EIGHTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES
0363

House Bill No.

Introduced by Representative Victor A. Yap

EXPLANATORY NOTE

The Philippines exercises sovereign rights to explore and exploit, and to conserve and
manage its natural resources. Article XII, Section 2, paragraph 2 of the 1987 Constitution states:
The State shall protect the nation’s marine wealth in its archipelagic waters, territorial sea, and
exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens

This principle is likewise embodied in Paragraph I(a) of Article 56 of the United Nations
Convention on the Law of the Sea (UNCLOS) which defines the rights of Coastal States over
their Exclusive Economic Zones, providing sovereign rights for the purpose of exploring and
exploiting, conserving and managing the natural resources, and with regard to other activities for
the economic exploitation and exploration of the zone, such as energy production from water,
currents and winds.

Under the July 2016 United Nations Permanent Court of Arbitration Ruling entitled In
the Matter of The South China Sea Arbitration between The Republic of Philippines and The
People’s Republic of China, the Philippines’ Exclusive Economic Zone in the West Philippine
Sea pertains to the maritime areas within 200 nautical miles from the baselines on the western
side of the Philippine archipelago, including the Luzon Sea as well as the waters around, within
and adjacent to the Kalayaan Island Group and Bajo De Masinloc, also known as Scarborough
Shoal. In light of this ruling, it is high time for our country to implement measures aimed at
protecting the natural resources within our Exclusive Economic Zone in the West Philippine Sea

The West Philippine Sea is said to have abundant aquatic and fishery resources, and
natural gas fields. It has great potential to be one of the country’s sources of natural gas and
cheaper electricity, which could ultimately address energy security concerns of the Philippines
Moreover, the West Philippine Sea may be further developed for coastal and marine tourism

This bill seeks to create the West Philippine Sea Development Authority which shall
have primary jurisdiction over the development, management, conservation, protection, and
utilization of all resources within the West Philippine Sea Exclusive Economic Zone of the
Philippines. Through such Authority, our country would be able to develop and harness the
revenue-generating potential of the area arising from the capture of fish and fishery products,
processing and marketing of all fisheries and aquatic products, marine energy exploration and
development, as well as coastal and marine tourism.

To protect and reserve the area for the exclusive use and enjoyment of Filipino citizens,
the approval of this measure is earnestly sought.

VI ASYAP
Representative, 2™ District of Tarlac


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EIGHTEENTH CONGRESS )
OF THE REPUBLIC OF THE PHILIPPINES)
First Regular Session )

HOUSE OF REPRESENTATIVES

House Bill No! 363

Introduced by Representative Victor A. Yap

AN ACT
CREATING THE WEST PHILIPPINE SEA AUTHORITY, PRESCRIBING ITS
POWERS AND FUNCTIONS, AND APPROPRIATING FUNDS THEREFOR

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

SECTION 1. Title ~ This Act shall be known as the “West Philippine Sea Development
Authority Act”,

SECTION 2. Declaration of Policy — It is hereby declared a national policy to protect
the nation’s maritime wealth within its Exclusive Economic Zone, and reserve its use and

enjoyment exclusively to Filipino citizens, particularly within the West Philippine Sea.

SECTION 3. Creation - In pursuance of said policy, there is hereby created a body
corporate to be known as the West Philippine Sea Development Authority which shall be
attached to the Office of the President.

The Authority shall be governed by the provisions of Republic Act No. 10149, otherwise
known as the “GOCC Governance Act of 2011”, and be subject to the regulatory jurisdiction of
the Governance Commission for GOCCs (GCG).

SECTION 4. Jurisdiction — The Authority shall have primary jurisdiction over the
development, management, conservation, protection, and utilization of all resources within the
West Philippine Sea Exclusive Economic Zone of the Philippines, as defined by Administrative
Order No, 29, s. 2012, and as enunciated in the United Nations Permanent Court of Arbitration
Ruling in PCA Case No. 2013-19 In the Matter of The South China Sea Arbitration between The
Republic of Philippines and The People’s Republic of China dated 12 July 2016, except for
municipal waters, which shall remain under the jurisdiction of Local Government Units (LGU).


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For purposes of this Act, the Philippines’ Exclusive Economic Zone in the West
Philippine Sea pertains to the maritime areas within 200 nautical miles from the baselines on the
western side of the Philippine archipelago, including the Luzon Sea as well as the waters around,
within and adjacent to the Kalayaan Island Group and Bajo De Masinloc, also known as
Scarborough Shoal.

The Authority shall exercise revenue-generating functions arising from, but not limited
to, capture of fish and fishery products, processing and marketing of all fisheries and aquatic
products, marine energy exploration and development, coastal and marine tourism within its

jurisdiction

The Authority shall supervise and regulate the production and capture of fish and fishery
products within its jurisdiction, as well as the processing and marketing of all fisheries and

aquatic products within its jurisdiction.

The Authority shall partake in rationalizing all ocean sector initiatives within its
jurisdiction which impact fish and marine resources or their habitat, including, but not limited to
marine energy exploration and development, coastal and marine tourism, designation of shipping

lanes and protected areas

SECTION 5. Capitalization and Funding. — The Authority shall have an authorized
capital stock of Two Billion Pesos (Php 2,000,000,000.00) divided into two billion
(2,000,000,000) shares having a par value of One Peso (Php 1.00) each, to be fully subscribed
and paid by the National Government.

SECTION 6. Powers and functions of the Authority - The Authority shall have the

following powers and functions:

a) To act as central administrative and coordinating body, particularly of other national
government agencies and local government units that are responsible for fisheries,
ecological protection, marine life and species, energy and other environmental issues

within its jurisdiction;
b) To administer, manage and develop the area covered by its jurisdiction;
©) To enhanze economic development opportunities that will provide sustainable financial

improvements benefiting the local environment and the economic quality of life for Local
Government Units (LGUs) bordering the area;


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a)

8)

h)

To accept any local or foreign investment, business or enterprises and to raise revenues

from among, but not limited to the following:

1) fees, tolls, charges, rentals and the like for the use of the waters for all beneficial
purposes, including but not limited to, fishery, recreation, industrial, agricultural
navigation and irrigation, as well as for the use of Authority properties, facilities and
equipment;

2) fees, tolls, charges, rentals and the like arising from marine energy exploration and
development, coastal and marine tourism;

3) periodic license fees and/or applications;

4) proceeds from administrative fines and penalties which may be imposed pursuant to
rules and regulations to be promulgated by the Board;

5) donations, grants, assistance and contributions of all kinds from the National
Government, LGUs, and foreign governments and privately-owned entities and

utilize the same;

To adopt and implement measure and standards for environmental pollution control of all

areas with its territory and to enforce the same;

To protect marine life and species, improve water quality in the area by:

1) Permanently protecting marine life that are dependent on the area’s ecosystem;

2) Restoring the long-term stable aquatic and shoreline habitat for marine life that
depend on the area;

3) Protecting water quality by minimizing pollutants and other sources of water quality
problems; and

4) Making, altering or modifying orders requiring the discontinuance of pollution,
specifying the conditions and the time within which such discontinuance must be

accomplished.

To undertake and regulate the establishment, operation and maintenance of utilities, other
services and infrastructure in the area;

To exercise exclusive jurisdiction to issue permits for the use of all surface water for any
projects or activities in or affecting the said area including navigation, construction, and

operation of fishpens, fish enclosures, fish corrals and the like;


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i) To exercise exclusive jurisdiction to issue permits and licenses for use in marine energy

exploration and development, as well as coastal and marine tourism:

i) To issue licenses for the operation of commercial fishing vessels and permits for the
conduct of fishery activities subject to the specific carrying capacities of the resource as
determined by studies or other reliable evidence, with preference being given to the local

communities living within bordering municipalities;

k) To adopt, prescribe, and promulgate rules and regulations governing the procedures of
the Authority with the respect to the issuance of permits. procedures and guidelines
concerning the classification, establishment, construction, maintenance and operation of
all fishing ports and the operation of businesses therein, except those which are owned

and operated by LGUs;

1) To issue, renew, or deny permits, under such conditions as it may determine to be

reasonable for the prevention and abatement of pollution:

m) To collect fees, tolls, charges, rentals and the like for the use of the waters for all
beneficia! purposes, including but not limited to, fishery, recreation, industrial,
agricultural navigation and irrigation, as well as for the use of Authority properties,
facilities and equipment. Provided, that the rates of the fees to be collected, and the
sharing with other government agencies and LGUs bordering the area:

n) To adopt, alter and use a corporate seal; make contracts, leases, own, or otherwise
dispose of personal or real property; sue and be sued; to form, establish, organize and
maintain a subsidiary corporation; and, otherwise, carry out its functions and duties as

provided for in this Act; and

©) To exercise such other powers and functions as may necessary and proper for the
effective implementation of this Act.

SECTION 7. Power to Issue Bonds

a) The Authority may be authorized to issue bonds and other securities and enter into any

form of indebtedness to finance its projects and programs: Provided, That only so much
of such bonds and securities as the annual project implementation would require shall be
issued and sold: Provided, further, That no bonds and securities shall be issued unless
eighty percent (80%) of those already issued have been sold: Provided, furthermore, That

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the total amount of the bonds or securities and long-term debts issued shall in no case
exceed twenty (20) times the paid-up capital and surplus of the Authority: Provided,
finally, That in no instance shall the sovereign guarantee of the Republic of the

Philippines be required or allowed.

b) The Authority, in consultation with the Secretary of Finance and the Monetary Board,
shall prescribe the form, the rate of interest and denomination, maturities, negotiabilities,
call or redemption features and all other terms and conditions for the bonds and securities

to be issued.

c) The bonds and securities issued under this Act, including the income thereof shall be
exempted from all kinds of local taxes and from attachment. execution and seizure which
facts shall be stated on the face thereof.

SECTION 8. Board of Directors

a) The Authority shall be governed and its activities be directed, controlled and managed by
a Board of Directors composed of seven (7) full-time Members. headed by a Chairman,
who shall be appointed by the President of the Philippines from a shortlist submitted by
the GCG and in accordance with the Fit and Proper Rule as determined by the GCG in
accordance with the provisions of Republic Act No. 10149.

b) The Chairman shall have a term of five (5) years but may be renewed for a non-
extendible neriod of one (1) vear: Provided. that the term of the initial appointees shall be
staggered such that the Chairman shall hold office for a term of five (5) years; the next
three (3) members for three (3) years and the other three (3) members for two (2) vears.

©) Upon the expiration of their respective terms, they shall continue to serve until their
successor shall have been appointed and qualified. In case a member fails to complete his,

term, his successor shall only serve the unexpired portion of the term of his predecessor.

d) A member may be removed from office by the President for cause in accordance with the

Civil Service rules and regulations.

©) The members of the board may receive per diems, allowances, and incentives in

accordance with the guidelines promulgated by the GCG.


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f) The Board shall meet regularly at least once a month, but special meetings may be called
either by the Chairverson or by four (4) members of the Board. when necessarv. Four (4)
members of the Board shall constitute a quorum and any approval of business shall

require the concurrence of at least four (4) members.

SECTION 9. Powers, Functions and Duties of the Board of Directors. — The Board

shall have the following powers, functions and duties:

a) To direct the management, operations, and administration of the Authority;

b) To approve the organizational structure of the Authority, define the duties and
responsibilities of all officials and emplovees and approve a compensation and benefit

scheme;

©) To formulate, revise or adjust periodically all policies, and to promulgate the necessary
rules and regulations and manuals of procedures for the effective implementation off this

Act;

d) To approve the annual and/or supplemental budgets of the Authority and authorize such
expenditures by the Authority as are in the interest of its effective administration and

operations;

e) To submit an annual report of the operation of the Authority to the President of the
Philippines. President of the Senate and Speaker of the House of Revresentatives: and

f) To exercise such other powers as may necessary and proper for the effective enforcement
of this Act and to accomplish the purposes for which the Authority was organized; and to
do and to perform any and all acts and incidental to the attainment of all the purposes of
the Authority,

SECTION 10. The Executive Director ~
a) The Authority shall have an Executive Director who shall be appointed by the Chairman.
b) No person shall be appointed Executive Director unless he is at least thirty five (35) years

of age at the time of his appointment. and who has at least ten (10) years experience in

the field of administration, management, and area development prior to the date of his


appointment. He must not have been a candidate for any elective position in the elections

immediately preceding his anvointment.

SECTION 11. Powers, Functions and Duties of the Executive Director - The

Executive Director shall have the following powers, duties and responsibilities:

a) To submit to the Board for consideration policies, plans and programs which, in his

iudoment. are necessarv to carry out the nurnoses and provisions of this Act:

b) To prepare the budget of the Authority for approval of the Board,

c) To execute, administer and implement the policies and measures approved by the Board:

4) To direct and supervise the operations and internal administration of the Authority. He
may delegate certain administrative responsibilities to other officers of the Authority

subiect to the rules and regulations of the Board:

e) To appoint all employees of the Authority except the heads of the departments and
divisions whose appointments shall be made by the Board of Directors upon his

recommendation:

f) Recommend the number and salaries of, appoint the subordinate officers and personnel of
the Authority, and remove or otherwise discipline for cause any officer or
emplovee: Provided, That in all cases the Authority shall be covered by Reoublic Act No.
6758, as amended by Joint Resolution Nos. 1, series of 1994, and4, series of 2009, the
Compensation and Position Classification System for GOCCs under Republic Act No.
10149, as approved by the President of the Philippines: Provided, further, That prior
approval from the GCG shall be obtained therefor:

) To represent the Authority in all dealings with other offices, agencies and
instrumentalities of the Government and with all persons and entities, public or private,
and

h) To exercise such other powers as may be vested in him by the Board.

SECTION 12. Organizational Structure of the Authority


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a) The Executive Director shall prepare the organizational structure of the Authority that
would best carry out its powers and functions, and attain the objectives of this Act and

shall present the same to the Board for its approval.

b) Subject to approval of the Board, the Executive Director shall likewise determine the
rates of allowances, honoraria and other additional compensation, which the Authority is
hereby authorized to grant its officers, technical staff, consultants and personnel detailed

toit,

SECTION 13. Applicability of the Corporation Law. — The provisions of the
Corporation Law, as amended, insofar as they are not inconsistent with this Act shall be
applicable to the operations of the Authority,

SECTION 14. By Laws and Rules and Regulations. — The Board of Directors shall
adopt its By-Laws promulgate the rules and regulations to implement the provisions of this Act
which shall take effect upon approval by the President of the Philippines.

SECTION 15. Separability Clause. ~ If, for any reason, any provisions of this Act is
declared invalid or unconstitutional, the other part or parts thereof which are not affected thereby
shall continue to be in full force and effect.

SECTION 16. Repealing Clause. ~ All laws, decrees, executive orders, issuances, or
rules and regulations, or portions thereof, that are inconsistent with this Act or any provision or

provisions, thereof, are repealed or modified accordingly

SECTION 17. Effectivity. — This Act shall take effect fifteen (15) days after its

publication in two (2) newspapers of general circulation

Approved