditures such as costs incident to the 
17 
development or improvement of a product, including pilot model 
18 
process, formula, invention, technique, patent or similar property. 
19 
(f) For the first ten (10) years from registration, a registered enterprise 
20 
shall be entitled to reimbursement for expenses incurred in 
21 
undertaking feasibility stUdies of projects deemed by the Board to be 
22 
critical to development objectives. Such reimbursement shall be given 
23 
by the Department with authority over the specific project. 
24 
(g) For the first ten (10) years from registration, a registered enterprise 
25 
may carry over its net operating loss as a deduction from its gross 
26 
income earned for the next three (3) consecutive years immediately 
27 
following the years of such loss. 
28 
(h) Private agricultural lands that have not been distributed and upon 
29 
which no Certificate of Land Ownership Award have been issued shall 
14 


I 
be exempt from the coverage of Republic Act No. 6657, known as the 
2 
Comprehensive Agrarian Reform Law (CARL); Provided, that such 
3 
lands shall be directly and exclusively used by registered enterprises 
4 
within the Region. 
5 
In cases where the lands have been subjected to the CARL, by voluntary 
6 
offer to sell, or commercial farms deferment or notices of compulsory 
7 
acquisition, a simple and absolute majority of the actual regular workers or 
8 
tenants must consent to the exemption within one (1) year from the effectivity of 
9 
this Act. Should the workers or tenants not agree to this exemption, the lands 
10 
shall be distributed collectively to the worker-beneficiaries or tenants who shall 
11 
form a cooperative or association to manage the same. 
12 
The provision of Republic Act No. 6657 to the contrary notwithstanding, 
13 
land subjected to CARL may be mortgaged, leased, sold or otherwise disposed 
14 
of in favor of a registered enterprise. 
15 
In cases where the land have not been subjected to the CARL, the 
16 
consent of the farm workers shall no longer be necessary. However, the 
17 
provision of Section 32-A of Republic Act No. 7881 on incentives shall apply. 
18 
SEC. 15. Labor Relations. - The Region shall uphold industrial peace. 
19 
Harmony and productivity to establish a sound and peaceful investment climate 
20 
and simultaneously promotes and enhance the lives and dignity of all workers. 
21 
Unless otherwise provided by law, all Philippine law and social security 
22 
laws shall apply within the Region pursuant to the above-stated policy, all laws 
23 
on strikes and lockouts will be strictly enforced. 
24 
MIDA shall establish a Labor Center which shall be responsible for 
25 
studying and amicably settling professional and labor relations and disputes, 
26 
interpretation of employment contracts and monitoring work, hygiene and safety 
27 
standards within the Region. 
28 
Subject to existing labor laws, as may be specified in employment 
29 
contracts or collective bargaining agreements, all labor disputes must be 
15 


brought before the Labor Center which will attempt to amicably settle the case. 
2 
In case the Labor Center cannot settle the dispute amicably, it will certify the 
3 
dispute for mediation or arbitration before the proper office of the Department of 
4 
Labor and Employment or the Secretary of Labor and Employment for 
5 
compulsory arbitration or assumption of jurisdiction. 
6 
SEC. 16. Government Assistance. - Upon the recommendation of the 
7 
MIDA Board and subject to the qualifications under its relevant charters, the 
8 
Development Bank of the Philippines, Land Bank of the Philippines and similar 
9 
government financial institutions are mandated to render financial assistance to 
10 
registered enterprises in the Region which may be secured by an undertaking 
11 
from the Government, through the Department of Finance to issue a guarantee 
12 
in favor of the aforementioned registered enterprise whenever warranted by the 
13 
circumstances. 
14 
Depending on the nature of the registered enterprise, line departments 
15 
shall be required to extend interest assistance to the extent determined by the 
16 
appropriate Secretary for loans availed of by the registered enterprise pursuant 
17 
to this Act. 
18 
SEC. 17. Other Incentives. -
The expatriates employed by the 
19 
registered enterprises shall be entitled to the following incentives: 
20 
(a) Upon submission of all necessary document, the Bureau of 
21 
Immigration shall issue the multiple entry special visa to foreign 
22 
personnel of registered enterprises, their respective spouses and 
23 
unmarried children under 21 years of age, if accompanying them or if 
24 
following to join them after their admission into the Philippines as non-
25 
immigrant within seventy-two (72) hours upon submission of all 
26 
required documents. This is without prejudice to the authority of the 
27 
Department of Foreign Affairs to issue visas. 
28 
The visa shall be valid for a period of five (5) years to enter the 
29 
Philippines. The admission and stay shall be co-terminus with the 
16 


validity of the multiple entry visa. The stay, however, is extendible to 
2 
five (5) years upon submission to the Bureau of Immigration of a 
3 
sworn certification by a responsible officer of the registered enterprise 
4 
that it is licensed to operate or that the registration remains valid and 
5 
subsisting and that .the registered enterprise has withheld tax due on 
6 
compensation and the same has been paid to the Bureau of Internal 
7 
Revenue. 
8 
Non-immigrants who have been admitted under the multiple entry 
9 
special visa, as well as their respective spouses and dependents, 
10 
shall be exempted from the payment of all fees due under immigration 
11 
and alien registration laws, securing alien certificates of registration; 
12 
and obtaining immigration clearance certificates, except reasonable 
13 
and administrative costs. They are also exempted from all types of 
14 
clearances required by any government department or agency, except 
15 
that upon final departure from the Philippines the employer of the said 
16 
non-immigrants shall so advise the Bureau of Immigration in writing at 
17 
least five (5) working days prior to the immigrant's departure and the 
18 
final departing non~immigrant employee shall be required to submit to 
19 
the said office a tax clearance from the Bureau of Internal Revenue. 
20 
(b) Alien executives occupying managerial and technical positions 
21 
employed by the registered enterprise shall be subject for each 
22 
taxable year to a final tax equal to fifteen percent (15%) of gross 
23 
income received as salaries, wages, annuities, compensations, 
24 
remuneration and emoluments. 
25 
The same tax treatment is applicable to Filipinos employed and 
26 
occupying the same positions as those aliens employed by registered 
27 
enterprises, regardless of whether or not there is an alien executive 
28 
occupying the same position. Qualified Filipino employees shall have 
29 
the option to be taxed at either 15% of gross income or at the regular 
17 


tax rate on their taxable income in accordance with the National 
2 
Internal Revenue Code of 1997. 
3 
(c) An alien executive of the registered enterprise shall enjoy tax and duty 
4 
free importation of personal and household effects as provided to 
5 
under Section 105(h) of the Tariff and Customs Code as amended, 
6 
and Section 109 (I) of the National Internal Revenue Code, as 
7 
amended; Provided, That the personal and household effects shall 
8 
arrive in the Philippines within ninety (90) days before or after 
9 
conversion of the alien executive's admission category to multiple 
10 
entry visa issued under this Act. 
11 
(d) Foreign personnel of registered enterprises and the dependents of 
12 
such foreign personnel if joining them during the period of their 
13 
assignment in the Philippines shall be exempted from the payment of 
14 
travel tax imposed under Section 1 of Presidential Decree No. 1183, 
15 
as amended. 
16 
SEC. 18. Simplified Public Bidding. - As a general rule, contracts for 
17 
infrastructure development, construction, repair, rehabilitation, improvement or 
18 
maintenance should be conducted through public bidding pursuant to Republic 
19 
Act No. 6957, as amended. However, in the exigency of public service and 
20 
national interest as may be determined by the President, and in order to achieve 
21 
the objective of this Act, simplified bidding through sealed canvass of at least 
22 
three (3) pre-qualified investors may be resorted to. The process of selecting the 
23 
prospective lessees and private investors shall be transparent, where 
24 
procedures and selection process adapted are made public through newspaper 
25 
advertisements and similar other means. 
26 
SEC. 19. Authority to Dec/are Economic Zones. - The President is 
27 
authorized to declare certain areas within the Region as economic, free trade, 
28 
agro-industrial agricultural, agri-tourism or industrial zones qualified and eligible 
29 
for all incentives provided for under this Act and other existing laws. The 
18 


1 
President is further authorized to declare areas within the Region as 
2 
underdeveloped and therefore entitled to incentives and support over and above 
3 
those provided in this Act. 
4 
SEC. 20. Applicability to Existing Enterprises in the Region. - The 
5 
basic rights and incentives granted under this Act. May be availed of by existing 
6 
business enterprises within the Region provided that these enterprises possess 
7 
the minimum qualifications as set forth in Section 8 and they register with the 
8 
MIDA within six (6) months from the effectivity of the rules implementing this Act. 
9 
SEC. 21. Coordination with Various Government Organizations. -
10 
The Board shall consult and coordinate with existing government organizations 
11 
including Autonomous Region of Muslim Mindanao, Mindanao Economic 
12 
Development Council, Southern Mindanao Development Authority, Special Zone 
13 
of Peace and Development in formulating policies and programs. 
14 
SEC. 22. Implementing Rules and Regulations. - To implement the 
15 
provisions of this Act, the Department of Agriculture, the Department of Trade 
16 
and Industry and the Department of Finance shall formulate the implementing 
17 
rules and regulations of this Act within thirty (30) days after its approval. Such 
18 
rules and regulations shall take effect fifteen (15) days after their publication in a 
19 
newspaper of general circulation in the Philippines. 
20 
SEC. 23. Separability Clause. - If any part or section of this Act is 
21 
declared unconstitutional for any reason or whatsoever, such parts not so 
22 
declared shall remain in full force or effect. 
23 
SEC. 24. Repealing Clause. -
All laws, decrees, orders, rules and 
24 
regulations or issuances or parts thereof inconsistent with the provisions of this 
25 
Act are hereby repealed or modified accordingly. 
26 
SEC. 25. Effectivity. -- This Act shall take effect fifteen (15) days after its 
27 
publication in two (2) leading newspapers of national circulation. 
28 
Approved, 
19