EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
SENATE
Senate Bill No. 2284
NDt X
INTRODUCED BY SENATOR RONALD "BATO" DELA ROSA
AN ACT
ESTABLISHING A SPECIAL DEFENSE ECONOMIC ZONE (SpeDEZ) INSIDE THE 
GOVERNMENT ARSENAL DEFENSE INDUSTRIAL ESTATE LOCATED IN CAMP 
GEN. ANTONIO LUNA, LAMAO, MUNICIPALITY OF LIMAY, PROVINCE OF 
BATAAN, CREATING FOR THIS PURPOSE THE SPECIAL DEFENSE ECONOMIC 
ZONE AUTHORITY (SpeDEZA), APPROPRIATING FUNDS THEREFOR AND FOR 
OTHER PURPOSES
EXPLANATORY NOTE
Section 19, Article II of the 1987 Constitution provides that "The State shall 
develop a self-reliant and' independent national economy effectively controlled by 
Filipinos." Further, the State recognizes the indispensable role of the private sector, 
encourages the participation of private enterprise, and provides incentives to needed 
investments.1
>.r
This measure seeks to establish the Special Defense Economic Zone Authority 
(SpeDEZA) which shall manage, maintain,.-and operate the Special Defense 
Economic Zone (SpeDEZ), to be located in Camp General Antonio Luna, Lamao, 
Municipality of Limay, Province of Bataan, primarily for the purpose of providing key 
opportunities and incentives for local and international defense contractors to locate 
their operations in the subject defense real estate.
The powers, authorities and functions that are vested in the SpeDEZA are 
intended to establish national self-sufficiency and self-reliance in the advancement 
of and protection of the national integrity, enhancement of national security.
1 Section 20, Article II of the 1987 Constitution.


decentralization of governmental functions and authority, and promote an efficient 
and effective working relationship between the SpeDEZA, the nationai government 
and the LGUs.
With oniy a few years left remaining for the completion of the AFP 
Modernization Program, the passage of this bill provide a complementary stream of 
income to support the Program, while creating job opportunities, pursuing 
infrastructure development and encouraging direct foreign investments.
In view of the foregoing, the passage of this bill Is urgently sought.
RONALD "
DELA ROSA


EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
Second Regular Session 
)
SENATE
Senate Bill No. 2284
DATE
TJME
NDtX
INTRODUCED BY SENATOR RONALD "BATO" DELA ROSA
AN ACT
ESTABLISHING A SPECIAL DEFENSE ECONOMIC ZONE (SpeDEZ) INSIDE THE 
GOVERNMENT ARSENAL DEFENSE INDUSTRIAL ESTATE LOCATED IN CAMP 
GEN. ANTONIO LUNA, LAMAO, MUNICIPALITY OF LIMAY, PROVINCE OF 
BATAAN, CREATING FOR THIS PURPOSE THE SPECIAL DEFENSE ECONOMIC 
ZONE AUTHORITY (SpeDEZA), APPROPRIATING FUNDS THEREFOR AND FOR 
OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress 
assembled:
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Section 1. Short Title. - This Act shall be known as the "Special Defense Economic
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Zone (SpeDEZ) Act of 2019".
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Sec. 2. Declaration of Policy. - It is hereby declared the policy of the State to
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develop a self-reliant and independent national economy effectively controlled by
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Filipinos. The State recognizes the indispensable role of the private sector, encourages
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the participation of private enterprise, and provides incentives to needed investments.
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To this end. State shall promote the preferential use of Filipino labor, domestic
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materials and locally produced goods and adopt measures to help make them more
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competitive. Further, the State actively encourages, promotes and accelerates the
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sound and balanced industrial, economic and social development of the country through
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the establishment, among others, of special economic zones in suitable and strategic
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locations in the country. In so doing, the State is able to attract legitimate and
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productive foreign investments with the objectives of providing jobs especially to those


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in the rural areas, increasing productivity and individual family income, and thereby
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improving the level and quality of living conditions of the people.
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Sec. 3. Creation of the Special Defense Economic Zone (SpeDEZ) - There is
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hereby created a special economic zone in Camp General Antonio Luna, Lamao,
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Municipality of Limay In the Province of Bataan, referred to as the Special Defense
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Economic Zone (SpeDEZ), for investments in defense, military, law enforcement, and
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defense-related advanced technologies, information and communications technology,
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research and development and their support industries. The SpeDEZ shall cover the
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Government Arsenal Industrial Estate inside Camp General Antonio Luna located in the
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Municipality of Limay, Province of Bataan, measuring approximately three hundred
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seventy (370) hectares. Including the seventy (70) hectares of land within which the
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Government Arsenal (GA), created pursuant to Republic Act No. 1884, otherwise known
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as "An Act to Establish A Government Arsenal, Provide for its Operation and for Other
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Purposes" operates, the portions allocated for the expansion of the GA, and all other
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areas which may be declared as part of the SpeDEZ in compliance with Section 5(h) of
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this Act: Provided, That the GA shall remain a line bureau of the Department of National
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Defense (DND) in accordance with Republic Act No. 1884, Executive Order No. 292,
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Series of 1987, othenvise known as the "Administrative Code of the Philippines",
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Republic Act No. 7898, as amended by Republic Act No. 10349, otherwise known as the
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"AFP Modernization Act", Executive Order No. 303 series of 2004, and other prevailing
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laws and executive issuances. Except for necessary coordination on matters of mutual
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and higher security concerns emanating from the very nature of their respective
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mandates, the operations of the GA shall remain independent of the management of
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the SpeDEZ, and the Special Defense Economic Zone Authority (SpeDEZA), in
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accordance with this Act, shall not interfere with the activities conducted in the seventy
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(70) hectare area on which the GA maintains and operates its buildings and structures
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(the "GA area"); Provided further, That the SpeDEZ shall not be expanded nor operated
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to the prejudice of the GA and the GA shall not be expanded nor operated to the
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prejudice of the SpeDEZ. The GA and the SpeDEZA shall continuously coordinate to
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ensure smooth and seamless operations involving the SpeDEZ and the GA; Provided
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finally, That investors who intend to do business in the GA area may do so only upon
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written consent of the GA prior to registration with the SpeDEZA.
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Sec. 4. Creation of the Special Defense Economic Zone Authority (SpeDEZA). - 
There is hereby created a specialized and independent body corporate to be known as 
the Special Defense Economic Zone Authority which shall manage and operate the 
SpeDEZ in accordance with the provisions of this Act. The SpeDEZA shall be considered 
a government instrumentality vested with corporate powers.
Notwithstanding Section 3 of Republic Act No. 7656, otherwise known as "An Act 
Requiring Government-Owned or Controlled Corporations to Declare Dividends under 
Certain Conditions to the National Government, and for other Purposes", all dividends 
remitted by the SpeDEZA shall exclusively be for the Armed Forces of the Philippines 
Modernization Program and in no case, shall dividends remitted by the SpeDEZA be 
used otherwise.
Sec. 5. Governing Principles. - The SpeDEZ shall be managed and operated under 
the following principles:
a) Within the framework and limitations of the Constitution, Republic Act No. 
1884, Republic Act No. 7898, as amended by Republic Act No. 10349, 
Republic Act No. 10697, otherwise known as the "Strategic Trade 
Management Act", Executive Order No. 303, Series of 2004, and applicable 
provisions of the Local Government Code, the SpeDEZ shall be developed into 
and operated as a decentralized, self-reliant and self-sustaining Industrial, 
commercial, trading, research, developnrient, engineering, information and 
communications technology and financial investment center exclusive for 
defense, military and law enforcement commercial activities and Investments, 
with provision for suitable residential, educational, recreational, and 
commercial areas;
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b) Notwithstanding the autonomy provided in Section 5(a) of this Act, the 
SpeDEZ may continue to be provided by the national government and local 
governments with transportation, telecommunications and other facilities 
needed to attract legitimate and productive investments, generate linkage


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With industries and empioyment opportunities for the people of the Province of 
Bataan and its neighboring towns and cities; Provided, That the autonomy and 
self-reliance of the SpeDEZ shall not be a hindrance to assistance nor 
partnerships with other units and instrumentalities of the government; 
Provided further, That no assistance or partnership shall be construed as a 
waiver of the autonomy of the SpeDEZA;
c) The SpeDEZA may establish mutually beneficial economic defense relations 
with other Investment promotion agencies, entities or enterprises within the 
country or with foreign entities or enterprises; Provided, That the SpeDEZA 
shall seek clearance from the DND and administrative guidance from the 
Department of Foreign Affairs (DFA) as to relations with foreign entities 
or enterprises;
d) Foreign citizens and companies owned by non-Filipinos may set up enterprises 
in the SpeDEZ with foreign ownership of up to the percentage allowed by law, 
subject to the approval of SpeDEZA, either by themselves or in joint venture 
with Filipinos or the GA in the defense and security industry within the 
territorial jurisdiction of the SpeDEZ; Provided, That the SpeDEZA may require 
individual locators to be subject to the provisions and limitations provided 
for by the Strategic Trade Management Act, Foreign Investment Act and 
the Regular Foreign Investment Negative List Issued by the President; 
Provided further. That the SpeDEZA may require a minimum investment in 
freely convertible currencies from any enterprise seeking registration as a 
locator of the SpeDEZ. All investments in the SpeDEZA shall fall under the 
priorities, thrusts and limits provided for in this Act; Provided finaiiy. That all 
investments that do not directly or indirectly further defense, military and law 
enforcement investments shall be prohibited from doing business within the 
SpeDEZ except for businesses that cater to or support the locators, their 
employees, and the residents of the SpeDEZ;
e) Subject to the limitations in this Act and its implementing rules and 
regulations, the SpeDEZ shall be managed and operated as a separate


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customs territory ensuring free flow or movement of necessary goods and 
products, and capital within, into and out of its territory; Provided, That 
subject to Section 14 of this Act, the SpeDEZ and all activities conducted 
therein shall be exempt from payment of all national and local taxes; Provided 
further. That in accordance with Sections 301 and 817 of Republic Act No. 
10863, otherwise known as the "Customs Modernization and Tariff Act", the 
Bureau of Customs (BOC) shall continue to exercise border protection and 
customs control authority over the customs territory adjacent to the SpeDEZ 
and to this end shall consult, coordinate, cooperate with the SpeDEZA to 
enhance its protection and control capacity and ensure compliance with 
customs laws and regulations;
f) 
The SpeDEZA shall provide incentives, such as tax and duty-free admissions of 
raw materials, capital and equipment to registered enterprises of the SpeDEZ; 
Provided, That exportation or removal of goods from the territory of the 
SpeDEZ to the other parts of the Philippine territory shall be subject, as 
applicable, to customs duties and taxes under the Customs Modernization and 
Tariff Act, as amended, and the National Internal Revenue Code of 1997, as 
amended; Provided further, that sales of good from the SpeDEZ to the Armed 
Forces of the Philippines (AFP), Philippine National Police (PNP) and local 
government units (LGUs) for defense and security purposes shall be exempt 
from all customs duties, national and local taxes; Provided finaiiy, that subject 
to coordination with the BOC, customs transit to and from the SpeDEZ, thru 
the Port of Lamao or other ports, shall also be considered tax and duty-free;
g) 
As far as practicable, enterprises located within the SpeDEZ shall acquire a 
certain percentage of their raw material requirements locally produced within 
the Philippines as determined by the SpeDEZA;
h) The areas comprising the SpeDEZ may be expanded or reduced when
necessary 
to improve its investment promotion capacity, ensure public
order and safety, consolidate lands for SpeDEZ development, acquire right of 
way or access necessary and appropriate to the SpeDEZ, protect and
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i)
safeguard watershed areas or maintain and improve water yieid for the 
benefit of the SpeDEZ and LGUs, manage solid and water waste in compliance 
with existing national laws and local ordinances, and promote the public good. 
For this purpose, the SpeDEZA, with the concurrence of the appropriate and 
affected LGUs in the Province of Bataan and in accordance and in compliance 
with existing national laws and local ordinances, shall have the power to 
acquire, procure. Increase, or otherwise expand, either by purchase, 
negotiation or condemnation proceedings, any private or public lands and their 
respective water territories within the Province of Bataan; Provided, That 
when applicable, the municipal waters of up to fifteen (15) kilometers from 
the low water mark area of the edge of the SpeDEZ shall be deemed included 
in the territorial jurisdiction of the SpeDEZ; Provided further. That the 
SpeDEZA and the relevant LGUs shall provide for immediate and responsive 
mechanisms, best management practices and suitable environmental 
protection programs for land and coastal zone management to address any 
abuse and/or exploitation of the natural environment within the territorial 
jurisdiction of the SpeDEZ;
Products and goods researched and developed, engineered or manufactured 
by registered enterprises may be made available in the domestic market, 
subject to the limitations in this Act and its Implementing rules and 
regulations, payment of corresponding duties, customs and taxes on raw 
materials, approval by the DND or the PNP In accordance with Republic Act 
No. 10697 and the Regular Foreign Investment Negative List issued by the 
President, other regulations that may be formulated by the SpeDEZA, and 
other applicable regulations and limitations imposed in accordance with law by 
the DND, AFP, PNP, Bangko Sentral ng Pilipinas (BSP), Department of Finance 
(DOF), BOC and Department of Trade and Industry (DTI); Provided, That in 
cooperation with the SpeDEZA, the DND and PNP shall provide and implement 
measures to improve ease and cost of doing business within the SpeDEZ and 
enhance the investment promotion capacity of the SpeDEZA; Provided further. 
That in order to protect domestic industries, a negative list of industries shall 
be drawn up and regularly updated by the SpeDEZA; Provided fmaiiy. That
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enterprises engaged in industries included in such negative list shall not be 
allowed to sell their products locally, notwithstanding the registration of such 
enterprises in the SpeDEZ; and
j) Subject to Section 6(n) of this Act, the defense of the SpeDEZ and the security 
of its perimeter fence shall be the responsibility of the National Government, 
thru the AFP and the GA, in coordination with the SpeDEZA.
Sec. 6. Powers and Functions of the SpeDEZA. - The SpeDEZA shall have the 
following functions:
a) To adopt, alter, and use a corporate seal;
b) To contract, lease, buy, sell, acquire, own and dispose properties of whatever 
nature; Provided, That real properties that form part of the original Camp 
General Antonio Luna shall not be disposed of or encumbered; Provided 
further, That expansion areas may be disposed of or encumbered by the 
SpeDEZA;
c) To sue and be sued in order to carry out its duties, responsibilities, privileges, 
powers and functions as granted and provided for in this Act;
d) To exercise the power of eminent domain for public use and public purpose;
e) To operate, administer, manage, develop, in accordance with Executive Order 
No. 525, as amended, the SpeDEZ according to the principles and provisions 
set forth in this Act;
f) To recommend to the President the issuance of a proclamation or any 
executive issuance to fix or delimit the metes and bounds of the SpeDEZ; 
Provided, that such proclamation shall not be required to expand the SpeDEZ 
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g) To register, regulate and supervise the entities and enterprises in the SpeDEZ 
in a competent and efficient manner that, as far as practicable, balances ease 
of doing business and sound restriction or regulation of activities; the 
SpeDEZA may also register, regulate, and supervise defense related 
enterprises outside of the SpeDEZ territory as defined in Section 3 and Section 
5(h) of this Act. Provided/ That the SpeDEZA shall submit to the DND a 
quarterly report on locators and other registered enterprises of the SpeDEZ.
h) To formulate and exercise general and sole supervision over the 
implementation of the development plans, activities and operations of the 
SpeDEZ; Provided, That the SpeDEZA may coordinate with LCDs when 
necessary to promote development in the SpeDEZ;
i) 
To authorize or undertake, on Its own or through others, and regulate the 
establishment, construction, operation and maintenance of public utilities, 
services, and infrastructure in the SpeDEZ such as shipping, barging, 
stevedoring, cargo, handling, hauling, warehousing, storage of cargo, port 
services or concessions, piers, wharves, bulkheads, bulk terminals, mooring 
areas, storage areas, roads, bridges, reclamation projects, terminals, 
conveyors, water supply and storage, sewerage, drainage, airport operations 
In coordination with the Philippine Ports Authority (PPA), the Civil Aviation 
Authority of the Philippines (CAAP), and the AFP, and such other services or 
concessions or Infrastructure necessary or incidental to the accomplishment of 
the objectives of this Act; Provided, That the registered enterprises of the 
SpeDEZ 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 SpeDEZ;
j) 
To issue license, set fees, regulate the establishment, operation, and
%
maintenance of utilities, educational and medical institutions, infrastructure 
related to military, defense and law enforcement investments and other 
services in the SpeDEZ such as, heat, light and power, water supply, 
telecommunications, mobile, Internet and other data facilities, transport, toll


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roads and bridges and port services, and to fix just, reasonable and 
competitive rates, fares, charges and prices thereof;
k) To construct, acquire, own, lease, operate and maintain on its own or through 
contracts, franchises, licenses, bulk purchase from the private sector and 
bulld-operate-transfer scheme or joint venture with the private sector, any or 
all of the public utilities and Infrastructure required or needed for the 
operation and development of the SpeDEZ, including transportation, access 
and connection to, and out of the SpeDEZA, in coordination with appropriate 
national and local government authorities and in conformity with applicable 
laws;
l) 
To raise or borrow, within the limitation provided by law, and subject to the 
approval or opinion of the Monetary Board of the BSP, as the case may be, 
adequate and necessary funds from local or foreign sources, to finance its 
projects and programs under this Act, and for this purpose, to issue bonds, 
promissory notes, and other forms of securities, and to secure the same by a 
guarantee, pledge, mortgage, deed of trust, or an assignment of all or part of 
its property or assets subject to Section 6(b) of this Act;
m) To enter Into Public-Private Partnership, Build-Operate-Transfer schemes or
any of its variants, management contract, joint venture, co-production, or 
similar 
agreements with local or foreign entities for the management
and operation of the SpeDEZ, a portion thereof, or any enterprise registered 
therein to ensure the viability of the SpeDEZ;
n) To provide internal security to the SpeDEZ, in coordination with the National 
Government and affected LGUs; Provided, That for this purpose, the SpeDEZA 
shall provide and establish its own internal security and firefighting forces and 
identify and reserve facilities and areas within the SpeDEZ for the AFP, which 
shall be responsible for the perimeter security of the SpeDEZ, through the GA; 
Provided further, That in the event that the assistance of the AFP or PNP is 
necessary, the AFP or PNP shall not interfere in the Internal affairs of the
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SpeDEZA, except to provide the necessary security and defense, or law 
enforcement assistance, as the case may be; Provided finally, That expenses 
of the AFP or PNP in the SpeDEZ shall be borne by the national government;
o) To protect, preserve, maintain and develop the forests, beaches, coral and 
coral reefs, and maintain ecological balance within the SpeDEZ; Provided, 
That notwithstanding the authority of the SpeDEZA to create rules for such
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purpose, the rules and regulations of the Department of Environment and 
Natural Resources (DENR) and other government agencies involved in the 
above functions shall be implemented by the SpeDEZA; Provided further, That 
the SpeDEZA shall create an Ecology Center for such purpose;
p) To create, operate or contract to operate such functional units or offices of the 
SpeDEZA as it may deem necessary;
q) To issue certificates of origin for products manufactured or processed in the 
SpeDEZ;
r) To Issue rules and regulations necessary to implement and accomplish the 
purposes, objectives and policies provided herein, in consultation with DND, 
DU, DOF and other relevant government agencies;
s) To appropriately zone the SpeDEZ and provide for buffer zones when 
necessary and reserve areas for housing;
t) 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 SpeDEZ, in 
coordination with government agencies having jurisdiction over activities in 
the SpeDEZ not otherwise solely reserved to the SpeDEZA; Provided, That all 
government agencies are directed to provide and extend utmost and full 
cooperation to the SpeDEZA in the establishment of such one-stop shops; and
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u) To perform such other functions as may be necessary to carry out the
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provisions of this Act.
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Sec. 7. Composition of the SpeDEZA. - The powers of the SpeDEZA shail be vested
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in and exercised by a Board of Directors which shail be composed of the following:
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a) The Secretary of the DND who shall be the ex-officio Chairman;
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b) The Undersecretary of National Defense of the DND as the Vice-Chairman; 
Provided, That in the absence of the Chairman, the Vice-Chairman shall 
preside over the meetings of the Board of the SPeDEZA;
c) Members who shall consist of:
1. 
DND Undersecretary;
2. 
DND Undersecretary;
3. 
DND Undersecretary;
4. 
DND Assistant Secretary;
5. 
DND Assistant Secretary;
6. 
Director of Government Arsenal;
7. 
Director of the Office of Strategy, Capability and Technology;
8. 
DND Chief of Legal Affairs;
9. 
One (1) representative from the from the investors within the SpeDEZ;
10. 
One (1) representative from the workers in the SpeDEZ;
11. 
One (1) representative from the Province of Bataan;
12. 
One (1) representative from the Municipality of Limay, Bataan;
13. 
One (1) representative from the legislative district covering the site of 
the SpeDEZ;
14. 
One (1) representative from the Department of Trade and Industry;
15. 
One (1) representative from the Department of Finance.
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In the event of abolition of concerned DND Office, SND has the authority to 
appoint the replacement to maintain majority members of the Board of Directors from 
the DND.
In the event the Chairman and Vice-Chairman are unable to attend the board 
meeting, the members present constituting a quorum shall elect amongst themselves 
the Presiding Officer for that particular meeting. The Presiding Officer shall not have 
voting rights except to break a tie. For the purpose of determining quorum, vacant 
seats shall not be considered.
Except those coming from the DND and GA, the members of the Board 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 
unused portion of the term.
All members of the Board shall be Filipino citizens and no person shall be 
appointed by the President of the Philippines as a member of the Board unless he is of 
good moral character and proven probity and Integrity. Except for the representatives 
of the DND, GA and workers, members of the Board are required to be degree holders 
in any of the following fields: economics, business, public administration, law, 
management, military science, 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 shall each receive per diem at rates to be determined 
by the Department of Budget and Management (DBM) in accordance with existing rules 
and regulations; Provided, That the total per diem collected each month shall not 
exceed the equivalent per diem for four (4) meetings.
Sec. 8. Administrator of the SpeDEZA - The SpeDEZA shall have an Administrator 
with a rank of Department Undersecretary who shall be appointed by the President of 
the Philippines. The Administrator shall be at least forty (40) years of age, of proven
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probity and integrity, and a degree holder in any of the following fieids: economics, 
business, pubiic administration, law, management or their equivalent, with at least ten 
(10) years relevant working experience, preferably In the field of business, 
management, or public administration.
Sec. 9. Powers and Duties of die Administrator. - The Administrator shall have the 
following powers and duties:
a) To direct and manage the affairs of the SpeDEZA in accordance with the 
policies of the Board;
b) To establish the internal organization of the SpeDEZA 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 SpeDEZA;
f) 
To create a mechanism for 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 SpeDEZ;
g) To preside at the meetings of the Board of the SpeDEZA in the absence of the 
Chairman;
h) To directly administer and supervise the operations and day-to-day business 
activities of the SpeDEZA;
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i) 
To execute, on behalf of the SpeDEZA, all contracts, agreements and other 
instruments affecting its interests and duly approved by the Board; and
j) 
To perform such other duties as may be assigned to him by the Board or 
which are necessary or incidental to his office.
Sec. 10. Principal Office of the SpeDEZA. - The SpeDEZA shail maintain its 
principal office in Camp Gen. Antonio Luna, Municipaiity of Limay, Province of Bataan, 
but it may establish iiaison offices within the Philippines as may be necessary for the 
proper conduct of its business.
Sec. 11. Organization and Personnel. - The Board of the SpeDEZA shali provide for 
an organizational structure and appoint employees, subject to applicable provisions of 
the civil service laws and regulations. Upon the recommendation of the Chairman and 
Administrator and with the approval of the Secretary of the DBM, 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; Provided, 
That the Chairman and Administrator shall exercise administrative supervision on its 
employees.
The officers and employees of the SpeDEZA, 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 SpeDEZA, subject to civil service laws and 
regulations, shall be removed or suspended except for cause, as provided by law.
Sec. 12. Special Labor Center. - A Special Labor Center shall be established within 
the SpeDEZ. This Center shall endeavor and be responsible to pro-actively play a vital 
role In studying and amicably settling professional, labor relations issues and disputes, 
interpretation of employment service contracts, and monitoring work, work place, 
hygiene and safety standards within the SpeDEZ, particularly of the duly registered 
entities and enterprises. The Special Labor Center shall comprise of a labor office, an
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industrial health and safety office, an inspectioh/investigative and disputes office, and 
an enforcement office.
In order to support the economic and employment generation thrusts of the LGUs, 
the SpeDEZA shall implement policies and programs that will serve to prioritize for 
employment In the SpeDEZ, workers who are residents of stakeholder LGUs. Registered 
enterprises shall, as far as practicable, source all its labor needs from the stakeholder 
LGUs of the SpeDEZ, subject to existing laws and regulations; Provided, That 
"stakeholder LGUs" for the purpose of this Act shall refer to all local government units 
which (1) derive a share in the five percent (5%) final tax Imposition within the 
SpeDEZ, (2) host expansion areas of the SpeDEZ in accordance with Section 5(g) or 
Section 6(0 of this Act, and/or (3) host registered enterprises of the SpeDEZ pursuant 
to section 6(g) of this act;
The SpeDEZA and, as far as practicable, the locators and registered enterprises of 
the SpeDEZ, shall prioritize for employment qualified former personnel of the GA who 
have been terminated or removed from the service due to modernization of the GA.
Sec. 13. Investors Visa. - Any foreign national who invests an amount of at least 
Two Hundred Thousand US Dollars (US$200,000.00), either in cash and/or equipment, 
in a registered enterprise shall be entitled to an investor's visa: Provided, That the 
foreign national has the following qualifications:
a) Must be at least eighteen (18) years of age;
b) Must not have been convicted by final judgment of a crime involving moral 
turpitude;
c) Must not be afflicted with any loathsome, dangerous or contagious disease;
d) Must not have been institutionalized for any mental disorder or disability; and
e) Must establish by verifiable and credible evidence his financial capability and 
capacity.
As a holder of investor's visa, an alien shall be entitled to reside in the Philippines 
while his investment subsists. For this purpose, the alien should submit an annual
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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, the investor's visa issued to him shall automatically expire and/or be 
withdrawn.
The authority to issue visas and work permits shall remain with the Bureau of 
Immigration (BI) and the Department of Labor and Employment (DOLE), respectively; 
Provided, That the BI and the DOLE shall implement measures to expedite the 
processing of such visas and permits for workers in the SpeDEZ and coordinate with the 
SpeDEZA for the purpose of Improving ease of doing business.
Sec. 14. Fiscal Incentives. - Registered enterprises of the SpeDEZ 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 SpeDEZA may impose its own conditions not otherwise prohibited by 
this Act; Provided further. That the SpeDEZA 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. 15. Imposition of a Tax Rate of Five Percent (5%) on Gross Income Earned. - 
The provision of existing laws, rules and regulations to the contrary notwithstanding, no 
taxes, local and national, shall be imposed on business establishments operating within 
the SpeDEZ Including but not limited to all taxes covered in Titles II, III, IV, V, VI, and 
VII of Republic Act No. 8424 otherwise known as the "National Internal Revenue Code" 
and all amendments and successors thereto, and all taxes covered under titles I and II 
of Book II of Republic Act No. 7160 otherwise known as the "Local Government Code" 
and all amendments and successors thereto. In lieu thereof, and subject to Section 16 
of this Act, said business establishments shall pay a five percent (5%) final tax on their
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gross income earned; Provided, That the proceeds from such final tax shall be shared 
by Instrumentalities of the government in accordance with the following percentages:
a) Three per centum (3%) to the National Government, particularly to the DND- 
AFP Modernization Program;
b) One half per centum (.5%) to the Province of Bataan;
c) One half per centum (.5%) to the Treasurer's Office of the Municipality of 
Limay;iand
d) Three fourth per centum (.75%) to the SpeDEZA: Provided, That any surplus 
in the operating, administrative and development expenses shall be remitted 
to the Armed Forces of the Philippines Modernization Program if such surplus 
is left unutilized for a period exceeding five (5) years.
e) One fourth per centum (.25%) to the Defense Research Fund.
For enterprises registered with the SpeDEZA but located in the territory of another 
investment promotion agency pursuant to a mutually beneficial economic defense 
relation established with such promotion agency in accordance with Section 5(c) of this 
act, the one per centum (1%) share from the five per centum (5%) final tax on gross 
Income earned shall be equally divided between the SpeDEZA and the investment 
promotion agency concerned.
The SpeDEZA shall have the authority to grant income tax holiday and net 
operating 
loss carry over subject to Section 16 of this Act and conditions as it
may have imposed pursuant to Section 13 of this Act.
SpeDEZ enterprises deemed as priority investments, as may be determined by the 
SpeDEZA, with the exception of those included in the negative list drawn up as provided 
for in Section 5(i) of this Act, may generate up to one hundred percent (100%) of their 
income from sources within the customs territory but without loss of eligibility to avail 
of the incentives in this act, subject to Section 5(f) of this act.
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Sec. 16. Administration, Impiementation and Monitoring of Incentives. - For the 
proper administration, impiementation and monitoring of tax incentives provided under 
this law, the following are herein mandated:
(a) The SpeDEZA shall be responsible for the administration, management, 
enforcement and implementation of the Incentives granted to registered enterprises; 
Provided, That the SpeDEZA shall, among others, adopt and implement systems and 
procedures affecting defense/military trade and the appropriate customs policies; 
Provided further, That the BOC shall set up and establish a customs controlled area 
outside the gate of the SpeDEZ or other registered enterprises of the SpeDEZ operating 
outside its territory to facilitate payment of taxes on goods entering the Philippine 
customs territory; Provided finaiiy. That notwithstanding the limitations In this Act, 
the SpeDEZA and 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 SpeDEZ, the SpeDEZA 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. 17. Duration of Incentives. - Fiscal incentives under this Act shall be 
terminated after a cumulative period of twenty (20) years from date of registration or 
start of commercial operation, whichever is applicable; Provided, That such 20-year 
period may be extended with regard to industries deemed Indispensable to national 
development and interest. The Industries exempted from this provision shall be 
determined by the SpeDEZA, In consultation with other government agencies. There 
shall be no limit to the enjoyment of the income tax holiday and NOLCO except for the 
sequential availment under Section 17 of this Act and the 20-year period as provided in 
this section.
Sec. 18. Sequentiai Avaiiment of Incentives. - Registered enterprises may enjoy 
the income tax holiday (ITH) granted by the SpeDEZA prior to the availment of the five
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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 for incentives with other 
investment promotion agencies; Provided, That registered enterprises electing to avail 
of the incentives of other promotion agencies shall not be able td avail of the Incentives 
of the SpeDEZ until the expiration of the incentives with such other investment 
promotion agencies.
Sec. 19. Extension of Period of Avaiiment - In the event that a registered 
enterprise has suffered cessation or suspension of operations due to force majeure, 
which has impaired its viability or profitability, the SpeDEZA may extend the period of 
validity of the incentives extended to such registered enterprise.
The SpeDEZA may also extend the period of validity of incentives to a registered 
enterprise which enter Into and fund research and development undertaking, 
technology sharing, or other similar arrangements with investment promotion 
agencies, government agencies and Instrumentalities, local government units, and 
educational Institutions under such terms and conditions as the SpeDEZA may 
prescribe.
Sec. 20. Banking Ruies and Reguiations. - Banks and financial Institutions to be 
established in the SpeDEZ shall be under the supervision of the BSP and shall be 
subject to existing banking laws, rules and regulations.
Sec. 21. Remittances. - In the case of foreign investments, a duly registered entity 
or enterprise within the SpeDEZ 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".
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Sec. 22. Multi-Year Contracts and Other Contractual Arrangements - To spur the 
development of SpeDEZ as a self-reliant and self-sustaining defense investment hub 
where duly qualified and selected locators are provided with guaranteed market access, 
the DND, AFP, PCG and PNP are hereby directed to procure their defense equipment 
and material, whenever available and practicable, from defense Industries registered 
with the SpeDEZA. For this purpose, the DND, AFP, PCG, and PNP are authorized to 
enter into multi-year contracts and other multi-year contractual arrangements with 
manufacturers/suppliers registered with the SpeDEZA under such terms and conditions 
to be provided in the implementing rules and regulations of this Act.
The SpeDEZA, the DND, AFP, PCG, and PNP shall jointly formulate the guidelines 
for the selection of manufacturers/suppliers to be awarded with multi-year contracts. 
Provided, that registration with the SpeDEZA and location of operation and manufacture 
of the defense equipment and material to be procured in the SpeDEZ shall be a 
condition precedent for the award of the multi-year contracts.
The selection of manufacturers/suppliers eligible for multi-year contracts with the 
government shall be exempt from the provisions of Republic Act No. 9184 otherwise 
known as the "Government Procurement Reform Act" and its implementing rules and 
regulations. The length of the multi-year contracts shall be agreed upon by the 
contracting parties taking into consideration the period within which the 
manufacturer/supplier may recoup its investment together with a reasonable rate of 
return. Provided, that the execution of the multi-year contract shall not preclude the 
manufacturer/supplier concerned from accepting and filling in orders from other clients 
as long as the fulfillment of Its obligations under the multi-year contract are not 
adversely affected.
Sec. 23. Countertrade - Whenever applicable and practicable, any of the 
countertrade arrangements defined in Executive Order No. 120 should be explored in 
pursuing deferise related acquisitions. The SpeDEZA in consultation with the DND, DTI, 
and other concerned offices, shall Identify or develop a list of goods/services or 
industries which may be subject to a countertrade.
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Sec. 24. Capitalization. - The SpeDEZA shall have an authorized capital stock of 
Three Billion Pesos (P3,000/000/000.00) to be subscribed wholly by the national 
government.
In addition, all lands embraced and covered by the SpeDEZ, including permanent 
improvements and fixtures, upon proper inventory by the GA or AFP, as the case may 
be, not otherwise alienated, conveyed or transferred to another government agency 
and all other assets which the President may transfer to the SpeDEZA as part of the 
equity contribution of the government.
The annual subscription of the national government to the capital stock of the 
SpeDEZA shall be Included in the General Appropriations Act.
Sec. 25. Supervision and Control. - For purposes of policy direction and 
coordination, the A-BASE shall be under the direct control and supervision of the Office 
of the President of the Philippines.
Sec. 26. Regional Development Council. - The SpeDEZA shall determine the 
development goals for the SpeDEZ within the framework of national development plans, 
policies and goals.
Sec. 27. Relationship with Local Government Units. - Except as herein provided, 
the Municipality of Limay In the Province of Bataan and such other local government 
units where registered enterprises of the SpeDEZ conduct business shall operate and 
function In accordance with the framework of the 1987 Constitution, Local Government 
Code of 1991, and Republic Act No. 7898, as amended by Republic Act No. 10349, 
applicable provisions of the Local Government Code, and this Act.
In case of any conflict between the SpeDEZA, the LGUs and the national 
government on matters affecting the SpeDEZA, other than national defense and 
security matters, the decision of the SpeDEZA shall prevail.
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Sec. 28. Legal Office. - The SpeDEZA shall have and maintain its own internal 
legal office, appropriate in number under the supervision of the Government 
Corporate Counsel. When the exigencies of its businesses and operations demand, the 
SpeDEZA may engage the services of an outside counsel either on a case to case or a 
fixed retainer basis. Such engagement shall not require further approval and 
concurrence of the Office of the Government Corporate Counsel or the Office of the 
Solicitor General and the Commission on Audit.
Sec. 29. Jnterpretation/Construction. - The powers, authorities and functions that 
are vested In the SpeDEZA are Intended to establish national self-sufficiency and self- 
reliance in the advancement of and protection of the national integrity, enhancement 
of national security, decentralization of governmental functions and authority, and 
promote an efficient and effective working relationship between the SpeDEZA, the 
national government and the LGUs. Any Interpretation of this Act shall consider such 
intentions. In the event of conflict of interpretation and provided the intentions cannot 
be harmonized, the provisions of this Act shall be construed In favor of an interpretation 
that would tend to protect national security.
Sec. 30. Audit - The Commission on Audit shall appoint a full-time auditor in the 
SpeDEZA or may assign such number of personnel as may be necessary in the 
performance of Its functions.
Sec. 31. Transitory Provisions. - The SpeDEZA shall be responsible for the 
operation, administration, management and development of the SpeDEZ. The SpeDEZA 
shall effect the transfer herein provided In a manner that will ensure the least disruption 
of ongoing programs of the GA.
Sec. 32. Implementing Rules and Regulations. - The SpeDEZA, DTI, DOF, DND, 
GU shall formulate the Implementing rules and regulations of this Act within ninety 
(90) days after its approval.
Sec. 33. 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,
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Otherwise known as 'The Special Economic Zone Act of 1995", as amended, shall 
likewise apply to the SpeDEZ.
Sec. 34. Separability Clause. - If any provision of this Act shall be held 
unconstitutional or Invalid, the remaining parts or provisions not otherwise affected 
shall remain in full force and effect.
Sec. 35. Repealing Clause. - All laws, executive orders, issuances, rule and 
regulations, or any part thereof, which are inconsistent with the provisions of this Act, 
are hereby repealed or modified accordingly.
Sec. 36. Effectivity Clause. - This Act shall take effect after fifteen (15) days 
following its complete publication in the Official Gazette or in two (2) newspapers of 
general circulation.
Approved/
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