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Republic of the Philippines

Bouse of Representatives
Queszon City, Metro Manila

+ HOGS

Twentieth Congress
First Regular Session

6
HOUSE BILL NO.

Introduced by Representatives Ferdinand Martin G. Romualdez,
Andrew Julian K. Romualdez and Jude A. Acidre

EXPLANATORY NOTE

This bill seeks to convert and expand the Leyte Industrial Development
Estate (LIDE) into the Leyte Ecological Industrial Zone (LEIZ) and create the
Leyte Ecological Industrial Zone Authority (LEIZA).

Section 20, Article II of the Constitution states that “The State recognizes
the indispensable role of the private sector, encourages private enterprise, and
provides incentives to needed investments.” Likewise, Section 12, Article XII
of the Constitution states that “The State shall promote the preferential use of
Filipino labor, domestic materials and locally produced goods and adopt
measures that help make them competitive.”

In line with these policies, the government shall provide measures that
shall effectively attract legitimate and productive foreign investments. The
government shall also actively encourage, promote and accelerate a sound and
balanced industrial, economic and social development of the country.

In 1979, the LIDE was established in Isabel, Leyte by virtue of Letter of
Instruction No.962 series of 1979 by former President Ferdinand E. Marcos.
The duty and function of implementing the industrial estate was entrusted to the
Leyte Sab-a Basin Development Authority. With the abolition of the Leyte
Sab-a Basin Development Authority, the ownership of LIDE was transferred to
the National Development Company and managed by LIDE Management
Corporation,


In 1998, the Philippine Economic Zone Authority approved the creation
of an economic zone, the Eastern Visayas Regional Growth Center, by virtue of
Presidential Proclamation No. 1210 series of 1998 by former President Fidel V.
Ramos, with the City Government of Tacloban as its developer and operator

In 2012, the LEIZ project was formed as part of the Copper Industry
Roadmap to promote the integrated development and competitiveness of copper
and other related industries in the region. Later, it was part of the government’s
efforts for the rehabilitation of the region after the devastation of typhoon
Yolanda in 2013.

The proposed bill provides for the creation of LEIZA by converting and
expanding LIDE into LEIZ. It will not only house potential locator in the
copper industry but also other major industries in the region. It will be
developed as a self-sustaining industrial, commercial, investment center, and
freeport. The creation of LEIZA will also enable the exploration, development
and utilization of natural resources of the area, create more employment
opportunities, and encourage legitimate and productive foreign investments. Its
establishment will create economic progress that will greatly benefit the
residents of Leyte and the Filipino people.

In view of the foregoing, approval of this bill is earnestly requested.

FE] ND MARTIN G. ROMUALDEZ

JUDE ¥ ACIDRE ANDREW JULIAN K. ROMUALDEZ


Republic of the Philippines

Bouse of Representatives
Quezon City, Metro Manila

Twentieth Congress
First Regular Session

HOUSE BILL NO. 6

Introduced by Representatives Ferdinand Martin G. Romualdez,
Andrew Julian K. Romualdez and Jude A. Acidre

AN ACT
CONVERTING AND EXPANDING THE LEYTE INDUSTRIAL
DEVELOPMENT ESTATE INTO THE LEYTE ECOLOGICAL
INDUSTRIAL ZONE, CREATING FOR THIS PURPOSE THE LEYTE
ECOLOGICAL INDUSTRIAL ZONE AUTHORITY, AND
APPROPRIATING FUNDS THEREFOR

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

CHAPTER 1
GENERAL PROVISIONS

SECTION 1. Short Title. — This Act shall be known as the “Leyte Ecological

Industrial Zone Act.”

SEC. 2. Declaration of Policy. - It is declared the policy of the State to
encourage, promote and accelerate the sound and balanced industrial, economic
and social development of the country. The establishment of special economic
zones shall attract legitimate and productive foreign investments in strategic

locations in the country. It shall generate employment and increase productivity


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and individual, as well as family incomes, thereby enhancing the quality of life

of the Filipino people.

CHAPTER II
CONVERSION AND EXPANSION OF THE ECONOMIC ZONE

SEC. 3. Conversion of the Leyte Industrial Development Estate. - The
Leyte Industrial Development Estate (LIDE) located in the municipality of
Isabel, Province of Leyte is hereby converted into a special economic zone,
consisting of an industrial estate (IE), export processing zone (EPZ) and free
trade zone to be known as the Leyte Ecological Industrial Zone, hereafter referred
to as LEIZ.

SEC. 4, Expansion of the LEIZ, — Subject to the concurrence of the affected
local government units of Leyte, the LEIZ shall be expanded to cover the

following areas:

(a) The land area that comprises the former Leyte Industrial Development

Estate, hereinafter referred to as the “LEIZ Core Area”;

(b) The land areas located within municipalities adjacent to the Municipality
of Isabel and the Municipality of Merida, Province of Leyte and the City of

Ormoc, hereinafter referred to as the “LEIZ Non-Core Areas”; and

(c) The land area covered by the Eastern Visayas Regional Growth Center,
hereinafter referred to as the “LEIZ Tacloban North.”

The areas comprising the LEIZ may be expanded or reduced when necessary.
For this purpose, the LEIZA, with the concurrence of the appropriate and affected
local government units (LGUs) and the agreement of appropriate national
government agencies, government-owned and -controlled corporations and

instrumentalities, and the approval of the LEIZA Board in accordance and in
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compliance with existing laws and local ordinances shall have the power to
acquire, procure, or expand either by purchase, negotiation, condemnation
proceedings, or any other arrangement, any private or alienable and disposable
public lands and their respective water territories within the territorial jurisdiction

of the Province of Leyte.

The metes and bounds of the LEIZ Core Area, the LEIZ Non-Core Areas and the
LEIZ Tacloban North shall be based on the technical description and coordinates
verified and approved by the Land Management Bureau, the National Mapping
and Resource Information Authority, and other government agencies as may be
provided by law.

In the event that the LEIZ Non-Core Area or the LEIZ Expansion Areas cover
economic zones of other investment promotion agencies, registered enterprises
in such economic zones may elect to register with the Leyte Ecological Industrial
Zone Authority (LEIZA) or to remain with such other investment promotion
agency: Provided, That in no case shall a registered enterprise enjoy incentives

from both investment promotion agencies.

SEC. 5. Governing Principles. - The LEIZ shall be managed and operated by
the Leyte Ecological Industrial Zone Authority, hereafter referred to as the
LEIZA, under the following principles:

(@ Within the framework and limitations of the Constitution and applicable
provisions of the Local Government Code, the LEIZ shall be developed into and
operated as a decentralized, self-reliant and self-sustaining industrial, commercial
and trading, agro-industrial, tourist, banking, financial and investment center with

suitable residential areas;


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©) The LEIZ shall be provided with transportation, telecommunications and
other facilities needed to attract legitimate and productive investments, generate
linkage industries and employment opportunities for the people of Leyte and its

neighboring towns and cities;

(© The LEIZ 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 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 LEIZ, either by themselves or in a joint
venture with Filipinos in any sector of industry, international trade and commerce
within the LEIZ;

(@) | The LEIZ shall be managed and operated as a separate customs territory
thereby ensuring the free flow or movement of goods and capital within, into and
out of its territory, and shall likewise provide incentives subject to Title XIII of
the National Internal Revenue Code of 1997, as amended. However, exportation
or removal of goods from the territory of the LEIZ to the other parts of the
Philippine territory shall be subject to customs duties and taxes under Republic
Act No. 10863, otherwise known as the “Customs Modernization and Tariff Act”

and other relevant tax laws of the Philippines;

( Goods manufactured by a LEIZ enterprise shall be made available for
immediate retail sale in the domestic market, subject to the payment of
corresponding taxes on raw materials and other regulations that may be formulated

by the LEIZA together with the PEZA, the Bureau of Customs (BOC), the Bureau

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of Internal Revenue, and the DTI. However, in order to protect domestic
industries, a negative list of industries shall be drawn up and regularly updated
by PEZA. Enterprises engaged in industries included in such negative list shall

not be allowed to sell their products locally;

(@) The defense of the LEIZ and the security of its perimeter shall be the
responsibility of the national government in coordination with the LEIZA and the
LGUs.

CHAPTER IIT
GOVERNING STRUCTURES

SEC. 6, Creation of the Leyte Ecological Industrial Zone Authority (LEIZA).
~ There is hereby created a body corporate to be known as the “Leyte Ecological
Industrial Zone Authority”, hereinafter referred to as the LEIZA, which shall
manage and operate the Leyte Ecological Industrial Zone, in accordance with the
provisions of this Act. This corporate franchise shall expire in fifty (50) years
counted from the first 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. 7. Capitalization. - The LEIZA shall have an authorized capital stock of
Two billion (2,000,000,000) 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 LGUs embracing the LEIZ. The Board of
Directors of the LEIZA may, with the written concurrence of the Secretary of
Finance, sell shares, representing not more than forty per centum (40%) of the
capital stock of the LEIZA to the general public under such policy as the Board
and the Secretary of Finance may determine. The National Government and the


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LGUs shall in no case own less than sixty per centum (60%) of the total issued
and outstanding capital of the LEIZA.

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

SEC. 8. Principal Office of the LEIZA,— The LEIZA shall maintain its principal
office in Tacloban City, but it may establish offices within the Philippines as

may be necessary for the proper conduct of its business.

SEC. 9. Powers and Functions of the LEIZA. ~ The LEIZA shall have
the following
powers and functions:

(a) To operate, administer, manage and develop the LEIZ according to the

principles and provisions set forth in this Act;

() To register, regulate and supervise the enterprises in the LEIZ in an

efficient and decentralized manner, subject to existing laws;

(© To coordinate with LGUs and exercise general supervision over the

development plans, activities and operations of the LEIZ:

(@ To regulate and undertake the establishment, construction, operation and
maintenance of public utilities, other services, and infrastructure in the LEIZ such
as light and power, shipping, barging, stevedoring, cargo handling, hauling,
warehousing, storage of cargo, port services or concessions, piers, wharves,
bulkheads, bulk terminals, mooring areas, storage areas, roads,

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telecommunications, transport, bridges, terminals, conveyors, water supply and
storage, sewerage, drainage, airport operations in coordination with the Civil
Aviation Authority of the Philippines (CAAP), and such other services or
concessions or infrastructure necessary or incidental to the accomplishment of

the objectives of this Act;

(©) 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, otherwise
known as the “Build-Operate-Transfer Law” as amended, or joint venture,
adequate facilities and infrastructure required or needed for the operation and
development of the LEIZ, in coordination with appropriate national and local

government authorities and in conformity with applicable laws thereon;

() To approve plans, programs and projects of the LEIZ to be submitted to
the Regional Development Council (RDC) for inclusion and inputs to the overall
regional development plan;

(g) To operate on its own, either directly or through licenses to others, tourism-
related activities, including games, amusements, recreational and sports facilities,
subject to the approval and supervision of the Philippine Amusement and Gaming
Corporation (PAGCOR);

(n) To raise or borrow, within the limitation provided by law, and subject
to the approval or opinion of the Monetary Board of the Bangko Sentral Ng
Pilipinas (BSP), as the case may be, adequate and necessary funds from local or
foreign sources, to finance its projects and programs under this Act and for this
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;


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(@ To protect, preserve, maintain and develop the forests, beaches, coral and
coral reefs, and maintain ecological balance within the LEIZ. Notwithstanding
the power of the LEIZA to create rules for such purpose, the rules and regulations
of the Department of Environment and Natural Resources (DENR) and other
government agencies involved in the above functions shall be implemented by
the LEIZA;

0) To create, operate or contract to operate such functional units or offices of
the LEIZA as it may deem necessary;

(k) To adopt, alter and use a corporate seal, contract, lease, buy, acquire, own
or otherwise dispose of personal and real property of whatever nature, sue and be

sued, and otherwise carry out its functions and duties as provided for in this Act;

© To issue certificates of origin for products manufactured or processed in
the LEIZ in accordance with prevailing rules of origin and the pertinent
regulations of the PEZA, the DTI and the Department of Finance (DOF);

(m) To establish one-stop shops for the issuance of all necessary permits,
clearances, licenses, and other similar certifications to conduct such activities
intended to improve the ease of doing business within the LEIZ, in coordination
with government agencies having jurisdiction over activities therein: Provided,
That all government agencies are directed to provide and extend utmost and full
cooperation to the LEIZA in the establishment of such one-stop shops;

() To provide internal security to the LEIZ in coordination with the National
Government and affected LGU. For this purpose, the LEIZA shall provide and

establish its own internal security and firefighting forces or hire others to provide


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the same. Military forces deployed to the LEIZ by the National Government for
the purpose of defense in times of aggression, terrorism, insurgency, rebellion
and similar acts shall not interfere in the internal affairs of the LEIZ and

expenditures for these military forces shall be borne by the National Government;

(©) — Toexercise such powers as may be essential, necessary or incidental to the
powers granted to it hereunder, as well as those that shall enable it to carry out,
implement and accomplish the purposes, objectives and policies of this Act; 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. 10. Board of Directors of the LEIZA. — The powers of the LEIZA 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 Chairperson, who shall at the same time be the administrator of the
LEIZA;

() Four members consisting of:

The Governor or a duly-authorized representative from the Provincial Government
of Leyte;

(2) The mayor of the municipality covered by the ecozone;
(3) One (1) representative from the investor’s group; and
(4) One (1) representative from among the workers in the LEIZ.

The Vice-Chairperson shall be selected from among the members of the Board.


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‘The Governor or his representative and the Mayor of the municipality covered by
the ecozone shall serve as ex-officio Board members, and their respective terms

of office in the Board shall correspond to their incumbency as elected officials.

The Chairperson-Administrator 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, their replacements shall serve only the unexpired portion of

the respective terms.

The Chairperson-Administrator must be 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

in the field of management or public administration.

The members of the Board, except the ex-officio members, shall each receive per
diem at rates to be determined by the Department of Budget and Management
(DBM) in accordance with existing rules and regulations: Provided, however,
That the total per diem 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 amount of per diem, the members of the Board shall receive per
diem of not be more than Ten thousand pesos (P10,000.00) for every Board

meeting.

SEC. 11, Organization and Personnel. - The Board of Directors of the LEIZA
shall provide for its organization and staff. The Board shall appoint and fix the
remuneration and other emoluments of its officers and employees in accordance

with existing laws on compensation and position classification system. The Board
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shall have exclusive and final authority to promote, transfer, assign, reassign, or
remove officers of the LEIZA, any provision of existing law to the contrary
notwithstanding. The Chairperson-Administrator shall carry out the decisions of
the Board.

The officers and employees of the LEIZA, including all members of the Board,
shall not engage directly or indirectly in partisan activities nor take part in any

election, except to vote.

No officer or employee of the LEIZA, subject to civil service laws and

regulations, shall be removed or suspended except for cause, as provided by law.

SEC. 12. Powers and Duties of the Chairperson-Administrator. — The
Chairperson-Administrator shall have the following powers and duties:

(a) To direct and manage the affairs of the LEIZA in accordance with the
policies of the Board;

(b) To establish the internal organization of the LEIZA 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;

(©) Tosubmit to the Board for its approval, policies, systems, procedures, rules

and regulations that are essential to the operation of the LEIZ;


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(f) To recommend to the Board the remuneration and other emoluments of its
officers and employees in accordance with existing laws on compensation and

position classification;

(g) 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 LEIZ; and

(h) To perform such other duties as may be assigned by the Board or which

are necessary or incidental to the office.

SEC. 13. Legal Counsel. — The LEIZA shall have its own internal legal counsel
under the supervision of the Government Corporate Counsel. When the
exigencies of businesses and operations demand it, the LEIZA may engage the
services of an outside counsel either on a case to case or fixed retainer basis.

CHAPTER IV
INCENTIVES TO ECOZONE ENTERPRISESAINVESTORS

SEC. 14. Investors Visa. - Any foreign national who invests an amount of Two
hundred thousand US dollars (US$200,000.00), either in cash and/or equipment,
in a registered enterprise shall be entitled to an investor's visa: Provided, That the
foreign national has the following qualifications:

(a) Must be at least eighteen (18) years of age;

(b)  Mustnot have been convicted by final judgment of a crime involving moral

turpitude;
(c) Must not be afflicted with any loathsome, dangerous or contagious disease;

(d) Must not have been institutionalized for any mental disorder or disability;

and


(e) Must establish his financial capability and capacity through verifiable and

credible evidence.

A foreign national may reside in the Philippines while the investment subsists.
To prove this, the foreign national shall submit an annual report, in the form duly
prescribed for the purpose. Should said investments be withdrawn from the
Philippines, the investor’s visa issued to said foreign national shall automatically

expire and be withdrawn

The authority to issue visas and work permits shall remain with the Bureau of
Immigration (BI) and the Department of Labor and Employment (DOLE),
respectively: Provided, That the BI and the DOLE shall implement measures to
expedite the processing of such visas and permits for workers in the LEIZ and

coordinate with the LEIZA for the purpose of improving ease of doing business.

SEC. 15. Fiscal Incentives, — Registered enterprises of the LEIZ may be
entitled to pertinent fiscal incentives granted under Title XIII (Tax Incentives) of
the National Intemal Revenue Code of 1997, as amended.

SEC. 16. Banking Rules and Regulations. — Banks and financial institutions to
be established in the LEIZ shall be under the supervision of the BSP and subject

to existing banking laws, rules and regulations.

SEC. 17. Remittances. — In the case of foreign investments, a duly registered
entity or enterprise within the LEIZ shall have the right to remit earnings from
the investment in the currency in which the investment was originally made and
at the exchange rate prevailing at the time of remittance, subject to the provisions
of Republic Act No. 7653, otherwise known as “The New Central Bank Act”, as

amended.


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CHAPTER V
NATIONAL GOVERNMENT AND OTHER ENTITIES
SEC. 18. Supervision and Control. — For purposes of policy direction and
coordination, the LEIZA shall be under the direct control and supervision of the
Office of the President of the Philippines: Provided, That the grant of fiscal
incentives shall be subject to the provisions of Title XII! of the National Internal

Revenue Code of 1997, as amended.

SEC. 19. Development Goals of the LEIZ. - The LEIZA shall determine the
development goals of the LEIZ within the framework of national development
plans, policies and goals. The Chairperson-Administrator shall, upon approval by
the Board, submit the LEIZ plans, programs and projects to the RDC for inclusion
and inputs to the overall regional development plan.

SEC. 20. Relationship with Local Government Units. - Except as herein
provided, the LGUs comprising the LEIZ shall retain their basic autonomy and
identity. They shall operate and function in accordance with the framework of the
Constitution, Local Government Code of 1991, and this Act.

In case of any conflict among the LEIZA, the LGUs and the National Government
on matters affecting the LEIZ, other than national defense and security matters,
the decision of the LEIZA shall prevail.

SEC. 21. Audit, — The Commission on Audit (COA) shall appoint a full-time
auditor in the LEIZA or may assign such number of personnel as may be
necessary in the performance of their functions.

CHAPTER VI
MISCELLANEOUS,


SEC. 22. Interpretation/Construction. — The powers, authorities and functions
that are vested in the LEIZA are intended to establish national self-sufficiency
and self-reliance in the advancement and protection of the national integrity,
enhancement of national security, decentralization of governmental functions and
authority, and promotion of an efficient and effective working relationship among
the LEIZA, the National Government and the LGUs. Any interpretation of this
Act shall consider such intentions. In the event of conflict of interpretation and
provided the intentions cannot be harmonized, the provisions of this Act shall be

construed in favor of an interpretation that would tend to protect national security.

SEC. 23. Applicability Clause. - Insofar as they are consistent with the
provisions of this Act, the provisions of Sections 30 to 41 of Republic Act No.
7916, otherwise known as "The Special Economic Zone Act of 1995", as
amended, shall likewise apply to the LEIZ.

SEC. 24, Transitory Provisions. - All properties, assets, funds, rights,
obligations, and liabilities of LIDE are hereby transferred to the LEIZA except
for the liabilities that are not properly accounted for as per the reports coming
from the Commission on Audit, which shall be retained by the National

Development Company.

The LEIZA shall carry out the transfer herein provided in a manner that will
ensure the least disruption of ongoing operations of the LIDE. The qualified and
necessary personnel of the LIDE shall be transferred to and absorbed by the
LEIZA: Provided, That the tenure, rank, salaries and privileges of such personnel
are not reduced or adversely affected. The personnel whose services are not
retained by the LEIZA shall be granted separation pay and retirement and other

benefits they are entitled to under existing laws, rules and regulations.


In the period prior to the actual assumption of duties by the LEIZA, all officers
and employees of the LIDE shall continue to exercise their functions and
discharge their duties and responsibilities. The LIDE shall be deemed abolished
upon the organization of LEIZA.

SEC. 25. Implementing Rules and Regulations. - The National Economic and
Development Authority (NEDA), in coordination with the DTI and DOF, shall
formulate the implementing rules and regulations of this Act within ninety (90)

days after its approval.

SEC. 26. 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, 27. Repealing Clause. — All laws, executive orders or issuances or any part
thereof, which are inconsistent herewith, are hereby repealed or amended

accordingly.

SEC. 28. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation.

‘Approved,