aN

RECEIVED

Republic of the Philippi
‘epublic of the Philippines are 01 JUL 20s

HOUSE OF REPRESENTATIVES
Quezon City

TWENTIETH CONGRESS
First Regular Session

HOUSE BILLNO._$29___

Introduced by Hon. Julienne L. Baronda

EXPLANATORY NOTE

This house bill proposes to create a special economic zone and free port in the City of Iloilo to be
known as the Metro Iloilo Special Economic Zone (MILOECOZONE) and the MILOECOZONE
Authority.

It is public knowledge that Iloilo City is a highly urbanized city located at the southern tip of
Panay Island. It lies on a flat alluvial plain mostly reclaimed from swampy areas resulting from
decades of urbanization. The city has a land area of 7,830 hectares. It is bordered in the north by
Pavia, Oton in the west and Leganes in the northeast. It faces the Iloilo Strait and the towns of
Buenavista and Jordan in the island of Guimaras.

Iloilo City functions as the regional capital and the administrative center of Western Visayas. It is
an international gateway with the presence of the international airport in Santa Barbara-Cabatuan
and seaport in Iloilo City. Based on the 2015 census, it has a total population of 447,992 growing
annually at the rate of 1.04%. The city attracts dwellers drawn to a peaceful environment and
good work-life balance. Its population continues to swells resulting from in-migration as the city
continues to attract investments mostly in Information Technology - Business Process
Management (IT-BPM) sector, MICE (meetings, incentives, conferences and exhibitions)
activities, health and wellness, accommodation and food service activities, real estate
development and other tertiary services.

If passed into law, the MILOECOZONE will serve as a critical and vital economic hub that will
bring substantial economic change for the City of Iloilo, and for the entire Western Visayas
through jobs generation and investments.

Based on the foregoing, the approval of this bill is earnestly sought.

Rep. Julienne “Jam” L. Baronda
District Representative
Lone District of lloilo City


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

TWENTIETH CONGRESS
First Regular Session

HOUSE BILLNO._ $25

Introduced by Hon. Julienne L. Baronda

AN ACT CREATING A SPECIAL ECONOMIC ZONE AND FREE PORT IN THE CITY OF
ILOILO, CREATING FOR THIS PURPOSE THE METRO ILOILO SPECIAL ECONOMIC ZONE.
AND FREE PORT AUTHORITY, APPROPRIATING FUNDS THEREFORE, AND FOR OTHER
PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

CHAPTER 1

GENERAL PROVISIONS

SECTION 1. Short Title. — This Act shall be known as the “Metro Iloilo Special 2 Economic
Zone Act."

SECTION 2. -Declaration of Policy. ~ It is declared the policy of the State to encourage,
promote, and accelerate the sound and balanced industrial, economic, and social development of
the country. The establishment of special economic zones shall attract legitimate and productive
forcign investments in strategic locations in the country. It shall generate employment, enhance
productivity, and increase individual and family incomes, thereby enhancing the quality of life of
the Filipino people.

CHAPTER IL
CREATION OF THE ECONOMIC ZONE

SECTION 3. Creation of the Metro Iloilo Special Economic Zone. — In accordance with the
foregoing declared policy and subject to the concurrence of the concerned local government
units (LGUs) of Hoilo, there is hereby established a special economic zone, hereinafter referred
to as the Metro Iloilo Special Economic Zone or MILOECOZONE. The MILOECOZONE shall
cover a particular area located in the City of Iloilo, the specific metes and bounds of which shall
be more particularly defined in a presidential proclamation that shall be issued for this purpose:
Provided, That the lands embraced therein shall be contiguous to one another.


SECTION 4. Creation of the Metro Iloilo Special Economic Zone Authority. ~ There is hereby
created a body corporate to be known as the Metro Iloilo Special Economic Zone Authority,
hereinafter referred to as the MISEZA which shall manage and operate the MILOECOZONE, in
accordance with the provisions of this Act. The corporate life of the MISEZA 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.

SECTION 5. Governing Principles. — The MISEZA shall manage and operate the
MILOECOZONE, under the following principles:

a) Within the framework and limitations of the Constitution and applicable provisions of
Republic Act No. 7160, or the Local Government Code, as amended, the
MILOECOZONE 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 MILOECOZONE shall be equipped with transportation, telecommunications, and
other facilities needed to attract legitimate and productive investments, generate linkage
industries and employment opportunities for the people of Iloilo City and those in
neighboring towns and cities;

°)

The MILOECOZONE 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, the Philippine Economic Zone Authority (PEZA), and the
Department of Trade and Industry (DTI), with foreign entities or enterprises;

4) Foreign citizens and companies owned by non-Filipinos in whatever proportion may set
up enterprises in the MILOECOZONE, either by themselves or in a joint venture with
Filipinos in any sector of industry, international trade and commerce within the
MILOECOZONE;

©)

The MILOECOZONE 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 subject to Title XIII of the National
Internal Revenue Code, as amended. However, exportation or removal of goods from the
territory of the MILOECOZONE to the other parts of the Philippine territory shall be
subject to customs duties and taxes under Republic Act No. 10863, otherwise known as
the “Customs Modernization and Tariff Act" and other relevant tax laws of the
Philippines;

f) The areas comprising the MILOECOZONE may be expanded or reduced when necessary
through a presidential proclamation issued for the said purpose. For this purpose, the
MISEZA, in consultation with the LGUs, shall have the power to acquire either by
purchase, negotiation or condemnation proceedings, any private land within or adjacent


to the MILOECOZONE for the following purposes: (1) consolidation of lands for zone
development; (2) acquisition of right of way to the MILOECOZONE; and (3) the
protection of watershed areas and natural assets valuable to the prosperity of the
MILOECOZONE;

Goods manufactured by a MILOECOZONE 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 MISEZA
together with the PEZA, the Bureau of Customs, the Bureau of Internal Revenue, 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; and

8)

h

The defense of the MILOECOZONE and the security of its perimeter fence shall be the
responsibility of the national government in coordination with the MISEZA and the
concerned LGUs.

SECTION 6. Development Goals of the MILOECOZONE. ~ The MISEZA shall determine the
development goals of the MILOECOZONE within the framework of national development plans,
policies, and goals. The Chairperson-Administrator shall, upon approval by the Board of the
MISEZA submit the MILOECOZONE plans, programs, and projects to the Regional
Development Council for inclusion in the regional development plan.

SECTION 7. Capitalization. — The MISEZA shall have an authorized capital stock of two
billion (2,000,000,000.00) no par shares with a minimum issue of Ten pesos (Php10.00) each, the
majority shares of which shall be subscribed and paid for by the national government and the
LGUs embracing the MILOECOZONE. The Board of Directors of the MISEZA 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 MISEZA 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
MISEZA.

‘The amount necessary to subscribe and pay for the shares of the national government to the
capital stock of the MISEZA shall be included in the General Appropriations Act. For the LGUs
concerned, the funds shall be taken from their internal revenue allotment and other local funds

SECTION 8. Principal Office of the MISEZA. — The MISEZA shall maintain its principal office
in the City of Hoilo but it may establish liaison offices within the Philippines as may be
necessary for the proper conduct of its business

SECTION 9. Powers and Functions of the MISEZA. ~ The MISEZA shall have the following
powers and functions:

a) To operate, administer, manage, and develop the MILOECOZONE according to the
principles and provisions set forth in this Act:


b)

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8)

h)

To register, regulate, and supervise the enterprises in the MILOECOZONE in an efficient
and decentralized manner, subject to existing laws;

To coordinate with LGUs and exercise general supervision over the development plans,
activities, and operations of the MILOECOZONE;

To regulate and undertake the establishment, construction, operation, and maintenance of
public utilities, other services, and infrastructure in the MILOECOZONE such as 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 coordination with the
Civil Aviation Authority of the Philippines, and such other services or concessions or
infrastructure necessary or incidental to the accomplishment of the objectives of this Act;

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
infrastructure required or needed for the operation and development of the
MILOECOZONE, in coordination with appropriate national and local government
authorities and in conformity with applicable laws thereon:

To approve plans, programs, and projects of the MILOECOZONE to be submitted to the
Regional Development Council for inclusion in the regional development plan;

To operate on its own, either directly or through licenses to others, tourism-related
activities, including games, amusements, recreational and sports facilities, subject to the
approval and supervision of the Philippine Amusement and Gaming Corporation;

To raise or borrow, within the limitation provided by law, and subject to the approval 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 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;

To protect, preserve, maintain, and develop the forests, beaches, corals, and coral reef’,
and maintain ecological balance within the MILOECOZONE. Notwithstanding the power
of the MISEZA to create rules for such purpose, the rules and regulations of the
Department of Environment and Natural Resources and other government agencies
involved in the above functions shall be implemented by the MISEZA;

To create, operate or contract to operate such functional units or offices of the MISEZA
as it may deem necessary;


k) To adopt, alter, and use a corporate seal; contract, lease, buy, acquire, own or otherwise
dispose of personal or real property of whatever nature: sue and be sued; and otherwise
carry out its functions and duties as provided for in this Act;

1) To issue certificates of origin for products manufactured or processed in
MILOECOZONE in accordance with prevailing rules of origin and the pertinent
regulations of the PEZA, the DTI, and 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 MILOECOZONE, in coordination with government agencies
having jurisdiction over activities therein: Provided, That all government agencies are
directed to provide and extend utmost and full cooperation to the MISEZA in the
establishment of such one-stop shops;

n)

To ensure that the area covered by the MILOECOZONE is secure at all times: Provided,
That the Armed Forces of the Philippines (AFP) or the Philippine National Police (PNP)
shall not interfere in the internal affairs of the MISEZA 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 the PNP in the MILOECOZONE shall be borne by
the national government;

0)

To exercise such powers as may be essential, necessary or incidental to the powers
granted to it by this Act, as well as those that shall enable it to carry out, implement and
accomplish the purposes, objectives, and policies of set forth in 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.

SECTION 10. Board of Directors of the MISEZA. — The powers of the MISEZA 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) AChairperson, who shall at the same time be the administrator of the MISEZA:
b) Vice-Chairperson who shall be elected from among the members of the Board of
Directors;
©) Members consisting of:
i) The Governor of the Province of Hoilo or a duly-authorized representative from
the Provincial Government of Hloilo:
ii) One (1) of the mayors of the municipalities covered by the ecozone;
iii) One (1) representative from the investors’ group; and
iv) One (1) representative from among the workers in the MILOECOZONE.


The Governor or the Governor's duly authorized representative and the mayors of the
municipalities within the ecozone shall serve as ex officio members of the Board, whose terms in
the Board shall correspond to their terms as elected officials.

The Chairperson-Administrator and the members of the Board, except for the representatives of
the investors and workers groups and 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, their replacements shall serve only the unexpired portion of the respective terms. No
person shall be appointed as a member of the Board unless the person is a Filipino citizen, of
good moral character, of proven probit 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 allowance
at rates to be determined by the Department of Budget and Management in accordance with
existing rules and regulations: Provided, however, That the total per diem allowance collected
each month shall not exceed the equivalent of four (4) meetings unless and until the President of
the Philippines has fixed a higher rate for the per diem allowance for the members of the Board,
such allowance shall not be more than Ten thousand pesos (Php10,000.00) for every Board
meeting,

SECTION 11. Organization and Personnel. — The Board of Directors of the MISEZA shall
provide for its organization and staff. 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 MISEZA, 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 MISEZA, 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 MISEZA, shall be removed or suspended except for cause, as
provided by civil service rules and regulations.

SECTION 12. 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 MISEZA in accordance with the policies of the
Board;

b) To establish the internal organization of the MISEZA 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 MILOECOZONE;

f) To recommend to the Board the remuneration and other emoluments of its officers and
employees in accordance with existing laws on compensation and position classification;

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 MILOECOZONE; and

g

h) To perform such other duties as may be assigned by the Board or which are necessary or
incidental to the office.

SECTION 13. Legal Counsel. — The MISEZA shall have its own internal legal counsel who
shall be under the supervision of the Government Corporate Counsel. When the exigencies of
business and operations demand it, the MISEZA may engage the services of an outside counsel
either on a case to case or on a fixed retainer basis.

CHAPTER UI
INCENTIVES TO ECOZONE ENTERPRISES AND INVESTORS

SECTION 14. Investors Visa. — Any foreign national who invests an amount of Two hundred
thousand US dollars (US$200,000.00) in a registered enterprise, either in cash or equipment,
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 dangerous or contagious disease;

d) Must not have been confined in an institution for any mental disorder or disability; and
e) Must be financially capable as borne out by credible and verifiable evidence.

With an investor's visa, an alien shall be entitled to reside in the Philippines while the
investment subsists. The alien investor shall submit an annual report, in the form duly prescribed
for the purpose, to prove that the investment in the country subsists. Should said alien investor
withdraw the investments from the Philippines, then the investor's visa issued to said alien shall
automatically expire and 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 MILOECOZONE and coordinate closely with the MISEZA to facilitate the
conduct of business operations.

SECTION 15. Fiscal Incentives. — Registered enterprises of the MILOECOZONE may be
entitled to pertinent fiscal incentives granted under Title XIII (Tax Incentives) of the National
Internal Revenue Code, as amended.

SECTION 16. Rules and Regulations Rules and Regulations Governing Banks and Other
Financial Institutions. ~ Banks and other BSP-supervised financial institutions to be established
in the MILOECOZONE shall be under the supervision of the BSP and subject to existing
banking laws, rules and regulations.

SECTION 17. Remittances. — In the case of foreign investments, a duly registered entity or
enterprise within the MILOECOZONE shall have the right to remit earnings to its investors 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” as amended.

CHAPTER IV
NATIONAL GOVERNMENT AND OTHER ENTITIES

SECTION 18. Supervision and Control. — For purposes of policy direction and coordination, the
MISEZA shall be under the direct control and supervision of the Office of the President of the
Philippines.

SECTION 19. Relationship with Local Government Units. ~ Except as herein provided, the
LGUs comprising the MILOECOZONE shall retain their basic autonomy and identity. The City
of Iloilo, Province of Iloilo, shall operate and function in accordance with the framework of the
Constitution, the Local Government Code of 1991, as amended, and this Act.

In case of any conflict among the MISEZA, the LGUs and the national government on matters
affecting the MILOECOZONE, other than national defense and security matters, the decision of
the MISEZA shall prevail.

SECTION 20. Audit. - The Commission on Audit shall appoint a full-time auditor for the
MISEZA and may assign such number of personnel as may be necessary to assist the auditor in
the performance of the auditor’s functions.

CHAPTER V
MISCELLANEOUS

SECTION 21. Interpretation and Construction. ~ The powers, authorities and functions that are
vested in the MISEZA 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 promotion of an efficient and
effective working relationship among the MISEZA, 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 shall protect national security.

SECTION 22. Applicability Clause. — Insofar as they are consistent with the provisions of this
Act, the provisions of Sections 30 to 41 of Republic Act No. 7916, otherwise known as "The
Special Economic Zone Act of 1995", as amended, shall likewise apply to the MILOECOZONE.

SECTION 23. Implementing Rules and Regulations. — Within sixty (60) days from effectivity of
this Act, the DTI shall, in coordination with the DOF and the National Economic and
Development Authority, formulate rules and regulations for the effective implementation of the
provisions of this Act.

SECTION 24. 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.

SECTION 25. Repealing Clause. ~ All laws, executive orders or issuances or any part thereof,
which are inconsistent herewith, are hereby repealed or amended accordingly.

SECTION 26. This Act shall take effect fifteen (15) days after its publication in the Official
Gazette or in a newspaper of general circulation.

Approved,