PRES
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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

House BiLNo.__/483

INTRODUCED BY REP. "KUYA” JOSE ANTONIO R. SY-ALVARADO

EXPLANATORY NOTE
San Miguel Corporation is proposing to build a new airport in Bulakan, Bulacan in
order to decongest the Ninoy Aquino Intemational Airport (NAIA) given that in 2019,
NAIA handled 39.5 million passengers despite its planned capacity of only 31 million.
The planned airport will cover a total land area of 2,500 hectares which can
accommodate six runways. It will have a total capacity of 100 million passengers
annually when fully operational. Aside from decongesting NAIA, the construction of the

new airport is consistent with the government's thrust to boost infrastructure spending.

This bill seeks to create an economic zone and freeport around the premises of
the new airport. The economic zone and freeport will provide altemative areas for
investments outside of Metro Manila. It has the potential to boost economic activity in the
area, provide more job opportunities to Bulakefios and the surrounding provinces and
improve the economic condition of the province. It is consistent with the declared policy
of the government to actively encourage, promote, induce and accelerate a sound and
balanced industrial, economic and social development in the country especially in rural
areas. Therefore, the establishment of the Bulacan Airport City Special Economic Zone

and Freeport is recommended.


In view thereof, the immediate consideration and approval of this bill is earnestly

requested.

CONG. “KUYA” JOSE ANTONIO R. SY-ALVARADO
Representative
First District of


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
Second Regular Session

HOUSE BILLNO.__7483

INTRODUCED BY REP. “KUYA” JOSE ANTONIO R. SY-ALVARADO

AN ACT
ESTABLISHING THE BULACAN AIRPORT CITY SPECIAL ECONOMIC ZONE AND
FREEPORT, PROVINCE OF BULACAN AND APPROPRIATING FUNDS THEREFOR

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

CHAPTER 1
GENERAL PROVISIONS
SECTION 1. Short Title. - This Act shall be known as the “Bulacan Airport City
Special Economic Zone and Freeport Act."

SEC. 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 foreign investments in strategic locations in the country.
It shall generate employment and increase productivity and individual, as well as family

incomes, thereby enhancing the quality of life of the Filipino people.

CHAPTER II
CREATION OF THE ECONOMIC ZONE AND FREEPORT
SEC. 3. Creation of the Bulacan Airport City Special Economic Zone and
Freeport - In accordance with the foregoing declared policy and subject to the
concurrence of the affected local government units (LGUs) of Bulacan, there is hereby
established a Special Economic Zone and Freeport, hereinafter referred to as the
Bulacan Ecozone. The Bulacan Ecozone shall cover the domestic and intemational
airport, the Airport City, and the entire Municipality of Bulakan in the Province of

Bulacan. The specific metes and bounds of the Bulacan Ecozone shall be more

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particularly defined in a presidential proclamation that shall be issued for this purpose:
Provided, That the lands embraced therein shall be public lands and contiguous to one
another.

SEC. 4. Creation of the Bulacan Airport City Special Economic Zone and
Freeport Authority. - There is hereby created a body corporate to be known as the
“Bulacan Airport City Special Economic Zone and Freeport Authority’ hereinafter
referred to as the BACSEZFA, which shall manage and operate the Bulacan Ecozone, in
accordance with the provisions of this Act. This corporate franchise shall expire in fifty
(60) years counted from the first year after the effectivity of this Act, unless otherwise
extended by Congress. It shall be organized within one hundred eighty (180) days after
the effectivity of this Act.

SEC. 5. Governing Principles. - The BACSEZFA, created under Section 4 of

this Act, shall manage and operate the Bulacan Ecozone under the following principles:

a) Within the framework and limitations of the Constitution and applicable provisions of
the Local Government Code, the Bulacan Ecozone shall have a domestic and
international airport and be developed into and operated as a decentralized, self-
reliant and self-sustaining industrial, commercialirading, agro-industrial, tourist,
banking, financial and investment center with suitable residential areas under the
Airport City;

b) The Bulacan Ecozone 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 the

Municipality of Bulakan and its neighboring towns and cities;

c) The Bulacan Ecozone may establish mutually beneficial economic relations with
other entities or enterprises within the country or, subject to the administrative
guidance of the Department of Foreign Affairs (DFA), the Philippine Economic
Zone Authority (PEZA), and/or the Department of Trade and Industry (DTI), with

foreign entities or enterprises;

d) Foreign citizens and companies owned by non-Filipinos in whatever proportion may
set up enterprises in the Bulacan Ecozone, either by themselves or in a joint

venture with Filipinos in any sector of industry, intemational trade and commerce


f)

9)

h)

within the Bulacan Ecozone;

The Bulacan Ecozone shall be managed and operated as a separate customs
territory thereby ensuring the free flow or movement of goods and capital within,
into, and out of its territory, and shall likewise provide incentives such as tax and
duty-free importations of raw materials, capital and equipment to registered
enterprises located therein. However, exportation or removal of goods from the
territory of the Bulacan Ecozone to the 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;

The areas comprising the Bulacan Ecozone may be expanded or reduced when
necessary. For this purpose, the BACSEZFA, 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 Bulacan Ecozone for the
following purposes: (1) consolidation of lands for zone development; (2) acquisition
of right of way to the Bulacan Ecozone; and (3) the protection of watershed areas
and natural assets valuable to the prosperity of the Bulacan Ecozone;

Goods manufactured by a Bulacan Ecozone enterprise shall be made available for
immediate retail sale in the domestic market, subject to the payment of
corresponding taxes on raw materials and other regulations that may be formulated
by the BSEZFA together with the PEZA, the Bureau of Customs (BOC) and the DTI.
However, in order to protect domestic industries, a Negative List of industries shall
be drawn up and regularly updated by PEZA. Enterprises engaged in industries
included in such Negative List shall not be allowed to sell their products locally;

The defense of the Bulacan Ecozone and the security of its perimeter fence shall be
the responsibility of the national government in coordination with the BACSEZFA
and the LGUs.

‘SEC. 6. Principal Office of the BACSEZFA. - The BACSEZFA shall maintain its

principal office at the Airport City, but it may establish liaison offices within the

Philippines as may be necessary for the proper conduct of its business.

SEC. 7. Powers and Functions of the BACSEZFA. - The BACSEZFA shall have

the following powers and functions:


b)

qd)

fy

g)

h)

To operate, administer, manage and develop the Bulacan Ecozone according to
the principles and provisions set forth in this Act,

To register, regulate and supervise the enterprises in the Bulacan Ecozone 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 Bulacan Ecozone;

To regulate and undertake the establishment, construction, operation and
maintenance of public utilities, other services, and infrastructure in the Bulacan
Ecozone 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
Bulacan Ecozone, in coordination with appropriate national and local goverment

authorities and in conformity with applicable laws thereon;

To approve plans, programs and projects of the Bulacan Ecozone, to be submitted
to the Regional Development Council for inclusion and inputs to the overall
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;

To raise or borrow, within the limitation provided by law, and subject to the
approval or opinion of the Monetary Board of the Bangko Sentral Ng Pilipinas

(BSP), as the case may be, adequate and necessary funds from local or foreign


i

k)

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, coral and coral
reefs, and maintain ecological balance within the Bulacan Ecozone.
Notwithstanding the authority of the BACSEZFA to create rules for such purpose,
the rules and regulations of the Department of Environment and Natural Resources
(DENR) and other government agencies involved in the above functions shall be
implemented by the BACSEZFA;

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

To adopt, alter and use a corporate seal; contract, lease, buy, acquire, own or
otherwise dispose of personal and/or real property of whatever nature; sue and be

sued; and otherwise carry out its functions and duties as provided for in this Act;

To issue certificates of origin for products manufactured or processed in the
Bulacan Ecozone in accordance with prevailing rules of origin and the pertinent
regulations of the PEZA, the DTI and/or the Department of Finance (DOF);

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 Bulacan Ecozone, in coordination
with government agencies having jurisdiction over activities therein: Provided, That
all goverment agencies are directed to provide and extend utmost and full
cooperation to the Bulacan Ecozone in the establishment of such one-stop shops;

To provide internal security to the Bulacan Ecozone in coordination with the
National govemment and affected LGU. For this purpose, the BACSEZFA shall
provide and establish its own internal security and firefighting forces or hire others
to provide the same. Military forces to be assigned by the National Government for
national defense purposes shall not interfere in the internal affairs of the Bulacan
Ecozone and expenditures for these military forces shall be bome by the National

Goverment;


©) To exercise such powers as may be essential, necessary or incidental to the
powers granted to it hereunder, as well as those that shall enable it to carry out,
implement and accomplish the purposes, objectives and policies of this Act; and

p) To issue rules and regulations consistent with the provisions of this Act as may be
necessary to accomplish and implement the purposes, objectives and policies
provided herein.

SEC. 8. Board of Directors of the BACSEZFA. - The powers of the
BACSEZFA shall be vested in and exercised by a Board of Directors, hereinafter
referred to as the Board, which shall be composed of the following:

a) The Chairperson, who shall at the same time be the administrator of the
BACSEZFA;

b) A Vice Chairperson who shall be elected from among the Members of the Board of
Directors;

c) Members consisting of.

1) Two (2) representatives from the National Government;

2) One (1) representative from the Province of Bulacan;

3) One (1) representative from the legislative district covering the premises of the
Bulacan Ecozone;

4) One (1) representative from the Municipality of Bulakan;

5) One (1) representative from the domestic investors in the Bulacan Ecozone;

6) One (1) representative from the foreign investors in the Bulacan Ecozone; and

7) One (1) representative from the workers working in the Bulacan Ecozone.

The Chairperson and 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, their replacements shall serve only the unexpired

portion of the respective terms.

Except for the representatives from the business and labor sectors, no person
shall be appointed by the President of the Philippines as a member of the Board unless
he is a Filipino citizen, of good moral character, of proven probity and integrity, and a
degree-holder in any of the following fields: economics, business, public administration,


law, management or their equivalent, and with at least ten (10) years relevant working

experience preferably in the field of management or public administration.

‘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, however, That the total per diem collected each month shall
not exceed the equivalent per diem for four (4) meetings. Unless and until the President
of the Philippines has fixed a higher per diem for the members of the Board, such per
diem shall not be more than ten thousand pesos (P10,000.00) for every Board meeting.

SEC. 9. Organization and Personnel. — The Board of Directors of the
BACSEZFA 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 BACSEZFA, 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 BACSEZFA, 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 BACSEZFA, subject to civil service laws and

regulations, shall be removed or suspended except for cause, as provided by law.

SEC. 10. Powers and Duties of the Chairperson-Administrator. — The

Chairperson-Administrator shall have the following powers and duties:

a) To direct and manage the affairs of the BSEZFA in accordance with the policies of
the Board;

b) To establish the intemal organization of the BACSEZFA 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;

) To submit to the Board for its approval, policies, systems, procedures, rules and
regulations that are essential to the operation of the Bulacan Ecozone;

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;

9) 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 Bulacan Ecozone; and

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

SEC. 11. Legal Counsel. - The BACSEZFA shall have its own intemal legal
counsel under the supervision of the goverment corporate counsel. When the
exigencies of its businesses and operations demand it, the BACSEZFA may engage the
services of an outside counsel either on a case to case or on a fixed retainer basis.

CHAPTER Ill

INCENTIVES TO ECOZONE ENTERPRISES/INVESTORS
SEC. 12. Investors Visa. - Any foreign national who invests an amount of 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 one's financial capability and
capacity.

A foreign national may reside in the Philippines while the investment subsists. To

10


prove this, the foreign national should submit an annual report in the form duly
prescribed for the purpose. Should said investments be withdrawn from the Philippines,
the investor's visa issued to said foreign national 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 Bulacan Ecozone and coordinate
with the BSEZFA for the purpose of improving ease of doing business.

SEC.13. Fiscal Incentives.- Registered enterprises operating within the
Bulacan Ecozone may be entitled to the existing pertinent fiscal incentives as provided
for under Republic Act No. 7916, as amended by Republic Act No. 8748, also known as
the Special Economic Zone Act of 1995, or those provided under Executive Order No.
226, as amended, otherwise known as the Omnibus Investment Code of 1987. The
foregoing notwithstanding, the fiscal incentives that would be available to registered
enterprises operating within the Bulacan Ecozone shall not be less favorable than any
incentives granted to other similar special economic zones andlor freeports in the
Philippines including the Subic Bay Special Economic and Freeport Zone created under
Republic Act No. 7227.

SEC. 14, Administration, Implementation and Monitoring of Incentives. — In
the interest of enhancing transparency in the management and accounting of tax
incentives in the Bulacan Ecozone, and ensuring the proper administration,
management, enforcement, implementation and monitoring of tax incentives, the
BACSEZFA 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.

The BOC shall set up and establish a customs-controlled area outside the gate of
the Bulacan Ecozone to facilitate payment of taxes on goods entering the Philippine
customs territory: Provided, That notwithstanding the limitations on this Act, the
BACSEZFA and BOC may coordinate and jointly implement measures on border
protection.

SEC. 15. Imposition of a Tax Rate of Five Percent (5%) on Gross Income

alt


Earned. — No taxes, local and national, shall be imposed on business establishments
operating within the Zone. In lieu thereof, said business establishments shall pay a five
percent (5%) final tax on their gross income eamed, to be distributed, as follows

a, One percent (1%) to the National Government;

b. One percent (1%) to the Province of Bulacan;

c. One percent (1%) to the Municipality of Bulakan; and
d. Two percent (2%) to the Authority.

‘SEC. 16. Banking Rules and Regulations. — Banks and financial institutions to
be established in the Bulacan Ecozone shall be under the supervision of the BSP and

subject to existing banking laws, rules and regulations,

SEC. 17. Remittances. - In the case of foreign investments, a duly registered
entity or enterprise within the Bulacan Ecozone shall have the right to remit eamings
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” as amended.

CHAPTER IV
NATIONAL GOVERNMENT AND OTHER ENTITIES
SEC. 18. Supervision and Control. - For purposes of policy direction and
coordination, the BACSEZFA shall be under the direct supervision and control of the
Office of the President of the Philippines.

SEC. 19. Development Goals of the Bulacan Ecozone. - The BACSEZFA
shall include in its development goals for the Bulacan Ecozone the construction and
operation of a domestic and international Airport and allied businesses within the
framework of national development plans, policies and goals. The Chairperson-
Administrator shall, upon approval by the Board, submit the Bulacan Ecozone plans,
programs and projects to the Regional Development Council for inclusion and inputs to

the overall regional development plan.

SEC. 20. Relationship with Local Government Units.— Except as herein
provided, the LGUs comprising the Bulacan Ecozone shall retain their basic autonomy

12


and identity. The Municipality of Bulakan, Province of Bulacan, shall operate and
function in accordance with the framework of the Constitution, Local Government Code
of 1991, and this Act.

In case of any conflict among the BACSEZFA and the LGUs and the National
Govemment on matters affecting the Bulacan Ecozone, other than national defense and

security matters, the decision of the BSEZFA shall prevail.

SEC. 21. Audit. - The Commission on Audit shall appoint a full-time auditor in the
BACSEZFA or may assign such number of personnel as may be necessary in the
performance of their functions.

CHAPTER V
MISCELLANEOUS

SEC. 22. Interpretation/Construction. - The powers, authorities and functions
that are vested in the BACSEZFA 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 among the BACSEZFA, the
National Govemment 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. 23. 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
otherwise known as “The Special Economic Zone Act of 1995" shall likewise apply to the

Bulacan Ecozone.

SEC. 24. Implementing Rules and Regulations.- The DTI, DOF and the
National Economic Development Authority (NEDA) shall formulate the implementing
rules and regulations of this Act within ninety (90) days after its approval.

SEC. 25. 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. 26. Repealing Clause. - All laws, executive orders or issuances or any
part thereof, which are inconsistent herewith, are hereby repealed or amended

13


accordingly.

SEC. 27. Effectivity.- This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,

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