‘ REPRESS

Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

Twentieth Congress
First Regular Session

HOUSE BILL NO. 2996

Introduced by Representative Carlos Andes Loria

EXPLANATORY NOTE

This bill seeks to establish a special economic zone in the City of Legazpi
in the Province of Albay to be known as the Legazpi Special Economic Zone,
create for the purpose the Legazpi Special Economic Zone Authority, and
appropriate funds therefor.

Legazpi City, the capital of the Province of Albay and a key urban center
in the Bicol Region, is strategically located as a gateway for trade, tourism,
education, and services in Southern Luzon. With a population of more than
250,000 and host to the Legazpi Domestic Airport, seaports, and national
government offices, Legazpi possesses immense potential for growth and
development.

However, despite its strategic location and urban infrastructure, Legazpi
continues to face challenges such as high poverty incidence, limited industrial
diversification, and vulnerability to climate-related disasters. The city’s
development is further constrained by underinvestment in key sectors and
limited mechanisms for coordinating inclusive, resilient, and innovation-driven
growth.

The proposed Special Economic Zone aims to accelerate Legazpi's
economic transformation by providing a robust legal and_ institutional
framework for promoting investment, creating employment, developing
infrastructure, and supporting sustainable and disaster-resilient urbanization.


While the Legazpi Special Economic Zone Authority is responsible for
coordinating inter-agency efforts, facilitating ease of doing business, regulating
development activities, and extending fiscal and non-fiscal incentives to
qualified enterprises.

By leveraging Legazpi’s strategic assets and addressing persistent socio-
economic challenges, this measure secks to make the city a model for inclusive
and climate-resilient growth in Southern Luzon and the entire country.

In view of the foregoing, the immediate passage of this bill is earnestly
sought.

CARLOS ANDES LORIA


Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

Twentieth Congress
First Regular Session

HOUSE BILL NO._2996

Introduced by Representative Carlos Andes Loria

AN ACT
ESTABLISHING A SPECIAL ECONOMIC ZONE IN THE CITY OF
LEGAZPI IN THE PROVINCE OF ALBAY TO BE KNOWN AS THE
LEGAZPI SPECIAL ECONOMIC ZONE, CREATING FOR THE
PURPOSE THE LEGAZPI SPECIAL ECONOMIC ZONE AUTHORITY,
AND APPROPRIATING FUNDS THEREFOR

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

CHAPTER I
GENERAL PROVISIONS

SECTION 1. Short Title. — This Act shall be known as the "Legazpi
Special Economic Zone Act."

SEC. 2. Declaration of Policy. — \t is the declared policy of the State to
promote sustainable, inclusive, and innovation-driven development by
accelerating economic transformation in urban areas with strategic potential.

Towards this end, the State supports the establishment of special economic
3


zones to stimulate economic growth, attract investments, generate employment,
accelerate ecological rehabilitation, enhance productivity, and improve the
quality of life of the people.

CHAPTER II
CREATION OF THE SPECIAL ECONOMIC ZONE

SEC. 3. Legazpi Special Economic Zone. — In accordance with the
declared policy and subject to the concurrence of the concerned local
government units (LGUs) of Albay, the City of Legazpi, Province of Albay, is
established as a special economic zone to known as the Legazpi Special
Economic Zone, hereinafter referred to as the “Legazpi Economic Zone.” The
metes and bounds of the Legazpi Economic Zone, which must be contiguous,
shall be defined in a presidential proclamation.

SEC. 4. Legazpi Special Economic Zone Authority. The Legazpi
Special Economic Zone Authority, hereinafter referred to as the “Authority,” is
created to manage and operate the Legazpi Economic Zone. The Authority shall
be organized within one hundred eighty (180) days from the effectivity of this
Act and its corporate life is fifty (50) years from its organization, unless
extended by Congress.

SEC. 5. Governing Principles.— The Authority shall manage and
operate the Legazpi Economic Zone under the following principles:

a. Within the framework and limitations of the Constitution and

applicable provisions of Republic Act No. 7160, as amended,

4


otherwise known as the “Local Government Code,” the Legazpi
Economic Zone 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 Legazpi Economic Zone shall be equipped with transportation,
telecommunications, and other facilities needed to attract legitimate
and productive investments, generate linkage industries and
employment opportunities for the people of Legazpi and those in
neighboring towns and cities;

. The Legazpi Economic Zone 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, Philippine Economic Zone Authority (PEZA), and
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 Legazpi Economic Zone,
either by themselves or in a joint venture with Filipinos in any sector
of industry, international trade and commerce within the Legazpi

Economic Zone;


. The Legazpi Economic Zone 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 may
provide incentives, subject to Title XIII of the National Internal
Revenue Code, as amended.

The areas comprising the Legazpi Economic Zone may be expanded
or reduced, when necessary, through a presidential proclamation, For
this purpose, the Authority, in consultation with the LGU, is
authorized to acquire either by purchase, negotiation or condemnation
proceedings, any private land within or adjacent to the Legazpi
Economic Zone for the following:

1, Consolidation of lands for zone development;

2. Acquisition of right of way to the Legazpi Economic Zone; and

3. Protection of watershed areas and natural assets valuable to the
prosperity of the Legazpi Economic Zone.

. Goods manufactured by a Legazpi Economic Zone 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 Authority together
with the PEZA, Bureau of Customs, Bureau of Internal Revenue, and

DTI. However, in order to protect domestic industries, a Negative List


of industries shall be drawn up and regularly updated by the PEZA.
Enterprises engaged in industries included in the Negative List shall
not be allowed to sell their products locally; and

h. The defense of the Legazpi Economic Zone and the security of its

perimeter fence shall be the responsibility of the national government
in coordination with the Authority and the concerned LGUs.

SEC. 6. Development Goals.— The Authority shall determine the
development goals of the Legazpi Economic Zone within the framework of
national development plans, policies, and goals. The Chairperson-
Administrator, upon approval by the Board of the Authority, shall submit the
Legazpi Economic Zone’s plans, programs, and projects to, the Regional
Development Council for inclusion in the regional development plan.

SEC. 7. Capitalization. — The Authority shall have an authorized capital
stock of Two billion pesos (P2,000,000,000.00) no-par shares, with a minimum
issue value of Ten pesos (P10.00) each. The majority of these shares shall be
subscribed and paid for by the national government, city government of
Legazpi and provincial government of Albay.

The Board of Directors of the Authority may, with the written
concurrence of the Secretary of Finance, sell shares representing not more than
forty percent (40%) of the capital stock of the Authority to the general public,

under such policies as may be jointly determined by the Board and the


Secretary of Finance. The national government and the LGUs shall, in no case,
own less than sixty percent (60%) of the total issued and outstanding capital of
the Authority.

The amount necessary to subscribe and pay for the shares of the national
government to the capital stock of the Authority shall be included in the
General Appropriations Act.

For the LGUs concerned, their share in the capitalization shall be sourced
from their respective development funds or other lawful sources, subject to
applicable budgeting, accounting, and auditing rules and regulations.

SEC. 8. Principal Office.— The Authority shall maintain its principal
office in Legazpi, Albay, but may establish liaison offices elsewhere.

CHAPTER IIL
POWERS, FUNCTIONS, AND STRUCTURE

SEC. 9. Powers and Functions. — The Authority shall:

a, Operate, administer, manage, and develop the Legazpi Economic
Zone according to the principles and provisions set forth in this Act;

b. Register, regulate, and supervise the enterprises in the Legazpi
Economic Zone in an efficient and decentralized manner, subject to
existing laws;

c. Coordinate with the LGU and exercise general supervision over the
development plans, activities, and operations of the Legazpi

Economic Zone;


d. Regulate and undertake the establishment, construction, operation,
and maintenance of public utilities, other services, and infrastructure
in the Legazpi Economic Zone 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, telecommunications,
transport, bridges, terminals, conveyors, water supply and storage,
sewerage, drainage, airport operations in coordination with the Civil
Aviation Authority of the Philippines, and such other services or
concessions or infrastructure necessary or incidental to the
accomplishment of the objectives of this Act;

e. 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 authorized under 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 Legazpi
Economic Zone, in coordination with the appropriate national and

local government authorities and in conformity with applicable laws;


. Approve plans, programs, and projects of the Legazpi Economic Zone
to be submitted to the Regional Development Council for inclusion in
the regional development plan;

. 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;

. Raise or borrow, within the limitation provided by law, and subject to
the approval 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, issue bonds, promissory notes,
and other forms of securities, and secure the same by a guarantee,
pledge, mortgage, deed of trust or an assignment of all or part of its
property or assets;

|. Protect, preserve, maintain, and develop the forests, beaches, corals

and coral reefs, and maintain ecological balance within the Legazpi

Economic Zone. Notwithstanding the power of the Authority to create

rules for the purpose, the rules and regulations of the Department of

Environment and Natural Resources and other government agencies


m.

involved in the above functions shall be implemented by the
Authority;

Create, operate or contract to operate such functional units or offices
of the Authority as it may deem necessary;

Adopt, alter, and use a corporate seal; contract, lease, buy, acquire,
own or otherwise dispose of personal or real property of whatever
nature; sue and be sued; and otherwise carry out its functions and
duties as provided for in this Act;

Issue certificates of origin for products manufactured or processed in
the Legazpi Economic Zone in accordance with prevailing rules of
origin and the pertinent regulations of the PEZA, the DTI, and the
Department of Finance (DOF);

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
Legazpi Economic Zone, 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 Authority in the establishment of such one-stop

shops;


n. Ensure that the area covered by the Legazpi Economic Zone is secure
at all times: Provided, That the Armed Forces of the Philippines
(AFP) or the Philippine National Police (PNP) shall not interfere in

the internal affairs of the Authority except to provide the ne

ary
security and defense, or law enforcement assistance, as the case may
be: Provided, That expenses of the AFP or the PNP in the Legazpi
Economic Zone shall be borne by the national government;

o. 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; and

p. Exercise such powers as may be essential, necessary or incidental to
carry out, implement and accomplish the purposes, objectives and

policies set forth in this Act.

SEC. 10. Board of Directors. — The Authority is governed by a Board of

Directors composed of:

a.

b.

Administrator as Chairperson; and

Governor of the Province of Albay or authorized representative;

. Mayor of the City of Legazpi;
. Representative of investors; and

.. Representative of local labor or fisherfolk sector, as members.


The Governor or the Governor’s duly authorized representative and the
mayor of the City of Legazpi shall serve as ex officio members of the Board,
whose terms in the Board shall correspond to their terms as elected officials.

The Chairperson-Administrator and the members of the Board, except for
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. No person shall be appointed
as a member of the Board unless the person 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, except the ex officio members, shall cach
receive per diem allowance at rates to be determined by the Department of
Budget and Management in accordance with the existing rules and
regulations: Provided, That the total per diem allowance collected each
month shall not exceed the equivalent of four (4) meetings: Provided

further, That unless and until the President of the Philippines has fixed a


higher rate for the per diem allowance for the members of the Board, the
allowance shall not be more than Ten thousand pesos (Php10,000.00) tor
every Board meeting.

SEC. 11. Organization and Personnel. — The Board of Directors shall
provide for the organization and staff of the Authority. The Board shall,
likewise, appoint and fix the remuneration and other emoluments of its officers
and employees in accordance with the existing laws on compensation and
position classification. The Board shall have exclusive and final authority to
promote, transfer, assign, reassign, or remove officers of the Authority, any
provision of existing law to the contrary notwithstanding. The Chairperson-
Administrator shall execute the decisions of the Board.

The officers and employees of the Authority, 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 Authority, shall be removed or suspended
except for cause, as provided by civil service rules and regulations.

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

a. Direct and manage the affairs of the Authority in accordance with the

policies of the Board;


b. Establish the internal organization of the Authority under such

conditions that the Board may prescribe;

c. Submit an annual budget and necessary supplemental budget to the
Board for its approval;

d. 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. Submit to the Board for its approval, policies, systems, procedures,

rules, and regulations that are essential to the operation of the Leg

Zpi
Economic Zone;

f. 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. Create a mechanism in coordination with relevant agencies for the
promotion of industrial peace, protection of the environment, and the
advancement of the quality of life in the Legazpi Economic Zone; and

h. 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 Authority shall have its own internal

legal counsel who shall be under the supervision of the Government Corporate

Counsel. When the exigencies of business and operations demand, the


Authority may engage the services of an outside counsel either on a case to case
or fixed retainer basis.

CHAPTER IV
INCENTIVES TO ENTERPRISES AND INVESTORS

SEC. 14. Investor’s Visa. — Any foreign national who invests an amount
of Two hundred thousand US dollars (US$200,000.00) in a registered
enterprise, either in cash or equipment, is 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. Must not have been convicted by final judgment of a crime involving

moral turpitude;

c. Must not be afflicted with any dangerous or contagious disease;

d. Must not have been confined in an institution for any mental disorder

or disability; and

e. Must be financially capable as borne out by credible and verifiable

evidence.

With an investor's visa, an alien is entitled to reside in the Philippines
while the investment subsists. The alien investor shall submit an annual report
to prove that the investment in the country subsists. If the alien investor
withdraws the investments from the Philippines, the investor's visa shal!

automatically expire and be withdrawn.


The authority to issue visas and work permits shall remain with the
Bureau of Immigration (BI) and the Departinent of Labor and Employment
(DOLE), respectively: Provided, That the BI and the DOLE shall expedite the

processing of such visas and permits for workers in the Legazpi Economic Zone

and coordinate closely with the Authority.
SEC. 15. Fiscal Incentives. — Registered enterprises are entitled tw
fiscal incentives under Title XIII of the National Internal Revenue Code, as
amended.
SEC. 16. Banking Rules. — Banks and financial institutions in the
Legazpi Economic Zone shall be supervised by the Bangko Sentral ng Pilipivas,
subject to existing banking laws, rules and regulations

SEC. 17. Remittances.— \n the case of

ign investments, a duly
registered entity or enterprise within the Legazpi Economic Zone shall have the
right to remit earnings to its investors in the currency in which the invesunent
was originally made and at the exchange rate prevailing at the tine of
remittance, subject to the provisions of Republic Act No. 7653, or the “New
Central Bank Act,” as amended.

CHAPTER V
NATIONAL GOVERNMENT AND LOCAL RELATIONS

SEC. 18. Supervision. — The Authority shall be under the direct

supervision of the Office of the President.


SEC. 19. Relationship with LGUs. — Except as herein provided, the
barangays comprising the Legazpi Economic Zone shall retain their basic
autonomy and identity. The City of Legazpi shall operate and function in
accordance with the framework of the Constitution, the Local Government
Code of 1991, as amended, and this Act.

In case of any conflict among the Authority, the LGU, and the national
government on matters affecting the Legazpi Economic Zone, other than
national defense and security matters, the decision of the Authority shall

prevail.

SEC. 20. Audit.— The Commission on Audit shall assign a full-time
auditor to the Authority.

CHAPTER VI
MISCELLANEOUS PROVISIONS

SEC. 21. Interpretation. —- The powers, authorities, and functions vested
in the Authority are intended to establish national self-sufficiency, promote
national integrity, decentralize governmental authority, and foster effective
relations among the Authority, national government, and LGU. Any contlict in
interpretation shall be resolved in favor of national security and sustainable
development.

SEC. 22. Applicability. — Insofar as consistent with this Act, the

provisions of Republic Act No. 7916, as amended, otherwise known as “Zhe

18


Special Economic Zone Act of 1995,” shall apply to the Legazpi Economic
Zone, including the benefits and incentives to enterprises.

SEC. 23. Implementing Rules and Regulations. — Within sixty (60)
days from effectivity of this Act, the Secretary of Trade and Industry shall, in
consultation with the Secretaries of Economy, Planning, and Development and
Finance, promulgate the neccessary rules and regulations for the effective
implementation of this Act.

SEC. 24, Separability Clause. — If any provision of this Act is declared
unconstitutional or invalid, the remaining provisions not affected shall remain
in full force and effect.

SEC. 25. Repealing Clause. — All laws, executive orders, issuances,
rules, and regulations, or parts thereof, inconsistent with the provisions of this
Act are repealed or modified accordingly.

SEC. 26. Effectivity. — This Act shall take effect fifteen (15) days atier
its publication in the Official Gazette or in a newspaper of general circulation.

Approved,