Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
EIGHTEENTH CONGRESS 
Second Regular Session 
House Bill No. ______ 
Introduced by Hon. Robert Ace S. Barbers 
AN ACT ESTABLISHING THE SURIGAO CITY SPECIAL ECONOMIC ZONE AND 
FREEPORT, PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
This bill seeks to create a special economic zone and freeport in the city of 
Surigao to be known as the Surigao City Special Economic Zone and Freeport 
(Surigao City Ecozone) which shall be managed and operated by the Surigao City 
Special Economic Zone and Freeport Authority (SCEZA). 
Special economic zones or ecozones remain an effective development tool in 
the global marketplace. They increase trade balance, generate employment, increase 
foreign investments, integrate local firms into global value chains, promote export 
oriented-growth and effective administration. 
Surigao City, as part of the fast growing CARAGA Region, is rich in mineral 
deposits and marine fishing ground. It also serves as a vital transportation link bound 
for Luzon and other parts of the country. Given its strategic position, it is now popular 
for its eco-tourism and surfing destination.  
Considering the city’s economic promise, Surigao City will no doubt be a self-
reliant and self-sustaining ecozone and the establishment thereof will open windows 
and more opportunities for both local and foreign investors. It will contribute to 
economic development not only in the city but in the entire region as well. 
In view of the foregoing, immediate approval of this bill is earnestly sought. 
HON. ROBERT ACE S. BARBERS 
2nd District, Surigao del Norte 
May 3, 2021
10:34 am
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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
EIGHTEENTH CONGRESS 
Second Regular Session 
House Bill No. _____ 
Introduced by Hon. Robert Ace S. Barbers 
AN ACT ESTABLISHING THE SURIGAO CITY SPECIAL ECONOMIC ZONE AND 
FREEPORT, PROVIDING 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. Short Title. – This Act shall be known as the “Surigao City Special 
Economic Zone and Freeport Act”. 
SEC. 2. Declaration of Policy. – It is hereby declared the policy of the State to 
actively encourage, promote, induce and accelerate the sound and balanced 
industrial, economic and social development of the country in order to provide jobs to 
the people, especially those in rural areas, increase their productivity and their 
individual and family income, and thereby improve the level and quality of their living 
conditions though the establishment, among others, of special economic zones in 
suitable and strategic locations in the country and through measures that shall 
effectively attract legitimate and productive foreign investments. 
SEC. 3. Creation of Surigao City Special Economic Zone and Freeport. – In 
pursuit of the foregoing declared policy and subject to the concurrence of the 
concerned local government unit affected zone, there is hereby established a special 
economic zone and freeport in the City of Surigao to be known as the Surigao City 
Special Economic Zone and Freeport, hereinafter referred to as the Surigao City 
Ecozone. The specific metes and bounds of the Surigao City Ecozone shall be more 
particularly defined in a presidential proclamation that shall be issued for this purpose. 
SEC. 4. Governing Principles. – The Surigao City Ecozone shall be managed 
and operated by the Surigao City Special Economic Zone and Freeport Authority, 
hereinafter referred to as the SCEZA, created under Section 12 of this Act, under the 
following principles: 
(a) Within the framework and limitations of the Constitution and applicable
provisions of the Local Government Code, the Surigao City Ecozone shall
be developed into and operated as a decentralized, self-reliant and self-
sustaining industrial, commercial trading, agro-industrial, tourist, banking,
financial and investment center with suitable residential areas;
(b) The Surigao City Ecozone shall be provided with transportation,
telecommunications and other facilities needed to attract legitimate and
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productive investments, generate linkage industries and employment 
opportunities for the people of Surigao City and its neighboring towns and 
cities; 
 
(c) The Surigao City Ecozone may establish mutually beneficial economic 
relations with other entities or enterprises within the country or, subject to 
the administrative guidance of the Department of Foreign Affairs (DFA), the 
Philippine Economic Zone Authority (PEZA) and/or the Department of Trade 
and Industry (DTI), with foreign entities or enterprises; 
 
(d) Foreign citizens and companies owned by non-Filipinos in whatever 
proportion may set up enterprises in the Surigao City Ecozone, either by 
themselves or in joint venture with Filipinos in any sector of industry, 
international trade and commerce within the Surigao City Ecozone; 
 
(e) The Surigao City Ecozone shall be managed and operated as a separate 
customs territory thereby ensuring the free flow or movement of goods and 
capital within, into, and out of its territory, and shall likewise provide 
incentives such as tax and duty free importations of raw materials, capital 
and equipment to registered enterprises located therein. However, 
exportation or removal of goods from the territory of the Surigao City 
Ecozone to other parts of the Philippine territory shall be subject to customs 
duties and taxes under the Customs and Tariff Code and other relevant tax 
laws of the Philippines; 
 
(f) The areas comprising the Surigao City Ecozone may be expanded or 
reduced when necessary. For this purpose, the SCEZA, in consultation with 
the LGU, shall have the power to acquire either by purchase, negotiation or 
condemnation proceedings, any private land within or adjacent to the 
Surigao City Ecozone for the following purposes: (1) consolidation of lands 
for Surigao City Ecozone development; (2) acquisition of right of way to the 
Surigao City Ecozone; and (3) the protection of watershed areas and natural 
assets valuable to the prosperity of the Surigao City Ecozone; 
 
(g) Goods manufactured by the Surigao City Ecozone 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 SCEZA, together with the PEZA, the Bureau of 
Customs (BOC) and the 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 such 
Negative List shall not be allowed to sell their products locally; 
 
(h) The defense of the Surigao City Ecozone and the security of its perimeter 
fence shall be responsibility of the national government in coordination with 
the SCEZA and the LGU. 
 
SEC. 5. Fiscal Incentives. - The registered enterprises operating within the 
Surigao City Ecozone may be entitled to the existing pertinent fiscal incentives as 
provided for under Republic Act No. 7916, as amended by Republic Act No. 8748, 


also known as the Special Economic Zone Act of 1995, or those provided under 
Executive Order No. 226, as amended, otherwise known as the Omnibus Investment 
Code of 1987; and/or those that may be further granted as the need and necessity 
arises by the appropriate government department, agency or office: Provided, That in 
the administration, implementation, and monitoring of incentives, the SCEZA may 
impose its own conditions not otherwise prohibited by this Act: Provided, further, That 
the SCEZA shall not be limited to the conditions provided under Republic Act No. 7916, 
Republic Act No. 8748 or any other related issuance rule or regulation. 
 
SEC. 6. Imposition of a Tax Rate of Five Percent (5%) on Gross Income 
Earned.— No taxes, local and national, shall be imposed on registered business 
establishments operating within the Surigao City Ecozone, including income, 
withholding, donor’s, percentage, and documentary stamp taxes. In lieu thereof, and 
subject to Section 10 of this Act, said business establishments shall pay a five percent 
(5%) final tax on their gross income earned in the following percentages: 
 
(a) Three per centum (3%) to the National Government; and 
 
(b) Two per centum (2%) to the City of Surigao. 
 
The SCEZA shall have the authority to grant income tax holiday (ITH) and net 
operating loss carry over (NOLCO) subject to Section 9 of this Act and the conditions 
as it may have imposed pursuant to Section 5 of this Act. 
 
SEC. 7. Incentive to Investors.— Any foreign national who invests an amount 
of One Hundred Thousand US dollars (US$100,000.00), either in cash and/or 
equipment, in a registered enterprise shall be entitled to an investor’s visa: Provided, 
That he has the following qualifications: 
 
(a) He is at least eighteen (18) years of age; 
 
(b) He has not been convicted of a crime involving moral turpitude; 
 
(c) He is not afflicted with any loathsome, dangerous or contagious disease; 
and 
 
(d) He has not been institutionalized for any mental disorder or disability. 
 
As a holder of investor’s visa, an alien shall be entitled to reside in the 
Philippines while his investment subsists. For this purpose, he should submit an 
annual report, in the form duly prescribed for the purpose, to prove that he has 
maintained his investment in the country, should said alien withdraw his investments 
from the Philippines, then the investor’s visa issued to him shall automatically expire. 
 
The authority to issue visas and work permits shall remain with the Bureau of 
Immigration (BI) and the Department of Labor and Employment (DOLE), respectively; 
Provided, That the BI and the DOLE shall implement measures to expedite the 
processing of such visas and permits for workers in the Surigao City Ecozone and 
coordinate with SCEZA for the purpose of improving ease of doing business. 
 


SEC. 8. Administration, Implementation and Monitoring of Incentives. – For 
proper administration, implementation and monitoring of tax incentives provided under 
this law, the following are herein mandated: 
 
(a) The SCEZA shall be responsible for the administration, management, 
enforcement and implementation of the incentives granted to registered 
enterprises; Provided, That the BOC shall set up and establish a customs 
controlled area outside the gate of the Surigao City Ecozone to facilitate 
payment of taxes on goods entering the Philippine customs territory: 
Provided, further, That notwithstanding the limitations in this Act, the 
SCEZA and the BOC may coordinate and jointly implement measures on 
border protection; and 
 
(b) In the interest of enhancing transparency in the management and 
accounting of tax incentives in the Surigao City Ecozone, the SCEZA shall 
comply with the provisions of Republic Act No. 10708, otherwise known as 
The Tax Incentives Management and Transparency Act (TIMTA)” and its 
implementing rules and regulations. 
 
SEC. 9. Duration of Incentives. – Fiscal incentives under this Act shall be 
terminated after a cumulative period of twenty (20) years from the date of registration 
or start of commercial operation, whichever is applicable, except that it could be 
extended with regard to industries deemed indispensable to national development and 
interest.  
 
The industries exempted from this provision shall be determined by the SCEZA, 
in consultation with other government agencies.. 
 
SEC. 10. Sequential Availment of Incentives. – Registered enterprises may 
enjoy the income tax holiday granted by the SCEZA prior to the availment of the five 
percent (5%) final tax on gross income earned incentive: Provided, That in the event 
a registered enterprise elects to avail of the final tax incentive, such registered 
enterprise shall be barred from availing the ITH incentive. 
 
Registered enterprises, if eligible, may register with other investment promotion 
agencies to avail of the incentives they offer: Provided, That registered enterprises 
electing to avail of the incentives of other promotion agencies shall not be able to avail 
of the incentives of the Surigao City Ecozone until expiration of the incentives 
extended by other investment promotions agencies. 
 
SEC. 11. Extension of Period of Availment. – The SCEZA may extend the 
period of validity of the incentives extended to a registered enterprise in the event that 
it suffers, due to force majeure, a cessation or suspension of operations that impairs 
its viability or profitability. 
 
SEC. 12. Creation of the Surigao City Special Economic Zone and Freeport 
Authority. – There is hereby created a body corporate to be known as the “Surigao 
City Special Economic Zone and Freeport Authority”, hereinafter referred to as the 
SCEZA which shall manage and operate the Surigao City Ecozone, in accordance 
with the provisions of this Act. This corporate franchise shall expire in fifty (50) years 


counted from the first year after the effectivity of this Act, unless otherwise extended 
by Congress. It shall be organized within one hundred eighty (180) days after the 
effectivity of this Act. 
 
SEC. 13. Capitalization. – The SCEZA shall have an authorized capital stock 
of Two Billion (2,000,000,000) no par shares with a minimum issue of Ten pesos 
(P10.00) each, the majority shares of which shall be subscribed and paid for by the 
National Government and the city government of Surigao. The board of directors of 
the SCEZA may, with the written concurrence of the Secretary of Finance, sell shares, 
representing not more than forty per centum (40%) of the capital stack of the SCEZA 
to the general public under such policy as the Board and the Secretary of Finance may 
determine. The National Government and the LGUs shall, in no case, own less than 
sixty per centum (60%) of the total issued and outstanding capital of the SCEZA. 
 
The amount necessary to subscribe and pay for the shares of the National 
Government to the capital stock of the SCEZA shall be included in the annual General 
Appropriations Act. For LGUs concerned, the funds shall be taken from their internal 
revenue allotment and other local funds. 
 
SEC. 14. Principal office of the SCEZA. – The SCEZA shall maintain its 
principal office in the City of Surigao, but it may establish branches within the 
Philippines as may be necessary for the proper conduct of its business. 
 
SEC. 15. Powers and Functions of SCEZA. – The SCEZA shall have the 
following powers and functions: 
 
(a) To operate, administer, manage and develop the Surigao City Ecozone 
according to the principles and provisions set forth in this Act; 
 
(b) To register, regulate and supervise the enterprises in the Surigao City 
Ecozone in an efficient and decentralized manner, subject to existing laws; 
 
(c) To coordinate with local government units and exercise general supervision 
over the development plans, activities and operations of the Surigao City 
Ecozone; 
 
(d) To regulate and undertake the establishment, construction, operation and 
maintenance of public utilities, other services and infrastructure in the 
Surigao City Ecozone such as but not limited to 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 accordance with the Civil Aviation 
Authority of the Philippines (CAAP) and other such other services or 
concessions 
or 
infrastructures 
necessary 
or 
incidental 
to 
the 
accomplishment of the objectives of this Act;  
 
(e) To construct, acquire, own, lease, operate and maintain on its own or 
through contracts, franchise, licenses, bulk purchase from the private sector 


or permits under any of the schemes allowed in Republic Act No. 6957, 
otherwise known as the Build-Operate-Transfer Law, as amended, or joint 
venture, adequate facilities and infrastructures required or needed for the 
operation and development of the Surigao City Ecozone, in coordination 
with appropriate national and local government authorities and in conformity 
with applicable laws thereon; 
 
(f) To approve plans, programs and projects of the Surigao City Ecozone to be 
submitted to the Regional Development Council for inclusion and inputs to 
the overall regional development plan; 
 
(g) To operate on its own, either directly or through a license to other tourism-
related activities, including games, amusements, recreational and sports 
facilities; 
 
(h) To raise or borrow, within the limitation provided by law, and subject to the 
approval or opinion of the Monetary Board of the Bangko Sentral ng 
Pilipinas (BSP), as the case may be, adequate and necessary funds from 
local or foreign sources, to finance its project and programs under this Act 
and for this purpose, to issue bonds, promissory notes and other forms of 
securities, and to secure the same by guarantee, pledge, mortgage, deed 
of trust or an assignment of all or parts of its property or assets; 
 
(i) To protect, preserve, maintain and develop the forests, beaches, or coral 
and coral reefs, and maintain ecological balance within the Surigao City 
Ecozone. Notwithstanding the authority of the SCEZA to create rules for 
such purpose, the rules and regulations of the Department of Environment 
and Natural Resources (DENR) and other government agencies involved in 
the above mentioned functions shall be implemented by the SCEZA; 
 
(j) To create, operate and/or contract to operate such functional units of offices 
of the SCEZA as it may deem necessary; 
 
(k) To adopt, alter and use a corporate seal; contract, lease, buy, acquire, own, 
or otherwise dispose of personal and/or real property of whatever nature; 
sue and be sued; and otherwise carry out its functions and duties as 
provided for in this Act; 
 
(l) To issue certificates of origin for products manufactured or processed in the 
Surigao City Ecozone in accordance with prevailing rules of origin, and the 
pertinent regulations of the PEZA, the DTI and/or the Department of Finance 
(DOF); 
 
(m) To establish one-stop shops for the issuance of all necessary permits, 
clearances, licenses, and other similar certifications to conduct such 
activities intended to improve the ease of doing business within the Surigao 
City Ecozone, in accordance with the government agencies having 
jurisdiction over activities therein: Provided, That all government agencies 
are directed to provide and extend utmost and full cooperation to the 
Surigao City Ecozone in the establishment of such one-stop shops; 


 
(n) To provide internal security to the Surigao City Ecozone in coordination with 
the National Government and the affected LGU. For this purpose, the 
SCEZA shall provide and establish its own internal security and firefighting 
forces or hire others to provide the same. Military forces to be assigned by 
the National Government for national defense purposes shall not interfere 
in the internal affairs of the Surigao City Ecozone and expenditures for these 
military forces shall be borne by the National Government; 
 
(o) To exercise such powers as may be essential, necessary or incidental to 
the powers granted to it hereunder as well as those that shall enable it to 
carry out, implement and accomplish the purposes, objectives and policies 
of this Act; and 
 
(p) To issue rules and regulations consistent with the provisions of this Act as 
may be necessary to accomplish and implement the purposes, objectives 
and policies provided herein. 
 
SEC. 16. Board of Directors of the SCEZA. – The powers of the SCEZA shall 
be vested in and exercised by a Board of Directors, hereinafter referred to as the 
Board, which shall be composed of the following; 
 
(a) The Chairperson, who shall, at the same time be the administrator of the 
SCEZA; 
 
(b) The Vice Chairman, who shall be elected from among the members of the 
Board; 
 
(c) Members consisting of: 
 
(1) The City’s Congressional Representative; 
 
(2) The mayor of the City of Surigao; 
 
(3) One (1) representative of the city council; 
 
(4) One (1) representative from the  registered domestic investors; 
 
(5) One (1) representative from the registered foreign investors; and 
 
(6) Two (2) representatives from the workers stationed in the Surigao 
City Ecozone. 
 
The city’s congressional representative, the mayor of the city of Surigao, and 
the representative of the city council shall serve as ex officio members of the Board, 
whose term in the Board corresponds to their terms as elected officials. 
 
The Chairperson and the members of the Board, except the ex 
officio members, shall be appointed by the President of the Philippines to serve for a 
term of six (6) years, unless sooner separated from service due to death, voluntary 


resignation or removal for cause. In case of death, resignation or removal for cause, 
the replacement shall serve only the unexpired portion of the term. 
 
The Chairperson of the Board must be a Filipino citizen of good moral 
character, of proven probity and integrity, and a degree-holder in any of the following 
fields: economics, business, public administration, law, management or their 
equivalent, and with at least ten (10) years relevant working experience preferably in 
the field of management or public administration. 
 
The members of the Board, except the ex-officio members, shall each 
receive per diem at a rate to be determined by the Department of Budget and 
Management (DBM) in accordance with existing rules and regulations: Provided, 
however, That the total per diem collected each month shall not exceed the 
equivalent per diem for four (4) meetings. Unless and until the President of the 
Philippines has fixed a higher per diem for the members of the Board, such per 
diem shall not be more than Ten thousand pesos (P10,000.00) for every Board 
meeting. 
 
SEC. 17. Powers and Duties of the Chairperson-Administrator. – The 
Chairperson-Administrator shall have the following powers and duties: 
 
(a) To direct and manage the affairs of the SCEZA in accordance with the 
policies of the Board; 
 
(b) To establish the internal organization of the SCEZA under such conditions 
that the Board may prescribe; 
 
(c) To submit an annual budget and necessary supplemental budget to the 
Board for its approval; 
 
(d) To submit within thirty (30) days after the close of each fiscal year an annual 
report to the Board and such other reports as may be required; 
 
(e) To submit to the Board for its approval policies, systems, procedures, rules 
and regulations that are essential to the operation of the Surigao City 
Ecozone; 
 
(f) To create a mechanism in coordination with relevant agencies for the 
promotion of industrial peace, the protection of the environment, and the 
advancement of the quality of life in the Surigao City Ecozone; and 
 
(g) To perform such other duties as may be assigned to him by the Board or 
which are necessary or incidental to his office. 
 
SEC. 18. Organization and Personnel. – The Board of Directors of the SCEZA 
shall provide for an organizational structure and appoint employees, subject to the 
Civil Service Law. Upon the recommendation of the Chairperson-Administrator, the 
Board shall appoint and fix the remuneration and other emoluments of its officers and 


employees in accordance with existing laws on compensation and position 
classification. The Board shall have exclusive and final authority to promote, transfer, 
assign, reassign, or remove officers of the SCEZA, 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 SCEZA, 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 SCEZA, subject to civil service laws and 
regulations, shall be removed or suspended except for cause, as provided by law. 
 
SEC. 19. Legal Counsel. - The SCEZA shall have its own internal legal counsel 
under the supervision of the Government Corporate Counsel. When the exigencies of 
its businesses and operations demand, the SCEZA may engage the services of an 
outside counsel either on a case-to-case basis or on a fixed retainer basis. 
 
SEC. 20. Banking Rules and Regulations. – Existing banking rules and 
regulations of the BSP shall apply to banks and other financial institutions to be 
established in the Surigao City Ecozone. 
 
SEC. 21. Remittance of Earnings. – In the case of foreign investments, a duly 
registered entity or enterprise within the Surigao City Ecozone shall have the right to 
remit earnings from the investment in the currency in which the investment was 
originally made and at the exchange rate prevailing at the time of remittance, subject 
to the provisions of Republic Act No. 7653, otherwise known as the “New Central Bank 
Act”. 
 
SEC. 22. Supervision and Control. – The Surigao City Ecozone shall be under 
the direct control and supervision of the Office of the President of the Philippines for 
purposes of policy direction and coordination. 
 
SEC. 23. Relationship with the Regional Development Council. – The SCEZA 
shall determine the development goals for the Surigao City Ecozone within the 
framework of national development plans, polices and goals, The Chairperson-
Administrator shall, upon approval by the Board, submit the Surigao City Ecozone 
plans, programs and projects to the Regional Development Council for inclusion and 
inputs to the overall regional development plan. 
 
SEC. 24. Relationship with Local Government Unit. – Except as herein 
provided, the city government of Surigao shall retain its basic autonomy and identity. 
It shall operate and function in accordance with the framework of the 1987 
Constitution, Local Government Code of 1991, and this Act.  
 
In case of any conflict between the SCEZA and the city government of Surigao 
on matters affecting the Surigao City Ecozone other than defense and security 
matters, the decision of the SCEZA shall prevail. 
 


SEC. 25. Interpretation/Construction. – The powers, authorities and functions 
that are vested in the SCEZA are intended to establish national self-sufficiency and 
self-reliance in the advancement of the protection of the national integrity, 
enhancement of national security, decentralization of governmental functions and 
authority, and promote an efficient and effective working relationship among the 
Surigao City Ecozone, the national government, and the local government units. Any 
interpretation of this Act shall consider such intentions. In the event of conflict of 
interpretation and provided the intentions cannot be harmonized, the provisions of this 
Act shall be construed in favor of an interpretation that would tend to protect national 
security. 
 
SEC. 26. Auditing. – The Commission on Audit shall appoint a representative 
who shall be a full time auditor of the SCEZA and assign such number of personnel 
as may be necessary to assist said representative in the performance of his/her duties. 
The salaries and emoluments of the assigned auditor and personnel shall be in 
accordance with pertinent laws, rules and regulations. 
 
SEC. 27. Applicability Clause. – Insofar as these are consistent with the 
provisions of this Act, the provisions of Sections 30 to 41 of Republic Act No. 7916, 
shall ipso facto apply to the Surigao City Ecozone. 
 
SEC. 28. Implementing Rules and Regulations. – The DTI, DOF and the 
National Economic Development Authority (NEDA) shall formulate the implementing 
rules and regulations of this Act within ninety (90) days after its approval, Such rules 
and regulations shall take effect fifteen (15) days after its publication in a newspaper 
of general circulation in the Philippines. 
 
 
SEC. 29. Separability Clause. – If any provision of this Act shall be held 
unconstitutional or invalid, the other provisions not otherwise affected shall remain in 
full force and effect. 
 
SEC. 30. Repealing Clause. – All laws, orders, issuances, circulars, rules and 
regulations or parts thereof, which are inconsistent with the provisions of this Act are 
hereby repealed, modified, or amended accordingly. 
 
SEC. 31. Effectivity Clause. – This Act shall take effect fifteen (15) days after 
its publication in at least two (2) newspapers of general circulation. 
 
Approved.