1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session  
House Bill No. _______ 
Introduced by Representative Richard I. Gomez, DPA 
EXPLANATORY NOTE 
True economic development can only be realized when it is experienced by all Filipinos. 
The Philippines had demonstrated impressive GDP growth, averaging above 5% per year. 
However laudable the year-on-year performances are, the economic and financial boon continue 
to be concentrated in the Metro Manila and the CALABARZON areas, which together contributed 
almost half of the country’s GDP. On the other hand, smaller regions, with limited resources-- 
financially, structurally and institutionally, also have limited contributions to the national GDP.  
This bill seeks to establish a special economic zone in Ormoc City, Province of Leyte to 
be known as the Special Economic Zone of Ormoc (SEZO). Ormoc is a first class independent 
component city in the Province of Leyte. It is the largest city, in  terms of land area in Leyte and 
second largest in Eastern Visayas next to Calbayog City in Samar. Ormoc is part of the Fourth 
Legislative District of Leyte, together with the Municipalities of Albuera, Isabel, Kananga, 
Merida, Matag-ob and Palompon. 
Besides the external economic justification for the development of the Fourth District and 
its environs, the intrinsic rationale for such a project is staggering, as well. 
Firstly, Ormoc City’s location provides the area gateways to three vital economic forces: 
to the west are the provinces of Cebu and Bohol, to the north and northeast are Tacloban City, and 
Samar which connects to the Bicol Region and the island of Luzon, and to the south, Southern 
Leyte, which connects to Surigao City and the island of Mindanao.  The city boasts of its highly 
developed external and internal roads and highways. The Ormoc Airport is newly renovated, with 
an expanded passenger terminal and a runway of 1,860 meters in length, which can now 
accommodate a Boeing 737. The port of Ormoc is well-established and continuously provides 
two-hour ferry rides to and from Cebu City and other neighboring destinations, as the city falls in 
line with the Philippine Nautical Highway System.  
Secondly, Ormoc City and the municipalities of the Fourth District have experienced active 
economic growth in the past six years due to a sweeping turnaround of its peace and order situation. 
Ormoc successfully overturned its prior image as the  drug capital of Eastern Visayas. In contrast, 
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Ormoc was recognized as one of the safest cities in the country, in the most recent years. As a 
result of increased investor confidence, more businesses opened and commerce flourished, which 
in turn, established the city as the richest in the region.  
Now, the city is brimming with mature economic activities that demand an elevation to the 
next levels of value addition. These industries  include small- and large-scale agriculture and 
aquaculture, tourism, manufacturing and commerce. Sugar cane, rice and pineapple comprise the 
bulk of large-scale farming. On the other hand, the city has generated numerous small-scale 
organic farms that continue to produce a wide range of organic produce and livestock.  
In terms of commerce, Ormoc has seen the establishment of leading national malls such as 
Robinsons Place and SM Center, as well as the presence of regional malls, such as Gaisano 
Riverside and Ormoc Centrum.  
Ormoc City is also very strategically located because it is the seat of the country’s largest 
geothermal power resource. The Tongonan Geothermal Power Plant is situated within Ormoc City 
and the Municipality of Kananga, which is also part of Leyte’s Fourth District. The district also 
houses Asia’s largest fertilizer factory, and the country’s biggest copper processing plant in the 
Municipality of Isabel. 
Ormoc City has never been so ripe for the next level of economic growth—which is the 
establishment of a special economic zone, that would attract national and foreign investors to 
develop value-adding businesses, such as food processing and packing, food storage, pineapple, 
silk and bamboo yarn and fabric manufacturing, and other agri-based manufacturing. A food-
processing special economic zone in the Visayas would also strengthen food security in the region.  
The realization of such a vision for the next level of  economic growth in Ormoc City and 
the Fourth District of Leyte, and the entire Eastern Visayas Region, would truly boost the area’s 
contribution to the national GDP. Most importantly, this project would certainly make countryside 
development a reality, uplifting not only the economies of provinces, but the lives of families in 
the Eastern Visayas Region. 
RICHARD I. GOMEZ, DPA


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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session  
House Bill No. _______ 
Introduced by Representative Richard I. Gomez, DPA 
AN ACT 
ESTABLISHING  A SPECIAL ECONOMIC ZONE IN ORMOC CITY TO BE KNOWN 
AS THE "SPECIAL ECONOMIC ZONE OF ORMOC,"  
AND APPROPRIATING FUNDS THEREFOR 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title.- This Act shall be known as the Special Economic Zone 
of Ormoc Act. " 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of  the State to 
encourage and promote the attainment of a sound and balanced industrial, economic and social 
development in the country through the promotion of private enterprises. Towards this end, the 
State shall endeavor to establish special economic zones in suitable and selected areas in the 
country where enterprises are given incentives to create an environment conducive to business. 
A friendly business environment will attract local and foreign investors, generate employment 
opportunities, and encourage the regional dispersal of industries. 
SEC. 3. Special Economic Zone of Ormoc. - In accordance with  the foregoing 
policy, there is hereby established a special economic zone in Ormoc City, Province of Leyte, to 
be known as the "Special Economic Zone of Ormoc, " hereinafter referred to as the SEZO. The 
specific metes and bounds of the SEZO shall be more particularly defined in a presidential 
proclamation that shall be issued for this purpose. 
SEC. 4. Governing Principles. - The SEZO shall be managed and operated under 
the following principles: 
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a) Within  the framework  and limitations of the Constitution  and the applicable provisions of the 
Local Government Code, the SEZO shall be composed of: (1) an agri- and aquatic-based food 
processing and agroforestry-based manufacturing park, and (2) a tourism center, in a decentralized 
self-reliant and self-sustaining economic zone. 
 
 
The SEZO shall be provided with appropriate road infrastructure, power and water system, internal 
and 
external 
transportation, 
access 
to 
airport, 
passenger 
and 
shipping 
seaports, 
telecommunications, residential and other facilities needed to attract legitimate and  productive 
local  and foreign investments,  generate linkage industries and employment opportunities  for  the 
people  of  Leyte and  its neighboring towns and cities; 
 
b)  The  SEZO may establish mutually beneficial economic relations with other entities within the 
country, subject to the administrative guidance of the Department of Foreign Affairs and the 
Department of Trade and Industry with foreign entities of enterprises; 
 
c) Foreign citizens and companies owned by non-Filipinos in whatever proportion may set up 
enterprises within the SEZO, either by themselves on in joint venture with Filipinos in any sector 
of industry, international trade and commerce;  
 
d) The SEZO shall be managed and operated as a separate customs territory to ensure and facilitate 
the free flow, entry and movement of machinery and other goods. However, exportation or 
removal of goods, articles and capital from the zone 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. It shall be vested with the authority to issue certificates of origin for 
products manufactured or processed within the SEZO in accordance with prevailing rules of 
origin, and the pertinent regulations of the duly recognized national bodies tasked to oversee all 
other ecozones in the country;  
 
e) Duty free shops shall be located only within the SEZO;  
 
f) Business establishments operating within the SEZO are entitled to the existing fiscal incentives 
as provided for under Presidential Decree No. 66, the law creating the Export Processing Zone 
Authority, or those provided under Book VI of Executive Order No. 226, otherwise known as the 
“Omnibus Investment Code of 1987,” and such incentives, benefits or privileges presently enjoyed 
by business establishments operating within the Subic Special Economic Zone pursuant to 
Republic Act No. 7227; 
 
g) Any provision of existing laws, rules or regulations to the contrary notwithstanding, no taxes, 
local and national, including final withholding taxes on dividends to the parent company and 
branch profit remittances to the head office of a business establishment, shall be imposed on 
business establishments operating within the SEZO. In lieu of all local and national taxes, said 
business establishments shall pay to the National Government a final tax of five (5%) of their gross 
income, to be divided as follows:  
  


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1) Three percent (3%) shall accrue to the National Government; 
2) One percent (1%) to the local government units affected by the declaration of the SEZO 
in proportion to their population, land area, and equal sharing factors; 
3) One percent (1%) to the Special Economic Zone of Ormoc Authority, to be created 
under this Act: Provided, That the final the final tax of five percent (5%) of gross 
income may be increased by the President of the Philippines after ten years from the 
effectivity of this Act, upon the recommendation of the Secretaries of Finance, and 
Trade and Industry, the Chairperson of the National Economic Development Authority 
and the administrator of the Special Economic Zone of Ormoc Authority; Provided, 
further, That in no case shall the final tax to be imposed exceed fifteen per centum 
(15%) of net taxable income.  
 
In case of conflict between local and national tax laws on the one hand, and the tax incentive 
herein granted on the other, the same shall be resolved in favor of the grant of incentives. 
 
h) Except as otherwise provided herein, the local government units embraced within the SEZO 
shall retain and maintain their basic autonomy and identity, and shall operate and function in 
accordance with Republic Act No. 7160, otherwise known as the “Local Government Code of 
1991;” 
 
(i) Any foreign investor who establishes a business enterprise within the SEZO and who maintains 
capital investment of not less than One hundred Fifty Thousand US Dollars (US$150,000) shall 
be granted, along with the foreign investor’s spouse, dependent and unmarried children below 
twenty-one  (21) years of age, a permanent resident status within the SEZO; Such foreign investor 
spouse, dependents and unmarried children below the age of twenty-one (21), shall have freedom 
of ingress and egress in the SEZO without any need of any special authorization from the Bureau 
of Immigration.  
Likewise, the Special Economic Zone of Ormoc Authority shall issue working visas renewable 
every two (2) years to foreign executives and foreign technicians with highly specialized skills 
which no Filipino possesses, as certified by the Department of Labor and Employment.  
 
The names of the foreigners granted permanent resident status and working visas by the Special 
Economic Zone of Ormoc Authority shall be reported to the Bureau of Immigration within thirty 
(30) days from such grant. 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. 
 
j) The provisions of any law in the country notwithstanding, any foreigner, partnership, 
corporation, or any other business association not created and existing under the laws of the 
Republic of the Philippines, engaged in the business of retailing goods and merchandise, shall be 
allowed to engage in such retail trade within the SEZO after securing a permit for that purpose 
from the Special Economic Zone of Ormoc Authority: Provided, That only foreign nationals 
engaged in medium and large-scale retail trade may be permitted to engage in such business within 


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the SEZO. The determination of the medium and large-scale retail operation shall be the 
responsibility of the Special Economic Zone of Ormoc Authority;  
 
k) Existing banking laws and Bangko Sentral ng Pilipinas (BSP) rules and regulations shall apply 
on foreign exchange and other current account trade banking laws and Bangko Sentral ng Pilipinas 
(BSP) rules and regulations shall apply on foreign exchange and other current account trade and 
non-trade transactions, local and foreign borrowings, foreign investments establishment and 
operation of local banks and foreign banks, foreign currency deposit units, offshore banking units 
and other financial institutions under the supervision of the BSP: Provided, however, That the 
Special Economic Zone of Ormoc Authority may, in coordination with the Bangko Sentral ng 
Pilipinas and the Department of Trade and Industry, adopt more liberal rules to attract offshore 
banking, financial services, trust or trading institutions to operate in the zone: Provided, further, 
That  such rules if adopted will be deemed to repeal, modify or amend existing legislation on 
offshore banking, finance, financial services, trust or trading institutions insofar as the SEZO is 
concerned. 
 
 
SEC. 5. Special Economic Zone of Ormoc Authority. Subject to the concurrence 
of the local government units that will be affected by the creation of the SEZO, there is hereby 
created a body corporate to be known as the Special Economic Zone of Ormoc Authority, 
hereinafter referred to as the Authority, which shall manage and operation the SEZO, in 
accordance with this Act. It shall be organized within one hundred eighty (180) days after the 
effectivity of this Act.  
 
 
SEC. 6. Principal Office. – The Authority shall maintain its principal office in Ormoc City, 
but it may establish branches and agencies within the Philippines and abroad as may be necessary 
for the proper conduct of its business.  
 
 
SEC. 7. Powers and Functions of the Authority. The Authority shall have the following 
functions: 
 
a) Create and develop a master plan for SEZO that incorporates a vision for a world class food 
processing, packing and manufacturing park, based on established and new agricultural, 
aquatic, and agroforestry advantages of Ormoc City and the Municipalities of the Fourth 
District of Leyte. Said master plan must likewise ensure the SEZO’s compliance to all 
environmental laws, including proper consultation with affected communities and 
environmental agencies and experts; 
 
b) Recommend to the President the issuance of a proclamation to fix and delimit the site of the 
SEZO;  
 
c) Create a sound, fair and efficient plan for land expropriate for the purposes of establishing 
the SEZO, which includes proper consultation with local residents and planning for displaced 
residents; 
 


5 
 
d) Operate, administer, and manage the SEZO according to the principles and provisions set 
forth in this Act; 
 
e) Register, regulate and supervise the enterprises in the SEZO n an efficient and decentralized 
manner; 
 
f) Regulate and undertake the establishment, operation and maintenance of utilities, other 
services and infrastructure in the SEZO such as heat, light and power water supply, 
telecommunications, transport, toll roads and bridges, port services and fix just, reasonable 
and competitive rates, fares, charges and prices therefor; 
 
g) Directly negotiate with and grant foreign or international airlines and carriers entry points and 
landing rights into the zone; 
 
h)  Have sole, absolute and exclusive authority to construct, acquire, own, lease, assign, 
establish, operate and maintain on its own or through others by virtue of contracts, franchises, 
licenses, or permits under any of the schemes allowed in Republic Act No. 6957, otherwise 
known as the “Build-Operate-Transfer Law,” or in joint venture with the private sector 
without the necessity of conducting public bidding thereon, any or all of the public utilities 
and infrastructure required or needed n the SEZO, which include transportation, construction 
of road networks, water and sewerage systems. electric power, wireless telecommunications 
systems, facilities and services, in coordination with appropriate national and local 
government authorities and in conformity with applicable laws thereon;  
 
i) To undertake all public infrastructure and utility projects within the SEZO and as provided 
for in this Act and to contract foreign loans and grants in accordance with existing laws; 
 
j) Operate on its own, either directly or through a subsidiary entity, or license to other tourism 
related activities, including games, amusements and recreational sports facilities to provide, 
in cooperation with the Department of Tourism, incentives to tourism-related businesses 
operating with the SEZO which include duty-free privileges for non-resident visitors; 
 
k) Within the limitation provided by law, to raise or borrow adequate and necessary funds from 
local or foreign sources 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 
same by the guarantee, pledge, mortgage, deed of trust, or an assignment of all or part of its 
property of assets;  
 
l) Provide security for the SEZO in coordination with the national and local governments. For 
this purpose, the Authority may establish and maintain its own security force and firefighting 
capability or hire others to provide the same; 
 
m) Protect, preserve, maintain and develop, among others, the virgin forests, beaches, coral and 
coral reefs and minerals and mineral deposits including precious metals within the SEZO. 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 


6 
 
implemented by the SEZOs, including the issuance of environmental clearance certificates, 
patents, and leasehold rights over government lands and mining, drilling and timber licenses; 
 
n) Acquire private and real properties or rights thereon for infrastructure and other development 
projects, secure rights-of-way which are needed or said projects and the settlement of claims 
for payments, without further need of conducting feasibility studies, information campaign, 
engineering surveys, project costs estimates as required by existing laws and regulations  
pertinent thereto; 
 
o) Charge reasonable fees for the provisions of services and the maintenance of infrastructure 
and utilities; 
 
p) Impose fines and penalties for violations of the provisions of this Act and the rules and 
regulations to be issued by the Authority;  
 
q) Phase the operationalization of the zone by delineating secured areas within the zone: 
Provided, That privileges including tax and duty-free retailing provided herein shall be 
accorded only to the secured areas: Provided, further, That the Authority-registered 
enterprises located outside of the secured areas may still enjoy the income incentives and 
duty-free importation privileges herein granted but may not engage in tax and duty-free 
retailing: Provided finally, That in such secured area, the component local government units 
may still exercise their taxing and revenue generating authority but only insofar as persons or 
enterprises not registered with the Authority as zone enterprises; 
 
r) Create, operate or contract to operate such agencies and functional units or offices of the 
Authority, as it may deem necessary;  
 
s) Adopt, alter and use a corporate seal; make contracts, leases, own or otherwise dispose of 
personal or real property; sue and be used; and otherwise carry out its functions and duties as 
provided for in the Act; and 
 
t) Issue rules and regulations consistent with the provisions of this Act as may be necessary to 
implement and accomplish the purposes, objectives and policies provided therein.  
 
SEC. 8. Non-profit Character of the Authority.--  The Authority shall be non-profit and 
shall devote the use of its returns from capital investments, as well as excess revenues from its 
operations, for the development, improvement, and maintenance and other related expenditures of 
the Authority, to pay its indebtedness and obligations, and in furtherance and effective 
implementation of the policy provided in this Act.  
 
 
In consonance thereto, the Authority is hereby declared exempt from the payment of all 
taxes, duties, fees, imposts, charges, costs and service fees as well as any other costs and charges 
in any court or administrative proceedings 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 effectivity of this Act, if the President finds the Authority to be self-sustaining and 
financially capable by then to pay such taxes, customs, duties fees and other charges after 


7 
 
providing for debt service requirements of the Authority and of its projected capital and operating 
expenditures. 
 
SEC. 9. Board of Directors, Composition and Tenure of the Authority.--  The powers of 
the Authority are vested and  exercised by a Board of Directors, hereinafter referred to as the 
Board. The Board is composed of the following; 
 
a) The chairperson who is appointed by the President of the Republic of the Philippines;  
b) The president and chief executive officer (CEO) who is appointed by the Board and who 
is the vice chairperson of the Board;  
c) One representative from the domestic investors;  
d) One representative from the foreign investors; 
e) One representative from the workers within in the SEZO; and  
f) Two prominent citizens of the Philippines of whom one shall be a resident of the Ormoc 
City, as members. 
 
The chairperson and the members of the Board shall be appointed by the President of the 
Philippines to serve for a term of (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 president and CEO shall serve 
for a term of three (3) years subject to reappointment by the Board.  Except for the representatives 
of the investors and labor sectors, no person shall be appointed by the President of the Philippines 
as a member of the Board unless the person is a Filipino citizen, of good moral character, of proven 
probity and integrity and a degree-holder in any of the following fields: economics, business, 
public administration, law, management or their equivalent, and with at least ten (10) years 
relevant working experience preferable in the fields of management or public administration.  
 
The members of the Board are entitled to receive a  per diem at a rate to be determined by 
the Department of Budget and Management 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 
(P 10,000.00) for every Board meeting. 
 
SEC. 10. Powers and Duties of the Chairperson, President and CEO of the Authority.--  
The chairperson shall have the following powers and duties: 
a) To exercise supervision over the affairs of the Authority; 
b) To preside over all the meetings of the Board; 
c) To spearhead the formulation of policies and procedures for the Board and the Authority 
with the concurrence of the majority of its members; 
d) To direct the affairs of the Authority in accordance with the policies of the Board through 
its president and CEO; 
e) To ensure that the goals and objectives set forth by the Board are achieved and its policies 
implemented; and 


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f) To lead the Board in carrying out the powers and functions of the Authority as enumerated 
in Section 7 of this Act. 
 
The president and CEO shall, among other powers and duties, execute, carry out and 
administer the policies, measures, orders and resolutions approved by the Board; direct and 
supervise the day to day operation and administration of the SEZO, and exercise such other powers 
and perform such other functions or duties as may be directed to or assigned by law or by the 
Board from time to time. Particularly, the president and the CEO shall exercise the following 
powers and duties: 
 
a) To serve as the vice chairperson of the Board and to assist the chairperson, and, in the case 
of absence or incapacity, act instead of the chairperson: Provided, however, That in the 
case both are absent, the Board shall designate a temporary chairperson from among its 
members; 
b) To sign and execute all contracts concluded by the Authority and enter in all necessary 
obligations required or permitted by the charter upon proper authorization by the Board; 
and sign all major documents, notes, checks for the SEZO;  
c) To exercise full discretion in the management of the affairs of the Authority in accordance 
with law and in accordance with the provisions of this Act and be accountable to the Board; 
d) To establish the internal organization of the Authority under such conditions that the Board 
may prescribe; 
e) To submit an annual budget and necessary supplemental budget to the Board for its 
approval; 
f) 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; 
g) To submit to the Board for its approval policies, systems, procedures, rules and regulations 
that are essential to the operation of the EVIS 
h) 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 SEZO; and 
i) To perform such other duties as may be assigned by the Board or which are necessary or 
incidental to the office. 
 
SEC. 11. Organization and Personnel.--  The board of directors of the Authority are 
entitled to organize its own personnel to assist the Board in the exercise of its functions and to 
provide for an organization of the Authority officers and employees.  
 
Upon recommendation of the President and CEO, the Board shall appoint and fix the 
remunerations and other emoluments of its officers and employees in accordance with existing 
laws on compensation and position classification: Provided, That the Board shall have exclusive 
and final authority to promote, transfer, assign or reassign officers of the Authority, any provision 
of existing law to the contrary notwithstanding: Provided, further, That the President and CEO 
may carry out  the removal of such officers and employees. 
 


9 
 
All positions of the Authority shall be governed by a compensation, position, classification 
system and qualification standards approved by the chairperson with the concurrence of the Board 
based on a comprehensive job analysis and audit of actual duties and responsibilities. The 
compensation plan must be comparable with the prevailing compensation plans in the Subic Bay 
Metropolitan Authority (SBMA), the Clark Development Corporation (CDC), the Bases 
Conversion and Development Authority (BCDA) and the private sector and subject to the periodic 
review by the Board no more than once every two (2) years without prejudice to yearly merit 
reviews or increases based on productivity and profitability. The Authority shall therefore be 
exempt from existing laws, rules and regulations on compensation, position classification and 
qualification standards. It shall, however, endeavor to make its systems conform as closely as  
possible with the principles under Republic Act No. 6758, otherwise known as the "Compensation 
and Position Classification Act of 1989," as amended. 
 
The officers and employees of the Authority, including its appointive members of the 
Board, shall not engage directly or indirectly in partisan activities nor take part in any election, 
except to vote. 
 
No officer or employee of the Authority, subject to civil service laws and regulations, shall 
be removed or suspended except for cause, as provided by law. 
 
SEC. 12. Labor and Management Relations.--  - Except as otherwise provided in this Act, 
labor and management relations in the SEZO shall be governed by applicable rules and regulations 
under the Labor Code of the Philippines, as amended. Employees and personnel in the registered 
enterprises shall receive salaries and benefits and shall enjoy working conditions provided under 
the Labor Code and other relevant laws and issuances of the Philippine government and the DOLE. 
The Authority shall allow the visitorial power of the Secretary of Labor and Employment or the 
duly authorized representative. 
 
SEC. 13. Ipso Facto Clause. - Sections 30-41 of Republic Act No. 7916, otherwise known 
as the "Special Economic Zone Act of 1995," as amended by Republic Act No. 8748, shall 
1psofacto apply to the SEZO. 
 
 
SEC. 14. Capitalization. - The Authority shall have an authorized capital stock of Two 
billion pesos (P2,000,000,000) no par shares with a minimum issue of Ten pesos (Pl0.00) each, 
the majority shares of which shall be subscribed and paid for by the National Government and the 
local government units (LGUs) comprising the SEZO. The Board of Directors of the Authority 
may,  with the written concurrence of 
the Secretary of Finance, sell shares, representing not 
more than forty per centum (40%) of the capital stock of  the Authority to the general public under 
such policy as the Board an d 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  Authority.  
 


10 
 
The amount necessary to subscribe and pay for the shares of the National Government to the capital 
stock of the Authority shall be included in the annual General Appropriations Act. For LGUs, the 
funds shall be taken from their internal revenue allotment and other local funds. 
 
SEC. 15. Supervision. – The SEZO shall be under the direct control and supervision of the 
Philippine Economic Zone Authority for purposes of policy direction and coordination.  
 
 
 
SEC. 16. Relationship with the Regional Development Council. – The Authority shall 
determine the development goals for the SEZO within  the framework of national development 
plans, policies and goals. The president and CEO shall, upon the approval by the Board, submit 
the plans, programs and projects to the Regional Development Council for inclusion and inputs to 
the overall regional development plan.  
 
SEC. 17. Relationship with Local Government Units. – Except  as herein provided, the 
local government units comprising the SEZO shall retain their basic autonomy and identity.  In 
case of any conflict between the Authority and the Province of Leyte  on matters affecting the 
SEZO other than defense  and security matters, the decision of the Authority  prevails.  
 
SEC. 18. Interpretation and Construction. – The powers, authorities and functions that 
are vested in the Authority are intended to decentralize government functions and authority and 
promote an efficient and effective working relationship between the SEZO, the National 
Government and the local government units.   
 
SEC. 19. Auditing. – The Commission on Audit shall appoint a representative who shall 
be a full time auditor of the Authority and assign such number of personnel as may be necessary 
to assist said representative in the performance of official duties. The salaries and emoluments of 
the assigned auditor and personnel shall be in accordance with pertinent laws, rules and 
regulations.  
 
SEC. 20. 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. 21. Repealing Clause. – All laws, executive orders and issuances ot any part thereof, 
which are inconsistent herewith are hereby repealed or amended accordingly.  
 
SEC. 22. Effectivity . – This Act shall take effect fifteen (15) days after its publication in 
the Official Gazette or in a newspaper of general circulation. 
 
 
 
Approved,