THIRTEENTH CONGRESS OF THE 
) 
Third Regular Session 
1 
REPUBLIC OF THE PHILIPPINES 
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S E N A T E  
S. B. NO. 
(In substitution of S.R. No. 2489, taking into consideration H. No. 5952) 
Preparcd by the Committees on Economic Affairs; Local Government; Ways and 
Means: and Finance with Senators Enrile. Roxas. Lim. Rgeio. and Drilon 
as authors thereof. 
9-6. 
- 
AN ACT 
ESTABLISHING A SPECIAL ECONOMIC ZONE IN THE PROVINCE OF 
SURIGAO DEL SUR, CREATING FOR THE PURPOSE THE SURIGAO DEL 
SUR SPECIAL ECONOMIC ZONE AUTHORITY, APPROPRIATING FUNDS 
THEREFOR AND FOR OTHER PURPOSES 
Be it enacted by tlie Senate and House of Representatives of the Philippines in 
Congress amin bled: 
Section 1. Short Title. - This Act shall be known as the “Surigao del Sur 
Special Economic Zone Act of 2007.” 
See. 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 
tlie 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 lhrough the establishment, among others, of special economic zones 
in suitable and strategic locations in the country and through measures that shall 
effectively attract legitimate and productive foreign investments. 
Sec. 3. Crention of tlie Surigao del Sur Special Econoniic Zone. - In pursuit 
of the foregoing dcclarcd policy and subject to the concurrence of the concerned local 
government units of Surigao del Sur affected by the zone, there is hereby established 
a Special Economic Zone, hereinafter referred to as the Surigao del Sur Ecozone. The 
Surigao del Sur Ecozone shall cover the entire area embraced by the Municipalities of 
Carrascal, Cantilan, Madrid, Carmen, and Lanuza, Province of Surigao del Sur. The 
specific metes and bounds of the Surigao dcl Sur Ecozone shall be more particularly 
defined in a proclamation to bc issued by the President of the Philippines, upon the 
recommendation of the Philippine Economic Zone Authority (PEZA), provided that 
the lands embraced therein shall be public lands. 
Sec. 4. Governing PriricQlm, - The Surigao del Sur Special Economic Zone 
shall be managed and operated by the Surigao del Sur Special Economic Zone 


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Authority, herein referred to as the SDSEZA, 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 Surigao del Sur 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 Surigao dcl Sur 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 Surigao del Sur and its neighboring towns and cities. 
(c) 
The Surigao del Sur Ecozone may establish mutually beneficial 
economic relations with other entities or enterprises within the country or, sub.ject to 
the administrative guidance o€ the Department of Foreign Affairs (DFA), the 
Philippine Economic Zone Anthority (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 Surigao del Sur Ecozone, either by 
themselves or in joint venture with Filipinos in any sector of industry, international 
trade and commerce within the Surigao del Sur Ecozone. 
(e) 
The areas comprising the Surigao del Sur Ecozone may be expanded or 
reduced when necessary. For this purpose, the SDSEZA, in consultation with the 
Local government units, shall have the power to acquire either by purchase, 
negotiation or condemnation proceedings, any private land within or adjacent to the 
Surigao del Sur Ecozone €or the following purposes: (1) consolidation of lands for 
Surigao del Sur Ecozone development; (2) acquisition of right of way to the Surigao 
del Sur Ecozone; and (3) the protection of watershed areas and natural assets valuable 
to the prosperity of the Surigao del Sur Ecozone. 
(f) 
Goods manufactured by an Surigao del Sur 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 SDSEZA, together with the PEZA, the Bureau of Customs 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 dial1 not be allowed to sell their products locally. 
(g) 
The national government shall maintain its ability to coordinate with 
the Surigao del Sur Ecozone and the local government units. 
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SEC. 5. Incentives to Registered Enterprises. - The Surigao del Sur Special 
Economic Zone Authority (SDSEZA) may administer the following incentives to the 
registered enterprises located therein to the extent of the activity/project: 
(A) 
Income Tax Holiday (ITEI) - 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 €allowing categories: 
Category A - Rcgistered 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 13 - 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 productslservices or having strong 
backward or €orward linkages 
Category C - Registered export enterprise shall be entitled to a six- year 
income tax holiday: Provided, however, That if the 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 BO1 
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 Surigao 
del Sur Special Economic Zone Authority (SDSEZA) to transact business within the 
Surigao del Sur 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%) of its normal operating revenues from the sale of its products or services 
abroad €or 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 he 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 project is listed in the IPP at the same time the 
additional investment in the project is madc: Provided, fkrther, That the entitlement 
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period for additional investments shall not exceed three times the period provided 
under this subsection: Provided honmw, That the total IT13 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 SDSEZA are required to share in the special 
developmcnt fund of the BO1 for investment promotion projects of the government 
equivalent to one percent (1%) of the ITH granted for every application. 
The Bureau of Internal Revenue (BIR) shall require a registered enterprise 
availing of TTH or Net Operating Loss Carryover (NOLCO) to secure a certificate of 
eligibility from the SDSEZA before submitting its income tax return (ITR) with 
SDSEZA for validation. 
Failure to secure certification and/or to file the IT13 or NOLCO availment for 
validation by the SDSEZA 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 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 ITB as herein provided shall not be 
entitled to avail of the NOLCO. 
(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 Surigao del Sur Ecozone. In 
lieu thereof, five percent (5%) of the gross income earned shalI be paid as follows: 
(a) Three percent (3%) to the national government; 
(b) Two percent (2%) shall be remitted by the business establishments to the 
treasurer’s office of the municipality or city where the enterprise is 
located; 
All persons and service establishments in the Surigao del Sur Ecozone shall be 
subject to national and local taxes under the National Internal Revenue Code of 1997, 
as amended, and the Local Government Code. 
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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 Intcrnal Revenue Code (NIRC) 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 exclusiveiy by the registered enterprise in its registered 
activity. Provided, furlher, That the importation of machinery and equipment and 
accompanying parts shall comply with the following conditions: 
1. 
comparable quality and at reasonable prices; 
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 SDSEZA is secured for the part time utilization of said equipment in a 
non-registered activity to maximize usage thereof or the proportionate taxes 
and dutics are paid on a specific equipment and machinery being permanently 
used for non-registered activities; and 
iii. 
the importation or such machinery, equipment and spare parts. 
Approval of the SDSEZA 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: 
They are not manufactured domestically in sufficient quantity, of 
Approval of the SDSEZA was obtained by the registered enterprise for 
1) 
The same is made to another enterprise enjoying tax and duty 
exemption on imported capital equipment; 
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; 
The cxportation of the capital equipment, machinery, spare parts or 
sowcc documents or those required for pollution abatement and 
2) 
3) 
4) 
control; or 
Proven technical obsolescence of the said equipment, machinery or 
spare parts. 
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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 on 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 registercd 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 date of importation, the 
registered enterprises are still liable to pay the taxes and duties based on the net book 
value of the capital equipment, machinery OK 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 DOF of thc 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 SDSEZA 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 be deemed waived if application for tax credit under this 
subsection was not filed within one year from date of delivery 
F. 
The importation of sowce documents by information technology- 
registered enterprises shall be eligible for tax and duty free importation. 
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G. 
Raw Materials Incentives. - Every registered export-oriented 
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enterprise shall enjoy a tax credit equivalent to the internal revenue taxes and customs 
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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 o f  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 filed within one year from date of exportation of the final product. 
H. Incentives on Brceding 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 SDSEZA. 
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 Cor 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 SDSEZA has been obtained by the registered enterprise; and 
(a) 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 date of delivery. 
I. 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 
Minimum Corporate Income Tax (MCIT) o f  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 MCTT shall be imposed only after the enterprise’s 
entitlement period to the income tax-based incentives has expired 
IC. Tax Treatment o€Merchandise in the Surigao del Sur Ecozone. - 
a. Domestic merchandise sent from the Surigao del Sur Ecozone to areas 
outside the said Ecozone shall, whether or not combined with or made 
part o f  other articles likewise o f  local origin or manufactured in the 
Philippines while in the export processing zone, be subject to internal 
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revenue laws of the Philippines as domestic goods sold, transferred or 
disposed offor local consumption. 
b. Merchandise sent from the Surigao del Sur 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). 
c. Articles produced or manufactured in the Surigao del Sur Ecozone and 
exported therefrom shall, on subsequent importation into the customs 
territory, be subject to the import laws applicable to like articles 
manufactured in a foreign country. 
d. Unless the contrary is shown, merchandise taken out of the Surigao del 
Sur Ecozone shall be considered for tax purposes to have been sent to 
customs territory. 
Tax Treatment of Raw Materials and Capital Equipment in the Surigao 
del Sur Ecozone. - Importations of raw materials and capital equipment shall be 
treated as in the Omnibus Investments Code. Registered export oriented enterprise 
shall have access to the utilization of the bonded warehousing system in accordance 
with the rules and regulations of the Bureau of Customs. 
L. 
M. 
Employment of Foreign Nationals. - Subject to the provisions of 
Section 29 of Commonwealth Act No. 613, as amended, a registered enterprise may 
employ foreign nationals in supervisory or technical positions for a period not 
exceeding ten (10) years from its registration: Provided, That when the majority of 
the capital stock ofa registered enterprise is owned by foreign investors, the positions 
of the president, treasurer and general manager or their equivalents may be retained 
by foreign nationals beyond the period set forth herein and such officer is the owner 
or a stockholder owning at least ten percent (10%) of the outstanding capital stock of 
the registered enterprise and he remains the owner or maintains his stockholdings 
therein. 
Foreign nationals under employinenelit contract within the purview of this 
incentive, their spouses and unmarried children under twenty-one (21) years of age, 
who are not excluded by Section 29 of Commonwealth Act No. 613, as amended, 
shall be permitted to enter and reside in the Philippines during the period of 
employment of such foreign nationals. They shall be entitled to a multiple entry visa, 
valid for a period of three years, and shall be allowed to enter and leave the 
Philippines without further documentary requirements other than valid passports or 
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other travel documents in the nature of passports. The validity of the multiple entry 
visa shall be extendible yearly. 
The said foreign nationals admitted under this provision, as well as their 
respective spouses and dependents shall be exempt fiom: 
(a) obtaining alien 
certificate of registration and immigration clearance certificates; and (b) securing the 
Alien Employment Permit (AEP) and all types of clearances, permits, licenses or their 
equivalents required by any government department or agency. 
Sec. 6. 
Znceutive to Investors. - Any foreign national covered under 
Subsection (M) of Section 5 or this Act, who invests an amount of US $ 150,000.00, 
either in cash and/or equipment, in a registered enterprise shall be entitled to an 
investor’s visa: Provided, That, 
(1) He is at least cighteen (1 8) 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 paragraph (M), Section 5 hereof. 
As a 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. 
See. 7. Adminisiration, Zmplementntion and Monitoring of Incentives. - 
The SDSEZA 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 BOT for registered enterprises shall be 
uniformly applied by SDSEZA. 
The following are the duties and responsibilities of the SDSEZA in the 
administration of incentives: 
(A) To adopt consistent procedures of administering incentives in 
accordance with the guidelines established by the BOI; 
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 BOI; 
To submit information on registered enterprises to the DOF and the BO1 
as required by any of these agencies to ascertain consistency of 
investment policies and incentives, including their implementation as 
(B) 
(C) 
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provided in paragraph (a) herein, and to ensure proper implementation of 
systcms and procedures affecting trade and customs policies as provided 
in paragraph (b) herein; and 
(D) To perform all other duties and responsibilities as may be required by 
the President of the Philippines. 
For proper monitoring, the BOT shall create a single database of all incentives 
provided by all incentives granting agencies, including SDSEZA, and all information 
thereto. Double entry accounting shall be done by the BO1 in recording all incentives 
granted by the government for transparency purposes. 
Sec. 8. Extension of Period of Avnilmenf. - The availment period of the 
incentives provided herein may be extended by SDSEZA, 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. 
Sec. 9. Duration of Incentives. - Enterprises registered with SDSEZA may 
enjoy ITH or NOLCO 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 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 BOI, 
with the concurrence of the Secretaries of the Department of Finance and Trade and 
Industry. 
Sec. 10. Creation of the Suriguo del Sur Special Economic Zone AutIioriQ. 
-There is hereby created a body corporate to be known as the Surigao del Sur Special 
Economic Zone Authority, hereinafter refcrred to as the SDSEZA, which shall 
manage and operate, in accordance with the provisions of this Act, the Surigao del Sur 
Special Economic Zone. This corporate franchise shall expire in fifty (50) years 
counted from the first day of the fifth (sth) 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 effcctivity ofthis Act. 
Scc. 11. Prirzcipnl Office of 
SDSEZA. - The Surigao del Sur Special 
Economic Zone Authority shall maintain its principal office in the Municipality of 
Cantilan, Province of Surigao del Sur, but it may establish branches within the 
Philippines as may be necessary for the proper conduct of its business. 
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SEC. 12. Po~ueus nrtd Functions of the Surigao del Sur Special Economic 
Zone Authority. - The Surigao del Sur Special Economic Zone Authority shall have 
the following powers and functions: 
(a) To operate, administer, manage and develop the Surigao del Sur Ecozone 
according to the principles and provisions set forth in this Act; 
(b) To register, regulate and supervise the enterprises in the Surigao del Sur 
Ecozone in an efficient and decentralized manner, subject to existing laws; 
(c) To coordinate with local government units and exercise general 
supervision over the development plans, activities and operations of the 
Surigao del Sur Ecozone; 
(d) To regulate and undertake the establishment, operation and maintenance 
of utilities, other services and infrastructure in the Surigao del Sur 
Ecozone such as but not limited to heat, light and power, water supply, 
telecominunications, 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 undcr any of the schemes allowed in Republic Act No. 
6957 (the Build-Operate-Transfer Law, as amended by RA 7718), or joint 
venture, adequate facilities and infrastructure required or needed for the 
operation and development of the Surigao del Sur Ecozone, in 
coordination with appropriate national and local government authorities 
and in conformity with applicable laws thereon; 
(9 To operate on its own, either directly or through a license to other 
tourism-related activities, including games, amusements, recreational and 
sports facilities; 
(g) Subject to the approval of the President and the Monetary Board of the 
Banglto Sentral ng Pilipinas upon the recommendation of the Department 
of Finance, to raise or borrow adequate and necessary funds from local or 
foreign soiirccs to finance its projects and programs under this Act, and 
€or 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; 
(h) To protect, preserve, maintain and develop the virgin forests, beaches, 
coral and coral reefs and maintain ecological balance within the Surigao 
del Sur Ecozone; 
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(i) To create, operate and/or contract to operate such functional units of 
offices of the SDSEZA as it may deem necessary; 
(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; 
(k) To issue certificates of origin for products manufactured or processed in 
the Surigao del Sur Ecozone in accordance with prevailing rules of origin, 
and the pertinent regulations of the I’EZA, DTI and/or the Department of 
Finance (DOF); 
(1) To issue working visas renewable every two (2) years to foreign 
executives and forcign technicians with highly specialized skills which no 
Filipinos possesses, as certified by the Department of Labor and 
Employment; 
(m) To report to thc Bureau of Immigration the names of the foreigners who 
have been granted pcrmanent resident status and working visas within 
thirty (30) days after issuance of such grant; 
(11) To exercise such powers as maybe 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 
(0) To issue rulcs and regulations consistent with the provisions of this Act as 
maybe necessary to accomplish and implement the purposes, objectives 
and policies provided herein. 
Sec. 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 be established in the Surigao del Sur 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. 
Sec. 14. Remittance qf Enmiitgs. - In the case of foreign investments, a 
registered enterprise in the SDSEZA 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. 245, as amended. 
Sec. 15. Board qf Directors of the Surigao del Sur Special Economic Zone 
Autkoriw. - The powcrs of the Surigao del Sur Special Economic Zone Authority 
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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 Chairman who shall, at the same time be the administrator of the 
SDSEZA; 
b) A Vice-Chairman who shall come from among the members of the Board; 
c) Members consisting of: 
(1) The Governor of the Province of Surigao del Sur; 
(2) The Congressional Representative of the district covering the site 
of the Surigao del Sur Ecozone; 
(3) The mayors of the Municipalities of Carrascal, Cantilan, Madrid, 
Carmen, and Lanuza, Province of Surigao del Sur; 
(4) One (1) representative from the domestic investors; 
(5) One (1) representative from the foreign investors; and 
(6) Two (2) representatives from the workers working in Surigao del 
Sur Ecozone. 
The Governor, the Congressional representative and the mayors of the 
Municipalitics of Carrascal, Cantilan, Madrid, Carmen, and Lanuza, Province of 
Snrigao del Sur shall serve as ex-qfjcio members o f  the Board, whose term in the 
Board corresponds to their term as elected officials. 
The Cbairnian and the members of the Board, except the ex-officio members, 
shall be appointed by the l’rcsident 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. 
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 
lie is a Filipino citizen, of good moral character, of proven probity and integrity, and a 
degree-holder in any or 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 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 (Pl0,OOO.OO) 
for every Board meeting. 
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Sec. 16. Powers and Duties of the Chairmnn-Administrntor. - The 
Chairman-Administrator shall have the following powers and duties: 
To direct and manage the affairs of the SDSEZA in accordance with 
the policies of the Board; 
To establish the internal organization of the SDSEZA under such 
conditions that the Board may prescribe; 
To submit an annual budget and necessary supplemental budget to 
the Board for its approval; 
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 Surigao del Sur Ecozone; 
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 Surigao del Sur 
Ecozone; and 
To perform such other duties as may be assigned to him by the 
Board or which are necessary or incidental to his office. 
See. 17. Orgnnizntion and Personnel. - The Board of Directors of the 
SDSEZA shall providc [or an organization and staff of its officers and employees. 
Upon recommendation of the Chairman-Administrator, the Board shall appoint and 
fix the remuneration and other emoluments of its officers and employees in 
accordance with existing laws on compensation and position classification: Provided, 
That the Board shall have exclusive and final authority to promote, transfer, assign or 
reassign officers or the SDSELA, any provision of existing law to the contrary 
notwithstanding: Provided, ,fiirtlzer, That the Chairman-Administrator may carry out 
removal of such officers and employees. 
The officers and employees of the SDSEZA, 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 SDSEZA, subject to Civil Service laws and 
regulations, shall be removed or suspended except for cause, as provided by law. 
Sec. 18. Ipso Facto Clncise. - Sections 30-41 of Republic Act 7916, shall ipso 
Sec. 19. Cnpitnlization. - The Surigao del Sur Special Economic Zone 
Authority shall have a11 authorized capital stock of One Billion (1,000,000,000) no par 
facto apply to the Surigao del Sur Special Economic Zone. 
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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 Surigao del Sur Special Economic Zone. 
The Board of Directors of the SDSEZA 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 SDSEZA 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 Surigao del Sur Special Economic Zone Authority. 
The amount necessary to subscribe and pay for the shares of the National 
Government to the capital stock of the SDSEZA shall be included in the Annual 
General Appropriations Act. For LGUs, the funds shall be taken from their internal 
revenue allotment and other local funds 
Sec. 20. Snpervision - The Surigao del Sur 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 
Sec. 21. 
Relntionship with the Regional Development Council. - The 
Surigao del Sur Special Economic Zone Authority shall determine the development 
goals for the Surigao del Sur Ecozone within the framework of national development 
plans, policies and goals. The Administrator shall, upon approval by the Board, 
submit the Surigao dcl Sur Ecozone plans, programs and projects to the Regional 
Development Council for inclusion and inputs to the overall regional development 
plan. 
Sec. 22. Relntivnskip with Local Government Units. - Except as herein 
provided, the local government anits comprising the Surigao del Sur Special 
Economic Zone shall retain tlicir basic autonomy and identity. The Municipalities of 
Carrascal, Cantilan, Madrid, Carmen, and Lanuza shall operate and function in 
accordance with the Local Government Code of 1991. In case of any conflict between 
the SDSEZA and the Province of Surigao del Sur on matters affecting the Surigao del 
Sur Ecozone other than defense and security matters, the decision of the SDSEZA 
shall prevail. 
Sec. 23. Ztzter~~r~tntionJConstrnctio~, 
- The powers, authorities and functions 
that are vested in the SDSEZA are intended to decentralize governmental functions 
and authority and promote an efficient and effective working relationship between the 
Surigao del Sur Ecozone, the NG, and the local government units. 
Sec. 24. Aruifitirzg. - The Commission on Audit shall appoint a representative 
who shall he a full time auditor of the SDSEZA and assign such number of personnel 
as may be necessary to assist said representative in the performance of hidher duties. 
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The salaries and emoluments on the assigned auditor and personnel shall be in 
accordance with pertinent laws, rules and regulations. 
See. 25. Sepnrnhilify Clause. - If any provisions of this Act shall be held 
unconstitutional or invalid, thc other provisions not otherwise affected shall remain in 
full force and effect. 
See. 26. Repealing Clause. - All laws, executive orders and issuances, or any 
parts thereof, which are inconsistent herewith are hereby repealed or amended 
accordingly. 
Scc. 27. EffectiviQ Clnusc. - This Act shall take effect upon its publication 
in at least one (1) newspaper of general circulation. 
Approved, 
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