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Republic of the Philippines
HOUSE OF
Constitution Hills, Quezon City

EIGHTEENTH CONGRESS
First Regular Session

4285
HOUSE BILL NO.

Introduced by REP. JOHNNY T. PIMENTEL

EXPLANATORY NOTE

The City of Bislig stands as the first city of Surigao del Sur. As the seat of Paper
Industries Corporation (PICOP), one of the then major industries of the
Philippines, it was both a national center for trade and commerce. Nevertheless,
with the cessation of the PICOP operations in Surigao del Sur in the 1990s, so
did the decline of the steady economic growth in the province.

‘Sfecial economic zones were created to lay alternative areas of investment across
the Philippines: They are intended to disperse economic development which has
been confined in’the main metropolitan areas. By introducing industrialization,
rural communities are given equitable access to the said growth giving its people
employment opportunities and growth. The same also contributes to the overall
economic development of the country in establishing competitive centers.

This Bill seeks to reintroduce decentralization, self-reliance and self-sustenance
to a geographic periphery of Surigao del Sur. This proposed creation of the Bislig
City Special Economic Zone shall again harness Bislig City and the contiguous
areas within and around their immediate vicinities maximizing them as an engine
of socio-economic development in Caraga Region.

‘The approval of this Bill is earnestly sought.

JOHNNY T.

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 4285 _

Introduced by REP. JOHNNY T. PIMENTEL

AN ACT
ESTABLISHING A SPECIAL ECONOMIC ZONE IN THE CITY OF BISLIG,
PROVINCE OF SURIGAO DEL SUR, CREATING FOR THE PURPOSE THE
BISLIG ECONOMIC ZONE AUTHORITY, APPROPRIATING FUNDS
THEREOF, AND 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 “Bislig Special
Economic Zone Act of 2019”.

Sec. 2. Declaration of Policy. - It is hereby declared the policy of the State
to actively encourage, promote, induce and accelerate the sound and balanced
industrial, economic and social development of the country in order to provide
jobs to the people, especially those in rural areas, increase their productivity
and their individual and family income, and thereby improve the level and
quality of their living conditions though the establishment, among others, of
special economic zones in suitable and strategic locations in the country and
through measures that shall effectively attract legitimate and productive
foreign investments.

Sec. 3. Creation of the Bislig Special Economic Zone. - In pursuit of the
foregoing declared policy and subject to the concurrence of the concerned
local government units (LGUs) of Bislig City affected by the zone, there is
hereby established a special economic zone, to be known as the Bislig
Ecozone. The Bislig Ecozone shall cover the entire area embraced by the City
of Bislig, Surigao del Sur.

Sec. 4. Governing Principles. - The Bislig Special Economic Zone shall be

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managed and operated by the Bislig Special Economic Zone Authority,
2. hereinafter referred to as the BSEZA, created under Section 10 of this Act,
3. under the following principles:

A.

Within the framework and limitations of the Constitution and
applicable provisions of the Local Government Code, the Bislig Ecozone
shall be developed into and operated as a decentralized, self-reliant
and self-sustaining industrial, commercial/trading, agro-industrial,
tourist, banking, financial and investment center with suitable
residential areas.

The Bislig Ecozone may establish mutually beneficial economic
relations with other entities or enterprises within the country or,
subject to the administrative guidance of the Department of Foreign
Affairs (DFA), the Philippine Economic Zone Authority (PEZA) and/or
the Department of Trade and Industry (DTI), with foreign entities or
enterprises.

Foreign citizens and companies owned by non-Filipinos in whatever
proportion may set up enterprises in the Bislig Ecozone, either by
themselves or in joint venture with Filipinos in any sector of industry,
international trade and commerce within the Bislig Ecozone.

‘The Bislig Ecozone shall be managed and operated as a separate
customs and taxation territory ensuring free flow or movement of goods
and capital within, into and out of its territory.

Sec. 5. Incentives to Registered Enterprises. - The Bislig Special Economic

Zone

Authority (BSEZA) may administer the following incentives to the

registered enterprises located therein to the extent of the activity/project:

A.

i.
ii.

Income Tax Holiday (ITH). - Registered enterprises shall be entitled to
an income tax holiday from the start of their commercial operations to
the extent of their activity under the following categories:

Category A - Registered domestic enterprise located in highly developed
areas, as determined by the Board of Investments (BOI), shall be
entitled to a four-year — income ~—tax_—_—haoliday.

Category B - Registered domestic enterprise on the following shall be
entitled to a six-year income tax holiday:

Located in less developed areas as defined by the BOI; or

Producing/rendering new products/services or having strong
backward or forward linkages.

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Category C - Registered export enterprise shall be entitled to a six-year
income tax holiday: Provided, however, That lithe export enterprise
complies with the following: (1) large capital investments or sizeable
employment generation; or (2) use high level of technology; or (3) located
outside Metro Manila, it shall be entitled to an eight-year income tax
holiday.

Registered enterprises embarking on new investments that are listed in
the current Investment Priorities Plan (IPP) shall be entitled to
incentives provided herein pertaining to the new investments and
subject to such terms and conditions as the BOI may determine.

For this purpose, a registered enterprise shall be defined as any person,
natural or juridical, licensed to do business in the Philippines and
registered with the Bislig Special Economic Zone Authority (BSEZA) to
transact business within the Bislig Special Economic Zone. A registered
export enterprise shall be defined as any registered enterprise engaged
directly or indirectly in the production, manufacture or trade of
products or services which earns at least seventy percent (70%) of its
normal operating revenues from the sale of its products or services
abroad for foreign currency. A registered domestic enterprise,
meanwhile, shall be defined as any registered enterprise not falling
under the definition of a registered export enterprise.

Additional investments in the project shall be entitled to the income tax
holidays corresponding to such investments as may be determined by
the BOI. Additional income tax holiday may be granted for as long as
the investment is made on the same project: Provided, That the project
is listed in the IPP at the same time the additional investment in the
project is made: Provided, further, That the entitlement period for
additional investments shall not exceed three times the period provided
under this subsection: “Provided, however, That the total ITH period for
an export enterprise availing of an eight-year ITH shall not exceed
twenty (20) years. Any unused incentives shall therefore be deemed
forfeited if not used during the incentive period.

The Bureau of Internal Revenue (BIR) shall require a registered
enterprise availing of ITH or Net Operating Loss Carryover (NOLCO) to
secure a certificate of eligibility from the BSEZA before submitting its
income tax return (ITR) with the BSEZA for validation.

Failure to secure certification and/or to file the ITH or NOLCO
availment for validation by the BSEZA within forty-five (45) days from
the last day of each statutory filing date for ITR shall cause the forfeiture
of the availment for the taxable period.

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B. Net Operating Loss Carryover (NOLCO). - Net operating loss of the
business or enterprise during the first three (3) years from the start of
commercial operations which have not been previously offset as
deduction from gross income shall be carried over as a deduction from
gross income for the next five consecutive years immediately following
the year of such loss: Provided, however, That operating loss resulting
from availment of incentives provided in this Act shall not be entitled to
NOLCO.

Registered enterprises availing of the ITH as herein provided shall not
be entitled to avail of the NOLCO.

C. Imposition of a tax rate of five percent (5%) on Gross Income Earned
(GIE) - Except for real property tax on land, no local and national taxes
as prescribed under Republic Act No. 8424, also known as “The
National Internal Revenue Code of 1997, as Amended” such as income
tax, excise tax and franchise taxes, shall be imposed on registered
enterprises operating within the Bislig Ecozone. In lieu thereof, five
percent (5%) of the gross income earned shall be paid as follows:

i, Two percent (2%) to the national government;
ii. One percent (1%) shall be remitted by the registered enterprises to
the treasurer's office of the Province of Surigao del Sur;
iii. One percent (1%) shall be remitted by the registered enterprises to
the City of Bislig; and
iv. One percent (1%) shall be remitted by the registered enterprises to
the BSEZA.

All persons and service establishments in the Bislig Ecozone shall be
subject to national and local taxes under the National Internal Revenue
Code of 1997, as amended, and the Local Government Code.

D. Accelerated Depreciation. - Accelerated depreciation of plant,
machinery and equipment that are reasonably needed and actually
used for the production and transport of goods and services may be
allowed using a rate not exceeding twice the rate which would have been
used had the annual allowance been computed in accordance with the
rules and regulations prescribed by the Secretary of Finance and the
provisions of the National Internal Revenue Code of 1997, as amended.

E. Capital Equipment Incentives. -
i, Importations of capital equipment, spare parts, tools and dye, or
those required for pollution abatement and control, cleaner

production and waste reduction including consignment thereof by
registered enterprises upon the effectivity of this law, shall be

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exempted to the extent of one hundred percent (100%) of the taxes
and customs duties: Provided, That the imported items thereof shall
be used exclusively by the registered enterprise in its registered
activity: Provided, further, That the importation of machinery and
equipment and accompanying parts shall comply with the following
conditions:

a. They are not manufactured domestically in sufficient quantity,
of comparable quality and at reasonable prices;

b. They are reasonably needed and will be used exclusively by the
registered enterprise in the manufacture of its products, unless
prior approval of the BSEZA is secured for the part time
utilization of said equipment in a non-registered activity to
maximize usage thereof Or the proportionate taxes and duties
are paid on a specific equipment and machinery being
permanently used for non-registered activities; and

c. Approval of the BSEZA was obtained by the registered
enterprise for the importation of such machinery, equipment
and spare parts.

Approval of the BSEZA must be secured before any sale, transfer or
disposition of the imported capital equipment, machinery or spare
parts is made: Provided, That if such sale, transfer or disposition is
made within the first five (5) years from date of importation, any of
the following conditions must be present:

(1) the same is made to another enterprise enjoying tax and duty
exemption on imported capital equipment;

(2) the same is made to another enterprise, upon the payment of any
taxes and duties on the net book value of the capital equipment
to be sold;

(3) the exportation of the capital equipment, machinery, spare parts
or source documents or those required for pollution abatement
and control; or

(4) proven technical obsolescence of the said equipment, machinery
or spare parts.

When the aforementioned sale, transfer or disposition is made under
any of the conditions provided for in the foregoing paragraphs other
than paragraph (2) herein, the registered firm shall not pay the taxes
and duties waived all such items: Provided, further, That if the
registered enterprises sell, transfer or dispose the aforementioned
imported items without prior approval within five (5) years from the
date of importation, the registered enterprise and the vendee,
transferee or assignee shall be solidarily liable to pay twice the
amount of the tax and duty exemption given it: Provided, finally,
‘That even if the sale, transfer or disposition of the capital equipment,

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machinery or spare parts is approved after five years from the date
of importation, the registered enterprises are still liable to pay the
taxes and duties based on the net book value of the capital
equipment, machinery or spare parts if any of the registration terms
and conditions has been violated. Otherwise, they shall no longer be
subject to the payment of the taxes and duties waived thereon.

‘The purchase of machinery, capital equipment, raw materials,
supplies, parts and semi-finished products to be used in the
fabrication of machinery and capital equipment by a registered
export-oriented enterprise from a domestic manufacturer shall be
subject to zero percent (0%) value-added tax.

The registered export-oriented enterprise shall be granted a tax
credit equivalent to the amount of duties that would have been
waived on the machinery, capital equipment, raw materials,
supplies, parts and semi-finished products used in the fabrication
of machinery and capital equipment, had these items been imported,
upon its submission to the Department of Finance (DOF) of the bill
of materials evidencing the transaction value of such and other
pertinent documents, for verification and proper endorsement.

The availment by a registered export enterprise of the incentive
stated under the immediately preceding two paragraphs shall be
subject to the following conditions: (a) that said capital equipment,
machinery and spare parts will be used exclusively by the registered
enterprise in its registered activity; (b) that the capital equipment or
machinery where the raw materials, supplies, parts and semi-
finished products were used would have qualified for tax and duty-
free importation; and (c) that the approval of the BSEZA is obtained
by the registered enterprise. If the registered enterprise sells,
transfers or disposes of these machineries, capital equipment and
spare parts, the provision in the preceding paragraphs for such
disposition shall apply.

This incentive shall he deemed waived if application for tax credit
under this subsection was not filed within one year from the date of
delivery,

F. Raw Materials Incentives. - Every registered export-oriented enterprise

shall enjoy a tax credit equivalent to the internal revenue taxes and
customs duties ‘Paid on the supplies, raw materials and semi-
manufactured products provided the same are not sufficient in
quantity, quality or are not competitively priced in the Philippines and
which are used in the manufacture, processing or production of its
export products forming part thereof, exported directly and indirectly
by the registered export-oriented enterprise, based on the actual taxes

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and duties paid for such materials/supplies/semi-manufactured
products by the registered enterprise.

This incentive shall be deemed waived if application for tax credit under
this subsection was not med within one year from the date of
exportation of the final product.

G. Incentives on Breeding Stocks and Genetic Materials. - Importation of
breeding stocks and genetic materials within ten (10) years from the
date of registration of commercial operation of the enterprise shall be
exempt from all taxes and duties: Provided, That such breeding stocks
and genetic materials are reasonably needed in the registered activity,
and approved by the BSEZA.

The availment of the incentives by the registered enterprise shall be
subject to the following: (a) that said breeding stocks and genetic
materials would have been qualified for tax and duty-free importation
under the preceding paragraph; (b) that the breeding stocks and genetic
materials are reasonably needed in the registered activity; (c) that
approval of the ASEZA has been obtained by the registered enterprise;
and (d) that the purchase is made within ten (10) years from the date of
registration of commercial operation of the registered enterprise.

This incentive shall be deemed waived if application for tax credit under
this subsection is not filed within one year from the date of delivery.

H. Exemption from Wharfage Dues. - The provisions of law to the contrary
notwithstanding, exports by a registered enterprise shall be exempted
from wharfage dues.

1. (1) Tax Treatment of Merchandise in the Bislig Ecozone. —

i. Except as otherwise provided in this Act, foreign and domestic
merchandise, raw materials, supplies, articles, equipment,
machineries, spare parts and wares of every description, except
those prohibited by law, brought into the Bislig Ecozone to be
sold, stored, broken up, repacked, assembled, installed, sorted,
cleaned, graded, or otherwise processed, manufactured, mixed
with foreign or domestic merchandise whether directly or
indirectly related in such activity, shall not be subject to
customs and internal revenue laws and regulations nor to local
tax ordinances, any provision of law to the contrary
notwithstanding.

ii. Merchandise purchased by a registered enterprise, from the customs
territory and subsequently brought into the export processing zone,

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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 Bislig Ecozone to areas outside
the said ecozone 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 Bislig Ecozone to areas outside the said
ecozone 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 has been admitted free of duty and
tax, may be taken into the Bislig 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 the
revenue as the Bislig Ecozone 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 Bislig Ecozone and exported
therefrom shall, on subsequent importation into the customs territory,
be subject to the import laws applicable to like articles manufactured
in a foreign country.

viii,Unless the contrary is shown, merchandise taken out of the Bislig
Ecozone shall be considered for tax purposes to have been sent to
customs territory.

(2) Tax Treatment of Merchandise in Free Trade/Freeport Zone. - The Bislig
Ecozone shall be operated and managed as a separate customs territory
ensuring free flow or movement of goods within, into and exported out of the
free trade/freeport zone. Importations of raw materials and capital
equipment are tax and duty free. However, exportations or removal of goods
from the free trade/freeport zones to the other parts of the Philippine

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territory shall be subject to customs and internal revenue regulations.
‘Tax Treatment of Services in the Bislig Ecozone. -

(a) Sale of service by an entity from the customs territory to a registered
ecozone or free trade enterprise, or by a registered ecozone or freeport
enterprise to another ecozone or freeport enterprise shall be treated as
indirect export, and hence, entitled to the benefits allowed by law for such
transaction.

(b) Sale or service by a registered ecozone or freeport enterprise to the
customs territory shall be subject to applicable internal revenue laws
and regulations.

J. Employment of Foreign Nationals. - Subject to the provisions of Section
29 of Commonwealth Act No. 613, as amended, a registered enterprise
may employ foreign nationals in supervisory or technical positions for
a period not exceeding ten (10) years from its registration: Provided,
That when the majority of the capital stock of a registered enterprise is
owned by foreign investors, the positions of the president, treasurer and
general manager or their equivalents may be retained by foreign
nationals beyond the period set forth herein and such officer is the
owner or a stockholder owning at least ten percent (10%) of the
outstanding capital stock of the registered enterprise and he remains
the owner or maintains his stockholdings therein.

Foreign nationals under employment contract within the purview of this
incentive, their spouses and unmarried children under twenty-one (21)
years of age, who are not excluded by Section 29 of Commonwealth Act
No. 613, as amended, shall be permitted to enter and reside in the
Philippines during the period of employment of such foreign nationals.
They shall be entitled to a multiple entry visa, valid for a period of three
years, and shall be allowed to enter and leave the Philippines without
further documentary requirements other than valid passports or other
travel documents in the nature of passports. The validity of the multiple
entry visa shall be extendible yearly.

‘The said foreign nationals admitted under this provision, as well as
their respective spouses and dependents shall be exempt from: (a)
obtaining alien certificates of registration and immigration clearance
certificates; and (b) securing the Alien Employment Permit (AEP) and all
types of clearances, permits, licenses or their equivalents required by
any government department or agency.

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Sec. 6. Incentive to Investors. - Any foreign national covered under
subsection (J) of Section 5 of this Act, who invests an amount of
US$150,000.00, either in cash and/or equipment, in a registered enterprise
shall be entitled to an investor's visa: Provided, That:

He is at least eighteen (18) years of age;
He has not been convicted of a crime involving moral turpitude;

He is not afflicted with any loathsome, dangerous or contagious disease;
and

He has not been institutionalized for any mental disorder or disability:

Provided, further, That in securing the investor's visa, the alien-applicant
shall be entitled to the same privileges provided for under subsection (J),
Section 5 hereof.

As a holder of investor's visa, an alien shall be entitled to reside in the
Philippines while his investment subsists. For this purpose, he should submit
an annual report, in the form duly prescribed for the purpose, to prove that
he has maintained his investment in the country. Should said alien withdraw
his investments from the Philippines, then the investor's visa issued to him
shall automatically expire.

Sec. 7. Administration, Implementation and Monitoring of Incentives. -
The BSEZA shall be responsible for the administration and implementation of
the incentives granted to its respective registered enterprises: Provided, That
any incentive administration policy adopted by the BOI for registered
enterprises shall be uniformly applied by the BSEZA.

The following are the duties and responsibilities of the BSEZA in the
administration of incentives:

A. To adopt consistent procedures of administering incentives in
accordance with the guidelines established by the BOI;

B. To adopt and implement systems and procedures affecting trade and
customs policies in accordance with the requirements established by
the Department of Finance (DOF) and the BOI;

C. To submit information on registered enterprises to the DOF and the
BOI as required by any of these agencies to ascertain consistency of
investment policies and incentives, including their implementation as
provided in paragraph (A) herein, and to ensure proper implementation
of systems and procedures affecting trade and customs policies as
provided in paragraph (B) herein; and

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D. To perform all other duties and responsibilities as may be required by
the President of the Philippines.

For proper monitoring, the BOI shall create a single database of all incentives
provided by all incentives granting agencies, including the BSEZA, and all
information thereto. Double entry accounting shall be done by the BOI in
recording all incentives granted by the government for transparency
purposes.

Sec. 8. Extension of Period of Availment. - The availment period of the
incentives provided herein may be extended by the BSEZA, in the event that
the registered enterprise suffers operational force majeure or any event
equivalent thereto, impairing its viability: Provided, That the availment period
shall not exceed the duration of the said force majeure or equivalent event.

Sec. 9. Duration of Incentives. - Enterprises registered with the BSEZA may
enjoy ITH or NOLCO granted by the latter prior to the availment of the five
percent (5%) GIE.

Fiscal incentives under this Act shall be terminated after a cumulative period
of twenty (20) years from the date of registration or start of commercial
operation, whichever is applicable, except that it could be extended with
regard to industries deemed indispensable to national development.

The industries exempted from this provision shall be recommended by the
BOI, with the concurrence of the Secretaries of the Departments of Finance
and Trade and Industry.

Sec. 10. Creation of the Bislig Special Economic Zone Authority. - There
is hereby created a body corporate to be known as the Bislig Special Economic
Zone Authority, to be known as the BSEZA, which shall manage and operate,
in accordance with the provisions of this Act, the Bislig Special Economic
Zone. This corporate franchise shall expire in fifty (50) years counted from the
first day of the fifth (5th) calendar year after the effectivity of this Act, unless
otherwise extended by Congress. it shall be organized within one hundred
eighty (180) days after the effectivity of this Act.

Sec. 11. Powers .and Functions of the Bislig Special Economic Zone
Authority (BSEZA). - The Bislig Special Economic Zone Authority shall have
the following powers and functions:

A. To operate, administer, manage and develop the Bislig Ecozone
according to the principles and provisions set forth in this Act;

B. To register, regulate and supervise the enterprises in the Bislig Ecozone
in an efficient and decentralized manner, subject to existing laws;

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C. To coordinate with local government units and exercise general
supervision over the development plans, activities and operations of the
Bislig Ecozone;

D. To license, set fees, regulate and undertake the establishment,
operation and maintenance of utilities, other services and
infrastructure in the Bislig Ecozone such as, but not limited to, heat,
light and power, water supply, telecommunications, mobile, internet
and other data facilities, transport, toll roads and bridges, port services,
etc. and to fix just, reasonable and competitive rates, fares, charges and
prices thereof;

E. To construct, acquire, own, lease, operate and maintain on its own or
through contracts, franchise, licenses, bulk purchase from the private
sector or permits under any of the schemes allowed in Republic Act No.
6957 (the Build-Operate-Transfer Law, as amended by R.A. No. 7718),
or joint venture, adequate facilities and infrastructures required or
needed for the operation and development of the Bislig Ecozone, in
coordination with appropriate national and local government
authorities and in conformity with applicable laws thereon;

F. To operate on its own, either directly or through a subsidiary entity, or
concession or license to others, tourism-related activities, including
games, amusements and nature parks, recreational and sports
facilities;

G. To authorize the BSEZA to enter into mutual cooperation agreement
with the PEZA for the utilization of the PEZA's resources, facilities and
assets;

H. Within the limitation provided by law, to raise or borrow adequate and
necessary funds from local or foreign sources to finance its projects and
programs under this Act, and for that purpose to issue bonds,
promissory notes, and other forms of securities, and to secure the same
by a guarantee, pledge, mortgage, deed of trust, or an assignment of all
or part of its property or assets;

I. To protect, preserve, maintain and develop the virgin forests, beaches,
coral and coral reefs and maintain ecological balance within the Bislig
Ecozone through the establishment of marine, forest, wildlife and
botanical reservations, in cooperation with the Department of
Environment and Natural Resources (DENR);

J. To establish, operate and/or contract to operate skills training centers,
plant and flower nurseries, forest and sea ranger services and such
other necessary and functional units of offices of the BSEZA as it may
deem necessary;

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K. To adopt, alter and use a corporate seal; make contracts, leases, own,
or otherwise dispose of personal or real property; sue and be sued; and
otherwise carry out its functions and duties as provided for in this Act;

L. To sue and be sued in order to carry out its duties, responsibilities,
privileges, powers and functions ae granted and provided for in this Act
and to exercise the power of eminent domain for public use and public
purpose;

M. To authorize or undertake, on its own or through others, and to regulate
the establishment, operation and maintenance of public utilities,
services, and infrastructure in the Bislig Ecozone such as shipping,
barging, stevedoring, cargo, handling, warehousing, storage of cargo,
port services or concessions, piers, wharves, bulkheads, bulk
terminals, mooring areas, storage areas, roads, bridges, terminals,
conveyors, water supply and storage, sewerage, drainage, airport
operations, in coordination with the Civil Aeronautics Board, and such
other services or concessions or infrastructure necessary or incidental
to the accomplishment of the objectives of this Act: Provided, however,
That the private investors in the Bislig Ecozone shall be given priority
in the awarding of contracts, franchises, licenses or permits for the
establishment, operation and maintenance of utilities, services and
infrastructures in the Bislig Ecozone;

N. To issue certificates of origin for products manufactured or processed
in the Bislig Ecozone in accordance with prevailing rules of origin, and
the pertinent regulations of the PEZA, the Department of Trade and
Industry (DTI) and/or the DOF;

O. To undertake and carry out at its own expense the reclamation by
dredging, filling, or other means, of any foreshore lands bordering the
Bislig Ecozone and to establish, provide, construct, maintain and repair
proper adequate docking and harbor facilities as the BSEZA may
determine in consultation with the Secretary of Finance and the
Secretary of Public Works and Highways; and

P. To issue rules and regulations consistent with the provisions of this Act
as may be necessary to accomplish and implement the purposes,
objectives and policies provided herein.

Sec. 12. Banking Rules and Regulations. -Existing laws and
rules/regulations of the Bangko Sentral ng Pilipinas (BSP) shall apply to
banks and financial institutions to be established in the Bislig Ecozone, such
as those governing foreign exchange and other concurrent account
transactions (trade and non-trade), local and foreign borrowings, foreign
investments, establishment and operation of local and foreign banks, foreign

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Searvd]HwAaAYwNe

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currency deposit units, offshore banking units and other financial institutions
under the supervision of the BSP.

Sec. 13. Board of Directors of the Bislig Special Economic Zone
Authority. - The powers of the Bislig Special Economic Zone Authority shall
be vested in and exercised by a Board of Directors, hereinafter referred to as
the Board, which shall be composed of the following;

A. The Chairman who shall, at the same time be the administrator of the
BSEZA;

B. A Vice Chairman who shall come from among the members of the
Board;

C. Members consisting of:

i, ‘The Congressional Representative of the district covering the site of
the Bislig Ecozone;

ii, The mayor of Bislig City;

iii, One (1) representative from the city council;

iv. One (1) representative from the domestic investors;

v. One (1) representative from the foreign investors; and

vi. One (1) representatives from the labor sector chosen from the
workers in the Bislig Ecozone.

The Congressional Representative and the mayor of Bislig City, Province of
Surigao del Sur shall serve as ex officio members of the Board, whose term in
the Board corresponds to their terms as elected officials.

‘The Chairman and the members of the Board, except the ex officio members,
shall be appointed by the President of the Philippines to serve for a term of
six (6) years, unless sooner separated from service due to death, voluntary
resignation or removal for cause. In case of death, resignation or removal for
cause, the replacement shall serve only the unexpired portion of the term.

Except for the representatives of the business and labor sectors, no person
shall be appointed by the President of the Philippines as a member of the
Board unless he is a Filipino citizen, of good moral character, of proven probity
and integrity, and a degree-holder in any of the following fields: economics,
business, public administration, law, management or their equivalent, and
with at least ten (10) years relevant working experience preferably in the field
of management or public administration.

The members of the Board shall each receive per diem at a rate to be

determined by the Department of Budget and Management in accordance with
existing rules and regulations: Provided, however, That the total per diem

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collected each month shall not exceed the equivalent per diem for four (4)
meetings. Unless and until the President of the Philippines has fixed a higher
per diem for the members of the Board, such per diem shall not be more than
Ten thousand pesos (P10,000.00) for every Board meeting.

Sec. 14. Powers and Duties of the Chairman-Administrator. - The
Chairman-Administrator shall have the following powers and duties:

A. To direct and manage the affairs of the BSEZA in accordance with the
policies of the Board;

B. To establish the internal organization of the BSEZA under such conditions
that the Board may prescribe;

C. To submit an annual budget and necessary supplemental budget to the
Board for its approval;

D. To submit within thirty (30) days after the close of each fiscal year an
annual report to the Board and such other reports as may be required;

E. To submit to the Board for its approval policies, systems, procedures, rules
and regulations that are essential to the operation of the Bislig Ecozone;

F. To create a mechanism in coordination with relevant agencies for the
promotion of industrial peace, the protection of the environment, and the
advancement of the quality of life in the Bislig Ecozone; and

G. To perform such other duties as may be assigned to him by the Board or
which are necessary or incidental to his office.

Sec. 15. Capitalization. - The Bislig Special Economic Zone Authority shall
have an authorized capital stock of one billion (1,000,000,000) no par shares
with a minimum issue of Ten pesos (P10.00) each, the majority shares of
which shall be subscribed and paid for by the National Government and the
local government units (LGUs) embracing the Bislig Special Economic Zone.
The board of directors of the BSEZA may, with the written concurrence of the
Secretary of Finance, sell shares, representing not more than forty per centum
(40%) of the capital stack of the BSEZA to the general public under such policy
as the Board and the Secretary of Finance may determine. The National
Government and the LGUs shall, in no case, own less than sixty per centum
(60%) of the total issued and outstanding capital of the Bislig Special
Economic Zone Authority.

The amount necessary to subscribe and pay for the shares of the national
government to the capital stock of the BSEZA shall be included in the annual
General Appropriations Act. For LGUs, the funds shall be taken from their
internal revenue allotment and other local funds.

Sec. 16. Supervision. - The Bislig Special Economic Zone shall be under the

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direct control and supervision of the Philippine Economic Zone Authority
(PEZA) for purposes of policy direction and coordination.

Sec. 17. Relationship with the Regional Development Council. - The Bislig
Special Economic Zone Authority shall determine the development goals for
the Bislig Ecozone within the framework of national development plans,
policies and goals. The Administrator shall, upon approval by the Board,
submit the Bislig Ecozone plans, programs and projects to the Regional
Development Council for inclusion and inputs to the overall regional
development plan.

Sec. 18. Relationship with Local Government Units. - Except as herein
provided, the local government units comprising the Bislig Special Economic
Zone shall retain their basic autonomy and identity. In case of any conflict
between the BSEZA and, the City of Bislig on matters affecting the Bislig
Ecozone other than defense and security matters, the decision of the BSEZA
shall prevail.

Sec. 19. Auditing. - The Commission on Audit shall appoint a representative
who shall be a full time auditor of the BSEZA and assign such number of
personnel as may be necessary to assist said representative in the
performance of his/her duties. The salaries and emoluments of the assigned
auditor and personnel shall be in accordance with pertinent laws, rules and
regulations.

Sec. 20. Separability Clause. - If any provision of this Act shall be held
unconstitutional or invalid, the other provisions not otherwise affected shall
remain in full force and effect.

Sec. 21. Repealing Clause. - All laws, executive orders and issuances, or any
part thereof, which are inconsistent herewith are hereby repealed or amended
accordingly.

Sec. 22. Effectivity Clause. - This Act shall take effect upon its publication
in the Official Gazette or in at least one newspaper of general circulation.

Approved.

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