SIXTEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES
Second Regular Session

HOUSE OF REPRESENTATIVES j

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

House Bill No. 4833

EXPLANATORY NOTE

It is internationally recognized that foreign direct investments (FDI) is imperative both
for developed and developing economies. Benefits from FDI can be seen across the
spectrum of activities not only with respect to investible resources but its corresponding
capital formation. FDI drives economic productivity; create jobs, raises income levels,
transfers production technology, innovative capacity as well as creating access to
international marketing networks:

The Philippine Government encourages foreign and local investments. This is
because it generates employment opportunities, boosts economic development, increases
financial resources, increase exports by raising efficiency, and enhances marketing
opportunities. In fact, the government has launched investment incentives programs
administered by thirteen (13) investment promotion agencies (IPAs). IPAs may be defined as
government entities created by law, executive order, decree or other Issuance for the
purpose of attracting domestic and foreign direct investment through the administration of
their respective fiscal and non-fiscal incentives; and, exercise regulatory powers over the
economic zones. These include the following: Board of Investment, Philippine Economic
Zone Authority, Bases Conversion Development Authority, Subic Bay Metropolitan Authority,
Clark Development Corporation, Poro Point Management Corporation, Bataan Technology
Park, Inc., Cagayan Economic Zone Authority, Zamboanga City Special Economic Zone
Authority, Phividec Industrial Estate, Aurora Pacific Economic and Freeport Zone, Authority
of the Freeport Bataan, and Tourism Infrastructure and Enterprise Zone Authority

Notwithstanding all of these, the National Economic Development Authority (NEDA)
reported in its Philippine Development Plan of 2011-2016, cited the lack of inclusive growth
in the economy. The Philippines’ economic performance in investments, exports, and terms
of competitiveness is unsatisfactory and needs to be improved (PDP 2011-2016). In a study
conducted by the World Bank with the International Finance Corporation in 2013, the
Philippines ranked 138 out of 185 economies as regards the ease of doing business in 185
economies. The first top five criteria where the Philippines ranked low were in a) starting a
business; b) registration of property; c) paying taxes: d) getting credit; and, e) protecting
investors.

The study showed that applying for a business in the country involves a long, tedious
and difficult process, i.e. an average of 15 procedures, 38 days, and costs 29.7% of income
per capita.

In weeding through the layers of requirements in starting up a business and in
qualifying for any of the investment incentives programs, the investor is confronted by
bureaucratic red tape, inconsistent, complex and lengthy procedures, delays and a high cost
for regulatory processes.

There is therefore a need to create a government agency/office that can assist in the
expeditious facilitation of business investment registration and permits requirements and of
the requirements for the availment of the investment incentives programs of the government.

This agency/office shall be known as the Office for Investor Facilitation and
Protection (OIFP). The OIFP shall be an independent and attached agency to the Office of
the President which shall


+ Acts as a coordinator and integrator for the investor, the IPAs and all other related
government agencies or departments with respect to business registration, permits,
Clearances, endorsements;

* Processes the automatic approval if not acted upon by the appropriate agency or
department within the time frame from the endorsement by the Office for Investor
Facilitation and Protection provided that the documentary requirements are complete
and without prejudice to Section 34 of E.0. No. 226.

* Acts as a protector by a) expeditiously resolving disputes between the investor and
the IPAs, and other related government agencies and departments with respect to
the administration of investment incentives program and grant of the investment
incentives; b) and considering that the grant of the particular incentives program to
which the investor has qualified and registered is a contract, it shall interpret it and
see to it that its provisions are carried out and performed by the parties

+ Establishes a mandatory alternative to dispute resolution through consultations or
consultative meetings and discussions before referring it to ADR, i.e., conciliation,
mediation, arbitration, or early neutral evaluation to assist and resolve disputes out of
court.

To attract investments into the country, stimulate the growth of local investments, and
meet investors’ expectations of fiscal and non-fiscal incentives, the government must protect
and safeguard these investors in their investments by providing a mechanism to avoid
protracted and tedious litigation in courts. History is replete with instances where the
investors are denied by the courts of their claims for they have to wait for a long period,
some lasting 10 years until the cases of the investors are finally resolved.

The OIFP will ensure that investors will not undergo lengthy and costly court
proceedings with unpredictable outcomes through consultation or consultative meetings and
discussions with the parties involved and referral to Alternative Dispute Resolutions such as
conciliation, mediation and arbitration.

This bill therefore seeks to create and establish the Office for Investor Facilitation and
Protection which shall be an independent authority attached to the Office of the President to
address the foregoing issues of foreign direct investors in the Philippines.

RUF! Mex
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IGUEZ, JR.



SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
Second Regular Session )

HOUSE OF REPRESENTATIVES

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

House Bill No. 4838
AN ACT

CREATING THE OFFICE FOR INVESTOR FACILITATION AND PROTECTION AND FOR
OTHER PURPOSES

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

SECTION 1. Short Title - This Act shall be known as the “The Office for Investor
Facilitation and Protection Act of 2014."

SEC 2. Declaration of Policy - It is the policy of the State to encourage Filipino and foreign
investments as a vehicle to national development in order to spur economic productivity,
create jobs, raises income levels, transfers production technology, innovative capacity as
well as creating access to international marketing networks.

It is also the policy of the State to attain inclusive growth by creating quality
employment to reduce massive poverty and to increase competitiveness by creating a level
playing field not only in its macroeconomic policy but also in its sector specific policies

It is the policy of the State to attract more foreign investments within its national
Jurisdiction and encourage participation in the investment incentives program. The State
recognizes its concomitant responsibility to protect and safeguard the Filipino and foreign
investors in their investments within the country

SEC 3. Purposes and Objectives - Itis the purpose and objective of this Act:

(a) To establish an independent authority/body that shall facilitate expeditious
endorsement of complete requirements in business registration and setting up of
business requirements, securing of permits, certificates, endorsements, etc.
necessary for the registration and availment of the investments incentives
programs of Government;

(b) To ensure the protection of investors in their investments within the country;

(c) To expeditiously settle controversies and disputes between investors and the IPA
concerned and other related government departments and agencies with respect
to the grant and administration of the incentives program and/or registration and
qualification for the investments incentives program including the interpretation of
the terms and the conditions of the grant of the specific incentives program of
government; and,

(d) To provide a mechanism for resolution of disputes between the investor
concemed and the IPAs, other related government agencies and departments
with respect to the administration of investment incentives program, the grant of
the investment incentives and interpretation of the terms and conditions of the
grant through consultation or consultative meetings and discussions and if not
resolved, to be referred for alternative dispute settlement (ADR), i.e. conciliation,
mediation and arbitration.


SEC 4. Definition of Terms - For purposes of this Act, the term:

A. “Altemative Dispute Resolution System" as defined in Republic Act No. 9285 as
any process or procedure used to resolve a dispute or controversy, other than by
adjudication of a presiding judge of a court or an officer of a government agency
in which @ neutral third party participates to assist in the resolution of issues,
which includes arbitration, mediation, conciliation, early neutral evaluation, mini-
trial, or any combination thereof;

B. “Investment Facilitation” refers to assistance, endorsement, and coordination for
the requisite business registration and setting up business; registration, permits,
licenses, endorsements to qualify the investor for the availment the investment
incentives program;

C. “Investment Promotion Agencies” refers to government entities created by law,
executive order, decree or other issuance for the purpose of attracting domestic
and foreign direct investment through the administration of their respective fiscal
and non-fiscal incentives; and, exercise regulatory powers over the economic
zones. This includes: Board of Investments (BOi), Philippine Economic Zone
‘Authority (PEZA), Bases Conversion Development Authority (BCDA), Subic Bay
Metropolitan Authority (SBMA), Clark Development Corporation (CDC), Poro
Point Management Corporation (PPMC), Bataan Technology Park, Inc. (BTPI),
Cagayan Special Economic Zone (CEZA), Zamboanga City Special Economic
Zone (ZCSEZA), Phividec Industrial Estate (PIA), Aurora Pacific Economic and
Freeport Zone (APECO), Authority of the Freeport Bataan (AFAB), and Tourism
Infrastructure and Enterprise Zone Authority (TIEZA), and other entities as may
be created by law,

D. “Strategic Investments” refer to investments that fall under the areas or sectors in
the Priority Development Plan approved by the President of the Philippines.

SEC 5. Creation of the Office for Investor Facilitation and Protection -There is hereby
created an independent departmentiagency attached to the Office of the President known as
the Office for Investor Facilitation and Protection (OIFP) dedicated to (a) coordinating and
assisting in the facilitation of business registration requirements, permits, certificates and
those requirements for the availment of the investments incentives program; and, (b) the
protection of the investors through consultation, consultative meetings and discussions and if
not resolved, for alternative dispute resolution (ADR), for issues that may arise between the
IPAs, other related government agencies and departments with respect to the administration
of investment incentives program, interpretation of the terms and conditions of the grant of
the investments incentives program and grant of the investment incentives in favour of the
Filipino or foreign investor.

‘SEC 6. Management Head - The management of the Office shall be vested in the Secretary
and two (2) Assistant Secretaries.

SEC 7. Qualifications - The Secretary and the two (2) Assistant Secretaries shall be chosen
by the President. The Secretary and his assistants shall be citizens of the Philippines, at
least thirty-five years old on the date of their appointment, of good moral character, and of
recognized executive ability and competence in previous public or private employment, with
adequate training and experience in economics, technology, finance, law, management,
public administration and investments.

SEC 8. Term- The Secretary and his two (2) Assistant Secretaries shall be appointed by the
President for a term of six (6) years: Provided, that the President may remove the Secretary
and his Assistant Secretaries for cause.


SEC 9. Powers and Functions of the Secretary - The Secretary shall have the following
powers and functions:

(a) To coordinate the facilitation of business registration requirements, permits,
certificates and those for the availment of the investments incentives program by
the investor with the 13 IPAs and other IPAs as may be created by law;

(b) To intervene and mediate disputes and controversies through consultations and
arbitration between investors and government agencies and departments first
before referring it to the alternative dispute resolution mechanism;

(c) To protect the investors through alternative dispute resolution for issues that may
arise between the IPAs, other related government agencies and departments
with respect to the administration of investment incentives program and grant of
the investment incentives and the investor; and,

(d) To delegate any of his functions to his assistant secretaries.

SEC 10. Investment Facilitation - When the Office for Investor Facilitation and Protection
endorses for approval any application for registration or for the Issuance of a certificate or
permit, it shall be deemed approved by the department or agency to which it was endorsed if
it is not acted upon within ten (10) days from official receipt of the transmittal by the IPA
involved without prejudice to Section 34 of E.0 No. 226 and four (4) days, in case of other
concerned agencies, departments, LGUs and other governmental bodies; Provided, that itis
accompanied with complete documentary requirements

SEC 11. Areas for investment Facilitation - The investment facilitation power of the OIFP
shall be limited to facilitation of strategic investments or those businesses which fall under
the sectors identified in the Investment Priorities Plan of government.

SEC 12. Alternative Dispute Resolution - The submission of the parties to the alternative
dispute resolution shall be mandatory before resort to courts.

SEC 13. Appropriations — There is hereby appropriated the sum of Two Hundred Million
Pesos (Php200,000,000.00) for the initial implementation of this Act. Thereafter, the funding
for OPIF shall be included in the Annual General Appropriations Act.

SEC 14. implementing Rules and Regulations - Within ninety (90) days after the effectivity
of this Act, the OPIF shall promulgate the rules and regulations needed for the
implementation of this Act, including the necessary rules for consultation, arbitration and
alternative dispute resolution

SEC 15. Separability Clause. — If any provision of this Act is held invalid or unconstitutional,
the same shall not affect the validity and effectivity of the other provisions hereof.

SEC 16. Repealing Clause — All laws, decrees, executive orders, rules and regulations and
other issuances or part thereof, which are inconsistent with this Act, are hereby repealed,
amended, or modified accordingly.

SEC 17. Effectivity - This Act shall take fifteen (15) days affer its publication in two (2)
newspapers of general circulation

Approved,