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, 
(In substitution of S.U. No. 2472) 
Prepared by the Coinniittccs on Econoiiiic Aflairs; Local Govemnient; Ways and 
Means; and Finance with Sciiators Enrile, IXoxas, Lim, 1 L e ~  
and Drilon 
as authors thercof. 
m C  
I 
” 
AN ACT 
ESTABLISHING A SPEClAL ECONOMIC ZONE IN THE PROVINCE OF 
NOIZTllICRN SAMAR, CREATlNG FOR TI1 E I’URI’OSE THE NORTHERN 
SAMAR Sl’EClAL ECONOMIC ZONE AUTHORITY, APl’ROPRIATING 
FUNDS TIIEREFOR AND FOR OTHER PURPOSES 
.Be il enacted by the Sen& 
and House qf Represenlalives of [he Philippines in 
Congyess nssernbled: 
Scctioii 1. Short Title. - ‘This Act shall be known as the “Northern Samar 
Special Economic Zone Act of 2007.” 
Scc. 2. Declrrrntion qf‘Policy. - It is hereby declared the policy ofthc State 
to actively encourage, promote, induce, and accelerate the sound and balanced 
industrial, economic and social dcvelopnient of the country in order to provide jobs to 
tlie people, especially those in r~iral areas, incrcase their productivity and their 
individual and Family iiicoine, and thereby iniprovc the lcvcl and quality of their 
living conditions through the eskiblishnie~it, among others, of special econoinic zones 
in suitable and slrategic locations in the country and tlirough rneasurcs tllat shall 
effectively attract legitimate and productive foreign investments. 
Sec. 3. Creation qf tire Northern Surnnr Specirrl Econornic Zom. - In 
pursuit of the foregoing declared policy and subject to the coiicurreiice of tlie 
conccriicd local govcrnincnt units of Northern Samar aKcctcd by the zoiie, tlicrc is 
hereby cslablishcd a Special Econonlic Zone, hereinafter relerrctl to as the Norlhern 
Saniar Ikozonc. ?‘he Northcrii Samar ficozone shall cover tlie entire arca eiiibraccd by 
the M~nnicipalities or San Jose, Bobon and Catarman, all in lhe province of‘ Northern 
Samar. The specific inctes and bounds of the Northern Sainar Ecozoiie shall be n1ore 
particnlarly defined in it proclamation to be issued by the l’resident of the l’liilippi~ics, 
upon the rccomn~endation of the I’hilippine Econoniic Zone Authority (I’EZA), 
provided that the laids eiiibraceci therein sllall be public lands. 
Scc. 4. Goverizir?g Prhcip/es. - ‘ h e  Northern Samar Special Econoiiiic Zone 
shall be iiianaged and operatcd by tlie Nortlierii Samar Special Economic Zoiie 


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Authority, herein rererred lo as the NSSEZA, created under Section IO of' this Act, 
under tlic f'ollowi~ig priaciples: 
(a) 
Within the fimicwork and limita[ioiis of' tile Coiistitutioii arid 
applicable provisions of the Local Goveriniient Code, tlic Norlhern Sainar Ecozo~ic 
shall be developed into and operated as a decentralized, self-rclimt a i d  self-suspai11jq 
industrial, com~nercialitrati~ig, agro-industrial, tourist, ballking, fiuancial and 
iiivestmeiit center with suitable rcsidciitial areas. 
(b) 
The Northern Sainar EcoLone shall bc provided with transportation, 
telecommuiiicatio~is and other facilities needed Lo aliract legiiirnate and productive 
investments, generate liulcage industries and employment opportunities roc the people 
of the Province of Northern Samar and its iieigliboring towns and cities. 
(c) 
The Northern Saiiiar Ecozzoiie may establish inutually bciieiicial 
economic relations with othcr eiitities or enterprises within the country or, subject to 
the admiiiislrative guidance of the Department of Foreign ATfairs (DFA), the 
Philippine Economic Zone Authority (I'EZA) and/or the Del~artmeiit of Trade and 
Industry (DIT), with foreign entities or enterprises. 
(d) 
Foreign citizens aud cotnpaiiies owiicd by iioii-Filipinos in whatever 
proportion may set up enterprises in the Northern Samar Ecozone, either by 
tlieinselves or in joint venturc with Filipinos in any sector or industry, interiiational 
trade and coiniiierce within [lie Northern Sainar Ecozoile. 
(e) 
The xeas coinpi-king the Northern Smiar 1:cozone may be expauded 
or reduced when necessary. For this purpose, the NSSEZA, in consultation wilh the 
local govcrunieut units, shall have the power to acquire either by purchase, 
liegotiation or coiideiniiatioii proceedings, any private land within or adjacent to the 
Northem Samar Ecozoiic for the following purposes: (1 ) consoliclation of lands cor 
Northern Samar Ecozone development; (2) acq~~isitio~~ 
or right of way to the Northern 
Sainar 1':cozonc; and (3) the protection of walershed areas and iiatural assets valuable 
to the prosperity of the NorLhcrn Saiirar Ecozonc. 
(0 
Goods manufi~ictured by n Northern Samar Ecozont? enterprise sllall l>c 
made available for iinniediatc retail sale in the doincstic market, subject to the 
payment of corresponding tmes on raw materials and other rcgulatio~is that  nay bc 
forinr~lated by the NSSEZA, togcthcr with the I'EZA, the Burea~i of' Customs and the 
ISI'I, Ilowever, in order lo protcct tlomcstic iudustries, a Negative List of industries 
sh:lIl be dl.awn up and regularly irpdaled by P E A .  Iinlerprises engaged in iiicliistries 
iucluded in such Negative List shall not be allowed to sell their products locally. 
(g) 
The national goveriiment shall n~aintain its abilily to coordi~~ate 
with 
the Northern Sainar Ecozoiie and the local govcr11111elll units. 
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Sec. 5. Iiiceiifives 7'0 Registered Etilerprises. - The Northern Saniar Special 
Economic Zone Authority (NSSEZA) niay atltniiiistcr thc i'oliowing inccntivcs to tlic 
rcgisterccl enteyriscs locatcd Llierein LO the exten( of tlic activity/project: 
(A) 
Income Tax lIoliday (I'fII) - Iiegistercd enterprises shdl be eiilitlcd to 
an income tax holiday fimli tlie start of their commercial operations to tlie extent of 
their activity under the following categories: 
Category A - Registered domestic enterprise located in high1 y developed 
areas, as deteriniiied by the Doud of Investments (130I), shall be entitled to a 
four-year income tax holiday. 
Category I3 - Regislered doniestic enterprise on the following shall be entitled 
to a six-year income tax holiday: 
(1) Located in less developed areas as clefincd by tlie Dol; or 
(2) Producing/rciideriiIg new productsiservices or having strong 
backward or [orward liiiltages 
Category C - Rcgistered export entcrprise shall be entitled to a six- ycar 
income tax holiday: Provided, however, That if the export enlerprise coniplics 
with the following: (1) large capital investnieiils or sizeable ernploynient 
generation, or (2) use high level of technology or (3) located outside Metro- 
Manila, it shall be enlitled to an eight-year iiiconie tax lioljday. 
Registered enterprises cmbarking on new investments that arc listcd in the 
current Investment Prioritics Plan (11'1') shall bc enlitled to incentives providcd herein 
pertaining to the new investiuents and subject to such terms and conditions as the BO1 
may deterniine. 
For this purpose, a registcrcd enterprise shall be defined as any person, natural 
or juridical, licensed to do business in the Philippincs and registered with the Northern 
Samar Special Economic Zone Autliorily (NSSEZA) Lo transact business within the 
Northern Saniar Special Econoinic Zone. A rcgislcred export enterprise shall be 
defined as any registered entcrlxisc engaged dircctly or indirectly in lhe production, 
manufaclure or trade of products or services which earns at least seventy percent 
(70%) of its noriiial operating revcnucs from the sale of its products or services 
abroad for foreign currency. A registered donicstic enterprise, iiieanwhile, shall be 
defined as tiny registered enterprise not Idling Luldcr the definition of a registered 
export enterprise. 
Additional inveslriicnts in the project shall be entitled to the income lax 
holichys corresponding to such invcstincnts as may be delerniincd by tllc BOI. 
Additional income lax IioIitlay may be granted for as long as the invcsln~cnt is liiade 
on the sane project: I+ovicled, That tlic project is listed in the IPP at the samc time the 
additioiial investment in the project is made: Proi~iclec~, 
,fi~r.ther; 'nlat the entitlcmcnt 
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period Tor aclditional investments shall not exceed three times tlie period provided 
under this subsection: Provided h o e v e r ,  That the total I’ll1 period for ail cspc)rt 
ciiterprisc availing of an eight year lTIl shall not cxcecd twenty (20) )/cars. Any 
unused incentives shall thercrore be dcemed lorleitcd if not used during thc incentive 
period. 
Enterprises registered with NSSEZA we required to share in tlie special 
development fund of tlie BO1 for iiivcstniciit promotion projects of the govern~ne~it 
equivalent to one percent (1%) oC the IT11 granted for every application. 
The Bureau of I~ilcrnal Reveiiue (BIR) shall rcquire a registered enterprise 
availing of ITH or Net Operating Loss Carryover (NOKO) to seciire a ccrtilicate of 
eligibility from tlie NSSEZA bcfore subniitti~ig its inconic tax return (ITK) with 
NSSI3ZA for validation. 
Failure to secure certification and/or to lilc the I’l‘li or NOLCO availmetit for 
validation by the NSSEZA within forty-five (45) days froin the last day of each 
statutory filing date for 1°K shall cause tlie forfeiturc ol‘ the availment for the taxable 
period. 
(B) 
Net Operating Loss Carryover (NOLCO) - Net operating loss of the 
business or enterprise during tlie first three years from skirt ol’ commercial operations 
which have no1 been previoitsly offset as deduction from gross income shall be 
carried over as a deduction l’rom gross income for tlie next five consecutive years 
iininediately following the year of such loss: Provided Izowever, That operating loss 
resulhg from availnient of incentives provided in this Act shall not be eiitilled to 
NOLCO. 
Registered entcrpriscs availing of the I‘ll1 as lierein provitled shall no1 be 
eniitlcd to avail of ihe NOLCO. 
(C) Imposition or a tax rate of five percent (5%) on Gross Incoine Earned 
(GIE) - Exccpt for real property tax on land, no local and national taxes as prescribed 
u&r 
Republic Act No. 8424, also bnowii as “The National Intcriial Revenue Codc or 
1997, as Amended” such as iiicome tax, excise tax, and francbke taxes, shall be 
imposed on registered enterprises opcrating within the Northern Sa~nar Ecozone. In 
lieu thereof, five percent (5%) oCthe gross income earlied shall bc paid as follows: 
(a) Thee percent (3%) to tlic national government; 
(b) ‘l’wo percent (2%) shall be remitted by tlic busincss cs~ablislunents to tlie 
treasurer’s office or tlie municipality or city where the entcrprisc is 
located; 
AI1 persons and service establisliments in Lhe Northern Samar Ecozone shall 
-be subjcct to national and local taxes ~uider the National Interi1al Revenue Code of 
1997, as amended, and tlie Local Covcrnment Cock 
A 


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D. Accelerated Depreciation - Accelerated depreciation of plant, machinery 
and equipiient tliat arc rcnson;ibly ncedcil and actually used cor the productirin and 
transport of goods and scrviccs niay bc allowcd using a ratc not cxceeding twice thc 
rate wliicli would have been used had the aniiual allowance been computed in 
accordance with tlie rules and regulations prescribed by tlie Secretary of Filmice and 
the provisions of tlie National Internal Revenue Code (NIRC) of 1997, as amended. 
E. 
Capital Equipment Iiicentivcs - ( I )  Importations of capitd equipincnt, 
spare parts, tools and dye, or those reqnired for pollution abatement and control, 
cleaner production and waste retlnction including coiisigiinieiit thereof by registered 
enterprises upon tlie effectivity of this law, shall be exempted to the extent of OM 
liundrcd percent (I 00%) of tlie taxes and customs duties: Pnwided, That tlie importcd 
itcms tliereof shall be used exclusively by the rcgistcrcd enterprise in its registered 
activity. Proidul, fzwthe/: 'fl~at the importation of machinery and equipinent and 
accompanying parts shall coiiiply \villi the following conditions: 
1. 
comparable quality a d  at rcasonable prices; 
11. 
They are reasonably needed and will be used exclusively by tlie 
registered enterprisc in the nianufacture of ils proo'lucls, unless prior app~ovd 
of the NSSEZA is secured for the part time utilization or said cqiiipnicnt in a 
non-registered activity to maxiiiiize usage thereol' or the proportionate taxes 
a~id duties are paid on a specific equipment and niacliinery bcing pernianently 
i~setl lix non-registered activities; and 
iii. 
the importation of such machinery, cquipnient and spare parts. 
Approval OC the NSSEZA must be secured before any sale, transfer or 
disposition of tlie imported capital equipment, machinery or spare parts is made: 
pro\iicled, That if such sale, transfer or disposilion is iiiadc williin the lirst five years 
from date of importation, any oftlie following conditions must be prese~~t: 
They are not manufactured cloiiiestically in sufficient quantity, of 
.. 
Approval of the NSSEZA was obtained by the registered eiilcrprise for 
1) 
The same is niade to another enlerprise enjoying tax and duty 
exemption on imported capital equipmelit; 
'rile same is niade to another enterprise, upon the payment of any 
taxes and duties OII the net book value of the capital equip~ilent to 
be sold; 
The exportation of llie capital equipnlenl, machinery, spare parts or 
source documents or those requircd lor pollution abatement and 
co11trol; or 
I'roven tecliiiical obsolescence of the said equipment, machinery or 
spare parts. 
2) 
3) 
4) 
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When thc al'orcmentioncd sale, traiisl'er or disposition is iiiade under any of the 
coliclitions providcd l i ~ r  
iii tlic foregoing paragraphs other tlian pmgrapli (2) iicrciii, 
thc rcgistcretl iirni slrall not pay the taxes and duties waived on such itenis: f'/,oikkd, 
ji~rrher, That if the regislered cnterprises sell, t r a d e r  or dispose the aroraiicntioned 
iiiiported items without prior approvnl wilhin five ycars from the date of iiiiportatioli, 
the registered enterprise aiid the vendee, transfcrce, or assignee shall be solitlarily 
liable to pay twice the aniount or the tax and duty exernption given it: I'rovided, 
finirll~: 7'liat even if the sale, transfer or disposition of the capital equipment, 
niacliinery or spare parts is approved arter five years li.oin tlatc of importation, the 
registered enterprises are still liable to pay the tnxes micl duties based on tlie lie[ book 
value of the capital equipnicnt, tnuchinery or spare parts ir any oC the registration 
terms and conditions has been violated. Otherwise, they shall no longer be subjcct to 
the papriieiit ol' the taxes and duties waived thereon. 
(2) 
'I'lie purchase of macliinery, capital equipuicnl, raw materials, supplies, 
parts aid semi-fiiiishcd products to be used in h e  i"ibrication of macliinery and capital 
equipiiient by a registered export-oricntccl cntcrprise from a domcstic niauufacturer 
shall bc subject to .rero percent (0%) value-added tax. 
'l'he registered export-oricntcil enterprisc shall be granled a tax credit 
equivalent to the amount of duties that would have h i 1  waived 011 the machinery; 
capital equipiiieiii; raw tnaterials, supplks, parts a11d scini-linishcd products  sed in 
the fabrication of machinery and capital equipment, had these items bee~i imported, 
npon its submission to the DOT: of the bill or iimtcvials cviclencing tlic transaction 
value of such and other pertinent docunients, for vcrilication and proper eutlorscn~cnt. 
'The availniciit by a registered export enterprise of the incentive slated under 
the iiiiinediately preceding two paragraphs shall be su1)ject to the following 
conditions: (a) That said capital equipment, machincry and spare parts will be used 
exclusively by the registered enterprise in its registered activity; (b) That the capital 
cquipinent or machinery wherc tlie raw materials, supplies, parts and semi-finished 
products were used would liave qiialilied for tax and duty-free importatio~i; and (e) 
That the approval of the NSSEZ,A is obtained by the registered enterprise. If the 
registered enterprise sells, transl'crs or disposes of these machineries, capital 
equipliient alld spare parts, the provision in the preceding paragraphs for such 
disposition shall apply. 
-rllis incentive shall be deeined waived il' application for tax credit under this 
subsection was not filed within oiie year rronl date of dclivery 
F. 
'l'he importation ol' source documents by inl'orlnation tcchnology- 
registered enterprises shall be eligible for tax and duty Cree importation. 
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Cr. 
Itaw Materials Inccntivcs - Evcry rcgislcrcci export-oricnted ciitcrprisc 
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sliall enjoy a tax credit cquivaleiit to the interual rcvciiue taxes and ciistums duties 
paid on thc stipplics, raw inaterials and seini-iiiaiiii~icturcd procl~cts providcd tilt 
same are not sul'Iicient in quantity, quality or arc not competitively priced iii the 
Philippiiics and which are used in the maiiufacturc, processing or prodilctioli of its 
export products forming part thereor, exported directly uiti indirectly by the registered 
export-oriented enterprise, based 011 the actual taxes and duties paid for sucll 
inaterialslsuppliesisciiii-iiiaii~ifactLire[l 
products by the registcred enterprise. 
This incentive shall be deemed waived ii' application Cor tax credit untlcr this 
subsection was not filed witliiii one year from date of exportation of the filial product. 
13. Incentives oii Rrccditig Stocks and Genetic Materials. - Importation of 
breeding stocks and genetic inaterials within ten (10) years Trom the date of 
registratioii of' coiiiiiiercial opcration of the enlerprisc shall bc exenipt froin all taxes 
and duties: Pmiidci4 That such breeding stoc.lts and gc~~etic 
inalerials arc reasonably 
iieedcd in the registered activity; and approvcd by the NSSEZA. 
?'lie availiiient of the iiicentivcs by the registered enterprise shall bc subject to 
the following: (a) that said breeding stocks and genetic inaterials W O L I ~ L ~  have bceii 
qualified for tax and duty-free iiiiportation under the pre~cdiiig paragraph; (1)) that the 
breeding stocks aiid genetic inaterials arc reasonably needed in thc registered activity; 
(c) that approval of the NSSEZA has bccit obtained by the rcgistered enterprise; and 
(d) that tlie purchase is tnatle within ten (10) years Troin the date of registration oT 
coinmcrcial operation of the registered enterprise. 
This incentive shall bc dccnicd waived if application for tax credit untlcr this 
subsection is not filed within one ycar from date of deiivcry. 
I. Exemption from WharPage DUX - The provisions o l  Pawn to the contrary 
notwitlistaiidiiig, exports by a rcgistered enterprise shall be exempted from wharfage 
ducs. 
J. Deterred Imposition oT the Minimum Corporate Income Tax. - The 
Milrimuiii Corporate Income Tax (IvlCIr) of two percent (2%) of the gross iiicome as 
of the elid of the taxable year shall be imposed when the MCIT is greater than the 
iiicoiiie tax coiiiputed under the NIRC or 1997, as amcnded, for the taxable year: 
projli&d, ho\qever, That said MCK shall be imposed only arter the enterprise's 
entitlement period to the inconic tax-based incentives has expired 
I<. 'l'ax lrcatiiient of Merchandise in the Nortlicrii Sainar Ecozonc. - 
a. Doiilcslic merchaiidisc sent from the Northern Sainar Ecozone to arcas 
outside the said Ecozotie shall, wlietlier or not coiiibined with or made 
part of othcr articlcs liliewise of local origin or i i i a ~ i ~ i f a c t ~ i ~ ~ ~ l  
in the 
Philippines while in the export processing zone, be subjcct to internal 


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C. 
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revcniic laws of the I'liilippines as domestic goods sold, transferred or 
disposed ol' fw local consumption. 
Mcrcliaiitlise sent froin the Nurlhcrn Saniar I~cozoiic lo arcas oiiisidc 
tlie said Ecozonc shall, wbetlier or not coiiibiiicd with or macle part or 
other articles while in the zone, be subject to rules a i d  regulations 
governing iiiiportcd ~iiercliaudise. Tlie cluties and taxes shall be based 
on tlie value oc said iiiiported niatcrials (except when the h a 1  product 
is exempt). 
Articles produced or nmnufaclwcd iii the Nortlierii Saim Ikozone and 
exported tlierefroiii shall, on sul~seque~it 
importation into tlie custorns 
territory, be sub.ject to the import lavvs applicable to like articles 
nianuhcturcd in a forcign country. 
Unless the contrary is shown, iiiercliaiidise talien out of the Northern 
Saniar Ecozone shall be considered h i -  tax purposes to have been sent 
to ciistonis territory. 
Tax Treatment ol" Raw Materials and Capital Ec~uipment in tlic 
Northern Sariiar Ecozonc. - Iiiipochtions or raw iiiatcrials and capival equipment shall 
be treated as in the Omnibus Investments Code. Registered export orieiitcd enterprise 
shall have access to the utilization of the boiided warehousing system in accordance 
with tlic rules arid regulations of the Bureau ol' Customs. 
M. 
Ei~~ploynieiit 
ol' Foreign Nationals. - Subject to thc provisions of 
Section 29 of Comn~on~vealth 
Act No. 613, as arncnded, a registered enterprise niay 
employ foreign iiatioiials in supervisory or technical posilions for a period not 
exceeding ten (1 0) years liom its rcgistration: i'/,ovided That when the majority of 
the capital stock of a registered enterprise is owned by foreign investors, the positions 
of the prcsiclent, treasurer and gciieral iiiaiiagcr or their equivalents ii~ay bc rclaincd 
by foreign nationals beyond tlic pcriod set for111 herein and such offiicer is tlie owner 
or a stocliliolder owning at least ten percent (10%)) oI' the outstandiug capital stock of 
the registered enlerprisc anti he remains the owiicr or riiaintains his stocliholdirigs 
therein. 
Foreign nationals under employment contract within the purview of this 
incentivc, ilieir spouses and unniarrieci cliildren under twenty-onc (2 1) ycars o f  age, 
who we not excluded by Section 29 of Commonwcdth Act No. 613, as amended, 
shall be permitted to eiitcr aiid rcsidc in the Philippines during tlic period of' 
e~iiployment oI' sucli foreign natioiials. They sliall be entitled to a mulliplc entry visa, 
valid lor a period of three ycars, and shall be allowed to enter and leave the 
Philippines without fuiilier documentary rcquirenients other tliaii valid passports or 
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oilier travel clocuriicnts in the nakirc of passporis. 'The validity of thc iiitiltipli: entry 
visa shall be estencliblc yearly. 
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Tlie said forcign natioiials admitted undc:r this provision, as 
as their 
respective spouses and dependents shall he ex.enipt from: 
(a) obtaining aliell 
certificate of registration and immigration clearamx certificates; and (b) securing tile 
Alien Employment Permit (AEP) atid all types of c:learances, permits, licenses or tlleir 
equivalents required by any government departmel-it or agency. 
SCC. 6. Iiicentive fo Invesfors. - Any foreign national covercd ulider 
Subsection (M) of Section 5 of this Act, who invi. ' 's an ainount of US $ 150,000.~0, 
either in cash and/or equipment, in a rcgistereo: ciiterprise dial1 be entitled to 311 
investor's visa: Provided, l'hat, 
(1) He is at least eighteen (1 8) years of age; 
(2) IIe has not been convicted oEa crime involvii,g moral turpitude; 
(3) IIe is not afilicted with any loathsome, dank.$ :TOLIS or contagious disease; 
and 
(4) IIe has not been institutionalized Tor any nieiital disorder OT disability. 
.Provided, 
filrlher; 'That in securing thc investor's visa, 11 ie alien-applicani shall be 
enfitled LO the same privileges provided for under paragraph (M), Section 5 hereof. 
As a holder of investor's visa, an alien shall I-I~: 
entitled to reside in the 
Philippines while liis investiiieiit subsists. For this p~ii-:~ose, 
he should submit an 
aiiiiual report, in the [orin duly prescribed for tlie ptii jiose, to prove that he has 
iiiaiiitained liis iiivestmcnt in the country. Slioulcl said alii II withdraw liis investnients 
from the I'liilippines, then the investor's visa issued to hili; shall autoinatically expire. 
SCC. 7. A(liiiiitisfr.crtioii, Zinpleutenfrrtioii crrul Al.oiritoriiig of' Ztncnitive.7. - 
The NSSEZA shall bc responsible for the adlniiiistralion m d  inip1cmentation of the 
incentives granted to its rcspectivc registered enterpri 
P mvided, l'hat any 
incentive aclininistration policy aclopled by tlie BO1 for regi:;tered cnterprises shall be 
unifomily applied by NSSEZA. 
Tlie following are the dutics and responsibilities of the NSSEZA in the 
adiiiinistration or incentives: 
(A) To adopt consistcnt procedures of adininistering incentives in 
accordance with the gtiitlelines csiablislictl by thc BOI; 
-10 adopt and implenicnt systems and procedures affecting trade :tiid 
cusio!ils policies in accordance with thc requiremenls established by the 
(B) 
Dcpart11mt orFinance (1101:) and the BOI; 
To sublilit inforination on registercd entcqirises to the 1lOF and the BO1 
as required by ally of these agcncics to ascertain consistency of 
ilivestrrlerlt policies and incentivcs, iiiciucliiig their implciliciitalion as 
(C) 
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provided in paragraph (a) herein, and to ensure proper ii nplemcntation of 
systems a d  procctlurcs al'l'ccting tratlc and custoiiis pollicies as provided 
iii paragraph (b) hercin; a ~ ~ c l  
To perform all other duties :uicl responsibilities as 111 ~y be required by 
the President or the Philippines. 
(I)) 
i:or proper monitoring, the BO1 shall create a single databa, .c: of' all incentives 
provided by nll incenlives granting ageiicics, including NSSIZA, :,ui 
all information 
thereto. Double entry accounting sllall be clone by the I301 in recc !ding all incentives 
granted by the goveriiiiiciit for transparency purposes. 
Scc. 8. Extension of Period ofAvailr,zerit. - The avaiiiueiit period of the 
incentives provided herein may be extended by NSSEZA, ira the event tliai the 
registered enterprise sufrers opcrational force mujezire or any evc'iit equivalent thereto, 
impairing its viability, provided that tlie availmelit period shall not exceed the 
duration of the saidforce ,najeure or equivalent event. 
Scc. 9. Drwafioir qf Zircefhes. - Enterprises registerixl with NSSEZA may 
enjoy 17'11 or NOLCO granted by the latter prior to the availmcnt of 11ie live percent 
(5%) GIE. 
Fiscal incentives uiider this Act shall be teriiiiiiated aficr a cu~nulative period 
of tweiily (20) years from dale of registration or start or commercial operation, 
whichever is applicable, except that it could be extended 
:,!I regard to iildustries 
deemed iiidispciisable to national tlevelopmcnt. 
The industries exenipted from this provision shall be recomiieiided by 1301, 
with the coiiciirreiicc of the Secretaries of the Department of Finance and Trade and 
Industry. 
Scc. 10. Crenfion of the Nortlrerrr Sartirrr Speciul Ecoconoirric Zone Arrthorify. 
- There is hereby created a body corporate to be Itiiown as (lie Nortliern Saiiiar 
Special Ikotiomic Zone Authority, herciiiafter referred to as the NSSI-:ZA, wliicli 
shall matiage and operate, in accordiiiice with tlie provisions or this Act, the N o r h x i  
Samar Special Economic Zone. l'liis corporate franchisc slmll expire in fifty (50) 
years counted from the first clay of the fifth (5'") calendar year alter the effectivity oC 
this Act, unless otherwise exteiidccl by Congress. It sllall be organized wilhin one 
11L~litlrcd eighty (1 80) days al'ter the effectivity of tliis Act. 
SCC. 11. Prirzcipcrf Ojfice of 
NSSEZA. - The Nortlicrii Samr Specie1 
I;cono~nic Zone Authority shall niainlain its principal orlice in the Municipality of 
Catarman, Province ol' Northern Samar, but it iiiap establish braiclies within the 
Pllilippincs as may be necessary for tlie proper conduct of its busiriess. 
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SEC. 12. Powers and Fiitictiotis of the Northern Snninr Specinl Eeoiroinic 
%me Ai~thuri(i~ 
- 'I'llc Nortlierii Siiiiiar Spccial Ico~iu~iiic 
Zonc ,4~1tliori~y 
sliall hiicc 
the Following powci 
(a) 'lo operate, adiuinister, manage alid develop the Nortlierii Samar Ecozone 
according to the principles and provisions set forth in this Act; 
(b) '1'0 register, regulate a i ~ d  supervise the enterprises in the Northern Samar 
Ecozone in an erficiciit and tlccciitraliz,cd manner, subject to existi tig laws; 
(c) To coordinate with local goveriiiueiit units antl excrcisc gciicral 
supervision over the development plans, activities and operations ol the 
Northern Saiiiar 13cozoiie; 
((I) To regulate and uiiclcrtalie the establishment, operation arid maintenancc 
of utilities, otlicr services and infrastructure in tlie Nortlierii Satliar 
Ecozoiie such as but not limited to h a t ,  light and power, water supply, 
teleconiiniiiiicatioiis, transport, toll roads and bridges, port services, etc. 
and to lix just, rcasoiiable and compelitive ratcs, lares, charges antl prices 
thereat, 
(e) To construct, acquire, OWII, lease, opcrale and maintain on its own or 
through contracts, franchise, licenses, bull< purchase froni the private 
sector or permits uiidcr any of tlie schciiics allowccl in Itepublic Act No. 
6957 (the 13tiild-Opeiate-l'aiisrer Law, as anicnded by RA 771 S), or joint 
venture, aclequatc Cacilities and inlraslructurc required or neeclccl for the 
operation and dcvelopiilcnt of the NoIthcm Samar Ecozo~le, in 
coordination with appropriate iiatioiial and local goveriiincnt atithoritics 
and in collCorriiity with applicable laws thercon; 
(I) 
To operate on its own, cithcr directly or through a license to other 
tourism-related activities, iiicludiiig games, amuscniciits, recreational and 
sports facilities; 
(g) Subject to tlie approval or the President ond the Monetary I3oaid or the 
I>a~igko Sentriil iig Pilipinns upon tlic rccoinmeiitlatioii 0 1  thc ~Cp~II'tlllCJlt 
or Finance, to wise oi- borrow adcqiiiitc and necessary ruiids Troni local or 
foreign sources to finance its projects atid programs under this Act, and 
for that purpose to issue bonds, promissory notes, and other forms of 
securities, and to secure the saiiie by a gumntee, pledge, mortgage, deed 
oftrust, or an assigiiiiiciit oi'all or part of its property or as~ets; 
(11) To protect, preserve, iriaiiitaiii and dcvclop the virgin forests, beaches, 
coral alid coral reek and maintain ecological balance within the Northcri1 
Saiiiar Ecozoiic; 
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(i) To create, operate aiid/or coiltract to operate such fuiictional unils of 
oCliccs ofthc NSSEZA as it may ileein necessary; 
(j) 'Yo adopt, alter and use a corporate seal; iilakc contracts, lwxs, own, or 
otherwise dispose of' personal or real property; sue and be suecl; and 
otherwise carry out its I'iuictions and duties as provided for in this ~ c t ;  
(IC) 'To issue certificates oC origin for products nmiuFktured or processecl in 
the Northern Saiiia Ecozone in accordance with prevailing rules of origin, 
and the perliiiciit regulations of the PEZA, UTI and/or the Department ol' 
Finance (DOF); 
(1) To issue working visas rene\vable every two (2) years to foreign 
executives and foreign technicians \villi higlily specialized sltills which no 
Filipinos possesscs, as certified by the Departnieiit of Labor and 
Employment; 
(m) 
To report to the Bureau of Inimigration tlie iiauics of tlie Coreigiiers who 
have been graiitcd periiiancnt residciit skutiis and working visas witliin 
thirty (30) days after issuance of such grant; 
(11) TO cxcrcise such powers as iimybc cssciitial, iiecessury or incidental to the 
powers granted Lo il hereuuder as well as those that shall enable it to carry 
out, implement and accoinplisli the purposcs, ohjectivcs and policies of 
this Act; and 
(0) 1'0 issue rules aiitl regulations coiisistciit with the provisions ol' Lliis Act as 
maybe necessary to accoinplisli aid iii1plelnent the purposes, ob,jcctivcs 
and policics provid~d hcrcin. 
Sec. 13. Bnnking Rules nnd Xegrrlntions. - Existing laws and rulcs/rcgulations 
of the Uanglro S e m d  ng f'ilipims (BSP) shall apply to banlts and linan~ial 
iiistituiioiis to he established in the Northern Samar Ecozone, such as thosc govcriiing 
fcxeign cschange and othcr concurrent account tralisachis (trade and non-tradc), 
local and foreign borrowings, foreign investments, eslablisliiiient and operation of 
local and foreign banlts, foreign currency deposil units, olTshore hadting units i
d
 
other linaiicial institutions under the supervision oI' the BSP. 
Scc. 14. Nenlitiuilcc of Earnings. - In the cilse of foreign investnieiits, a 
registered eiitcrprise in the NSSEZA shall have tile right to rcmit earnings fro111 the 
in\iestliicnt in the currency in wliicli tlic iiivestnieiit \vas origidly made and at the 
exchauge rate prevailing ai the time of remittance, subjcct to the provisiolis or Section 
74 ofRepublic Act No. 265, as amended. 
Sec. 15. Uoarrl of Directors of tlie Northern Saninr. Speciul Econolnic Zone 
AcltlturitJ,. - ,171~ powers of thc Northern Sainar Special I~commic Zone Authority 
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sliall be vested in and exercised by a 13oard of Directors, hereinafter referred to as the 
-Boarcl, which sliall be comq~oscd ofthc following: 
a) The Chairman who sliail, at the same tinic be tIic adininistrator oi the 
NSSEZA; 
b) A Vice-Chairinan who shall come from among the members of the Board; 
c) Members consisting of 
(I) The Governor 0 1  the Province oL‘ Northern Samar; 
(2) ‘llic Congressional Representative of the district covering tlic site 
of the Norllierii Samar Ecozone; 
(3) The mayors or the Municipalities of Sa1 Jose, Bobon and 
Catarman, Province of Nortlicrn Samar; 
(4) Onc (1) representative f m n  tlic doincstic investors; 
(5) One (I) rcpreseiitative koin the foleigii investors; and 
(6) Two (2) rcpresentalives froin the worlters working in Northern 
Saniar Ecozoiie. 
The Governor, lhe Congressional representative and the mayors of tlie 
Municipa1itie.s of Sail Jose, Bobon and C’Vai-nian, Prvvince of Northern Sarna shall 
serve as ex-officio membcrs of the Board, whose term in tlic Board corresponds to 
their term as elccted officials. 
The Chairnian and tlic members of the Board, except the ex-@cio nicmbers, 
shall tic appointed hy the President of tlic Philippines to serve for ti term uC six (6) 
years, tinless sooner separated from service due to death, voluntary resignation, or 
removal for cause. In case oC death, resignation or removal for causc, the rcpliicement 
shall serve only the uiiexpircd portion of the term. 
Except for the representatives of the busincss and labor sectors, no pcrsoi1 
shall be appointed by the President ofthe Pliilippines as a 11icinber of tile Board unless 
he is a Filipino citizen, of good iiioral cbaracter, of proven probity and iiitcgrity, and a 
degrcc-holder in any of the followiiig Gelds: 
ccono~~iics, busincss, public 
administration, law, ~nanagenient or their equivalent, and with at least ten ( I  0) )rears 
relevant working expcricnce preferably in the field of mai~agcment or public 
administration. 
Thc Members of the L3oarcl shall each receive per diem at rate to be 
deterliiined by the Del~artmcnt of Budget and Managen~ent in accordance with 
existing rules and regulations: ProvideLl, how eve^, That the total per diem collected 
eacli liionth sliall not exceed the equivalent pei’ tliem for four (4) n1eetings. Unless 
a~id Llntil the l’resident of the I’liilippines has fixed a higher per diem for the members 
o l  the board, such per diem shall 1101 be more than ten thousand pesos (Pl0,OOO.OO) 
for every Board meeting. 
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See. 16. Pinons crud Duties of the Cliaivnza/?-A~lmi/ii.stv~toc - The 
Chairmail-Admiiiistrato~ sliall have tlie following powcrs and dutics: 
To direct aiid iiianage llie af'f'airs of' the NSSEZA in ac:corciilrice wit11 
the policies of thc lloard; 
'10 establish the iiileriiiil organization of the NSSEZA ulider such 
conditions that the Board iiiay prescribe; 
To submit an annual budget and necessary suppleiiiental budget to 
tlie Board ror its approval; 
To submit within thirty (30) days aficr the close of each fiscal year 
an aiinual report to the Board aiid such other reports as may be 
rcq~ii~ed; 
To submit to the Board for its approval policies, syslcms, 
proceclures, rules and rcgulations that are esseiitial to the operation 
of tlie Northern Sainru. Ecozone; 
To crcatc a iiiccllatiism in coorclination with rclcvaiit agencies for 
the promotion of industrial peacc, tlie protcction of the environment, 
and the advanceiiient of the quiility or lire in the Northern Sainar 
Ecozone; and 
To perform such other duties as map be assigned to him by the 
Board or which arc iiccessary or incidental to his office. 
Sec. 17. 
Ovganiznticm crnd Personmf. - l'he Board of Directors of' the 
NSSEZA shall provide for ail orgaiiizalioii and stafl' or its dIicers arid cniployees. 
Upoii rccomiiiendatioII~itioii of the Chairillan-Adiiiiiiistra~or, tlie Board shall appoint aiid 
fix tlie remiineration and other cmolumciits of its orhers and ciiiployees in 
accordaiice with existing laws on coiiipeiisation and position classification: P7.0videU: 
That the Board shall have exclusive arid final authority to proiiiole, transfer, assign or 
reassign officers of the NSSIZA, any provision of existing law to the conlrary 
notwitlistanding: f'/nvidecl fiu%/w~, 
lhat tlie Chuiriiiali-i\ilminislrator may carry out 
removal of such officers and ciiiployees. 
The olficers and employees of the NSSEZA, iiicludiiig all Meiiibcrs of the 
Board, slid1 not engage directly or iiidirectly in partisan activities nor tiike part in ally 
election, except lo vote. 
No of'ficer or employee of tlie NSSEZA, sub,jcct to Civil Service laws slid 
regulations, shall be rciiioved or suspended except for causc, as provided by law. 
SCC. 18. Ipso Facto Clciiise. - Sectioiis 30-41 or Republic Act 7910, shall il,so 
facfo apply io the Northern Smiar Special I~coiiomic Zone. 
Scc. 19. 
Capitnfiznliorr. -- The Northern Saiiiar Special Ecoliomic Zone 
Authority shall have an authorized capital stock of One Billion ( I  ,000,000,000) 110 IJZir 
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shares with a iiiiniinuni issue of Ten Pesos (P10.00) each, the majority shares of 
which sliall be subscribed and paid For hy die National Governiiieiit and tlic 1,ocal 
Govcriinient Uiiils (LCi Us)  embracing^ the Nortliem Samar Spccial ficonoinic Zoiic. 
Tlie Board of Directors of the NSSEZA may, with the written concurrence of the 
Secretary of Finance, sell sharcs, represcliting 1101 inore than lorty per ceiitinil (40%) 
of tlie capital stock ol" thc NSSEZA to the gciierd public iiiider such policy as the 
Board and the Secretary of Fiimncc may determine. The National Goveriinicnt and tlie 
LGIJs slid1 in no case own lcss than sixty per centuni (60%) or the total issued and 
oiitstaiiding capital oftlie Northern Sainilr Special Econoinic %one i\uthority. 
,. 
Ilie amount necessary to subscribe and pay for tlie shares of the National 
Government to tlie capital stock of the NSSEZA shall be included in the Annual 
General Appropriations Act. For LGUs, the fuiicls shall be talten ~rom their intcriial 
revenue allotiueiit and other local runcls 
See. 20. Siipervisioit. - TIie Northcrn Saiiiar Speciitl Econoinic Zone shall he 
under the direct control and supervision of the Philippine Economic Zonc Authority 
(PEZA) for purposes ol" policy direction and coordination 
Sec. 21. Rel[rtioizslrip witli /lie Regional Devek~pzertt Council. - The 
Northern Saiiiar Special Ecoiioinic Zone Authority shall determine the developnicnt 
goals for the Northern Saiiiar Ecozoiie within tlic fuaiiieworlc of' iiatioiial development 
plajis, policies and goals. The Adiiiinistrator sliall, tipon approval by tlie Board, 
suhmit the Northern Saiimr Ecozone plans, prograiis and projects to the Regional 
~evclopmcnt Council for inclusion iuid inputs to the overall regional devcloplnent 
plan. 
See. 22. Rd(~tioiis1iip with Locd Goverrtnzciit Units.- 
Except as 11crcin 
provided, tlie local goveriiiiient units comprising the Northern Satnm Special 
Economic Zone shall retain their basic autonomy arid identity. The Municipalities of 
Sa11 .rose, Uabon and Ctitnmiali sliall operate and function in accordance wih the 
Local Goveriinicnt Codc of 1991, In case oC any connict bctween the NSSEZA and 
the Proviiice of Noi-thern Saiiiar on matters affecting the Northern Samar Ecozone 
other than defense and security niatters, the decision of the NSSEZA shall prcvail. 
See. 23. Z~rterjure/ntioi~/C~iCor2st,.uction. 
- The powers, authorilics and liiiictioiis 
that are vested in the NSSEZA are intended to decentralize governniental l~inctions 
alld authority and promote an cl'licient aiid elkciivc working relationship between the 
Northern Samar Ecozone, the NG, 
and the local goveriunent units. 
See. 24. An(/ifin~g. - The Conimission on Audit sliall appoint a representative 
who shall be a full time auditor of the NSSEZA and assign such nulnber of pcrsoiiiiel 
as may be necessary to assist said rcpreseiitative in the perfurniance of Iiisiher duties. 
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Ihc salaries aiid eniolunienk ULI ti~c assigilcil auditor and persunncl sl,ail be in 
:iccorhcc: w i h  pcrliiiciit laws, rulcs m c i  rcgiilakmi 
Sec. 25. Sqmrilbilily Ckiiise. - lr any provisioiis of Lliis Act sirall bc hdd 
iincoiistilutioiial or invalid, the other provisions  no^ otherwise affected shall remain in 
MI h c e  and efrect. 
Sec. 26. Repealing CIrruse ~ All laws, esecutivc orders and issuances, or any 
parts tllercof, which are iilcoiisisteiit hercwith mc licreby repealcd or amended 
accordingly. 
SCC. 27. E;fccfii)if.y Clmise. - TICS Act shall lalcc efCcct upon its publication in 
at least one (1) newspaper of geiieral circulation. 
Approved, 
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