NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
SENATE
S.B. No. 2998
Introduced by SENATOR IMEE R. MARCOS
AN ACT
ESTABLISHING A SPECIAL ECONOMIC ZONE IN THE PROVINCE OF BOHOL, 
CREATING FOR THAT PURPOSE THE NORTHERN BOHOL SPECIAL ECONOMIC 
ZONE AUTHORITY, APPROPRIATING FUNDS THEREFOR AND FOR OTHER
PURPOSES
EXPLANATORY NOTE
Section 20 of Article II of the 1987 Philippine Constitution provides that, "The 
State recognizes the indispensable role of the private sector, encourages private 
enterprise, and provides incentives to needed investments."
According to the World Investment Report 2019 by the United Nations 
Conference on Trade and Development (UNCTAD), Special Economic Zones (SEZs) refer 
to specific geographic areas where governments promote industrial development by 
offering tax incentives, regulatory advantages, and infrastructure support. Today, more 
than 5,400 SEZs exist across over 140 countries.
In Region VII, there are currently three (3) existing Special Economic Zones 
(SEZs) namely Carmen Cebu Gum Industrial Zone located in Cebu, San Carlos Ecozone 
located in Negros Occidental, and Valencia Special Economic Zone located in Negros 
Oriental.
The towns of Ubay, Talibon, Buenavista, and Getafe are situated in the northern 
region of Bohol. They are bordered by the Camotes Sea to the north, Bien Unido to the 
east, Inabanga to the west, and Talibon to the northwest. Ubay, Talibon, Buenavista, 
and Getafe offer diverse investment opportunities in tourism, business, and trade for 
locals and foreigners alike.
Thus, this bill seeks to establish a special economic zone in the municipalities of 
Ubay, Talibon, Buenavista, and Getafe and transform it into a decentralized and 
self-sufficient hub for agro-industry, commerce, finance, investment, and tourism by


encouraging responsible and productive local and foreign investments. It also intends to 
stimulate related industries that can boost local government income.
Through this initiative, the Northern Bohol Ecozone which we intend to establish 
will be equipped with transportation, telecommunications, and other essential 
infrastructure to attract genuine and productive investments, while also fostering 
related industries and creating job opportunities for the people of Bohol and other 
nearby communities. The creation of the Northern Bohol Ecozone is expected to help 
realize the goal of making these municipalities a more advanced, tourism-friendly, and 
globally competitive region.
Given the above mentioned circumstances, the approval of this bill is earnestly
sought.
EE R. MARCOS


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
SENATE
S.B. No. 2998
Introduced by SENATOR IMEE R. MARCOS
AN ACT
ESTABLISHING A SPECIAL ECONOMIC ZONE IN THE PROVINCE OF BOHOL, 
CREATING FOR THAT PURPOSE THE NORTHERN BOHOL SPECIAL 
ECONOMIC ZONE AUTHORITY, APPROPRIATING FUNDS THEREFOR AND
FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled:
1 
SECTION 1. Short Title. — This Act shall be known as the "Northern Bohoi
2 
Special Economic Zone Act."
3
4 
SEC. 2. Declaration of Policy. — It is hereby declared the policy of the State to
5 
encourage, promote, and accelerate the sound and balanced industrial, economic and
6 
social development of the country. The establishment of special economic zones shall
7 
attract legitimate and productive foreign investments in strategic locations in the
8 
country. It shall generate employment and increase productivity and individual, as well
9 
as family incomes, in order to enhance the quality of life of the Filipino people.
10 
SEC. 3. Creation of the Northern Bohoi Special Economic Zone. — In accordance
11 
with the the foregoing declared policy and subject to the concurrence of the concerned
12 
local government units (LGUs) of Bohol affected by the zone, there is hereby
13 
established a special economic zone in the Municipalities of Ubay, Buenavista, Talibon
14 
and Getafe which shall be known as the Northern Bohol Special Economic Zone,
1


1 
hereinafter referred to as the "Northern Bohol Ecozone". The specific metes and bounds
2 
of the Northern Bohol Ecozone shall be more particularly defined in a presidential
3 
proclamation that shall be issued for this purpose.
4 
SEC. 4. Creation of the Northern Bohol Special Economic Zone Authority. —
5 
There is created a body corporate to be known as the Northern Bohol Special Economic
6 
Zone Authority, hereinafter referred to as the NBEZA, which shall manage and operate
7 
the Northern Bohol Ecozone in accordance with the provisions of this Act. The corporate
8 
life of the NBEZA shall expire in fifty (50) years, counted from the first year after the
9 
effectivity of this Act, unless otherwise extended by Congress. It shall be organized
10 
within one hundred eighty (180) days after the effectivity of this Act.
11 
SEC. 5. Governing Principles. — The NBEZA shall manage and operate the
12 
Northern Bohol Ecozone, under the following principles:
13 
(a) Within the framework and limitations of the Constitution and the applicable
14 
provisions of the Local Government Code, the Northern Bohol Ecozone shall be
15 
developed into and operated as a decentralized, self-reliant and self- sustaining
16 
industrial, commercial/trading, agro-industrial, tourism, banking, financial and
17 
investment center with suitable residential areas;
18 
(b) The Northern Bohol Ecozone shall be provided with transportation,
19 
telecommunications and other facilities needed to attract legitimate and productive
20 
investments, generate linkage industries and employment opportunities for the people
21 
of the Province of Bohol and its neighboring towns and city;
22 
(c) The Northern Bohol Ecozone may establish mutually beneficial economic
23 
relations with other entities or enterprises within the country or, subject to the
24 
administrative guidance of the Department of Foreign Affairs (DFA), the Philippine
25 
Economic Zone Authority (PEZA) or the Department of Trade and Industry (DTI), with
26 
foreign entities or enterprises;
27 
(d) Foreign citizens and companies owned by non-Filipinos in whatever
28 
proportion may set up enterprises in the Northern Bohol Ecozone, either by themselves


1 
or in joint venture with Filipinos in any sector of industry, international trade and
2 
commerce within the Northern Bohol Ecozone;
3 
(e) Goods and capital equipment including spare parts are subject to the tax
4 
incentives provided in this Act;
5 
(f) The areas comprising the Northern Bohol Ecozone may be expanded or
6 
reduced when necessary. For this purpose, the Northern Bohol Ecozone, in consultation
7 
with the LGUs, shall have the power to acquire either by purchase, negotiation or
8 
condemnation proceedings, any private land within or adjacent to the Northern Bohol
9 
Ecozone for the following purposes: (1) consolidation of lands for the Northern Bohol
10 
Ecozone development; (2) acquisition of right-of-way to the Northern Bohol Ecozone;
11 
and (3) the protection of watershed areas and natural assets valuable to the prosperity
12 
of the Northern Bohol Ecozone;
13 
(g) Goods manufactured by a Northern Bohol Ecozone enterprise shall be made
14 
available for immediate retail sale in the domestic market, subject to the payment of
15 
corresponding taxes on raw materials and other regulations that may be formulated by
16 
the NBEZA, together with the PEZA, the Bureau of Customs (BoC) and the DTI in
17 
accordance with the NIRC of 1997, as amended, and the Tariff and Customs Code of
18 
the Philippines, as amended. However, in order to protect domestic industries, a
19 
Negative List of industries shall be drawn up and regularly updated by the PEZA.
20 
Enterprises engaged in industries included in such Negative List shall not be allowed to
21 
sell their products locally; and
22 
(h) The defense of the Northern Bohol Ecozone and the security of its perimeter
23 
fence shall be the responsibility of the national government in coordination with the
24 
Northern Bohol Ecozone and the LGUs. For this purpose, a special defense team shall
25 
be organized to define its power, duties and responsibilities.
26 
SEC. 6. Development Goals of the Northern Bohol Ecozone. — The NBEZA shall
27 
determine the development goals for the Northern Bohol Ecozone within the framework
28 
of national development plans, policies and goals. The administrator shall, upon
29 
approval by the Board, submit the Northern Bohol Ecozone plans, programs and


1 
projects to the Regional Development Council for inclusion and inputs to the overall
2 
regional development plan.
3 
SEC. 7. Capitalization. — The NBEZA shall have an authorized capital stock of
4 
two billion (2,000,000,000) no-par shares with a minimum issue of Ten Pesos
5 
(PhplO.OO) each, the majority shares of which shall be subscribed and paid for by the
6 
national government and the LGUs embracing the Northern Bohol Ecozone.
7 
The Board of Directors of the NBEZA may, with the written concurrence of the
8 
Secretary of Finance, sell shares, representing not more than forty per centum (40%)
9 
of the capital stock of the NBEZA to the general public under such policy as the Board
10 
and the Secretary of Finance may determine. The national government and the LGUs
11 
shall, in no case, own less than sixty per centum (60%) of the total issued and
12 
outstanding capital of the NBEZA.
13 
The amount necessary to subscribe and pay for the shares of the national
14 
government to the capital stock of the NBEZA shall be included in the annual General
15 
Appropriations Act. For the LGUs concerned, the funds shall be taken from their internal
16 
revenue allotment and other local funds.
17 
SEC. 8. Principal Office of the Northern Bohoi Special Economic Zone Authority.
18 
— The NBEZA shall maintain its principal office in the Municipality of Ubay, Bohol, but
19 
it may establish branches within the Philippines as may be necessary for the proper
20 
conduct of its business.
21 
SEC. 9. Powers and Functions of the Northern Bohoi Special Economic Zone
22 
Authority. — The NBEZA shall have the following functions:
23 
(a) To operate, administer, manage and develop the Northern Bohol Ecozone
24 
according to the principles and provisions set forth in this Act;
25 
(b) To recommend to the President of the Philippines the issuance of a
26 
proclamation to fix and delimit the site of the Northern Bohol Ecozone;
27 
(c) To register, regulate and supervise the enterprises in the Northern Bohol
28 
Ecozone in an efficient and decentralized manner, subject to existing laws;


1 
(d) To coordinate with LCDs and exercise general supervision over the
2 
development plans, activities and operations of the Northern Bohol Ecozone;
3 
(e) To authorize or undertake, on its own or through others, and regulate the
4 
establishment, operation and maintenance of public utilities, services, and
5 
infrastructure in the Northern Bohol Special Economic Zone such as shipping, barging,
6 
stevedoring, cargo handling, hauling, warehousing, storage of cargo, port services or
7 
concessions, piers, wharves, bulkheads, bulk terminals, mooring areas, storage areas,
8 
roads, bridges, terminals, conveyors, water supply and storage, sewerage, drainage,
9 
airport operations in coordination with the Civil Aeronautics Board, and such other
10 
services or concessions or infrastructure necessary or incidental to the accomplishment
11 
of the objectives of this Act:
12 
Provided, however. That the private investors in the Northern Bohol Ecozone
13 
shall be given priority in the awarding of contracts, franchises, licenses, or permits for
14 
the establishment, operation and maintenance of utilities, services and infrastructure
15 
in the Northern Bohol Ecozone;
16 
(f) To regulate and undertake the establishment, operation and maintenance of
17 
utilities, other services and infrastructure in the Northern Bohol Ecozone such as, but
18 
not limited to, heat, light and power, water supply, telecommunications, transport, toll
19 
roads and bridges, port services, etc. and to fix just, reasonable and competitive rates,
20 
fares, charges and prices thereof;
21 
(g) To construct, acquire, own, lease, operate and maintain on its own or
22 
through contracts, franchise, licenses, bulk purchase from the private sector or permits
23 
under any of the schemes allowed in Republic Act No. 6957 (the Build-Operate-Transfer
24 
Law, as amended), or joint venture, adequate facilities and infrastructure required or
25 
needed for the operation and development of the Northern Bohol Ecozone, in
26 
coordination with appropriate national and local government authorities and in
27 
conformity with applicable laws thereon;


1 
(h) To operate on its own, either directly or through licenses to others, tourism-
2 
related activities and sports facilities, such as golf courses and others, under priorities
3 
and standards set by NBEZA;
4 
(i) Subject to the approval of the President of the Philippines and the Monetary
5 
Board of the Bangko Sentral ng Pilipinas (BSP), upon the recommendation of the
6 
Department of Finance (DOF), to raise or borrow adequate and necessary funds from
7 
local or foreign sources to finance its projects and programs under this Act and for that
8 
purpose, to issue bonds, promissory notes and other forms of securities, and to secure
9 
the same by a guarantee, pledge, mortgage, deed of trust or an assignment of all or
10 
part of its property or assets;
11 
0) To provide security for the Northern Bohol Ecozone in coordination with the
12 
national and local governments. Military forces sent by the national government for the
13 
purpose of defense shall not interfere in the internal affairs of the Northern Bohol
14 
Ecozone and expenditures for these military forces shall be borne by the national
15 
government. For this purpose, the NBEZA may establish and maintain its security forces
16 
and firefighting capability or hire others to provide the same;
17 
(k) To protect, preserve, maintain and develop the forests, beaches, coral and
18 
coral reefs, and maintain ecological balance within the Northern Bohol Ecozone;
19 
(I) To create, operate and/or contract to operate such functional units or offices
20 
of the NBEZA as it may deem necessary;
21 
(m) To adopt, alter and use a corporate seal; contract, lease, buy, acquire, own
22 
or otherwise dispose of personal and/or real property of whatever nature; sue and be
23 
sued; and otherwise carry out its functions and duties as provided for in this Act;
24 
(n) To issue certificates of origin for products manufactured or processed in the
25 
Northern Bohol Ecozone in accordance with prevailing rules of origin and the pertinent
26 
regulations of the PEZA, the DTI and/or the DOF;
27 
(o) To issue working visas renewable every two (2) years to foreign executives
28 
and foreign technicians with highly specialized skills which no Filipino possesses, as
29 
certified by the Department of Labor and Employment (DOLE);


1 
(p) To report to the Bureau of Immigration (BI) the names of the foreigners who
2 
have been granted permanent resident status and working visas within thirty (30) days
3 
after issuance of such grant;
4 
(q) To exercise such powers as may be essential, necessary or incidental to the
5 
powers granted to it hereunder, as well as those that shall enable it to carry out,
6 
implement and accomplish the purposes, objectives and policies of this Act; and
7 
(r) To issue rules and regulations consistent with the provisions of this Act as
8 
may be necessary to accomplish and implement the purposes, objectives and policies
9 
provided herein.
10 
SEC. 10. Tax Exemptions. — The NBEZA shall be exempt from the payment of
11 
all taxes, duties, fees, imports, charges, costs, and service fees in any court or
12 
administrative proceedings in which it may be a party.
13 
However, the foregoing exemptions may be entirely or partially lifted by the
14 
President of the Philippines upon the recommendation of the Secretary of Finance, not
15 
earlier than five (5) years from the effectivity of this Act, if the President shall find the
16 
NBEZA to be self-sustaining and financially capable by then to pay such taxes, customs
17 
duties, fees and other charges after providing for debt service requirements of the
18 
NBEZA and of its projected capital and operating expenditures.
19 
Furthermore, all donations made by any person or entity in favor of the NBEZA
20 
shall be exempt from the payment of the donor's tax and the same shall be considered
21 
as deductible from the gross income of the donor, pursuant to the NIRC of 1997, as
22 
amended.
23 
SEC. 11. Administration, Impiementation and Monitoring of Incentives. — The
24 
NBEZA shall be responsible for the administration and implementation of the incentives
25 
granted to its respective registered enterprises: Provided, That any incentive policy
26 
adopted by the BOI for incentives common to all registered enterprises shall be
27 
uniformly applied by the NBEZA.
28 
The following are the duties and responsibilities of the NBEZA in the
29 
administration of incentives:


1 
(a) To adopt consistent procedures of administering incentives in accordance
2 
with the guideiines estabiished by the BOI and to amend the same when necessary;
3 
(b) To adopt and implement systems and procedures affecting trade and
4 
customs poiicies in accordance with the requirements estabiished by the DOF and the
5 
BOI and to amend the same when necessary;
6 
(c) To submit data and information to the DOF and the BOI as required by any
7 
of these agencies to ascertain consistency of investment poiicies and incentives,
8 
inciuding their impiementation as provided in (a) and to ensure proper impiementation
9 
of systems and procedures affecting trade and customs poiicies as provided in (b); and
10 
(d) To perform all other duties and responsibilities as may be required by the
11 
President of the Philippines.
12 
For proper monitoring, the BOI shall create a single database of all incentives
13 
provided by all incentives-granting agencies, including the NBEZA and all information
14 
thereto. Double-entry accounting shali be done by the BOI in recording ali incentives
15 
granted by the government for transparency purposes.
16 
SEC. 12. Board of Directors of the NBEZA. — The powers of the NBEZA shali be
17 
vested in and exercised by a board of directors, hereinafter referred to as the Board,
18 
which shail be composed of the foliowing:
19 
(a) The chairperson who shail, at the same time, be the administrator of the
20 
NBEZA;
21 
(b) A vice chairperson who shaii come from among the members of the Board;
22 
(c) Members consisting of:
23 
1. The governor of the Province of Bohoi;
24 
2. The mayors of the municipalities of Ubay, Buenavista, Talibon and Getafe;
25 
3. One (1) representative from the domestic investors group;
26 
4. One (1) representative from the foreign investors group; and
27 
5. One (1) representative from among the workers in the Northern Bohol
28 
Ecozone.


1 
The governor and the mayors of the municipalities of Ubay, Buenavista, Talibon
2 
and Getafe shall serve as ex officio members of the Board, whose terms in the Board
3 
correspond to their terms of office.
4 
The chairperson and the members of the Board, except the ex officio members,
5 
shall be appointed by the President of the Philippines to serve for a term of six (6)
6 
years unless sooner separated from service due to death, voluntary resignation, or
7 
removal for cause. In case of death, resignation or removal for cause, the replacement
8 
shall serve only the unexpired portion of the term.
9 
Except for the representatives of the business and labor sectors, no person shall
10 
be appointed by the President of the Philippines as a member of the Board unless he
11 
is a Filipino citizen, of good moral character, of proven probity and integrity, and a
12 
degree holder in any of the following fields: economics, business, public administration,
13 
law, management or their equivalent, and with at least ten (10) years relevant working
14 
experience preferably in the field of management or public administration.
15 
The members of the Board shall each receive per diem at rates to be determined
16 
by the Department of Budget and Management (DBM) in accordance with existing rules
17 
and regulations: Provided, however, That the total per diem collected each month shall
18 
not exceed the equivalent per diem for four (4) meetings. Unless and until the President
19 
of the Philippines has fixed a higher per diem for the members of the Board, such per
20 
diem shall not be more than Ten Thousand Pesos (Phpl0,000.00) for every Board
21 
meeting.
22 
SEC. 13. Organization and Personnei. — The Board of Directors of the NBEZA
23 
shall provide for its organization and staff. Upon the recommendation of the
24 
chairperson-administrator, the Board shall appoint and fix the remuneration and other
25 
emoluments of its officers and employees in accordance with existing laws on
26 
compensation and position classification: Provided, That the Board shall have exclusive
27 
and final authority to promote, transfer, assign or reassign officers of the NBEZA, any
28 
provision of existing law to the contrary notwithstanding: Provided, further. That the
29 
chairperson-administrator may carry out removal of such officers and employees.


1 
The officers and employees of the NBEZA, including all members of the Board,
2 
shall not engage directly or indirectly in partisan activities nor take part in any election,
3 
except to vote.
4 
No officer or employee of the NBEZA shall be removed or suspended except for
5 
cause, as provided by civil service rules and regulations.
6 
SEC. 14. Powers and Duties of the Chairperson-Administrator. — The
7 
chairperson-administrator shall have the following powers and duties:
8 
(a) To direct and manage the affairs of the NBEZA in accordance with the policies
9 
of the Board;
10 
(b) To establish the internal organization of the NBEZA under such conditions
11 
that the Board may prescribe;
12 
(c) To submit an annual budget and necessary supplemental budget to the Board
13 
for its approval;
14 
(d) To submit within thirty (30) days after the close of each fiscal year an annual
15 
report to the Board and such other reports as may be required;
16 
(e) To submit to the Board for its approval policies, systems, procedures, rules
17 
and regulations that are essential to the operation of the Northern BoholEcozone;
18 
(f) To create a mechanism in coordination with relevant agencies for the
19 
promotion of industrial peace, the protection of the environment and the advancement
20 
of the quality of life; and
21 
(g) To perform such other duties as may be assigned to him/her by the Board
22 
or which are necessary or incidental to his/her office.
23 
SEC. 15. GeneraiManager. — The Board of Directors of the NBEZA shall appoint
24 
a full-time professional and competent chief executive officer for the NBEZA whose
25 
compensation shall be determined by its Board of Directors and shall be in accordance
26 
with the revised compensation and position classification system. The general manager
27 
as chief executive officer of NBEZA shall be responsible to the Board and to the
28 
President of the Philippines for the efficient management and operation of the NBEZA.
10


1 
SEC. 16. Legal Counsel. — The NBEZA shall have its own internal legal counsel
2 
under the supervision of the government corporate counsel. When the exigencies of its
3 
businesses and operations demand it, the NBEZA may engage the services of an outside
4 
counsel either on a case to case or on a fixed retainer basis.
5 
SEC. 17. Incentives to Registered Enterprises. — The NBEZA shall provide the
6 
following incentives to the registered enterprises located therein to the extent of the
7 
activity/project:
8 
(a) Income Tax Holiday (TTH) - Registered enterprises shall be entitled to a
9 
maximum of six (6) years ITH depending on BOI classification of the firm.
10 
Enterprises registered with the NBEZA are required to share in the special
11 
development fund of the BOI for investment promotion projects of the government
12 
equivalent to one percent (1%) of the ITH granted for every application.
13 
The Bureau of Internal Revenue (BIR) shall require a registered enterprise
14 
availing of the ITH or the net operating loss carryover (NOLCO) to secure a certificate
15 
of eligibility from the NBEZA before submitting its income tax return (TTR) with the
16 
NBEZA for vaiidation.
17 
Failure to secure certification and/or to file the ITH or the NOLCO availment for
18 
validation by the NBEZA within forty-five (45) days from the last day of statutory filing
19 
date for ITR shall cause the forfeiture of the availment for the taxable period.
20 
(b) NOLCO - The net operating loss of the business or enterprise during the first
21 
three (3) years from the start of commercial operations which have not been previously
22 
offset as a deduction from the gross income shall be carried over as a deduction from
23 
the gross income for the next five (5) consecutive years immediately following the year
24 
of such loss:
25 
Provided, however, That operating loss resulting from the availment of
26 
incentives provided in this Code shall not be entitled to NOLCO.
27 
Registered enterprises availing of the ITH as herein provided shall not be entitled
28 
to avail of the NOLCO.
11


1 
(c) Imposition of a Tax Rate of Five Percent (5%) on Gross Income Earned(GIE)
2 
- Except for real property tax on iand, no iocai and nationai taxes, as prescribed under
3 
Republic Act No. 8424, aiso known as "the National Internal Revenue Code of 1997, as
4 
Amended", such as the income tax, the excise tax and the franchise taxes shaii be
5 
imposed on business establishments operating within the Northern Bohol Ecozone. In
6 
lieu thereof, there shaii be imposed a tax rate of five percent (5%) of the gross income
7 
earned by ail the business enterprises with the NBEZA and remitted as foliows:
8 
(1) Three per cent (3%) to the Nationai Government; and
9 
(2) Two per cent (2%) which shaii be directiy remitted by the business
10 
establishments to the treasurer's office of the municipality or city where the enterprise
11 
is located. All persons and service estabiishments in the Northern Bohoi Ecozone that
12 
are not covered by Section 17 hereof shall be subject to national and local taxes under
13 
the NIRC of 1997, as amended, and the Local Government Code.
14 
(d) Accelerated Depreciation - Acceierated depreciation of piant, machinery and
15 
equipment that are reasonabiy needed and actualiy used for the production and
16 
transport of goods and services may be aiiowed using a rate not exceeding twice the
17 
rate which would have been used had the annual allowance been computed in
18 
accordance with the rules and regulations prescribed by the Secretary of Finance and
19 
the provisions of the NIRC of 1997, as amended.
20 
(e) Capitai Equipment Incentives - Importations of capital equipment, spare
21 
parts, toois and dye, or those required for poliution abatement and controi, cleaner
22 
production and waste reduction including consignment thereof by registered
23 
enterprises upon the effectivity of this Act shaii be exempted to the extent of one
24 
hundred percent (100%) of the taxes and customs 
duties: Provided, That the
25 
importation thereof shall be used exclusively by the registered enterprise in its
26 
registered activity within the Northern Bohoi Ecozone: Provided, further. That the
27 
importation of machinery and equipment and accompanying parts shaii comply with
28 
the following conditions:
12


1 
(1) These are not manufactured domestically in sufficient quantity, of
2 
comparable quality and at reasonable prices;
3 
(2) These are reasonably needed and will be used exclusively by the registered
4 
enterprise in the manufacture of its products, unless prior approval of the NBEZA is
5 
secured for the part-time utilization of said equipment in a non-registered activity to
6 
maximize usage thereof or the proportionate taxes and duties are paid on a specific
7 
equipment and machinery being permanentiy used for non-registered activities; and
8 
(3) Approval of the NBEZA was obtained by the registered enterprise for the
9 
importation of such machinery, equipment and spare parts.
10 
Approval of the NBEZA must be secured before any sale, transfer or disposition
11 
of the imported capitai equipment, machinery or spare parts is made: Provided, That if
12 
such sale, transfer or disposition is made within the first five (5) years from the date of
13 
importation, any of the following conditions must be present;
14 
(i) If made to another enterprise enjoying tax and duty exemption on
15 
imported capital equipment;
16 
(ii) If made to another enterprise not covered by part (i), upon payment
17 
of the taxes and duties on the net book value of the capital equipment to be
18 
soid;
19 
(iii) If exportation of the capitai equipment, machinery, spare parts or
20 
source documents are required for pollution abatement and control; and
21 
(iv) For reasons of proven technical obsolescence.
22 
When the aforementioned saie, transfer or disposition is made under any of the
23 
conditions provided for in the foregoing paragraphs other than paragraph (ii), the
24 
registered firm shall not pay the taxes and duties waived on such items: Provided,
25 
further. That if the registered enterprise seiis, transfers or disposes the aforementioned
26 
imported items without prior approval within five (5) years from the date of importation,
27 
the registered enterprise and the vendee, transferee or assignee shail be soiidariiy iiabie
28 
to pay twice the amount of the tax and duty exemption given it: Provided, finally. That
29 
even if the saie, transfer or disposition of the capitai equipment, machinery or spare
13


1 
parts is approved after five (5) years from the date of importation, the registered
2 
enterprise is stiil iiabie to pay the taxes and duties based on the net book value of the
3 
capitai equipment, machinery or spare parts if it has vioiated any of its registration
4 
terms and conditions. Otherwise, it shail no longer be subject to the payment of the
5 
taxes and duties waived thereon.
6 
The purchase of machinery and capital equipment and raw materials, supplies,
7 
parts and semi-finished products used in the fabrication of machinery and capital
8 
equipment by a registered export-oriented enterprise from a domestic manufacturer
9 
shall be subject to zero percent (0%) value-added tax.
10 
The registered export-oriented enterprise shall be granted a tax credit equivalent
11 
to the amount of duties that wouid have been waived on the machinery, capitai
12 
equipment and raw materials, supplies, parts and semi-finished products used in the
13 
fabrication of machinery and capital equipment, had these items been imported, upon
14 
its submission to the DOF of the biii of materiais evidencing the transaction value of
15 
such and other pertinent documents, for verification and proper endorsement.
16 
The registered export-oriented enterprise avaiiing of the incentives provided
17 
under the immediateiy preceding two (2) paragraphs shall be subject to the following:
18 
(i) that said capitai equipment, machinery and spare parts wili be used
19 
exciusiveiy by the registered enterprise in its registered activity;
20 
(ii) that the capital equipment or machinery where the raw materials,
21 
supplies, parts and semi-finished products were used wouid have quaiified for
22 
tax-and duty-free importation; and
23 
(iii) that the approvai of the NBEZA is obtained by the registered
24 
enterprise. If the registered enterprise sells, transfers or disposes of these
25 
machineries, capitai equipment and spare parts, the provision in the preceding
26 
paragraphs for such disposition shall apply.
27 
This incentive shaii be deemed waived if application for tax credit under
28 
this subsection is not filed within one (1) year from the date of delivery.
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(f) Tax-and Duty-Free Importation - The importation of source documents by
2 
information technology-registered enterprises shall be eligible for tax-and duty-free
3 
importation.
4 
(g) Raw Material Incentives - Every registered export-oriented enterprise shall
5 
enjoy a tax credit equivalent to the internal revenue taxes and customs duties paid on
6 
the supplies, raw materials and semi-manufactured products: Provided, That the same
7 
are not sufficient in quantity, quality or are not competitively priced which are used in
8 
the manufacture, processing or production of its export products forming part thereof,
9 
exported directly and indirectly by the registered export-oriented enterprise based on
10 
the actual taxes and duties paid for such materials/supplies/semi-manufactured
11 
products by the registered enterprise.
12 
This incentive shall be deemed waived if application for tax credit under this
13 
subsection was not filed within one (1) year from the date of exportation of the final
14 
product.
15 
(h) Incentives on Breeding Stocks and Genetic Materials - Importation of
16 
breeding stocks and genetic materials within ten (10) years from the date of registration
17 
of commercial operation of the enterprise shall be exempt from all taxes and duties:
18 
Provided, That such breeding stocks and genetic materials are reasonably needed in
19 
the registered activity and approved by the NBEZA.
20 
The availment of the incentives by a registered enterprise shall be subject to the
21 
following:
22 
(i) that said breeding stocks and genetic materials would have been
23 
qualified for tax- and duty-free importation under the preceding paragraph;
24 
(ii) that the breeding stocks and genetic materials are reasonably needed
25 
in the registered activity;
26 
(iii) that approval of the NBEZA has been obtained by the registered
27 
enterprise; and
28 
(iv) that the purchase is made within ten (10) years from the date of
29 
registration of commercial operation of the registered enterprise.
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1 
This incentive shall be deemed waived if application for tax credit under this
2 
subsection is not filed within one (1) year from the date of delivery.
3 
(i) Exemption From Wharfage Dues - The provisions of law to the contrary
4 
notwithstanding, exports by a registered enterprise shall be exempted from wharfage
5 
dues.
6 
(j) Deferred Imposition of the Minimum Corporate Income Tax - The minimum
7 
corporate income tax (MCIT) of two percent (2%) of the gross income as of the end of
8 
the taxable year shall be imposed when the MCIT is greater than the income tax
9 
computed under the NIRC of 1997, as amended, for the taxable year: Provided,
10 
however, That said MCIT shall be imposed only after the enterprise's entitlement period
11 
to the income tax-based incentives.
12 
(k) Tax Treatment of Goods and Services in the Northern Bohol Ecozone. - The
13 
treatment of goods and services in the NBEZA shall be as follows:
14 
1) Tax Treatment of Merchandise - The free trade/freeport zone shall be
15 
operated and managed as a separate customs territory ensuring free flow or movement
16 
of goods within, into and exported out of the free trade/freeport zone.
17 
Importations of raw materials and capital equipment are tax- and duty-free.
18 
However, exportations or removal of goods from the free trade/freeport zone to
19 
the other parts of the Philippine territory shall be subject to customs and internal
20 
revenue regulations:
21 
(i) Except as otherwise provided in this Act, foreign and domestic
22 
merchandise, raw materials, supplies, articles, equipment, machineries, spare
23 
parts and wares of every description, except those prohibited by law, brought
24 
into the zone to be sold, stored, broken up, repacked, assembled, installed,
25 
sorted, cleaned, graded or otherwise processed, manufactured, mixed with
26 
foreign or domestic merchandise, whether directly or indirectly related in such
27 
activity, shall not be subject to customs and internal revenue laws and
28 
regulations nor to local tax ordinances, any provision of law to the contrary
29 
notwithstanding;
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10
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(ii) Merchandise purchased by a registered Northern Bohol Ecozone 
enterprise, from the customs territory and subsequently brought into the export 
processing zone, shall be considered as export sales and exportation thereof 
shall be entitled to the benefits allowed by law for such transaction;
(iii) Domestic merchandise sent from the Northern Bohol Ecozone to the 
customs territory shall, whether or not combined with or made part of other 
articles likewise of local origin or manufactured in the Philippines while in the 
export processing zone, be subject to internal revenue laws of the Philippines as 
domestic goods sold, transferred or disposed of for local consumption;
(iv) Merchandise sent from the Northern Bohol Ecozone to the customs 
territory shall, whether or not combined with or made part of other articles while 
in the zone, be subject to rules and regulations governing imported 
merchandise.
The duties and taxes shall be based on the value of said imported 
materials (except when the final product is exempt);
(v) Domestic merchandise on which all internal revenue taxes have been 
paid, if subject thereto, and foreign merchandise previously imported on which 
has been paid, or which have been admitted free of duty and tax, may be taken 
into the Northern Bohol Ecozone from the customs territory of the Philippines 
and be brought back thereto free of quotas, duty or tax;
(vi) Subject to such regulations respecting identity and safeguarding of 
revenue as the NBEZA may deem necessary, when the identity of an article 
entered into the export processing zone under the immediately preceding 
paragraph has been lost, such article when removed from the zone and taken 
to the customs territory shall be treated as foreign merchandise entering the 
country for the first time, under the provisions of the Tariff and Customs Code 
of the Philippines, as amended;
(vii) Articles produced or manufactured in the Northern Bohol Ecozone 
and exported therefrom shall, on subsequent importation into the customs
17


1 
territory, be subject to the import laws applicable to like articles manufactured
2 
in a foreign country; and
3 
(viii) Unless the contrary is shown, merchandise taken out of the export
4 
processing zone shall be considered for tax purposes to have been sent to
5 
customs territory.
6 
2) Tax Treatment of Services - (i) Sale of service by an entity from the customs
7 
territory to a registered ecozone or free trade enterprise, or by a registered ecozone or
8 
freeport enterprise to another ecozone or freeport enterprise shall be treated as indirect
9 
export and, hence, entitled to the benefits allowed by law for such transaction; and (ii)
10 
Sale or service by a registered ecozone or freeport enterprise to the customs territory
11 
shall be subject to applicable internal revenue laws and regulations.
12 
(I) Bonded Warehousing System - Registered export-oriented enterprises shall
13 
have access to the utilization of the bonded warehousing system in accordance with
14 
the rules and regulations of the BoC.
15 
(m) Employment of Foreign Nationals - Subject to the provisions of Section 29
16 
of Commonwealth Act No. 613 otherwise known as "The Philippine Immigration Act of
17 
1940, as amended, a registered enterprise may employ foreign nationals in supervisory
18 
or technical positions for a period not exceeding ten (10) years from its registration:
19 
Provided, That when the majority of the capital stock of a registered enterprise is owned
20 
by foreign investors, the positions of the president, treasurer and general manager or
21 
their equivalents may be retained by foreign nationals beyond the period set forth
22 
herein and such officer is the owner or a stockholder owning at least ten percent (10%)
23 
of the outstanding capital stock of the registered enterprise and he/she remains the
24 
owner or maintains his stockholdings therein.
25 
Foreign nationals under employment contract within the purview of this
26 
incentive, their spouses and unmarried children under twenty-one (21) years of age,
27 
who are not excluded by Section 29 of Commonwealth Act No. 613, as amended, shall
28 
be permitted to enter and reside in the Philippines during the period of employment of
29 
such foreign nationals. They shall be issued multiple-entry visas, renewable every two
18


1 
(2) years, and shall be allowed to enter and leave the Philippines without further
2 
documentary requirements other than valid passports or other travel documents in the
3 
nature of passports.
4 
The foreign nationals admitted herein, as well as their respective spouses and
5 
dependents, shall be exempt from: (i) obtaining alien certificates of registration and
6 
emigration clearance certificates; and ii) securing the alien employment permits (AEP)
7 
and all types of clearances, permits, licenses or their equivalents required by any
8 
government department or agency.
9 
SEC. 18. Extension of Period of Avaiiment — The availment period of the
10 
incentives provided herein may be extended by the BEZA in the event that the
11 
registered enterprise suffers operational force majeure or any event equivalent thereto,
12 
impairing its viability.
13 
SEC. 19. Duration of Incentives. — Enterprises registered with the NBEZA may
14 
enjoy ITH, NOLCO and five percent (5%) Gross Income Earned (GIE) granted by the
15 
BNEZA sequentially.
16 
Fiscal incentives under this Act shall be terminated after a cumulative period of
17 
twenty (20) years from the date of registration or the start of commercial operation,
18 
whichever is applicable, except that it could be extended with regard to industries
19 
deemed indispensable to national development as determined by NBEZA.
20 
The industries exempted from this provision shall be recommended by the BOI,
21 
with the concurrence of the secretaries of the DOF and the DTI.
22 
SEC. 20. Incentive to Investors. — Any foreign national covered under
23 
subsection (m) of Section 17 of this Act, who invests an amount of One Hundred Fifty
24 
Thousand US Dollars (US$150,000.00), either in cash and/or equipment, in a registered
25 
enterprise shall be entitled to an investor's visa: Provided, That, the investor
26 
(a) is at least eighteen (18) years of age;
27 
(b) has not been convicted of a crime involving moral turpitude;
28 
(c) is not afflicted with any loathsome, dangerous or contagious disease; and
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1 
(d) has not been institutionalized for any mental disorder or disability: Provided,
2 
further, That in securing the investor's visa, the alien-applicant shall be entitled to the
3 
same privileges provided for under Section 17(m), last paragraph.
4 
As a holder of an investor's visa, an alien shall be entitled to reside in the
5 
Philippines while his investment subsists. For this purpose, he shall submit an annual
6 
report, in the form duly prescribed for the purpose, to prove that he has maintained
7 
his investment in the country. Should said alien withdraw his investments from the
8 
Philippines, then the investor's visa issued to him shall automatically expire.
9 
SEC. 21. Banking Rules and Regulations. — Banks and financial institutions to
10 
be established in the Northern Bohol Ecozone shall be under the supervision of the BSP
11 
and shall be subject to existing banking laws, rules and regulations.
12 
SEC. 22. Remittance of Earnings. — In the case of foreign investments, a
13 
registered enterprise in the BEZA shall have the right to remit earnings from the
14 
investment in the currency in which the investment was originally made and at the
15 
exchange rate prevailing at the time of remittance, subject to the provisions of Republic
16 
Act No. 7653, otherwise known as the New Central Bank Act, as amended.
17 
SEC. 23. Interpretation/Construction. — The powers, authorities and functions
18 
that are vested in the NBEZA are intended to decentralize governmental functions and
19 
authority and promote an efficient and effective working relationship among the
20 
Northern Bohol Ecozone, the national government and the LGUs.
21 
SEC. 24. Supervision and Coordination of Development Rians. — For purposes
22 
of policy direction and coordination, the Northern Bohol Ecozone shall be under the
23 
direct control and supervision of the Office of the President of the Philippines.
24 
SEC. 25. Authority of the Bureau of Customs to Examine the Entry and Exit of
25 
Imported Articles in the Northern Bohoi Economic Zone. — The BoC, in coordination
26 
with the appropriate government agencies such as, but not limited to, the Departments
27 
of Trade and Industry, Agriculture, Transportation and Communications, and Health
28 
shall have the authority to examine the entry and exit of imported articles in the
29 
Northern Bohol Special Economic Zone for the purpose of determining: i) the quantity
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1 
and description of subject imported articles, and ii) the compliance with the sanitary
2 
and agricultural requirements.
3 
SEC. 26. Relationship with LGUs. — Except as herein provided, the LGUs
4 
comprising the Northern Bohol Ecozone shall retain their basic autonomy and identity.
5 
The municipalities of Ubay, Talibon, Buenavista and Getafe shall operate and
6 
function in accordance with the Local Government Code of 1991. In case of any conflict
7 
among the NBEZA and the municipalities of Ubay, Buenavista, Talibon and Getafe on
8 
matters affecting the Northern Bohol Ecozone other than defense and security matters,
9 
the decision of the NBEZA shall prevail.
10 
SEC. 27. Auditing. — The Commission on Audit shall appoint a representative
11 
who shall be a full-time auditor of the NBEZA and assign such number of personnel as
12 
may be necessary to assist said representative in the performance of his/her duties.
13 
The salaries and emoiuments of the assigned auditor and personnei shail be in
14 
accordance with pertinent laws, rules and regulations.
15 
SEC. 28. Applicability Clause. — The provisions of Sections 30 to 41 of Republic
16 
Act No. 7916 or the Special Economic Zone Act of 1995, as amended, on leases of lands
17 
and buildings, land conversion, shipping and shipping register, protection of
18 
environment, termination of business, registration of business enterprises, one-stop
19 
shop center and on industrial harmony in the ecozones shall apply to the BEZA.
20 
SEC. 29. Implementing Rules and Regulations. — Within sixty (60) days from
21 
effectivity of this Act, the DTI shall, in coordination with the DOF and the National
22 
Economic and Development Authority, formulate rules and regulations for the effective
23 
implementation of the provisions of this Act.
24 
SEC. 30. Separability Clause. — If any provision of this Act shall be held
25 
unconstitutional or invalid, the other provisions not otherwise affected shall remain in
26 
full force and effect.
27 
SEC. 31. Repealing Clause. — All laws, executive orders or issuances, or any
28 
part thereof which are inconsistent herewith are hereby repealed or amended
29 
accordingly.
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SEC. 32. Effectivity Clause. — This Act shall take effect fifteen (15) days after 
its publication in the Official Gazette or in a newspapers of general circulation.
Approved,
22