Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS

Second Regular Session

House Bill No, 7651

Introduced by Representative Jose Enrique S. Garcia II

AN ACT CREATING THE CENTRAL LUZON INVESTMENT AND
INFRASTRUCTURE CORPORATION TO FACILITATE THE
ESTABLISHMENT OF THE CENTRAL LUZON INVESTMENT
CORRIDOR, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Infrastructures already existing in the country such as the interconnecting
highways; railway in Luzon; seaports in Subic, Mariveles, Aurora, and Manila; and
airports in Subic, Clark, and Manila, when integrated and optimized effectively and
efficiently, with vast idle lands nearby, when utilized gainfully by the Special Economic
Zones shall accommodate the development of our national economy. The
interconnecting infrastructures could serve as an economic engine of growth for
Central Luzon to promote and encourage entrepreneurship and to create various jobs
and business opportunities to the Filipino people.

Moreover, because of the global accessibility and direct access of these
transportation hubs to domestic and foreign markets, economic activities must not be
highly concentrated in Metro Manila. With the establishment of the Central Luzon
Investment Corridor, Metro Manila will be decongested, as industries and populations
will be dispersed to other locations in Central Luzon by granting incentives thereto,
thereby helping solve Metro Manila’s long-standing traffic and congestion problem.

The development of Special Economic Zones in the areas of Central Luzon
through the Central Luzon Investment and Infrastructure Corporation must, thus, be
encouraged, as this will create business opportunities and various job opportunities
for the Filipino workers. This is in line with the government’s policy to encourage,
promote, induce, and accelerate a sound and balanced, industrial, economic, and
social development of the country.

S. GARCIA II
Second District, Bataan


Republic of the Philippines
HOUSE OF REPRESENTATIVES.
SEVENTEENTH CONGRESS
Second Regular Session

House Bill No._ "2651

Introduced by Representative Jose Enrique S. Garcia III

AN ACT CREATING THE CENTRAL LUZON INVESTMENT AND
INFRASTRUCTURE CORPORATION TO FACILITATE THE
ESTABLISHMENT OF THE CENTRAL LUZON INVESTMENT
CORRIDOR, AND FOR OTHER PURPOSES

Sec. 1. Short Title. — This Act shall be known as the “Central Luzon
Investment and Infrastructure Corporation Act of 2018.”

Sec. 2. Policy. — It is hereby declared the policy of the state to encourage
investments and livelihood activities for the sustainable development of the economic
landscape of the entire Central Luzon Region by maximizing existing resources in the
area and interconnecting infrastructures that would link airports and seaports, to
serve as an economic engine of growth for Central Luzon. It is likewise declared the
policy of the state to harmonize development efforts through a masterplan that will
ensure an integrated and coordinated approach to the development of Central Luzon.

Sec. 3. Purposes. — This Act shall have the following purposes:

a) Generate investments to create more jobs, economic activities, and
entrepreneurship resulting from business opportunities;

b) Create operational synergies to optimize the connecting highways and
railway in Central Luzon; seaports in Subic, Mariveles, Aurora, and Manila;
and airports in Subic, Clark, and Manila to serve as an investment corridor
for Central Luzon;

¢)

Encourage the participation of Local Government Units (LGUs) in
identifying areas to be declared as new Special Economic Zones (SEZs)
through the Central Luzon Investment and Infrastructure Corporation and
provide incentives to attract and maximize investments in infrastructure
from local and foreign business partners;


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Strengthen the culture of cooperation amongst the LGUs, the private sector
as one collective stakeholders to result from the coordination of the Subic
Bay Freeport Zone (SBFZ), the Clark Freeport Zone (CFZ), the Freeport
Area of Bataan (FAB), the Aurora Pacific Economic Zone and Freeport
(APECO) and other SEZs to be giobally competitive;

Move businesses and people away from Metro Manila by locating more
businesses to the SBFZ, the CFZ, the FAB, the APECO and other SEZs under
a sustainable “live, work, play” environment, thereby helping ease and
lessen congestion in Metro Manila;

Make the LGUs less dependent on the National Government for monetary
and budgetary support, and instead, make these units more self-sustaining
and income generating entities;

To create industrial cities and livable urban space that work around the
carrying capacities of the environment - working with the natural
endowments but within its limitations, thereby balancing economic
progress and future developments with the need to protect and preserve the
surrounding ecosystems and habitats;

To incentivize public and private investments locating inside these
economic zones to further pump prime the local economics;

Create a comprehensive master development plan for the Region
incorporating the existing plans of the Investment Promotion Agencies
(IPAs), Subic-Clark Alliance for Development Council (SCADC), and LGUs
in Central Luzon; and

Encourage and facilitate private sector participation in utilities and
infrastructure development, management and operations through lease,
contracts, franchises, joint ventures, BOT or its variants and other methods
consistent with applicable laws and subject to Constitutional limitations.

Sec. 4. Central Luzon Investment and Infrastructure Corporation.
— There is hereby created a Central Luzon Investment and Infrastructure Corporation,
hereinafter referred to as “CLIC”, with the following powers and functions:

(a)

To formulate, coordinate, and implement a comprehensive and
integrated master development and marketing plan for the region
incorporating and harmonizing the existing plans of the IPAs, SCADC,
and LGUs in Central Luzon;


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(b)

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(h)

To create, develop, manage, promote, and operate new Freeport or SEZs
within Central Luzon and other development programs and projects
connected therewith but outside the territorial jurisdiction of
established Economic Zones and Freeport authorities;

To authorize or undertake, on its own or through others, and to regulate
the establishment, construction, operation and maintenance of public
utilities, services, and infrastructure in the region: Provided, however,
‘That the private investors in the region shall be given priority in the
awarding of contracts, franchises, licenses, or permits for the
establishment, operation and maintenance of utilities, services and
infrastructure in the region;

To license, set fees, regulate and undertake the establishment, operation
and maintenance of utilities, other services, educational and medical
institutions and infrastructure in the region 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., aud to fix just, reasonable and competitive rates, fares,
charges and prices thereof;

To construct, acquire, own, lease, operate and maintain on its own or
through contracts, franchises, licenses, bulk purchase from the private
sector and build-operate-transfer scheme, or under a joint venture with
the private sectors, any or all of the public utilities and infrastructure
required or needed for the operation and development of the region, in
coordination with appropriate national and local government
authorities and in conformity with applicable laws thereon;

To formulate such rules and regulations that will be adopted by any
Freeport or SEZ to be thereafter established, whenever applicable, for
the grant of permits/licenses or clearances for businesses, buildings to
ensure ease of doing business;

To identify areas not otherwise within the jurisdiction of any Freeport or
SEZ, and which cannot be placed within the ambit of the jurisdiction of
any such Freeport or SEZ, as certified by the Freeport or SEZ nearest the
identified areas, to consolidate/merge, purchase and develop the same,
on its own or in cooperation with the affected LGUs, into new Freeport
or SEZs, new industrial townships, commercial and retail developments;

To raise and borrow the necessary funds from local and international
financial institutions and to issue bonds, promissory notes and other


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securities for that purpose and to secure the same by guarantee, pledge,
mortgage, deed of trust or assignment of properties;

To establish subsidiaries and serve as holding company of such
subsidiaries;

To enter into, make, perform and carry out contracts of every class, kind,
and description which are necessary or incidental to the realization of
this Act with any person, firm or corporation, private or public, or with
foreign government entities, upon prior approval by higher government
offices, when required and necessary;

To exercise the right of eminent domain;

To issue environmental permits and clearances;

To establish by itself or in coordination with national and local
government agencies “One-stop Shops” for investors that promote
focused, fast, friendly, flexible, and forward-looking businesses and

investments;

To promote the Central Luzon Investment Corridor to local and
international investors/locators;

To sue or be sued;
To promulgate Rules and Regulations and perform such other

powers and functions as may be necessary, appropriate, or incidental
to this Act.

See. 5. Supervision. — The CLIIC shall be under the general supervision of
the Office of the President of the Philippines; Provided, That the following agencies
shall be mandated to coordinate with the CLIC with minimum red tape to allow CLIC
to undertake and implement its mandate by virtue of this Act, related laws, and its
rules and regulations, to wit:

(a)
(b)
(0)
(d)

The Department of Trade and Industry (DTI);

The Department of Foreign Affairs (DFA);

The Department of Finance (DOF;

The Department of Transportation (DOTr);

The Department of Environment and Natural Resources (DENR);
The Department of Tourism (DOT);

The Department of Public Works and Highways (DPWH);

The Department of Labor and Employment (DOLE);


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‘The Department of Energy (DOE);

The Department of Information and Communications Technology
(DICT);

‘The Bureau of Immigration (BI);

The Department of Health — Food and Drug Administration (DOH-
FDA);

The Bureau of Internal Revenue (BIR);

The Bureau of Customs (BOC);

The Securities and Exchange Commission (SEC);

The Department of Energy (DOE);

The Energy Regulatory Commission (ERC);

The Philippine Economic Zone Authority (PEZA);

The Tourism Infrastructure and Enterprise Zone Authority (TIEZA); and
The Department of Social Welfare and Development (DSWD).

Sec. 6. Board of Directors of the CLIIC. — The powers of the CLIIC shall
be vested in and exercised by a Board of Directors, initially of seventeen (17) members

composed of the following:

(a) The Executive Director of CLIIC;

(b) The President of the BCDA;

(©) The Chairman and Administrator of the SBMA;

(d) The President of the CDC;

(©) The President of the APECO;

( The Chairman and Administrator of the AFAB;

(g) The Provincial Governors of the Provinces of Aurora, Bataan, Bulacan,
Nueva Ecija, Pampanga, Tarlac, and Zambales;

(h) The Chairman of the Regional Development Council of Region IIT;

(i) The Chairman of the Metro Manila Development Authority (MMDA);

(j) The Director-General of PEZA;

(k) The Director-General of the TIEZA.

The Chairman, Administrator, or President of any newly-created special
economic zone shall also serve as a member of the board of directors of CLIIC.

The Executive Director of CLIIC shall be the ex officio Chairman of the Board
of Directors and shall have the rank of Secretary. The Executive Director shall have the
power to formulate the structure of the corporation.

See. 7. Executive Director. — An Executive Director shall be appointed by
the President of the Philippines from among three (3) independent individuals
recommended through a majority vote of the CLIIC Board; Provided, That the
individuals recommended by the Board shall have at least five (5) years of work
experience in finance administration or management. The incumbent Executive


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Director of the SCADC shall act as Executive Director of the CLIIC until one shall have
been appointed and qualified.

The Executive Director shall have the following powers and functions:

(a)
(b)

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(a)

Assist in the administration and management of the CLIIC;

Assist in the development and improvement of the Central Luzon
Investment Corridor Master Plan;

Promote trade, tourism, and agriculture enterprises within the SEZs, so
as to encourage more investments;

Ensure that Rules and Regulations established by the CLIC are enforced
and implemented;

Resolve disputes between and among authorities, their locators,
including labor disputes, in order to address local disputes and prevent
strikes or lockouts;

Encourage the LGUs to provide incentives to private sectors and entities
who decide to relocate from Metro Manila to the SEZs under the CLIC;
and

Guarantee that safety and security measures are properly maintained
within the Special Economic and Freeport Zones not covered by existing
Ecozones and Freeport Authorities.

Exercise such other powers and perform other functions as may be
delegated or assigned.

Sec. 8. Central Luzon Investment and Infrastructure Corridor
Master Plan. - Immediately upon the creation of the CLIIC, coordination shall be
made by all its members to arrive at a consensus to develop the Central Luzon
Investment and Infrastructure Corridor Master Plan (CLIIC-MP) through the active
participation of all stakeholders in planning and implementing the creation and
continuous operation of an aggregation of SEZs within the area.

The CLIIC-MP shall include provisions for housing facilities within or in the
proximity of the SEZs. The CLIIC-MP shall be approved and signed by the majority of
the CLIIC Board, which shall contain a long-term strategy and their concomitant
commitment to implement the same. The Plan shall not be subject to frequent policy
revisions unless for key changes essential to further improve the productivity within

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Sec. 9. Responsibilities of Partners/Stakeholders. - The CLIIC-MP
shall be implemented by the authorities established for their respective purposes. The
CLIC shall become the overall coordinating body in the implementation of the plan,
especially for projects that cross border locations of established Economic Zones.

The BCDA, the SBMA, the CDC, the AFAB, the APECO and other SEZs,
thereafter established, shall coordinate with the CLIIC and the rest of the stakeholders
in the implementation of their respective components in the CLIIC - MP.

‘The CLIC shall promote the Central Luzon Investment Corridor to local and
international investors/locators, and provide standards for doing business in the
respective SEZs.

Sec. 10. Establishment of CLIIC-Registered Agro-Industrial and
Agro-Processing Ecozone Export Enterprises and Agro-Industrial, Agro-
Processing and Agro-Tourism Ecozone Enterprises. — The CLIIC, upon
registration, may allow the establishment of Agro-Industrial and Agro-Processing
Ecozone Export Enterprises and Agro-Industrial, Agro-Processing and Agro-Tourism
Ecozone Enterprises within the SEZs that are located in areas identified by the DA, the
DAR and/or the Bureau of Fisheries and Aquatic Resources (BFAR), which are
suitable for the processing of agricultural and aquatic products, consistent with the
Agriculture and Fisheries Modernization Act. The Agro-Industrial and Agro-
Processing Ecozone Export Enterprises and Agro-Industrial, Agro-Processing and
Agro-Tourism Ecozone Enterprises shall be engaged in the following types of
activities:

(a) Import-substituting commercial production and processing of agricultural
crops for bio-fucl (such as but not limited to coconut, jathropa, sugarcanc,
cassava, corn, and sweet sorghum);

(b) Processing/Manufacturing, including packing and canning, for export of
agricultural and marine products (livestock and poultry, fruits and
vegetables, aqua-culture products);

(c)_ Integrated livestock, poultry and related projects involving primary
production up to processing and export of final product;

(@) Production of agricultural inputs such as feeds, veterinary drugs, and
vaccines, fertilizers, and agri-chemicals for export;

(e)_ Planting and operation of vineyards and wineries;

() Project involving the processing of agricultural waste materials into a
commercially valuable product for export;


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(g) Bio-technology products using agricultural products as inputs or to be
used as inputs for agricultural production; and

(h) Agro-tourism zones such as fruit orchards, plantations, vineyards and
wineries, man-made lakes for fishing, with or without the establishment
of hotels, resorts, entertainment, sports and recreational facilities and
similar leisure facilities. The CLIIC-registered Agro-Industrial and Agro-
Processing Ecozone Export Enterprises and Agro-Industrial, Agro-
Processing and Agro-Tourism Ecozone Enterprises shall be entitled to
the following incentives:

(i) Four (4) years Income Tax Holiday;

(i) Special five per cent (5%) tax on gross income in lieu of all national
and local taxes after the ITH period;

(iii) Tax and duty free importation of production equipment and
machineries, breeding stocks, farm implements, including spare
parts and supplies of the equipment and machineries;

(iv) Exemption form export taxes, wharfage dues, imposts and fess;

(v) Exemption of payment of local government fecs such as mayor's
permit, business permit, permit on the exercise of
profession/occupation/calling, health certificate fee, sanitary
inspection fee, and garbage fee;

(vi) Zero value-added-tax (VAT) rate on local purchases to include
telecommunication, power, and water bills;

(vii) Special investor's visa;
(viii) Employment of foreign nationals; and
(ix) Simplified import and export procedures.

See. 11. Income Tax Holiday. — Au Income Tax Holiday (ITH) may be
administered by the CLIIC to the entities which locate and register in the SEZs outside
the territorial jurisdiction of existing Economic Zones and Freeport Authorities in the
Central Luzon Investment Corridor. An ITH of one hundred per cent (100%) from
corporate income tax for the first five (5) years from its operations, may be granted to
any registered entity operating within the SEZ if the said registered entity constructs
housing and recreational facilities within their respective SEZs so as to provide its


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workers with a comfortable and livable life which is within their place of occupation.
Moreover, an ITH for the first ten (10) years from its operations, may be granted to a
registered entity if it constructs a housing and recreational facility within the SEZs and
construct either a school, hospital or clinic, and places of worship for employees,
and/or the immediate community, and the like. Upon expiry of the ITH, a five per cent
(5%) final tax on gross income earned in lieu of all national and local taxes shall be
applied, distributed, and directly remitted as follows:

a) Two per cent (2%) to the CLIC;

b) One per cent (1%) to the province where the Freeport or SEZ is located;

©) One per cent (1%) to the host city/municipality;

) One per cent (1%) to the National Government remitted through the
BIR.

The BIR shall require a registered enterprise availing of the ITH to secure a
Certificate of Eligibility from the CLIIC before submitting its income tax return (ITR)
with the BIR for validation. Failure to secure the Certification and/or to file the ITH
availment for validation within thirty (30) days from the last day of each statutory
filing date for the ITR shall cause the forfeiture of the ITH availment for the taxable
period. For this purpose, a “Registered Entity” shall be defined as any person, natural
or juridical, licensed to do business in the Philippines and registered with the CLIIC
to transact business within the SEZs which may hereafter be established within the
Central Luzon Investment Corridor.

Furthermore, “Gross Income Earned” refers to gross sales or gross revenues
derived from the registered activity, net of sales discounts, sales returns and
allowances and minus cost of sales or direct costs but before any deduction is made for
administrative expenses or incidental losses during a given taxable period. Existing
entities or enterprises located in Metro Manila but relocate to the SEZs administered
by the CLIIC within the Central Luzon Investment Corridor may avail of the tax and
fiscal incentives available herein upon the following conditions:

1. At least fifty per cent (50%) of products manufactured are exported to
other countries, and

2. They relocate their employees to the new location and construct decent
housing facilities with clean water and sewerage systems for them;

Provided, that these businesses and industries that relocate to the Central
Luzon Investment Corridor pursuant to this section may likewise deduct from their
gross revenues for tax purposes, the equivalent of one hundred per cent (100%) of their
relocation costs which may include, but not be limited to, construction of industrial
and/or administrative buildings, purchase of equipment and machinery, construction
of private and public infrastructure, housing and recreational facilities, schools,

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hospitals and clinics and places of worship for employees and/or the immediate
community, and the like. Provided, further, That the CLIIC may automatically revoke
the license of any Registered Entity who violates any of the CLIIC Rules and
Regulations, submits false documents, and declares any false information in
connection with its application, as determined by the CLIIC and upon substantial
proof of such violation.

Sec. 12. One-Stop Shop Center. — The CLIIC shall establish a “One-Stop
Shop” center for the purpose of facilitating the registration of new enterprises in the
SEZs to be established outside the territorial jurisdiction of existing Economic Zones
and Freeport Authorities in the Central Luzon Investment Corridor. All appropriate
government agencies that are involved in registering, or issuing permits to investors
shall assign their representatives to the SEZs to attend to investors’ requirements. For
this purpose, a “One-Stop Shop” Center refers to a center established by the CLIC
where a single common site or location is designated for all concerned agencies in the
registration, licensure, and issuance of permits to investors who wish to be registered
within the SEZs.

Sec. 13. Eminent Domain. — The areas comprising the SEZs administered
by the CLIC may be expanded or reduced when necessary. For this purpose, the CLIIC
shall have the power to acquire, either by purchase, negotiation or condemnation
proceedings, any private lands within or adjacent to the SEZs for:

(a) Consolidation of lands for zone development purposes;
(b) Acquisition of right of way to the Zones; and

(©) _ The protection of watershed areas and natural assets valuable to the
prosperity of the Zones.

If in the establishment of a publicly-owned SEZ, any person or group of persons
who has been occupying a parcel of land within the SEZ has to be evicted, the CLIC
shall provide the person or group of persons concerned with proper disturbance
compensation: Provided, That in the case of displaced agrarian reform beneficiaries,
they shall be entitled to the benefits under the Comprehensive Agrarian Reform Law,
including but not limited to those provided under Section 36 of Republic Act No. 3844,
in addition to a home lot in the relocation site and preferential employment in the
project being undertaken.

Sec. 14. Land Re-Classification and Conversion. Only agricultural
lands shall be subject to reclassification processes of the LGUs, subject to their
respective approved comprehensive land use plans and the master plan to be approved
by the CLIIC. The authority to convert agricultural lands shall remain subject to RA
No. 6657, unless the CLIIC certifies as urgent and vital to the economy any particular

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undertaking and the agricultural property involved is certified by pertinent
agencies/organizations as not irrigated and not planted to rice.

See. 15. Presidential Land Grant. — The provisions of any existing law to
the contrary notwithstanding, the President may, upon the recommendation of the
DENR Secretary, grant by donation, sale, lease or otherwise, to the CLIIC portions of
the land of the public domain as may be necessary for the establishment and
development of other SEZs in Central Luzon for the increased efficiency of its
performance and the accomplishment of its purpose which is to become the “Engine
‘of Growth for Central Luzon and the Philippines.”

Sec. 16. Coordination. - The CLIIC, the BCDA, the SBMA, the CDC, the
APECO, the AFAB, the PEZA, the TIEZA, and other SEZs which may thereafter be
ed, shall coordinate and, to the extent possible, standardize their programs
and policies; Provided, That nothing in this Act shall be construed as to diminish or
degrade the powers and functions already enjoyed by the aforementioned agencies by
virtue of their respective charters.

Sec. 17. Electric Power Supply. — Electric companies providing electric
power supply to CLIIC-registered entities and its established communities shall be
given lower electricity charge rates, as compared to areas outside the jurisdiction of
the SEZs. Furthermore, the Electric Companies operating within the SEZs shall be
under the direct supervision of the CLIC.

Sec. 18. Budget. — The amount of Five Hundred Million Pesos (Php
500,000,000.00), for the first three (3) years of its operations, is hereby appropriated
for the organization, operation, and management of the CLIIC which shall be included
in the annual General Appropriations Act (GAA). Thereafter, the CLIIC may, on its
own, maintain its operation and management through its acquired earnings from the
first three (3) years of its operations.

Sec. 19. Exemption from the Salary Standardization Law. — The
salaries and benefits of employees of the CLIC shall be fixed by the CLIC Board and
shall be exempt from the Salary Standardization Law, as amended.

Sec. 20. Legal Counsel. — Without prejudice to the hiring of an outside
counsel, the Government Corporate Counsel shall be the ex officio legal counsel of
CLIIC. In the event that highly specialized legal services cannot be provided for by the
Office of the Government Corporate Counsel as may be required, the services of an
outside counsel, whose compensation shall be approved by the Board of Directors,
may be engaged and no further approval or concurrence of the Office of the
Government Corporate Counsel and the Commission on Audit (COA) shall be
required.


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Sec. 21. Injunctions or Restraining Orders. The implementation of the
provisions of this Act is of national interest. Thus, no project, bidding, and undertaking
in implementation of the provisions of this Act shall be restrained or enjoined by an
injunction or restraining order except by the Supreme Court of the Philippines.

Sec. 22. Repealing Clause. — Alllaws, decrees, orders, rules and regulations
or other issuances or parts thereof inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.

Sec. 23. Separability Clause. - If any portion or provision of this Act is
declared unconstitutional, the remainder of this Act or any provision not affected
thereby shall remain in force and effect.

Sec. 24. Effectivity. — This Act shall take effect after fifteen (15) days
following the completion of its publication either in the Official Gazette or in a
newspaper of general circulation in the Philippines.

Approved.