FOURTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPHPINES 
) 
7 J1.t -4 P ,’ r-p 
First Regular Session 
1 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
This bill mandates the establishment of an economic zone and free port in Jolo, Sulu to 
promote and hasten the industrial, economic and social development in the area. 
Republic Act No. 7916, also known as the ”Special Economic Zone of 1995”, encourages 
economic growth through the creation of special economic zones or Emzones. Each ecozone is 
developed into an independent community with minimum government supervision. There are 
four types of ecozones: industrial estates (IEs), export processing zones (EPZs), free trade zones 
and tourist and recreational centers. The Bases Conversion and Development Act of 1992 created 
several areas such as the Subic Naval Base, Clark Air Base and Camp John Hay into special 
economic zones. These areas drew in investors which allowed them to be self sustaining and 
developing communities. 
, 
Jolo is located in the island of Sulu. It is geographically situated and can be utilized to as 
a dock for local and international vessels. The center of the Royal Sultanate of Sulu, it was once 
a thriving city even before Manila was declared a city. It is a third class municipality yade up of 
eight barangays. In the 2000 Philippine Census, the municipality had a population of 87,988 
people from 12,814 households. Because of the increasing military operations in the area, an 
increasing number of people are leaving the area. In 2005, an estimated 12,000 people fled, 
affecting the economic and social conditions of the area. Cleaily, necessary measures are needed 
to prrmote the economic and industrial advancements in the area. 
This bill answers the need for development in the area through the creation of a special 
economic zone and free port. It shall be managed and operated by the Sulu Special Economic 
Zone and Free Port Authority (SSEZA) headed by a board of directors. The Secretary of the 
Department Trade and Industry, the Director General of the National Economic Development 
Authority or their respective representatives will serve as ex-officio members of the board. 
This measure allows foreign individuals and organizations to invest in the zone. 
Investors shall be granted incentives such as resident status and visa, fiscal incentives and tax 
exemptions. 
Finally, the bill provides the SSEZA an authorized stock of two billion (P2,000,000,000) 
no par shares with a minimum value of ten pesos (P10.00) each. The National Government shall 
own no less than 60 percent of the said capital stock. 
For these reasons, the passage of this bill is earnestly sought. 
OdP 
LOREN LEGARDA 
Senator 


FOURTEENTH CONGRESS OF THE REPUBLIC 
) 
7 
OF THE PHILIPHPINES 
) 
i 
\IN -4 
First Regular Session 
) 
Introduced by Senator Loren Legarda 
AN ACT 
CREATING A SPECIAL ECONOMIC ZONE AND FREEPORT IN SOLO, SULU, 
CREATING FOR THIS PURPOSE THE SULU SPECIAL ECONOMIC ZONE AND 
FREE PORTAUTHORITY, APPROPRIATING FUNDS THEREFOR, AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
Section 1. Title. This Act shall be known as the "Sulu Special Economic Zone 
and Free Port Act 2007". 
Sec 2. Declaration of State Policy and Principles. It is hereby declared the policy 
of the State to actively encourage, promote and accelerate a sound and balanced 
industrial, economic and social development of the country in order to provide jobs to 
people, increase productivity and income, and improve the quality of living condition 
through the establishment of special economic zones and free ports in suitable and 
strategic locations in the country and through measures that shall effectively attract 
legitimate and productive foreign investments. 
It is likewise the policy of the State to enhance regional economic cooperation as 
a means of bolstering the country's own industrial development, and to establish 
facilities with such cooperation can materialize. 
Sec 3. Creation of Sulu Special Economic Zone and Free Port. In pursuit of the 
foregoing declared policy, there is hereby established a special economic zone and free 
port in Jolo, Sulu, to be known as the Sulu Economic Zone and free Port herein referred 
to as the Zone. 
Sec 4. Government Principles. The Sulu Economic Zone and Free Port shall be 
managed and operated by the Sulu Special Economic Zone and Free Port r-athority, 
herein created and referred to as the SSEZA, under the following principles: 
(a) Under the framework and limitations of the constitution and applicable 
provision of the local Government Code, the Zone Shall be development into 
and operated as a decentralized, self-reliant and self-sustaining industrial, 
commercial / trading, agro-industrial, tourist / recreational, banking, 
financial and investment center with corresponding residential areas in order 
to create employment opportunities in and around and to effectively 
encourage and attract legitimate and productive foreign investment; 


(b) Except as otherwise provided herein, the local government units totally or 
partially embraced within the Zone shall retain and maintain their basic 
autonomy and ickntity. The Municipality of Jolo shall operate and function in 
accordance with Republic act 7160, otherwise known as the Local 
Government Code of 1991, insofar as the areas within its jurisdiction covered 
in this Act are concerned. 
(c) The Zone shall be managed and operated as a separate customs territory 
outside the customs territory of the Philippines to ensure and facilities the 
free flow or movement of machinery, goods, articles and capital within, into 
and exported out of the Zone. However, exportation or removal of goods, 
articles and capital from the Zone to other parts of the Philippines territory 
shall be subject to customs duties and taxes under the Customs and Tariff 
code and other relevant tax laws of the Philippines. 
(d) The areas comprising the Zone may be expanded or reduced when necessary. 
For this purpose, the SSEZA, in consultation with the local government units, 
shall have the power to power to acquire either by purchase, negotiation or 
condemnation proceedings, any private lands within or adjacent to the Zone 
for the following purpose: 
(1) consolidation of lands for zone development; 
(2) acquisition of right of way the Zone; and 
(3) the protection of watershed areas and natural assets valuable to the 
prosperity of the Zone. 
(e) the Zone shall be provided with transportation, telecommunication, and 
other facilities needed to attract legitimate and productive foreign 
investments, generate linkage with industries and create employment 
opportunities for the people of the province of Sulu. 
(f) the 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 (DFA), the Philippines 
Economic Zone Authority (PEZA) and/ or the Department of trade and 
Industry (DTI), with foreign entities or enterprises. 
(g) Foreign citizens. and companies owned by non-Filipinos may set up 
enterprises in the Zone either by themselves or in joint venture with Filipinos 
in whatever proportion in any sector of industry, international trade and 
commerce within the Zone. 
(h) Goods manufacture by a Zone enterprise shall be made availsble for 
immediate retail sale in the domestic market, subject to the payment of 
corresponding taxes on raw materials and other regulations that may be 
formulate by the SSEZA together with PEZA, the Bureau of Customs and the 
DTI. However, in order to protect the domestic industry, there shall be a 
negative list of industries that will be drawn up and regularly updated by the 
PEZA. Enterprises engaged to industries included in such negative list shall 
not be allowed to sell their products locally. 


(i) The defense of the Zone and Security of its perimeter fence shall be the 
responsibility of the national government in coordination with the SSEZA 
and local goverrieient units. 
SEC 5. Incentives. Investors and business enterprise within the Zone shall be 
entitled to the following incentives: 
(a) Resident Status and Visa - Any Foreign investor who establishes a business 
enterprise within the Zone and who maintains capital investment of not less 
than One Hundred Fifty Thousand United States Dollars (US$l50,000.00) 
shall be granted, along with his or her spouse, dependents, and unmarried 
children below twenty-one (21) years of age, permanent resident status 
within the Zone and freedom of ingress and egress to and from the Zone 
without any need of any special authorization from the Bureau of 
Immigration. Working,visas renewable every two (2) years shall be issued to 
foreign executives and foreign technicians with highly specialized skills 
which no Filipino possesses, as certified by the Department of Labor and 
Employment. 
The foregoing is without prejudice to a foreigner acquiring permanent 
resident status in the Philippines in accordance with applicable immigration, 
retirement, and other related laws. 
(b) Fiscal Incentives - business establishments within the Zone shall he entitled 
to the existing fiscal incentives as provided for under Presidential Decree No. 
66, the law creating the Export Processing Zone Authority (EPZA), or those 
provided under Book VI of Executive Order No. 226, otherwise known as the 
”Omnibus Investments Code of 1987”, and Republic act No. 7916, otherwise 
known as the ”Special Economic Zone Act of 1995”, as amended by R.A. 8748. 
(c) Taxation - Except for real property taxed on land owned by the developers, 
no taxes, local and national including final withholding taxes on dividend to 
a business establishment’s parent company and branch profits remittance to a 
business establishment’s head office, shall be imposed on business 
establishments operating within the Zone. In lieu thereof, said business 
establishments shaII pay to the national government a final tax of eight 
percent (8%) of the net taxable income as determined in accordance with the 
provisions of the National internal Revenue Code, as amended, to be divided 
as follows: 
(1) Four percent (4%) shall be paid immediately to the National 
(2) One percent (1%) 
to the Province of Sulu; 
(3) One percent (1%) 
to the municipality of Jolo; 
(4) Two percent to the Sulu Special Economic Zone and Free Port 
Authority which shall be created under this Act; Provided, ho~ueueu, 
That the preferential tax herein granted shall not apply to offshore 
banking, financial services, trust and trading institutions which shall 
enjoy total exemption from payment of income tax for purely offshore 
transactions as well as transaction within the Zone itself with SSEZA 
investors and residents; Puouided, fivtheu, That domestic manufacturing 
firms or foreign firms and their local subsidiaries that export more 
than thirty percent (30%) of their total production in terms of volume 
Government; 


per year to the customs territory of the Philippines shall be allowed to 
enjoy the income tax incentives herein granted; Provided, fi*rtkermore, 
That the final tax of eight percent (8%) of net taxable income be 
increased by Congress after ten (10) years from effectivity of the 
amended tax and fiscal incentives of this Act and; and Prouided, jnnlly, 
That in no case shall the tax be imposed exceed fifteen percent (15%) of 
net taxable income as determined in accordance with the provisions of 
the National InternaI Revenue Code, as amended. 
In cases of conflict between the local and national tax laws on one 
hand, and the tax incentives herein granted on the other, the same 
shall be resolved in favor of the latter.' 
(d) Banking Rules and Regulations - Existing banking laws, specifically 
Presidential Decree No. 1034 and Republic Act No. 6426 and their 
implementing rules and regulations as amended, and pertinent Bangko 
Sentral ng Pilipinas (BSP) circulation, rules and regulations shall apply on 
foreign exchange transactions in the current account transactions (trade and 
non-trade), local and foreign borrowings foreign banks, foreign currency 
deposit units (FCDUs), offshore banking units (OBUs) and other financial 
institutions under the supervision of the BSP; Provided, That FCDUs of local 
commercial banks and OBUs of foreign banks shall enjoy minimum 
regulation by the BSP. 
(e) Profit Remittance - without prior BSP approval, after tax profits and other 
earings or foreign investments in enterprises in the Zone may be remitted 
outward 
(f) In the equivalent foreign exchange through any of the banks licensed by the 
BSP in the Zone; Provided, ko7oever, That such foreign investment in said 
enterprises have been previously registered with the BSP. 
Sec 6. Ipso Facto Clause. Section 30 - 42 of Republic Act No. 7916 shall Ipso facto 
apply to the Sulu special Economic Zone and Free Port. 
Sec 7. Creation of the Sulu Special Economic Zone and Free Port Authority. A 
body corporate to be known as the Sulu Special Economic Zone to manage and operate 
the Sulu Economic Zone and Free Port, in Accordance with the provisions of this Act. 
This corporate franchise shall expire in fifty (50) years counted from the first day of the 
fifth year after the effectivity of this Act, unless otherwise extended by Congress. It shall 
be Organized within one hundred eighty (180) days after effectivity of this Act. 
SEC 8. Principal Office. The Sulu Special Economic Zone and Free Port 
Authority shall maintain its principal office in Jolo, Sulu but it may establish branches 
and agencies within the Philippines and abroad as may be necessary for the proper 
conduct of its business. 
Sec 9. Powers and Functions of the Sulu Special Economic Zone and Free Port 
Authority. The Sulu Special Economic Zone and Free Port Authority shall have the 
following powers and functions: 
a) To operate, administer, and manage the Zone According to the principles and 
provisions set forth in this Act; 


b) To adopt, alter and use a corporate seal; to contract, lease, buy, sell, acquire, 
own and /or otherwise dispose of movable or immovable as well as personal 
or real property of whatever nature (including but not limited to shares of 
stock or participation in private corporations or in limited partnerships, or in 
joint ventures with limited liability), bonds, precious metals in bullions, 
ingots, and easily convertible foreign exchange; 
c) To sue and be sued in order to carry out its duties, responsibilities, privileges, 
powers and function as granted and provided for in this Act; and to exercise 
the power of eminent domain for public use and public purpose; 
d) To raise or borrow adequate and necessary funds from local or foreign 
sources within the limitation provided by the law, to finance its projects and 
programs under this Act, and for that purpose to issue bonds, promissory 
notes, and other forms of securities, and to secure the by a guarantee, pledge, 
mortgage, deed of trust or an assignment of all or part of its property or 
assets; 
, 
e) To recommend t9 the President the issuance of a proclamation to fix delimit 
the site of the Zone; 
f) To issue certification of origin for products manufactured or processed in the 
Zone in accordance with prevailing rules or origin, and the pertinent 
regulations of PEZA, DTI and/or the Department of finance (DOF); 
g) To approve, 'accept, accredit and allow m y  local or foreign business, 
enterprise or investment  in^ the Zone subject only to such rules and 
regulations as SSEZA may promulgate from time to time in conformity with 
the provisions of this Act and the limitations provided in the Constitution; 
h) To authorize or undertake on its own or through others, and regulate the 
establishment, operation and maintenance of public utilities, services and 
infrastructure in the Zone such as shipping, shipbuilding, ship registry .and 
every matter related or attendant thereto, barging, stevedoring, cargo 
handling, hauling, warehousing, storage of cargo, port services or 
concessions, pier, wharves, bulkheads, bulk terminals, conveyors, water 
supply and storage, sewerage, drainage, airport operations, such other 
services or concessions or infrastructure necessary or incidental to the 
atcomplishment of the objectives of this Act; Provide, hozoever, that the private 
investors in the Zone shall be given priority in the awarding of contracts, 
franchises, licenses or permits for the establishment, operation and 
maintenance of utilities, services and infrastructure in the Zone; 
i) To construct, acquire, own, lease, operate and maintain on its own or through 
others by virtue of contracts, franchises, licenses, or permits under the build- 
operate-transfer scheme or under a joint venture with the private sector any 
or all of the public utilities and infrastructure required needed in the Zone, in 
coordination with appropriate national and local government authorities and 
in conformity with applicable laws thereon; 
j) To operation on its own, either directly or through a subsidiary entity or 
license to other, tourism-related activities, including games, amusements, 


recreational and. .;ports facilities such as golf courses, and others, under 
priorities and standard by the SSEZA; 
k) To maintain ecological balance, and promote sustainable development in 
Sulu while preserving, developing and maintaining marine resources, 
beaches, minerals and mineral deposits including precious metals, coral and 
coral reefs within the Zone. The virgin forests within Zone shall be 
proclaimed as a national park and shall be covered by a permanent total log 
ban. For this purpose, the rules and regulations of the Department of 
Environment and natural Resources and other government agencies involved 
in the above functions shall be implemented by the SSEZA, including the 
issuance of environmental certificates, free patents and leasehold rights over 
government lands and mining, drilling and timber licenses; Provided, that all 
legal restrictions imposed for the conveyance, use, lease or other disposition if 
free patents issued prior to the effectivity of this Act may be lifted should the 
SSEZA deem it necessary to carry out its mandate under this Act; 
. 
1)’ To adopt, implement and enforce reasonable measures and standards to 
control pollutiollwithin the Zone; 
m) To establish and maintain a security force and firefighting capability or hire 
others to provide the same for the defense and security of the Zone; 
n) To form, establish, organize and maintain subsidiary corporations, as its 
business and operations may require, whether under the laws of the 
Philippines or not; 
o) To report to the Bureau of Immigration the names of the foreigners who have 
been granted permanent resident status and working visas within thirty (30) 
days after issuance of such grant; 
p) To formulate and approve the organization and budget as submitted by the 
Chairman-Administra tor; 
q) To regulate and undertake the establishment, operation and maintenance of 
public utilities services and infrastructure in the Zone Such as Heat, light and 
power, water s q p l y  telecommunications, transport, toll roads and bridges, 
port services, and to fix just, reasonable and competitive rates, fares, charges 
and prices thereof; 
r) To directly negotiate with and grant foreign and /or international airlines 
and landing rights into the port; 
s) To provide, in cooperation with Department of Tourism, non-fiscal incentives 
to tourism-related business operating within the Zone; 
t) To charge reasonable fees for the provision of other services and the 
maintenance of infrastructure and utilities; 
u) To impose reasonable fines and penalties for violations of the provisions of 
this Act, the rules and regulations to be established by the SSEZA or any 
other law that the SSEZA is tasked to enforce; and 


v) To issue rules ad regulations consistent with the provision of this purpose, 
objectives and policies provided. 
Sec 10. Non- Profit Character of the Sulu Special Economic Zone Authority. 
The Sulu Special Economic Zone and Free Port Authority shall be a non-profit 
institution and shall devote the use of its returns from capital investment as well as 
excess revenues from its operations, for the development, improvement and 
maintenance and other related expenditures of the SSEZA to pay its indebtedness and 
obliptions and in furtherance and effective implementation of the policies provided for 
in this Act. In consonance with this, the SSEZA is hereby declared exempt from the 
payment of court or administrative proceeding in which it may be a party. 
The foregoing exemptions may. However, be entirely or partially lifted by the 
President of the Philippines upon the recommendation of the Secretary of Finance, not 
earlier than five (5) years from the efectivity of this Act, if the President shall find the 
SSEZA to be self-sustaining and financially capable by then to pay such taxes, customs, 
duties, fees and other charges after providing for debt service requirements of the 
SSEZA and of its projected capital and operating expenditures. 
Sec 11. Board of Directors of the Sulu Special Economic Zone and Free Port 
Authority. The powers of the SSEZA shall be vested in and shall be composed of the 
following: 
(a) The Secretary of the Department of Trade and Industry or his duly 
authorized representative, as ex-officio member of the board of Directors; 
(b) The Director General of the National Economic Development Authority or his 
duly authorized representative, as ex-officio member of the Board; 
(c) Two (2) other representatives of the National Government, as ex-officio 
members; 
(d) The Administrator of SSEZA who shall serve as ex-officio chairman of the 
Board; 
(e) The mayors of the municipality of Jolo as ex-officio member; 
(f) Two (2) representatives from the labor sector from among the workers in the 
Zone; 
(g) Two (2) representatives from the business and investments sectors; 
(h) Three (3) representatives from the private sector coming from the residents of 
Jolo, preferably Moslem. 
The Administrator/Chairman and members of the board, except the ex-officio 
member, shall be appointed by the President of the Philippines to serve for a term of six 
(6) years, unless sooner removed for cause or dies or resigns voluntarily. In case of the 
death, resignation or removal for cause, the replacement shall serve only the unexpired 
portion of the term. The Vice-chairman shall be elected form among members of the 
Board. 


Except for the representatives of the business and investment sector, no person 
shall be appointed by the President of the Philippines as member of the Board unless he 
is a Filipino citizen, of good moral character, of proven probity and integrity and a 
degree-holder in any of the following fields: economics, business, public administration, 
law, management, or their equivalent, and with at least ten (10) years relevant working 
experience preferably in the field of management or public administration. 
For the purpose determining a quorum during the meetings of the Board, a 
quorum shall exist despite the duly authorized representative is present thereat, and 
attends such meeting on the member’s behalf. 
The member of the Board, except the Administrator, Chairman whose 
compensation shall be determined by the Board, shall each receive a per diem of not 
more than Ten Thousand Pesos (Pl0,000.00) for every Board meeting actually attend, 
unless and until the President of the Philippines has fixed a higher per diem for 
member of the Board: Provided, kozoever, That the fixed a per diem collected each month 
shall not exceed the equivalent per diem for four (4) meetings. 
Sec 12. SSEZA Administrator and chief Executive Officer. The President of the 
Philippines shall appoint a full-time professional and competent administrator and 
chief executive officer of the Sulu Special Economic Zone and Free Port Authority who 
shall serve for a term of six (6) years, unless sooner removed for a cause or dies or 
resigns voluntarily. In case of death, resignation, or removal for cause, the replacement 
shall serve the unexpired portion of the term. The compensation of the Administrator 
and Chief Executive Officer shall be determined by the Uoard of Directors. 
Sec 13. Powers and duties of the Chairman-Administrator. The Chairman 
Administrator shall have the following powers and duties: 
a) To direct and manage the affairs of the SSEZA in accordance with the policies 
off the Board; 
b) To establish to internal organization of the SSEZA under conditions that the 
Board may prescribe; 
c) To submit an animal budget and necessary supplement budget to the Board 
for its approval; 
d) To submit within thirty (30) days after the close each fiscal year 
annual 
report to the Board and such other reports as maybe required; 
e) To submit to the Board for its approval policies, systems, procedures, 
f) To create a mechanism in coordination with relevant agencies for the 
promotion of industrial peace, the protection of the environment, and the 
advancement of the quality of life in the Zone; and 
g) To perform such other duties as may be assigned to him by the Board or 
which are necessary or incidental to his office. 
Sec 14. Personnel. The Board Directors of the SSEZA shall provide for an 
organizations and staff of its officers and employees and the corresponding 
qualification standards in accordance with Civil Service Laws and other Pertinent laws. 


Upon Recommendation of the Chairman/Administrator, the Board shall appoint and 
fix the remuneration and other emoluments in accordance with R.A. 6758, otherwise 
known as the salary Standardization law; Provided, That the Board shall havc.:xclusive 
and final authority to promote, transfer, assign or reassign officers of the SSEZA in 
accordance with Civil Service Law and Rules; Provided, further, that the Chairman- 
Administrator may carry out removal of such officers and employees as authorized by 
the Board. 
The officers and employees of the SSEZA, 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 he SSEZA, subject to Civil service laws and 
regulations, shall be removed or suspended except for cause, as provided by law. 
Sec 15. Capitalization. The Sulu Special Economic Zone Free Port Authority 
shall have an authorized capital stock of two billion (2,000,000,000.00) no par shares 
with a minimum value of Ten Pesos (P1O.OO) each. 
The Board of Directors of SSEZA may, form time to time, and with the written 
concurrence of the Secretary of Finance, increase the issue value of 0,s shares 
representing the capital stock of the SSEZA. The Board of Directors of SSEZA, with the 
written concurrence of the Secretary of Finance, may sell shares representing not more 
than forty percent (40%) of the capital stock of the SSEZA to the general public with 
such an annual dividend policy as the Board and Secretary of Finance may determine. 
The National government shall, in no case, own less than sixty percent (60%) of the total 
issued and outstanding capital stock of SSEZA. 
All unoccupied government-owned lands as of the creation of Sulu Economic 
Zone Port, falling within its jurisdiction, shall also be included as part the equity of the 
national government in SSEZA and may be disposed as part of the equity of the 
national government in SSEZA and may be disposed of by the SSEZA; Provided, That in 
case absolute sale or conveyance, the SSEZA shall seek the approval of the Office of the 
president ; Provided, firther, That all lands owned by SSEZA should not be included in 
the land reform. 
Sec 16. Supervision and Coordination of Development Plans. For purpose of 
policy direction and coordination, the Sulu Special Economic Zone and free Port shall 
be under the direct control and supervision of the Office of the President. 
Sec 17. Legal counsel. The provisions of the existing laws, orders or issuances, 
particularly R.A. 2327, as amended, Executive Order No. 29,series of 1987, and 
Administrative Order No. 130, series of 1994, to the contrary withstanding, the SSEZA 
shall have its own internal legal counsel completely independent from the Office of the 
Government Corporate Counsel completely as the legal adviser of SSEZA and its 
subsidiaries and who shall be solely responsible for reviewing contracts entered into by 
SSEZA an its subsidiaries. The internal legal counsel shall represent SSEZA and its 
subsidiaries in all judicial and administrative proceedings. When the exigencies of its 
business and operations demand it, the SSEZA may engage the services of an outside 
counsel either on a case to case basis or on a fixed retainer. 
Sec 18. Relationship with the Regional Development council. The SSEZA shall 
determine the developmegt goals for the Zone within the framework of national 


development plans, policies and goals. The Administrator shall, upon approval by the 
Board, submit Zone plans, programs and projects to the Regional Developmrlii Council 
for inclusion and input to the overall regional development plan. 
Sec 19. Relationship with Local Government Units. Except as herein provided, 
the local government units comprising the, Zone shall retain their basic autonomy and 
identity. The Municipality of Jolo shall operate and function in accordance with Local 
Government Code of 1991. in case of any conflict between the Authority and the 
Province of Sulu on matters affecting the Zone other than defense and security matters, 
the decision of the SSEZA shall prevail. 
Sec 20. Auditing. The Commission on audit shall appoint a representative who 
shall be a full-time auditor of the SSEZA and its subsidiaries if in which I controis a 
majority of the shares of stock, and assign such number if personnel as may be 
necessary to assist said representative in the performance of his/her duties. The salaries 
and emoluments of the assigned auditor and personnel of the Commission on Audit 
shall be in accordance with pertinent laws, rules and regulations. The Commission on 
Audit shall render an annual report to the President of the Philippines and to Congress 
ion the business activities, transactions and operations of the SSEZA. 
To ensure the expeditions implementation of the economic policy and prupose 
embodied in this Act, the Commission on Audit, in cooperation with SSEZA, shall 
formulate special rules on audit, disbursement of funds, bidding, procurement- of goods 
and services, accounting, use of government equipment and resources and the like, 
towards the aforesaid needs. 
Sec 21. Retention of all Earnings. The SSEZA shall retain all earnings from all its 
activities, regulatory or propriety, and need not remit the same to the National 
Treasury. Such earning shall be considered as corporate income which SSEZA may 
invest in its various infrastructure or special projects, and corporate undertakings 
Sec 22. Injunctions, restraining Orders and other Interlocutory Orders. The 
development of the Sulu special economic Zone and free Port is national government 
priority and, therefore, no injunctions, retraining orders and other or project undertaken 
by SSEZA may be issued any court of law of quasi-judicial body except by the Supreme 
Court of the Philippines. 
Sec 23. Interpretation/ Construction. The powers, authorities and functions that 
are vested in the SSEZA are intended to establish decentralization of government 
functions and authority and promote an efficient and effective working relationship 
among the Zone the national government and the local government units. 
Sec 24. Implementing Rules and Regulations. The Philippine Economic Zone 
Authority (PEZA); the Department of Trade and industry (DTI), Finance (DOF), Foreign 
Affairs (DFA), Labor and Employment (DOLE), Interior and Local Government 
(DILG), Agriculture (DA), Agrarian Reform (DAR), Public Work and Highways 
(DPWH), Science and Technology (DOST) and Energy (DOE); the Bureau of 
Immigration; bureau of Customs; National Economic and Development Authority 
(NEDA); Bangko Sentral ng Pilipinas (BSP), and representative from the technical staff 
of the Committee in Economic Affairs of both Houses of Congress and other concerned 
agencies shall formulate the implementing rules and regulations of this Act Within 
ninety (90) days after its a,nproval. Such rules and regulations shall take effect fifteen 
(15) days after their publication in a newspaper o general circulation in the Philippines. 


Sec 25. Separability Clause. If any provisions of this Act shall be held 
unconstitutional or invalid, the other provisions not otherwise affected shall remain 
force and effect. 
Sec 26. Repealing Clause. AI1 law, executive orders or issuance or any parts 
thereof which are inconsistent herewith are hereby or amended accordingly. 
Sec 27. Effectivity Clause . This Act shall take effect upon its publication in at 
least one (1) newspaper of general circulation. 
Approved,