ermvaneune

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

House Bill No.

Introduced by REP. JOSE T. PANGANIBAN, JR.
of ANAC-IP Partylist

AN ACT
ESTABLISHING THE ISABELA COASTAL SPECIAL
ECONOMIC ZONE (ICSEZO) IN THE PROVINCE OF
ISABELA, CREATING FOR THE PURPOSE THE ISABELA
COASTAL SPECIAL ECONOMIC ZONE AUTHORITY,
APPROPRIATING FUNDS THEREFOR AND FOR OTHER
PURPOSES

EXPLANATORY NOTE

‘The bill seeks to establish the Special Economic Zone and Freeport in the coastal
municipalities of Dinapigue, Divilacan, Palanan and Maconacon, all in the Province of Isabela.

The advent of globalization and international trade opened the opportunities as well as
challenges in international trading system. The national government is pushing for inclusive
economic growth and promotes investments both foreign and domestic to establish in different
economic zones in the country. To keep pace with global competition and international trade,
there is a need to enhance business climate in order to attract investments both domestic and
intemational and provide a competitive playing fields in domestic enterprises and
manufactures.

The proposed economic zone is strategically located in the coastal municipalities of
Isabela. The municipalities of Dinapigue, Divilican, Palanan and Maconacon are considered as
the gateway of Isabela due to its accessibility in terms of ship route into and outside the entire
Region 2. These coastal municipalities are potentials of the province for the development of
agro-tourism industry that will continuously boost the economic potentials of Isabela. The


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Isabela Coastal Special Economic Zone and Freeport is conceptualized as a self-sustaining
agro-industrial, commercial/trading, tourism and investment promotion center that will
encourage inclusive economic growth and accelerate employment generation in the province
and nearby areas of the ecozone.

In view of the above premises, the approval of this bill is earnestly sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

6993

House Bill No.

Introduced by Rep. JOSE T. PANGANIBAN, JR.
of ANAC-IP Partylist

AN ACT
ESTABLISHING THE ISABELA COASTAL SPECIAL
ECONOMIC ZONE (ICSEZO) IN THE PROVINCE OF
ISABELA, CREATING FOR THE PURPOSE THE ISABELA
COASTAL SPECIAL ECONOMIC ZONE AUTHORITY,
APPROPRIATING FUNDS THEREFOR AND FOR OTHER
PURPOSES

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 ~ Isabela Coastal Special
Economic Zone and Freeport Act of 2017.

Section 2. Declaration of Policy. - It is hereby declared the policy of the State to.
actively encourage, promote, induce and accelerate the sound and balanced industrial,
economic and social development of the country in order to provide jobs to the people,
especially those in rural areas, increase their productivity and their individual and family
income, and thereby improve the level and quality of their living conditions though the
establishment, among others, of special economic zones in suitable and strategic
locations in the country and through measures thatshall effectively attract legitimate and
productive foreign investments.

Section 3. Creation of the Isabela Coastal Special Economic and Freeport Zone. - In
pursuit of the foregoing declared policy and subject to the concurrence of the concerned
local government units (LGUs) of Isabela affected by the zone, there is hereby established
a special economic zone and freeport, hereinafter referred to as the Isabela Costal Special

3


1 Ecozone. The Isabela Coastal Special Ecozone shall cover the entire coastal municipalities
2 of Dinapigue, Divilacan, Palanan, and Maconacon herein described as follows:
3

TECHNICAL DESCRIPTION — DINAPIGUE ISABELA
UNE BEARING DISTANCE

12 N. 79° 44" W. 13,022.17 m.
23 N. 26° 28" W. 1,505,25 m.
3-4 N. 26° 28" W. 525.87 m.
45 N. 26° 28" W. 9,565.26 m.
5-6 N. 26° 28" W. 4,668.06 m.
67 N. 26° 28" W. 2,082.13 m.
78 N. 26° 28" W. 2,148.01 m.
8-9 N. 52°54" E. 110,488.04 m.
9-10 N. 52°54" E. 202.32 m.
10-11 N. 52°54" E. 14,577.73 m.
11-12 N. 52°54" E. 820.80 m.
12-13 N. 52°54" E. 9,634.47 m.
13-14 N. 52°54" E. 2,146.34 m.
14-15 N. 52" 54" E. 6,899.93 m.
15-16 N. 52°54" E. 6,405.56 m.
16-17 S. 25° 58" W. 6,662.79 m.
17-18 S. 25° 58" W. 2,389.32 m.
18-19 S.21° 24 W. 9,219.74 m.
19-20 'S. 30° 48" W. 3,669.56 m.
20-21 S.24° 43" W. 12,071.85 m.
21-22 S. 34° 00" W. 1,982.82 m.
22-23 S. 49° 38" W. 2,084.51 m.
23-24 S. 41° 55° W. 463.20 m.
24-25 S. 61° 46' W. 674.21 m.
25-26 S. 41° 18" W. 172.00 m.
26-27 S34" 40" W. 163.90 m.
27-28 S. 42° 15' W. 138.68 m.
28-29 S. 75° 14° W. 899.28 m
29-30 5. 50° 32' W. 1,266.47 m.
30-31 S. 46" 10° W. 486.02 m.
31-32 S.19°41' W. 187.16 m.
32-33 S.04* 43" W. 225.31 m.
33-34 S. 23° 34° W. 132.21 m.
34-35 S. 20° 28" W. 93.34 m.
35-36 S.02° 48" W. 94.97 m.
36-37 S.16° 27' W. 196.44 m.
37-38 S. 28° 56" W. 198.44 m.
38-39 'S. 21° 00 W. 788.91 m.
39-1 S.49° 51 W. 1,373.24 m.



zt

2
TECHNICAL DESCRIPTION — MACONACON, ISABELA
LINE BEARING DISTANCE

12 N. 88° 29" W. 16,145.36 m.
23 S. 88° 00" W. 5,258.61 m.
3-4 S. 88° 00" W. 6,999.99 m.
45 N. 01° 15° E. 5,313.76 m.
5-6 N. 09" 42" E. 2,00228 m.
67 N. 09° 42" E. 3,248.21 m.
78 N. 09° 42' E. 5,083.89 m.
8-9 N. 31° 41' E. 5,726.63 m.
9-10 N. 31° 40' E. 1,203.16 m.
10-11 N. 89° 21' E. 1,869.50 m.
11-12 N. 89° 41' E. 4,985.01 m.
12-13 S. 82° 46' E. 4,671.82 m.
13-14 N. 83° 35' E. 3,203.73 m.
14-15 N. 83° 35' E. 3,203.73 m.
15-16 S277 13" E; 134.34 m.
16-17 S. 10" 02! E. 126.65 m.
17-18 S. 51° 18' E. 195.81 m.
18-19 S. 60° 34" E. 196.31m.
19-20 S. 25°34" W. 140.86 m.
20-21 S.21° 47" E. 158.09 m.
21-22 S.43°51' E. 132.88 m.
22-23 'S. 31° 08' W. 139.08 m.
23-24 S.52°45' W. 125.54 m.
24-25 S. 11° 28" E. 176.73 m.
25-26 S.44° 59 W. 96.10 m.
26-27 S. 63° 39° W. 138.81 m.
27-28 S. 70° 59° W. 133.34 m.
28-29 S. 61° 50’ E. 234,97 m.
29-30 N. 88" 30' E. 154.30 m.
30-31 S.81° 40' E. 221.13 m.
31-32 S.82° 59' E. 144.16 m.
32-33 N. 76° 30' E. 93.96 m.
33-34 S. 55° 37' E. 126.26 m.
34-35 'S. 40° 09' E. 121.83 m.
35-36 S.27° 40 E. 137.84 m.
36-37 'S. 28° 57" E. 123.82 m.
37-38 S.05" 03" W. 163.17 m.
38-39 S. 65° 29' W. 190.22 m.
39-40 S. 72° 29' W. 170.49 m.
40-41 S. 51° 58" W. 126.97 m.



41-42 S. 23° 54° W. 114.73 m.
42-43 S. 04° 32' W. 97.40 m.
43-44 S.10° 22! E. 138.92 m.
44-45 $.19° 57" E. 121.87 m.
45-46 S. 05° 33' E. 112.47 m.
46-47 S.03° 16' E. 124.10 m.
47-48 S. 00° 58" W. 101.43 m.
48-49 S.01° 04' E. 124.87 m.
49-50 S.03° 57" W. 186.54 m.
50-51 S.04° 48" W. 140.36 m.
51-52 S. 15° 54’ E. 94.35 m.
52-53 'S. 19° 07' E. 542.75 m.
53-54 S. 39° 39' W. 140.97 m.
54-55 'S.05* 06' E. 90.66 m.
55-56 S. 22°30 E. 116.05 m.
56-57 S.21°47' E. 131.90 m.
57-58 S. 28° 20' E. 125.23 m.
58-59 S. 16° 44" E. 305.80 m
59-60 S. 31° 37' E. 239.72 m.
60-61 S. 75° 01' E. 204.65 m.
61-62 S.17°33' E. 219.25 m.
62-63 S.09° 16" W. 136.60 m.
63-64 S.00° 44" W. 253.42 m.
64-65 S. 06" 11' W. 133.34 m.
65-66 S. 19° 49' E. 490.25 m.
66-67 S. 18° 18" E. 611.99 m.
67-68 S.23°11' E. 672.15 m.
68-69 S.32°27' E. 133.20 m.
69-70 'S.22° 42' E. 1,678.46 m.
70-71 S. 08° 37' E. 370.01 m.
71-72 'S. 28° 25' E. 844.40 m.
R73 S.24°19' E. 249.10 m.
73-74 S. 23° 34" E. 512.86 m.
74-75 S.27° 28" E. 1,360.34 m.
75-76 S.23°59' E, 864.49 m.
76-77 S.37° 49' E. 1,141.88 m.
77-78 S. 64° 26' E. 1,139.89 m.
78-79 'S. 55° 59" E. 290.17 m.
79-80 'S. 29° 26" E. 259.40 m.
80-81 SAP 1216. 81.61m.
81-82 'S.00° 11° W. 134.64 m.
82-83 S.17° 24" W. 221.86 m.
83-84 S.27°05' W. 148.77 m.
84-85 S. 89° 40" W. 618.65 m.



85-86 S. 47° 28" W. 1,070.16 m.
86-87 S.09°31' E. 521.07 m.
87-88 S.20°47' E. 316.92 m.
88-89 S. 45° 08" E. 318.66 m.
89-90 S.17°37' E. 484.36 m.
90-91 N. 50° 35' E. 134.75 m.
91-92 S. 16°24" E. 151.72 m.
92-93 S. 72° 18' E. 118.02 m.
93-94 S. 86° 26' E. 105.85 m.
94-95 S. 71° 46' E. 301.96 m.
95-96 S. 85° 54’ E. 1104.88 m.
96-97 N. 42° 12" E. 186.55 m.
97-98 N. 10° 40° E. 216.73 m.
98-99 N. 23° 23' E. 172.72m.
99-100 S. 50° 59' E. 88.68 m.
100-101 S. 15°58" E. 71.61 m.
101-102 S.07° 07" W. 293.37 m.
102-103 N. 81° 28' E. 121.42 m.
103-104 S. 60° 16" E. 140.61 m.
104-105 S.71° 27 E. 101.77 m.
105-106 S. 09° 33! W. 144.23 m.
106-107 'S. 51° 06' W. 246.01 m.
1107-108 S.59° 49° W. 431.51m.
108-109 S.27° 28" W. 936.72 m.
109-110 S. 46° 54° W. 147.74 m.
110-111 S. 20°40" W. 152.51 m.
111-112 S. 16" 16' W. 245.86 m.
112-113 S. 18° 35' E. 989.39 m.
113-114 S. 76° 05' E. 687.55 m.
114-115 N. 26° 27" E. 117.51 m.
115-116 N. 25° 26" E. 129.91 m.
116-117 N. 53°01" E. 121.67 m.
117-118 S. 33°32! E. 116.10 m.
118-119 S. 10°27" W. 487.07 m.
119-120 S. 43° 58" W. 140.05 m.
120-121 $.09°01' W. 87.14 m.
121-122 S. 40° 51' E. 94.12 m.
122-123 S.01° 44" W. 81.51m.
123-124 S.27° 40" W. 70.45 m.
124-125 S. 75°12" W. 92.57 m.
125-126 S. 26° 39' W. 66.10 m.
126-127 N. 87° 45! W. 92.57 m.
127-128 S. 45°35! W. 91.34 m.
128-129 N. 89° 02" W. 121.07 m.



129-130 S. 74° 18" W. 133.25 m.
130-131 N. 65° 20" W. 101.15 m.
131-132 N. 16° 00 W. 58.48 m.
132-133 N. 32°57" E. 112.80 m.
133-134 N. 17°47" E. 101.50 m,
134-135 S. 73° 06' W. 170.46 m.
135-136 N. 83° 37" W. 53.01 m.
136-137 S.80° 47" W. 80.87 m.
137-138 N. 83° 03 W. 94.14 m.
138-139 S.23°31' E. 122.76 m.
139-140 S. 26° 12' W. 250.17 m.
140-141 N. 53° 19" W. 118.40 m.
141-142 S. 73° 45' W. 60.17 m.
142-143 N. 79° 06" W. 78.48 m.
143-144 N.89°51' W. 122.94 m.
144-145 S. 44° 28" W. 59.81 m.
145-146 S.24° 17" W. 70.95 m.
146-147 N.77° 14" W. 41.28 m.
147-148 $.51° 33" W. 101.77 m.
148-149 N. 80° 25" W. 66.62 m.
149-150 S. 46° 10" W. 96.53 m.
150-151 N. 84° 37" W. 68.81 m.
151-152 N. 73° 29" W. 1107.30 m.
152-1 S.41° 14" W. 114.12 m.
1
2
TECHNICALDESCRIPTION — PALANAN, ISABELA
tor | CLAIMANT ‘BEARING AND DISTANCE ‘AREA IN SQ.
ot THELINE UNET2 | UNE23 | UNESS NESS | UNES6 | METERS
BOUNDARY MOMNe.S= | NOFOSE | NATSI Ww. | NST3eW. | NSA Ww. | NGAP W.
— 336 ery 19505 Tas T1405
Nmwrare | Nar2ee | Sarave | sarsew. | Sororw.
3078880 | 2.68738 a7 Ero a7
Saree | SaFase | SHE | NITE | NITE
33607 ‘aia Su ‘u907 wi83
warore | Norave | Nasasw. | Narine | S6eOs Ee
‘wre 176 Tee coer) a
Nese | sae | swsre | NSFSE | NITSTE
Waa corr) es yo0ss 807
wre | serve | sivase | ssrare | sersve.
cry Bs 35825 coy 10126
Sarre | SaPaVE | SSTSeE | Sasave | SSFOTE
B38 36.98 38286 23896 ‘8083
S72 e | SMITE | SOME | STSTE | STORE



Err Wear 3088 807 ‘0844
SOE | SeTTE | NESTE | NOTE | NETATE
170 eae 30838 222s 26a6
NWME | SWOFE | SwOFE | SITE | SwITE
3828 37 iaio7 ass TES56
SIE | SOTSTE | SAIL | STOWE | NOTATE
72 20638 coer) ETT aoe
Nerve | NAPSPE | NIFITE | Nira w. | NOPGT Ww,
aa Tas a3 m8 Cx
NIPise | NAPSCE | NIPSTE | NSPATE | NSPATE
a7 75820 wa 1073 Bis
Nerve | NIE | NEPATE | NAST E | NIFOFE
743.08 Ear 255 sat a8
NSIT | NSE | NESE | NATATE | NIPATE
Baza wa7 0296 Ba 7286
NSwE | SaFaTE | NOPATE | NISATE | NSIT E
aaa Cx aa 73 ro
Nerse | NwaTE | NIFaTE | NOSaTw. | NAIS Ww.
aaa 75898 75999 3538 ee
Mori w. | NII E | NSSF E | NOTSTE | NIE
7am 16733 088 wa Be
wersee | Sacre | ssrore | serare | sarsve
Ger was 708 qooa 18s
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Tas 2739 23 i837 a7
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4640 a7 TeA03 sae ns
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3255 Est) a7 cr Toa
TOFS E | SOP Ww. | Sirsew. | SiFIeW. | S3eST Ww.
7835 e735 mae Free) ‘a7
See | SWE | Siw | saw | srw
am mat ae =o a5
SWiOW. | SHE | SIFTE | Sirsve | SIPTE
ais ass Tas Be 7088
SSITE | NIE | NOISE | NAPIVE | NIFATE
war ms Tine 4676 ‘oa
SOTOWE | NGWE | NOTE | NSTITE | NISME
an csr} Tam very wa
Sree | sivew | swww. | sew. | saw
7696 39 cr Tot Ba
Tara w | Sera Ww | SFOS Ww | SieseW | Duesouth
Tea 70833 or 36a ey
Sime | Sess e | SSPE | Niwa Ww. | SOF Or Ww.



Fr) was 17
SOE | SOE | SeraTE
3303 16889 2
Sarore | SarOre | SOsSs Ww.
7238 70882 689
wares w. | Serorw. | SSeSe Ww.
Tea ae 35
Saris w. | Sarsew. | swrarw. | seraew. | Sarin w
800 3685 02 Tas ToA8s
Sass w. | Sirorw. | Sasarw. | Sorayw. | sivore
07 76898 308 398 cr
SOE | Sisiwe | sivasw. | Seorw. | Saar Ww
TASS cr as a4 762
Serse w. | Savas w. | savas w. | Sere w. | SSTse Ww.
cr ee an war ToL
Sivstw. | Siviee | Sorstw. | Sorave | Somasw.
T7855 327 Tia wma as
Srive | sivsow. | soraw. | Sieinw. | ssroW.
Bear 6i7 Teas 15877 mis
sororw. | sorziw. | sarisw. | Narase | sarssw.
O78 55 Base wom as
Sarore. | savorw. | serarw. | sisarw. | sa03sw.
Fron) Err) sae me eas
EOaW. | N@ISW | duewet | SaroeW. | S5e4FW.
7420 297 7s 13378 76
sirsiw. | Neriow. | Seratw. | SaFsrw. | Sorcow.
a7 Ca 7028 7035t ex
sive | sore | sarave | soware | sirive
we wa a8 Tae
Ferry Sarawre | SorsW. | S35wE
638 78 ae BH
SSE SIFSTE | Sieme | SIPwe
eas 3a5s 7aa7 erry
coro ware | Serore | Sorwe
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7397 ae 365 m7
S05 ae Ww. Sire | sivorw. | Seraw.
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ssw. | Sore | sormw. | sirisw. | sorore
35 7B 13787 78 a7
Saree. | Srsw. | Serzew. | Naesew. | S3T26E
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See sew. | Nasisw. | NOeSTW.
378 7236 ae
Warsow. | Serzew. | Sarsrw.
sor 033 For
Nieiew. | Serarw. | NOraFw.
07 7808 Be
Saree. | SEW. | SeraeW.
sia wa as
Tivos | Sorsrw. | Sivsre | sarive | sarave
cr 708 28 mast 0258
Sire | sorarw. | soriew. | saree | sarorw.
3623 70853 T2768 ESE as
seraw. | Siroe | sorsrw. | sissiw. | Sersew.
Be 70000 30535 ais 15555
saraw. | s7aw. | Neeasw. | NisseW. | NABAIW.
s9 oo) a7 ToL was
Naraw. | NerawW. | NaFiSW. | NaSaeW. | SOFSEW.
7736 14250 TORS 6 T3
Nasagw. | s7ravw. | sersew. | serisw. | Serarw.
Tas ea7 FEC) Tea AT
Nerorw. | serizw. | Siworw. | sarsew. | Sirare.
3333 78 Er T2276 m6
Saree | saForw. | Seraw. | soraw. | sorarw.
72 mer ne 16682 as
saraw. | s7riew. | saraew. | Siraw. | Soriow.
coy wis am mS 3eaa
sarorw. | NIarw. | soscow. | Sisire | S2608e
3550 maT 3am aa Ties
Serre | sarwe | sivorw. | saragw. | siwsre
Ger) ae 555 7676 Taio
Tarww. | Seow. | NoFaw. | NSFW. | NOFSTW.
Ta8 S208 3s wat 386
wstw. | S77stW. | Sarasw. | Samssw. | S205E
Bas Ba 10247 Tear wa
Saroow. | NIFOFW. | NOFITW. | NOFSSW. | S2FITW.
se Cr a7 asa 257
Siwawe | Sore | sirmw. | sarsew. | Sarirw.
3550 FEceTy aa 19836 537
Earaw. | sarorw. | s7rsvw. | sipzew. | S2see
eaat 1758 Toa cr 10528
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eat 90 a ESET} Taaa7
swrarw. | sirew. | ssroow. | swizw. | soraee

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sivive. | sarivw. | sirsew. | sivaw. | sorse
70298 Frey ura ose 535
sivoe | sarire | saat | swe | werwe
cry wae 70286 Tear cer
Saragw. | Ss51sw | S2eisW. | Sisase | S2F2sW.
E30 76a ea ior77 ass
S7PSeW. | S3615W. | SSTOSW. | SOSWE | SSTOTE
Toast Tae aa ay we
EaFSW. | Ouse | SowE | NOPaTE | S2rsTW.
Ba 79825 TSA Tomas | 41270
Saroow. | Sorare | Sivsre | siszw. | Sorarw.
38 16205 375 ma 7696
Sororw. | sas27w. | seeaew. | ssrsrw. | Sarasw.
Eas 79 Tas 660 18406
Saw. | Sorsew. | sarsw. | Siew. | SorIeW
cod 7355 Po) 16087 14720
Serisw. | Ner2ew. | Sarsrw. | Sorosw. | S36i19W.
Bas 2s T5678 aa m7
Sorsow. | NSF25W. | OueSoth | Sie | SOFIE
m7 wae WH Teas Tia
Sarsew. | Sariew. | Sororw. | Sivire | Sersrw.
3731 3875 7836 70298 3008
Swrsw. | ssraw. | Sore | SIrwe | SHTOFE.
4610 ear qoRi6 wast ms
sarase | Sire | sarsew. | ssrivw. | sarorw.
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saraw. | Si6ssw. | SI73E | NeFISW. | NEDSTW.
Oras 5a7 76a semis | aas7223
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502046 | _13,78830

wearvausune

10

12
13



a
2)

TECHNICAL DESCRIPTION — DIVILACAN ISABELA
tor | CLAIMANT | LAND We ‘BEARINGS AND DISTANCE ‘AREAIN
bas Oe ent | TO | UNEI2 | UNEZS | UNESS | UNESS | TL
os ‘CORNER
Nwrwe | serve | NIA E | SORE
3078 Baas as The
Nerve | WOTIE | NISSTE | NOF3e Ww.
sae B78 16086 mae
NTE Se w. | Nase Ww. | NerIe WwW. | SOFIE Ww
29805 17055 R68 2889
Nav 08 w. | NSO W. | NIFOO Ww. | NOOSE W.
TaL.0r 16558 DAe7 358A
Norave | Nararw. | Nomis w. | NATIeE
7398 Res aia ie7aa
NATO E | Naar Ww. | NIP W. | NSO Ww.
WI 1533 ea ie7aa
Waras Ww. | N2eST Ww. | NOPATE | NIS2e Ww.
738 T3806 73 16557
WSssO Ww. | Nasa Ww. | SOAs Ww. | SSF OR Ww.
183 Ta 3338 7378
Wai W. | NAPST Ww. | NOOO Ww. | NSF 2S Ww.
Ta 3a86 ErreTy uss
wirarw. | Norave | Nororw. | NOTE
ae a7 BTS 574
wore w. | werarw. | NID Ww. | N2eSE
13126 we 878 ei
SOME | NSPISE | NIFIVE | NOPE
me ‘607 167.88 3836
SerOre | Saree | SOE | SITE
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19

Section 4. Governing Principles. - The Isabela Coastal Special Economic Zone and

Freeport shall be managed and operated by the Isabela Coastal Special Economic Zone
and Freeport Authority, hereinafter referred to as the ICSEZA, created under Section 10
of this Act, under the following principles:

(a) Within the framework and limitations of the Constitution and applicable
provisions of the Local Government Code, the Isabela Coastal Special Ecozone shall
be developed into and operated as a decentralized, self-reliant and self-sustaining
industrial, commercial trading, agro-industrial, tourist, banking, financial and
investment center with suitable residential areas.

(b) The Isabela Coastal Special Ecozone shall be provided with transportation,
telecommunications and other facilities needed to attract legitimate and
productive investments, generate linkage industries and employment
opportunities for the people of the Province of Isabela and its neighboring towns
and cities.

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(c) The Isabela Coastal Special 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 (DT!), with foreign entities or enterprises.

(a) Foreign citizens and companies owned by non-Filipinos in whatever
proportion may set up enterprises in the Isabela Coastal Special Ecozone, either
by themselves or in joint venture with Filipinos in any sector of industry,
international trade and commerce within the Isabela Coastal Special Ecozone.

(e) The Isabela Coastal Special Ecozone shall be managed and operated as a
separate customs and taxation territory ensuring free flow or movement of goods
and capital within, into and out of its territory.

() The Isabela Coastal Special Ecozone may 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 Isabela Coastal Special Ecozone to the other parts of the Philippine
territory shall be subject to customs duties and taxes under the Tariffand Customs
Code of the Philippines, as amended, and the National Internal Revenue Code
(NIRC) of 1997, as amended.

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

(h) Goods manufactured by an Isabela Coastal Special 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 ICSEZO, in consultation with the PEZA, the Department of
Finance (DOF), 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
and the Board of Investments (BOI). Enterprises engaged in industries included in
such negative list shall not be allowed to sell their products locally.

(i) The defense of the Isabela Coastal Special Ecozone and the security of its

perimeter fence shall be the responsibility of the national government in
coordination with the ICSEZO and the LGUs concerned.

22


(j) The national government shall actively cooperate and coordinate with the
Isabela Coastal Special Ecozone and the LGUs to ensure its speedy development as
the vital gateway to the Pacific.”

Section 5. Incentives to Registered Enterprises.- The Isabela Coastal Special
Economic Zone Authority (ICSEZA) may administer the following incentives to the
registered enterprises located therein to the extent of the activity/project:

(A) Income Tax Holiday (ITH). - Registered enterprises shall be entitled to
an income tax holiday from the start of their commercial operations to the
extent of their activity under the following categories:

Category A - Registered domestic enterprise located in highly
developed areas, as determined by the Board of Investments (BOI), shall be
entitled to a four-year income tax holiday.

Category B - Registered domestic enterprise on the following shall
be entitled to a six-year income tax holiday:

(1) Located in less developed areas as defined by the BOI; or
(2) Producing/rendering new products/services or having strong
backward or forward linkages.

Category C - Registered export enterprise shall be entitled to a six-
year income tax holiday: Provided, however, That lithe export enterprise
complies with the following: (1) large capital investments or sizeable
employment generation; or (2) use high level of technology; or (3) located
outside Metro Manila, it shall be entitled to an eight-year income tax
holiday.

Registered enterprises embarking on new investments that are
listed in the current Investment Priorities Plan (IPP) shall be entitled to
incentives provided herein pertaining to the new investments and subject
to such terms and conditions as the BO! may determine.

For this purpose, a registered enterprise shall be defined as any
person, natural or juridical, licensed to do business in the Philippines and
registered with the Isabela Coastal Special Economic Zone Authority
(ICSEZA) to transact business within the Isabela Coastal Special Economic
Zone. A registered export enterprise shall be defined as any registered
enterprise engaged directly or indirectly in the production, manufacture or
trade of products or services which earns at least seventy percent (70%)

23


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of its normal operating revenues from the sale of its products or services
abroad for foreign currency. A registered domestic enterprise, meanwhile,
shall be defined as any registered enterprise not falling under the definition
of a registered export enterprise.

Additional investments in the project shall be entitled to the income
tax holidays corresponding to such investments as may be determined by
the BOI. Additional income tax holiday may be granted for as long as the
investment is made on the same project: Provided, That the projectis listed
in the IPP at the same time the additional investment in the project is
made: Provided, further, That the entitlement period for additional
investments shall not exceed three times the period provided under this
subsection: Provided, however, That the total ITH period for an export
enterprise availing of an eight-year ITH shall not exceed twenty (20) years.
Any unused incentives shall therefore be deemed forfeited if not used
during the incentive period.

Enterprises registered with the ICSEZA are required to share in the
special development fund of the BO! for investment promotion projects of
the government equivalent to one percent (1%) of the ITH granted for
every application.

The Bureau of Internal Revenue (EIR) shall require a registered
enterprise availing of ITH or Net Operating Loss Carryover (NOLCO) to
secure a certificate of eligibility from the ICSAZA before submitting its
income tax return (ITR) with the ICSEZA for validation.

Failure to secure certification and/or to file the ITH or NOLCO
availment for validation by the ICSEZA within forty-five (45) days from the
last day of each statutory filing date for ITR shall cause the forfeiture of the
availment for the taxable period.

(B) Net Operating Loss Carryover (NOLCO). - Net operating loss of the
business or enterprise during the first three years from the start of
commercial operations which have not been previously offset as deduction
from gross income shall be carried over as a deduction from gross income
for the next five consecutive years immediately following the year of such
loss: Provided, however, That operating loss resulting from availment of
incentives provided in this Act shall not be entitled to NOLCO.

Registered enterprises availing of the ITH as herein provided shall not be
entitled to avail of the NOLCO.

24


(C) Imposition of a tax rate of five percent (5%) on Gross Income Earned
(GIE). - Except for real property tax on land, no local and national taxes as
prescribed under Republic Act No. 8424, also known as "The National
Internal Revenue Code of 1997, as Amended” such as income tax, excise tax
and franchise taxes, shall be imposed on registered enterprises operating
within the Isabela Coastal Ecozone. In lieu thereof, five percent (5%) of the
gross income earned shall be paid as follows:

(a) Three percent (3%) to the national government;

(b) One percent (1%) shall be remitted by the business
establishments in equal shares to the respective treasurer's office of the
province and the municipality where the enterprise is located; and

(c) One percent (1%) shall be remitted by the registered enterprises
to the ICSEZO.

All persons and service establishments in the Isabela Coastal
Ecozone shall be subject to national and local taxes under the National
Internal Revenue Code of 1997, as amended, and the Local Government
Code.

(D) Accelerated Depreciation. - Accelerated depreciation of plant,
machinery and equipment that are reasonably needed and actually used
for the production and transport of goods and services may be allowed
using a rate not exceeding twice the rate which would have been used had
the annual allowance been computed in accordance with the rules and
regulations prescribed by the Secretary of Finance and the provisions of
the National Internal Revenue Code of 1997, as amended.

(E) Capital Equipment Incentives. —

(1) Importations of capital equipment, spare parts, tools and dye,
or those required for pollution abatement and control, cleaner production
and waste reduction including consignment thereof by registered
enterprises upon the effectivity of this law, shall be exempted to the extent
of one hundred percent (100%) of the taxes and customs
duties: Provided, That the imported items thereof shall be used exclusively
by the registered enterprise in its registered activity: Provided,
further, That the importation of machinery and equipment and
accompanying parts shall comply with the following conditions:

(i) They are not manufactured domestically in sufficient
quantity, of comparable quality and at reasonable prices;

25


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(ii) They are reasonably needed and will be used exclusively
by the registered enterprise in the manufacture of its products,
unless prior approval of the ICSEZA is secured for the part time
utilization of said equipment in a non-registered activity to
maximize usage thereof or the proportionate taxes and duties are
paid on a specific equipment and machinery being permanently
used for non-registered activities; and

(iii) Approval of the ICSEZA was obtained by the registered
enterprise for the importation of such machinery, equipment and
spare parts.

Approval of the ICSEZA must be secured before any sale,
transfer or disposition of the imported capital equipment,
machinery or spare parts is made: Provided, That if such sale,
transfer or disposition is made within the first five years from date
of importation, any of the following conditions must be present:

(1) the same is made to another enterprise enjoying tax and
duty exemption on imported capital equipment;

(2) the same is made to another enterprise, upon the
payment of any taxes and duties on the net book value of the capital
equipment to be sold;

(3) the exportation of the capital equipment, machinery,
spare parts or source documents or those required for pollution
abatement and control; or

(4) proven technical obsolescence of the said equipment,
machinery or spare parts.

When the aforementioned sale, transfer or disposition is
made under any of the conditions provided for in the foregoing
paragraphs other than paragraph (2) herein, the registered firm
shall not pay the taxes and duties waived all such items: Provided,
further, That if the registered enterprises sell, transfer or dispose
the aforementioned imported items without prior approval within
five years from the date of importation, the registered enterprise
and the vendee, transferee or assignee shall be solidarily liable to
pay twice the amount of the tax and duty exemption given
it: Provided, finally, That even if the sale, transfer or disposition of
the capital equipment, machinery or spare parts is approved after
five years from the date of importation, the registered enterprises

26


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are still liable to pay the taxes and duties based on the net book
value of the capital equipment, machinery or spare parts if any of
the registration terms and conditions has been violated. Otherwise,
they shall no longer be subject to the payment of the taxes and
duties waived thereon.

(2) The purchase of machinery, capital equipment, raw materials,
supplies, parts and semi-finished products to be used in the fabrication of
machinery and capital equipment by a registered export-oriented
enterprise from a domestic manufacturer shall be subject to zero percent
(0%) value-added tax.

The registered export-oriented enterprise shall be granted a
tax credit equivalent to the amount of duties that would have been
waived on the machinery, capital equipment, raw materials,
supplies, parts and semi-finished products used in the fabrication of
machinery and capital equipment, had these items been imported,
upon its submission to the Department of Finance (DOF) of the bill
of materials evidencing the transaction value of such and other
pertinent documents, for verification and proper endorsement.

The availment by a registered export enterprise of the
incentive stated under the immediately preceding two paragraphs
shall be subject to the following conditions: (a) that said capital
equipment, machinery and spare parts will be used exclusively by
the registered enterprise in its registered activity; (b) that the
capital equipment or machinery where the raw materials, supplies,
parts and semi-finished products were used would have qualified
for tax and duty-free importation; and (c) that the approval of the
ASEZA is obtained by the registered enterprise. If the registered
enterprise sells, transfers or disposes of these machineries, capital
equipment and spare parts, the provision in the preceding
paragraphs for such disposition shall apply.

This incentive shall he deemed waived if application for tax
credit under this subsection was not filed within one year from the
date of delivery,

(F) The importation of source documents by information technology-
registered enterprises shall be eligible for tax and duty free importation.

(G) Raw Materials Incentives. - Every registered export-oriented
enterprise shall enjoy a tax credit equivalent to the internal revenue taxes

27


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and customs duties 'Paid on the supplies, raw materials and semi-
manufactured products provided the same are not sufficient in quantity,
quality or are not competitively priced in the Philippines and which are
used in the manufacture, processing or production of its export products
forming part thereof, exported directly and indirectly by the registered
export-oriented enterprise, based on the actual taxes and duties paid for
such materials/supplies/semi-manufactured products by the registered
enterprise.

This incentive shall be deemed waived if application for tax credit under
this subsection was not med within one year from the date of exportation
of the final product.

(H) Incentives on Breeding Stocks and Genetic Materials. - Importation of
breeding stocks and genetic materials within ten (10) years from the date
of registration of commercial operation of the enterprise shall be exempt
from all taxes and duties: Provided, That such breeding stocks and genetic
materials are reasonably needed in the registered activity, and approved
by the ICSEZA.

The availment of the incentives by the registered enterprise shall be
subject to the following: (a) that said breeding stocks and genetic materials
would have been qualified for tax and duty-free importation under the
preceding paragraph; (b) that the breeding stocks and genetic materials
are reasonably needed in the registered activity; (c) that approval of the
ICSEZA has been obtained by the registered enterprise; and (d) that the
purchase is made within ten (10) years from the date of registration of
commercial operation of the registered enterprise.

This incentive shall be deemed waived if application for tax credit under
this subsection is not filed within one year from the date of delivery.

(1) Exemption from Wharfage Dues. - The provisions of law to the contrary
notwithstanding, exports by a registered enterprise shall be exempted
from wharfage dues.

(J) Deferred Imposition of the Minimum Corporate Income Tax. - The
Millennium Corporate Income Tax (MCIT) of two percent (2%) of the gross
income as of the end of the taxable year shall be imposed when the MCIT is
greater than the income tax computed under the NIRC of 1997, as
amended, for the taxable year: Provided, however, That said MCIT shall be
imposed only after the enterprise's entitlement period to the income tax. -
based incentives has expired.

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(K) (1) Tax Treatment of Merchandise in the Isabela Coastal Ecozone. -

(a) Except as otherwise provided in this Act, foreign and
domestic merchandise, raw materials, supplies, articles,
equipment, machineries, spare parts and wares of every
description, except those prohibited by law, brought into the
Isabela Coastal Special Ecozone to be sold, stored, broken up,
repacked, assembled, installed, sorted, cleaned, graded, or
otherwise processed, manufactured, mixed with foreign or
domestic merchandise whether directly or indirectly related
in such activity, shall not be subject to customs and internal
revenue laws and regulations nor to local tax ordinances, any
provision of law to the contrary notwithstanding.

"(b) Merchandise purchased by a registered enterprise, from
the customs territory and subsequently brought into the
export processing zone, shall be considered as export sales
and exportation thereof shall be entitled to the benefits
allowed by law for such transaction.

"(c) Domestic merchandise sent from the Isabela Special
Coastal Ecozone to areas outside the said ecozone shall,
whether or not combined with or made part of other articles
likewise of local origin or manufactured in the Philippines
while in the export processing zone, be subject to internal
revenue laws of the Philippines as domestic goods sold,
transferred or disposed of for local consumption.

"(d) Merchandise sent from the Isabela Coastal Ecozone to
areas outside the said ecozone shall, whether or not
combined with or made part of other articles while in the
zone, be subject to rules and regulations governing imported
merchandise. The duties and taxes shall be based on the
value of said imported materials (except when the final
product is exempt).

"(e) Domestic merchandise on which all internal revenue
taxes have been paid, if subject thereto, and foreign
merchandise previously imported on which has been paid,
or which has been admitted free of duty and tax, may be
taken into the Isabela Coastal Ecozone from the customs
territory of the Philippines and be brought back thereto free
of quotas, duty or tax.

"(f) Subject to such regulations respecting identity and
safeguarding of the revenue as the Isabela Coastal Ecozone
may deem necessary when the identity of an article entered
into the export processing zone under the immediately

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1 preceding paragraph has been lost, such article when
2 removed from the zone and taken to the customs territory
3 shall be treated as foreign merchandise entering the country
4 for the first time, under the provisions of the Tariff and
5 Customs Code of the Philippines, as amended.
6
7 (g) Articles produced or manufactured in the Isabela Coastal
8 Ecozone and exported there from shall, on subsequent
9 importation into the customs territory, be subject to the
10 import laws applicable to like articles manufactured in a
1 foreign country.
12
13 (h) Unless the contrary is shown, merchandise taken out of
14 the Isabela Coastal Special Ecozone shall be considered for
15 tax purposes to have been sent to customs territory.
16
7 (2) Tax Treatment of Merchandise in Free Trade/Freeport Zone. -
18
19 The Isabela Coastal Special Ecozone shall be operated
20 and managed as a separate customs territory ensuring free
a flow or movement of goods within, into and exported out of
2 the free trade/freeport zone. Importations of raw materials
23 and capital equipment are tax and duty free. However,
24 exportations or removal of goods from the free
25 trade/freeport zones to the other parts of the Philippine
26 territory shall be subject to customs and internal revenue
27 regulations.
28
29 (3) Tax Treatment of Services in the Isabela Coastal Special Ecozone.
30 bi
31
32 (a) Sale of service by an entity from the customs
33 territory to a registered ecozone or free trade enterprise, or
34 by a registered ecozone or freeport enterprise to another
35 ecozone or freeport enterprise shall be treated as indirect
36 export, and hence, entitled to the benefits allowed by law for
37 such transaction.
38
39 "(b) Sale or service by a registered ecozone or
40 freeport enterprise to the customs territory shall be subject
a1 to applicable internal revenue laws and regulations.
a2
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44 Section 6. Incentive to Investors. - Any foreign national covered under subsection

45 (M) of Section 5 of this Act, who invests an amount of US$150,000.00, either in cash
46 and/or equipment, in a registered enterprise shall be entitled to an investor's
47 visa: Provided, That:


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(1)He is at least eighteen (18) years of age;

(2)He has not been convicted of a crime involving moral turpitude;

(3)He is not afflicted with any loathsome, dangerous or contagious disease; and
(4)He has not been institutionalized for any mental disorder or disability:

Provided, further, That in securing the investor's visa, the alien-applicant shall be
entitled to the same privileges provided for under subsection (M), Section 5 hereof.

Asa holder of investor's visa, an alien shall be entitled to reside in the Philippines
while his investment subsists. For this purpose, he should submit an annual report, in the
form duly prescribed for the purpose, to prove that he has maintained his investment in
the country. Should said alien withdraw his investments from the Philippines, then the
investor's visa issued to him shall automatically expire.

Section 7. Administration, Implementation and Monitoring of Incentives. - The
ICSEZO shall be responsible for the administration and implementation of the incentives
granted to its respective registered enterprises: Provided, That any incentive
administration policy adopted by the BOI for registered enterprises shall be uniformly
applied by the ICSEZO.

ities of the ICSEZO in the

The following are the duties and responsi
administration of incentives:

(A) To adopt consistent procedures of administering incentives in
accordance with the guidelines established by the BOI;

(B) To adopt and implement systems and procedures affecting trade and
customs policies in accordance with the requirements established by the
Department of Finance (DOF) and the BOl;

(C) To submit information on registered enterprises to the DOF and the BOI
as required by any of these agencies to ascertain consistency of investment
policies and incentives, including their implementation as provided in paragraph
(A) herein, and to ensure proper implementation of systems and procedures
affecting trade and customs policies as provided in paragraph (B) herein. In
particular, the ICSEZO shall submit its annual tax expenditures to the DOF based
on the tax incentives granted to its registered enterprises, for policy and revenue
administration purposes; and

(D) To perform all other duties and responsibilities as may be required by
the President of the Philippines.

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Section 8. Extension of Period of Availment.- The availment period of the
incentives provided herein may be extended by the ICSEZA, in the event that the
registered enterprise suffers operational force majeure or any event equivalent thereto,
impairing its viability: Provided, That the availment period shall not exceed the duration
of the said force majeure or equivalent event.

Section 9. Duration of Incentives. - Enterprises registered with the ICSEZA may
enjoy ITH or NOLCQ granted by the latter prior to the availment of the five percent (5%)
GIE.

Fiscal incentives under this Act shall be terminated after a cumulative period of
twenty (20) years from the date of registration or start of commercial operation,
whichever is applicable, except that it could be extended with regard to industries
deemed indispensable to national development.

The industries exempted from this provision shall be recommended by the BOI,
with the concurrence of the Secretaries of the Departments of Finance and Trade and
Industry.

Section 10. Creation of the Isabela Coastal Special Economic Zone Authority. -
There is hereby created a body corporate to be known as the Isabel coastal Special
Economic Zone Authority, hereinafter referred to as the ICSEZA, which shall manage and
operate, in accordance with the provisions of this Act, the Isabela Coastal Special Special
Economic Zone. This corporate franchise shall expire in fifty (50) years counted from the
first day of the fifth (5%) calendar 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 11. Principal Office of the ICSEZA. - The Isabela Coastal Special Special
Economic Zone Authority shall maintain its principal office in the Municipality of
Dinapigue, but it may establish branches within the Philippines as may be necessary for
the proper conduct of its business.

Section 12. Powers .and Functions of the Isabela Coastal Special Economic Zone
Authority (ICSEZA). - The ICSEZO shall have the following powers and functions:

(a) To operate, administer, manage and develop the Isabela Coastal Special
Ecozone according to the principles and provisions set forth in this Act;

(b) To register, regulate and supervise the enterprises in the Isabela

Coastal Special Ecozone in an efficient and decentralized manner, subject
to existing laws;

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(©) To coordinate with local government units and exercise general
supervision over the development plans, activities and operations of the
Isabela Coastal Special Ecozone;

(d) To license, set fees, regulate and undertake the establishment,
operation and maintenance of utilities, other services and infrastructure in
the Isabela Coastal Special Ecozone such as, but not limited to, heat, light
and power, water supply, telecommunications, mobile, internet and other
data facilities, transport, toll roads and bridges, port services, etc. and to fix
just, reasonable and competitive rates, fares, charges and prices thereof;

(e) To construct, acquire, own, lease, operate and maintain on its own or
through contracts, franchise, licenses, bulk purchase from the private
sector or permits under any of the schemes allowed in Republic Act No.
6957 (the Build-Operate-Transfer Law, as amended by R.A. No. 7718), or
joint venture, adequate facilities and infrastructures required or needed
for the operation and development of the Isabela Coastal Special Ecozone,
in coordination with appropriate national and local government
authorities and in conformity with applicable laws thereon;

(8 To operate on its own, either directly or through a subsidiary entity, or
concession or license to others, tourism-related activities, including games,
amusements and nature parks, recreational and sports facilities such as
casinos, online game facilities, golf courses and others under priorities and
standards set by the ICSEZO;

(g) To authorize the ICSEZO to enter into mutual cooperation agreement
with the PEZA for the utilization of the PEZA's resources, facilities and
assets;

(h) 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 a guarantee, pledge, mortgage, deed of trust, or
an assignment of all or part of its property or assets;

(i) To protect, preserve, maintain and develop the virgin forests, beaches,
coral and coral reefs and maintain ecological balance within the Isabela
Coastal Special Ecozone through the establishment of marine, forest,
wildlife and botanical reservations, in cooperation with the Department of
Environment and Natural Resources (DENR);

(j) To establish, operate and/or contract to operate skills training centers,
plant and flower nurseries, forest and sea ranger services and such other
necessary and functional units of offices of the ICSEZO as it may deem
necessary;

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(i) To adopt, alter and use a corporate seal; make contracts, leases, own, or
otherwise dispose of personal or real property; sue and be sued; and
otherwise carry out its functions and duties as provided for in this Act;

() To sue and be sued in order to carry out its duties, responsibilities,
privileges, powers and functions granted and provided for in this Act and
to exercise the power of eminent domain for public use and public purpose;

(m) To recommend to the President the issuance of a proclamation to fix
and delimit the size of the Isabela Coastal Special Ecozone;

(n) To authorize or undertake, on its own or through others, and to regulate
the establishment, operation and maintenance of public utilities, services,
and infrastructure in the Isabela Coastal Special Ecozone such as shipping,
barging, stevedoring, cargo, handling, warehousing, storage of cargo, port
services or concessions, piers, wharves, bulkheads, bulk terminals,
mooring areas, storage areas, roads, bridges, terminals, conveyors, water
supply and storage, sewerage, drainage, airport operations, in coordination
with the Civil Aeronautics Board, and such other services or concessions or
infrastructure necessary or incidental to the accomplishment of the
objectives of this Act: Provided, however, That the private investors in the
Isabela Coastal Special Ecozone shall be given priority in the awarding of
contracts, franchises, licenses or permits for the establishment, operation
and maintenance of utilities, services and infrastructures in the Isabela
Coastal Special Ecozone;

(0) To issue certificates of origin for products manufactured or processed
in the Isabela Coastal Special Ecozone in accordance with prevailing rules
of origin, and the pertinent regulations of the PEZA, the Department of
Trade and Industry (DT!) and/or the DOF;

(p) To issue working visas renewable every three (3) years to foreign
executives and foreign technicians with highly specialized skills which no
Filipinos possesses, as certified by the Department of Labor and
Employment (DOLE);

(q) Toreportto the Bureau of Immigration the names of the foreigners who
have been granted permanent resident status and working visas within
thirty (30) days after issuance of such grant;

(r) To issue exemptions from the requirements of alien employment
permits (AEP) and/or working visas for aliens employed with, or
consultants of, ICSEZO-registered enterprises who will stay and perform
work in the Philippines for less than six (6) months, subject to such rules
and regulations as may thereafter be established;

(s) To undertake and carry out at its own expense the reclamation by
dredging, filling, or other means, of any foreshore lands bordering the
Isabela Coastal Special Ecozone and to establish, provide, construct,

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49

maintain and repair proper adequate docking and harbor facilities as the
ICSEZO may determine in consultation with the Secretary of Finance and
the Secretary of Public Works and Highways;

(t) To create and establish subsidiaries, affiliates or other entities for the
operations of ancillary activities/services which the ICSEZO is authorized
to undertake but for reasons of cost-effectiveness, are better contracted out
to such subsidiaries, affiliates or similar entities; in such event, the ICSEZO
may invite the private sector investors to participate up to sixty percent
(60%) of the capital of the entity;

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

(v) 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 12-A. Non-profit Character of the ICSEZO. - The ICSEZO shall be
non-profit and shall use its one percent (1%) share as provided in Section 5(C) of
this Act for its operations, development, improvement, maintenance and other
related expenditures in furtherance and effective implementation of the policy
provided in this Act.

In consonance with this, the ICSEZO is hereby declared exempt from the
payment of all taxes, duties, fees, imposts, charges, costs and service fees in any
court or administrative proceedings in which it may be a party. Furthermore, all
donations made by any person or entity in favor of the ICSEZO shall be exempt
from the payment of the donor's tax and the same shall be considered as
deductible from the gross income of the donor, pursuant to the NIRC of 1997, as
amended: Provided, That from the shares of the national government from the five
percent (5%) tax, one hundred percent (100%) shall be appropriated over a ten
(10)-year period to an infrastructure development trust fund to be created by the
Bureau of Treasury for the purpose of financing the infrastructure requirements
of the Isabela Coastal Special Economic Zone and Freeport.

Section 12-B. Enjoyment of Benefits of Other Ecozones and Freeport. - The
ICSEZO shall enjoy, receive and benefit from the same privileges, licenses or
concessions granted or to be granted to other ecozones and free trade zones, such
as the Subic Special Economic and Freeport Zone, the Clark Special Economic and
Freeport Zone, the Zamboanga City Special Economic and Freeport Zone and the
Cagayan Special Economic and Freeport Zone."

Section 13. Banking Rules and Regulations. -Existing laws and rules/regulations

of the Bangko Sentral ng Pilipinas (BSP) shall apply to banks and financial institutions to

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be established in the Isabela Coastal Special Ecozone, such as those governing foreign
exchange and other concurrent account transactions (trade and non-trade), local and
foreign borrowings, foreign investments, establishment and operation of local and
foreign banks, foreign currency deposit units, offshore banking units and other financial
institutions under the supervision of the BSP.

Section 14. Remittance of Earnings.- In the case of foreign investments, a
registered enterprise in the ICSEZO 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 Section 74
of Republic Act No. 265, as amended.

Section 15. Composition/Board of Directors/Tenure of the ICSIZO. - The powers of
the ICSEZO shall be vested in and exercised by a Board of Directors, hereinafter referred
to as the Board, and its duly constituted set of officers which shall be composed of the
following:

(a) The Chairman who shall be appointed by the President of the Republic
of the Philippines;

(b) The President and CEO who shall be appointed by the Board of
Directors and who shall be the Vice Chairman of the Board; and

(c) The Board of Directors composed of the following:
(1) The Governor of the Province of Isabela;

(2) The Congressional Representative of the district covering the
site of the Isabela Coastal Special Ecozone;

(3) The President and CEO of the ICSEZO;

(4) The mayor of the Municipality of Dinapigue, Province of Isabela
alternating every year with the mayors of the municipalities of
Palanan and Divilican, Maconacon for a term of one (1) year each;
(5) One representative from the domestic investors;

(6) One representative from the foreign investors;

(7) One representative from the workers working in the Isabela
Coastal Special Ecozone; and

(8) Two prominent citizens of the Philippines of whom one shall be
a resident of the Province of Isabela.

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The Governor, the Congressional Representative and the mayors of
the municipalities of Dinapigue Divilacan and Palanan and
Maconacon, Province of Isabela shall serve as ex officio members of
the Board, whose term in the Board corresponds to their terms as
elected officials, except that in the case of the municipal mayors
serving on a rotation basis, each one shall serve one calendar year
starting on the 1* of January till the 31* of December.

The Chairman and the members of the Board, except the ex
officio members, shall be appointed by the President of the
Philippines to serve for a term of six (6) years, unless sooner
separated from service due to death, voluntary resignation or
removal for cause. In case of death, resignation or removal for cause,
the replacement shall serve only the unexpired portion of the term.
‘The President and CEO shall serve for a term of three (3) years
subject to reappointment by the Board of Directors.

Except for the representatives of 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 ata 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 (P10,000.00) for every Board meeting.”

Section 16. Powers and Duties of the Chairman and the President and CEO of the
ICSEZO. - The Chairman shall have the following powers and duties:

(a) To exercise supervision over the affairs of the ICSEZO Board;
(b) To preside over all the meetings of the Board;

(c) To spearhead the formulation of policies and procedures for the Board
and the ICSEZO with the concurrence of the majority of its members;

(d) To direct the affairs of the APECO in accordance with the policies of the
Board through its President and CEO;

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(e) To ensure that the goals and objectives set forth by the Board are
achieved and its policies implemented; and

(0 To lead the Board in carrying out the powers and functions of the
ICSEZO as enumerated in Section 12 (a) to (v) 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 Isabela Coastal Special Ecozone; and exercise such
other powers and perform such other functions or duties as may be
directed to or assigned to him by law or by the Board from time to time.
Particularly, he shall have the following powers and duties:

(a) To be the Vice Chairman of the Board and shall assist the
Chairman and act in his stead in case of absence or incapacity: Provided,
however, That in case both are absent, the Board of Directors shall
designate a temporary Chairman from among its members;

(b) To sign and execute all contracts concluded by the ICSEZO and
enter into all necessary obligations required or permitted by the charter
upon proper authorization by the Board; and sign all major documents,
notes and checks for the Isabela Coastal Special Ecozone;

(c) To exercise full discretion in the management of the affairs of the
ICSEZO in accordance with law and in accordance with the provisions of
this Act and be accountable to the Board for all his acts;

(d) To establish the internal organization of the ICSEZO under such
conditions that the Board may prescribe;

(e) To submit an annual budget and necessary supplemental budget
to the Board for its approval;

(8) 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 is essential to the operation of the
Isabela Coastal Special Ecozone;

(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 Isabela Coastal Special
Ecozone; and

(i) To perform such other duties as may be assigned to him by the
Board or which are necessary or incidental to his office.”

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aaRs

5

Section 17. Organization and Personnel. - The Board of Directors of the ICSEZO
shall be entitled to organize its own personnel who will assist the Board in the exercise
of its functions and shall likewise provide for an organization of the ICSEZO 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 ICSEZO, any provision of existing law to the contrary notwithstanding: Provided,
further, That the President and CEO may carry out removal of such officers and
employees.

All positions in the ICSEZO shall be governed by a compensation, position
classification system and qualification standards approved by the Chairman with
the concurrence of the Board of Directors based on a comprehensive job analysis
and audit of actual duties and responsibilities. The compensation plan shall 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 shall
be 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 ICSEZO 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.

The officers and employees of the ICSEZO, 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 ICSEZO, subject to civil service laws and
regulations, shall be removed or suspended except for cause, as provided by law."

Section 17-A. Labor and Management Relations. - Except as otherwise provided
in this Act, labor and management relations in the Isabela Coastal Special Ecozone
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 APECO shall allow the visitorial power of the
Secretary of Labor and Employment or his duly authorized representative and/or
may assign its personnel to join the DOLE Regional Office II in the conduct of labor
inspection.

Section 18. Ipso Facto Clause. - Sections 30-41 of Republic Act No. 7916, shall ipso
facto apply to the Isabela Coastal Special Economic Zone and Freeport.

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Section 19. Capitalization. - The Isabela Coastal Special Special Economic Zone
Authority shall have an authorized capital stock of one billion (1,000,000,000) no par
shares with a minimum issue of Ten pesos (P10.00) each, the majority shares of which
shall be subscribed and paid for by the National Government and the local government
units (LGUs) embracing the Isabela Coastal Special Economic Zone. The board of
directors of the ICSEZA may, with the written concurrence of the Secretary of Finance,
sell shares, representing not more than forty per centum (40%) of the capital stack of the
ICSEZA 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 Isabela Coastal
Special Economic Zone Authority.

The amount necessary to subscribe and pay for the shares of the national
government to the capital stock of the ICSEZA 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.

Section 20. Supervision. - The Isabela Coastal Special Economic Zone shall be
under the direct control and supervision of the Philippine Economic Zone Authority
(PEZA) for purposes of policy direction and coordination.

Section 21. Relationship with the Regional Development Council. - The Isabela
Coastal Special Economic Zone Authority shall determine the development goals for the
Isabela Coastal Special Ecozone within the framework of national development plans,
policies and goals. The Administrator shall, upon approval by the Board, submit the
Isabela Coastal Special Ecozone plans, programs and projects to the Regional
Development Council for inclusion and inputs to the overall regional development plan.

Section 22. Relationship with Local Government Units.- Except as herein
provided, the local government units comprising the Isabela Coastal Special Economic
Zone shall retain their basic autonomy and identity. In case of any conflict between the
ASEZA and, the Province of Isabela on matters affecting the Isabela Coastal Special
Ecozone other than defense and security matters, the decision of the ASEZA shall prevail.

Section 23. Interpretation/Construction.- The powers, authorities and
functions that are vested in the ICSEZA are intended to decentralize governmental
functions and authority and promote an efficient and effective working relationship
between the Isabela Coastal Special Ecozone, the national government, and the local
government units.

Section 24, Auditing. - The Commission on Audit shall appoint a representative
who shall be a full time auditor of the ICSEZA and assign such number of personnel as

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Cavausune

te
12
13
4
15
16
7
18

20
2
22
23
24

may be necessary to assist said representative in the performance of his/her duties. The
salaries and emoluments of the assigned auditor and personnel shall be in accordance
with pertinent laws, rules and regulations.

Section25. 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 26. Repealing Clause. - All laws, executive orders and issuances, or any
part thereof, which are inconsistent herewith are hereby repealed or amended

accordingly.

Section 27. Effectivity Clause. - This Act shall take effect upon its publication in
the Official Gazette or in at least one newspaper of general circulation.

Approved.

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