;:. 
%< 5 Yy 
fjt-st;., .ir‘ : i t L  ~~.~~~~~~~~~ 
i -  
7 At -3 PS :54 
,
,
 
.1 
FOURTEENTH CONGRESS OF THE 
1 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B.No. 88% 
l?CCFIm-,f2 BY: -.., 
Introduced by SENATOR EDGARDO J. ANGARA 
EXPLANATORY NOTE 
There is a need to expedite the rehabilitation and development of the 
Mindanao Region (the “Region”) given the lack of development in certain 
areas on the Region as well as the debilitating effects of the recent conflicts. 
Unfortunately, the public sector cannot provide enough funds for the 
total development and rehabilitation of Mindanao. The recent hostilities have 
also scared away numerous private investors fearful of the peace and order in 
the Region. There is, therefore, a crucial need to attract private investors to 
invest in Mindanao. 
The approach to developing Mindanao should therefore be two- 
pronged-by 
providing the Executive enough powers to expedite the 
development and rehabilitation of the Region, and by attracting private 
investors through a series of incentives over and above the existing incentives 
provided to other areas of the country and under existing laws. 
The proposed Mindanao Development Incentives Act will provide the 
following incentives and powers: 
1. 
Fiscal Incentives 
1.1 
1.2 
1.3 
Duty-free importation of raw materials and capital equipment, 
as well as exemption from value added tax; 
5% tax in lieu of all taxes except real property tax; 
Tax credit of 200% of value of labor training expenses, and 300% 
in the case of labor training expenses for Muslims and other 
ethnic minorities; 
Tax credit of 200% of research and development expense; 
Allowance to carry over net operating loss for ten ( I 0) years; 
Reimbursement of cost for feasibility studies in areas deemed in 
critical need of investments; 
Interest assistance by line departments for all loans availed of 
by registered investing enterprise. 
1.4 
1.5 
1.6 
1.7 
2. 
Non-Fiscal Incentives 
2.1 
2.2 
2.3 
Nationality requirements shall not be required except those 
provided under the Constitution; 
Labor disputes must be referred to a labor center for amicable 
settlement; 
Infrastructure development and construction may be on build- 
operate-transfer basis, or other contractual arrangement, with 
the registered investor allowed to charge tolls and other fees; c 


2.4 
2.5 
Government financial assistance through Land Bank and DBP; 
Incentives to expatriates such as multiple entry visas, final tax 
of 15% of gross income, tax and duty free importation of 
personal and household effects, travel tax exemptions; 
2.6 
Exemption of private agricultural lands used by registered 
enterprises from CARL coverage under certain conditions; 
2.7 
Basic rights and guarantees on repatriation of investments, 
remittance of earnings and freedom from expropriation. 
3. 
Powers of the President 
3.1 
Authority to set in place such policies which will ensure that 
Mindanao becomes competitive and investor-friendly; 
3.2 
Authority to realign funds from dormant or non-moving 
in€rastructure projects to projects of immediate necessity; 
3.3 
Authority to revoke or terminate existing contracts whenever it 
appears that the contractor is unreasonably delayed; 
3.4 
Authority to resort to simplified public bidding in contracts for 
infrastructure development, construction and repair; 
3.5 
Authority to declare economic zones with appropriate incentives; 
3.6 
Authority to declare specific areas in the Region as 
underdeveloped and thus entitled to additional incentives and 
support; 
Authority to declare tax holidays over and above those presently 
enjoyed by existing economic zones; 
Authority to contract with private firms and entities for the 
latter 
to construct, build 
or rehabilitate public rural 
infrastructure and to be reimbursed in such manner and under 
such terms and conditions as the President may determine. 
The foregoing incentives and powers are sufficient to encourage 
3.7 
3.8 
investment in Mindanao and ensure growth in the region. 
For the above-mentioned reasons, approval of this bill is earnestly 
urged. 
EDG *fl 
RD J.ANGARA 
Senator 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
FOURTEENTH CONGRESS OF THE 
1 
First Regular Session 
1 
REPUBLIC OF THE PHILIPPINES 
7 JUL. -3 P5 5 4  
--: 
:*,3,* 
SENATE 
,, 
, 
~~~~~~~~~~~ 
BV: 
Y- f 
S.B.No. 888 
Introduced bv SENATOR EDGARDO J. ANGARA 
AN ACT PROVIDING FOR INVESTMENT INCENTIVES TO 
ACCELERATE DEVELOPMENT IN MINDANAO, CREATING THE 
MINDANAO INCENTIVES DEVELOPMENT AUTHORITY FOR THIS 
PURPOSE, 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 
"Mindanao Development Incentives Act." 
SECTION 2. Declaration of Policy. - The State recognizes the need 
to promote and accelerate the growth and development of the Mindanao 
Region, hereinafter referred to as the Region, in order to make it, at the least, 
at par with the other regions of the country and promote the overall growth of 
the Region in particular and national economy in general. The State takes 
note of the centuries-old conflict between the government and Muslim 
Mindanao and of the need to find a lasting solution rooted in the social, 
economic and cultural realities. The State further recognizes the vast 
potential of the Region, including its immense natural resources, which 
remain largely untapped, and the need for public and private investment in 
infrastructure and spending to ensure the development of the Region. 
Pursuant thereto, and in order to address effectively the conflict 
between government and Muslim Mindanao, it is the declared policy of 
government to actively encourage, promote, induce and accelerate a sound 
and balanced agricultural, industrial, economic and social development in the 
Region in 
order to alleviate poverty therein, provide jobs to the people, 
especially those in the rural areas, increase their productivity and their 
individual and family income, and thereby improve the level and quality of 
their living condition and hence secure peace and stability in the Region 
through the provision of economic and fiscal incentives and through measures 
1 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
that shall effectively attract legitimate and productive local and foreign 
investments. The government shall furthermore undertake efforts to promote 
the development of the Region into the hub of investment, trade and 
commerce in the East Asian region through private capital and investment 
which shall serve as the engines of growth and development of the Region, 
creating jobs, providing increased income and productivity, and bringing new 
technology. 
SECTION 3. Creation of the Mindanao Incentives Development 
Authority.- There is hereby created a body corporate to be known as the 
Mindanao Incentives Development Authority, hereinafter referred to as 
MIDA. The MIDA shall have a Director-General with the rank of a 
department undersecretary who shall be appointed by the President. The 
director-general shall be at least forty (40) years of age, of proven probity and 
integrity, and have a strong knowledge or background in agriculture, 
investments , economics, business, public administration, law or their 
equivalent. 
The Director General shall be assisted by three (3) deputy directors 
general each for policy and planning, administration and operations, who 
shall be appointed by the MlDA Board, upon the recommendation of the 
Director General. The deputy directors shall be at least thirty-five (35) years 
old, with proven probity and integrity and with a degree in agriculture, 
economics, business, public administration, law, management or their 
equivalent. 
The Board shall be composed of the Secretary of Agriculture who shall 
serve as ex officio chairman, the Director General who shall serve as Vice 
Chairman, with four (4) members as follows: the Secretaries of the 
Department of Environment and Natural Resources, Department of Finance, 
Department of Trade and Industry and one (1) representative from the 
investorshusiness sector in Mindanao. 
Members of the Board shall receive a per diem of not more than Five 
Thousand Pesos (P5,OOO) for every board meeting: Provided, however, that 
the per diem collected per month does not exceed the equivalent of four (4) 
meetings. Provided, further, that the amount of per diem for every board 
meeting may be increased by the President but such amount shall not be 
increased within two (2) years after its last increase. [BCDA law] 
2 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
SECTION 4. Functions and Powers of the Board. - The Board 
shall have the following functions and powers: 
(a) Set the general policies on the establishment of the enterprises 
that will register with MIDA; 
(b) Review proposals for the establishment of MlDA registered 
enterprises, and to facilitate and assist in the organization of said 
entities; 
(c) Provide assistance to registered enterprises to ensure that 
sufficient agro-industrial activities within the Region are 
undertaken, 
including 
agro-industrial processing, high-end 
technology production of high value crops, high-technology 
aquaculture farming, direct agriculture and biotech industries, in 
coordination with the Department of Agriculture. The MIDA, in 
coordination with the Department of Agriculture and the 
Department of Trade and Industry, shall periodically furnish a list 
of agro-industrial activities which may be undertaken within the 
Region. 
(d) Approve the annual budget of MlDA and its development plans; 
(e) Issue rules and regulations to implement the provisions of this Act 
insofar as its powers and functions are concerned; 
(f) Exercise its powers and functions as provided for in this Act; and 
(9) Render annual reports to the President and the Congress. 
SECTION 5. General Powers and Functions of the MlDA. - The 
MlDA shall have the following powers and functions: 
To administer and supervise the incentive schemes of the Region 
according to the principles set forth in this Act; 
To register the enterprises in the Region in an efficient and 
expeditious manner; 
To coordinate with regional development councils and other 
development bodies in the identification and preparation of 
development programs and projects in the Region; 
To recommend to the President and Congress such other 
incentives, concessions or preference necessary to fully implement 
the letter and spirit of this Act; 
3 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
To adopt, alter and use a corporate seal; make contracts, lease, 
own or otherwise dispose of personal or real property; sue and be 
sued; and otherwise carry out its duties and functions as provided 
for in this Act; 
To consult on a regular basis with the local government units, 
private sector and civil society on plans and policies to be 
formulated and promulgated; 
To monitor and evaluate the development and requirements of 
entities within the Region and recommend to the local 
government units or other appropriate authorities the location, 
incentives, basic services, utilities and infrastructure required or 
to be made available for said entities; and 
TO accept any local or foreign investment, business or enterprise, 
subject only to such rules and regulations to be promulgated by 
the MlDA in conformity with the policies of the MlDA without 
prejudice to the nationalization requirements provided for in the 
Constitution. 
Within thirty (30) days from its constitution, the MlDA shall 
promulgate a priority investment plan over the Region in order to accomplish 
the intent of this Act. 
SECTION 6. Powers and Functions of the Director General. - The 
Director General shall provide overall supervision over the operations of the 
MIDA. He shall recommend to the Board the structure and the staffing 
pattern and personnel complement of the MlDA and establish regional 
offices, when necessary, subject to the approval of the MlDA Board. 
In addition, he shall have the following specific powers and 
responsibilities: 
(a) To safeguard all the lands, buildings, records, monies, credits and 
other properties and rights of the,MIDA; 
@) To ensure that all revenues of the MlDA are collected and applied 
in accordance with its budget; 
(c) To ensure that the employees of the MlDA are properly discharging 
their respective duties; 
4 


1 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
(d) TO give such information and recommend such measures to the 
Board, as he shall deem advantageous to the Region; 
(e) To submit to the Board, the ongoing and proposed projects, work 
and financial program, annual budget or receipts, and expenditures 
of MIDA; 
(0 To represent the MIDA in all its business matters and sign on its 
behalf after approval of the Board, all its contracts, agreements and 
obligations made in accordance with this Act; 
(g) To perform such other duties and exercise such powers as may be 
prescribed by the Board, and to implement the policies, rules and 
regulations set by the MIDA. 
SECTION 7. Autonomy of Local Government Units. Except as 
herein provided, the local government units comprising the Region shall 
retain their basic autonomy and identity. The cities shall be governed by 
their respective charters and the municipalities shall operate and function in 
accordance with the Local Government Code. 
SECTION 8. Qualifications of a Registered Enterprise. - To be 
entitled to registration under this Act, an applicant must satisfy to the Board 
that: 
(a) He is a citizen of the Philippines, if an individual, or in case of a 
corporation, partnership or association, it is organized under 
Philippine laws and that at least sixty percent (60%) of the capital 
stock outstanding and entitled to vote is owned and held. by 
Philippine nationals as defined in Republic Act No. 7042. If it does 
not possess the required degree of ownership as mentioned above, 
It will engage in an activity that is not within the activities 
reserved by the Constitution to Philippine citizens or corporation 
owned and controlled by Philippine citizens; 
(b) It shall make an initial investment in the Region in an amount 
not less than the equivalent of Two Hundred Fifty Thousand 
Dollars (US$250,000), United States currency, unless a higher 
amount of investment is required under existing laws; 
(c) The applicant will engage in an activity which will necessitate the 
employment of at least fifty (50) local employees; 
5 


I 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
(d)The applicant is capable of operating on a sound and efficient 
basis and of contributing to the development of the Region in 
particular and of the national economy in general; and 
(e) If the applicant is engaged in undertakings or activities outside 
the Region, it has installed or undertakes to install an accounting 
system adequate to identify the investments, revenues, costs, and 
profits or losses of the project to be undertaken in the Region from 
the aggregate investment, revenues, costs, and profits or losses of 
the whole enterprise or to establish a separate corporation for the 
project to be undertaken in the Region if the Board so requires. 
SECTION 9. Basic Rights and Guarantee. - All investors and 
registered enterprises are entitled to the basic rights and guarantees 
provided in the Constitution. Among the other rights recognized by the 
Government of the Philippines are the following: 
(a) Repatriation of Investments. In the case of foreign investments, 
the right to repatriate the entire proceeds of the liquidation of the 
investment in the currency in which the investment was 
originally made and at the exchange rate prevailing at the time of 
repatriation. 
(b) Remittance of Earnings. In the case of foreign Investments, 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. 
(c) Foreign Loans and Contracts. The right to remit at the exchange 
rate prevailing at the time of remittance such sums as may be 
necessary to meet the payments of interest and principal on 
foreign loans and foreign obligations arising from technological 
assistance contracts. 
(d) Freedom from Expropriation. Except as provided in Section 9 (e) 
below, there shall be no expropriation by the government of the 
property represented by investments or of the property of the 
registered enterprise. 
(e) Requisition of Inuestment. There shall be no requisition of the 
property represented by the investment or of the property of the 
registered enterprise, except in the event of war. 
6 


I 
2 
3 
policies: 
4 
(a) Within the framework and subject to the mandate and limitations 
5 
of the Constitution and the pertinent provisions of the Local 
6 
Government Code, the Region shall be developed into a self- 
7 
sustaining agricultural, agro-industrial, industrial, commercial, 
8 
financial and investment center to generate employment 
9 
opportunities in and around the Region and to attract and 
SECTION 10. Policies. - The Region shall be subject to the following 
10 
promote productive investments; 
11 
(h) Merchandise, raw materials, supplies, equipment, machinery, 
12 
spare parts and wares of every description, agricultural and 
13 
fisheries inputs brought into the Region by a registered enterprise 
14 
to be sold within the Region, stored, broken up, repacked, 
15 
assembled, installed, sorted, cleaned, graded or otherwise 
16 
processed, manipulated, manufactured, mixed with foreign or 
17 
domestic merchandise whether directly or indirectly related in 
18 
such activity and brought out of the Philippines, shall not be 
19 
subject to customs and internal revenue laws and regulations of 
20 
the Philippines,, including value added tax, nor to local tax 
21 
ordinances; 
22 
(c) The provision of existing laws, rules and regulations to the 
23 
contrary notwithstanding, no taxes, national and local except real 
24 
property tax, shall be imposed upon registered enterprises located 
25 
within the Region. In lieu of paying taxes, three percent (3%) of 
26 
the gross income earned by all registered enterprises within the 
27 
Region shall be remitted to the National Government, one percent 
28 
(1%) each to the local government unit having jurisdiction over 
29 
the particular registered enterprise. In addition, there is hereby 
30 
established a development fund of one percent (1%) of the gross 
31 
income earned by all registered enterprises within the Region to 
32 
be utilized for the development of the Region. 
33 
In case of conflict between national and local laws with 
34 
respect to tax exemption privileges in the Region, the same shall 
35 
be resolved in favor of the latter; 
7 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
(d) Registered enterprises establishing their production, processing or 
manufacturing plants in an area within the Region which the 
Board designates as necessary for the proper dispersal of the 
industry or in an area which the Board funds deficient in 
infrastructure, public utilities, and other facilities, such as 
irrigation, drainage and other similar waterworks infrastructure 
may apply in payment of taxes due from it to the government an 
amount equivalent to 100% of the necessary and major 
infrastructure works it may have undertaken with the prior 
approval of the Board under such terms and conditions as the 
Board may determine and in consultation with other government 
agencies concerned, provided that: 
(i) 
the title to all such infrastructure works shall, upon 
completion, be transferred to the Philippine Government; 
and 
(ii) should the registered enterprise undertake necessary and 
major maintenance work on such infrastructure works with 
the prior approval of the Board, a similar incentive shall be 
given to it in an amount equivalent to the cost of such 
necessary maintenance. 
Provided, that in cases where the Board may certify that 
infrastructure or the rehabilitation thereof is urgently needed in specific 
areas, the 
registered 
enterprise 
undertaking the 
construction of 
infrastructure or rehabilitation thereof may apply in payment of taxes due 
from it to the government an amount equivalent to 200% of the necessary and 
major infrastructure works it may have undertaken with the prior approval 
of the Board. 
Provided, further, that a registered enterprise shall be encouraged to 
undertake infrastructure and development projects, including but not limited 
to, power plants, highways, ports, airports, canals, dams, hydropower 
projects, water supply, irrigation, telecommunications, railroads and 
railways, 
transport 
systems, 
land 
reclamation 
projects, 
markets, 
slaughterhouses, warehouses, solid waste 
management, information 
technology 
networks 
and 
database 
infrastructure, 
education 
and 
development projects as may be authorized by the appropriate agency 
8 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
pursuant to this Act. Such projects shall be undertaken through contractual 
arrangements as defined hereunder and under Republic Act No. 6957, as 
amended, and such other variations as may be approved by the President of 
the Philippines. 
For the construction stage of these infrastructure projects, the project 
proponents may obtain financing from foreign and/or domestic sources and/or 
engage the services of a foreign and/or Filipino contractor: Provided, That in 
case an infrastructure or a development facility’s operation requires a public 
utility franchise, the facility operator must be Filipino or if a corporation, it 
must be duly registered with the Securities and Exchange Commission and 
owned up to at least sixty percent (60%) by Filipinos: Provided, further, That 
in the case of foreign contractors, Filipino labor shall be employed or hired in 
the different phases of the construction where Filipino skills are available: 
Provided, finally, That subjects which would have difficulty in sourcing funds 
may be financed partly from direct government appropriations and/or from 
Official Development Assistance (ODA) of foreign governments or institutions 
not exceeding fifty percent (50%) of the project cost, and the balance to be 
provided by the project proponent. 
All government infrastructure agencies, including government-owned 
and -controlled corporations and local government units are hereby 
authorized to enter into contracts with any duly prequalified project 
proponent for the financing, construction, operation and maintenance of any 
financially viable infrastructure or development facility through any of the 
projects authorized in this Act and other laws. Said agencies, when entering 
into such contracts, are enjoined to solicit the expertise of individuals, groups, 
or corporations in the private sector who have extensive experience in 
undertaking infrastructure or development projects. 
(e) For the first ten (10) years from registration, a registered 
enterprise shall be allowed to deduct from its gross income earned 
two hundred percent (200%) of the value of the labor training 
expenses incurred for upgrading the productivity and efficiency of 
unskilled labor and of apprentices, provided that: 
1. the training program is duly approved by the Board; 
2. the deduction shall not exceed twenty percent (20%) of 
direct labor wage; and 
36 
3. the apprentices shall be paid the minimum wage. 
9 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
Provided, that in case at least ten percent (10%) of the trainees or 
apprentices shall be Muslim or belong to other ethnic minorities, a registered 
enterprise shall be allowed to deduct from its gross income earned three 
hundred percent (300%) of the value of the labor training expenses incurred 
for upgrading the productivity and efficiency of the unskilled labor and 
apprentices belonging to the Muslim or other ethnic minorities. 
(0 For the first ten (10) years from registration, a registered 
enterprise shall be allowed to deduct from its gross income earned 
two hundred percent (200%) of the value of the research and 
development 
expenses incurred relating to the business 
undertaken by the registered enterprise, provided that: 
1. the research and development program is duly approved by 
the Board; and 
2. the deduction shall not exceed ten percent (10%) of gross 
income of the registered enterprise. 
(9) For the first ten (IO) years from registration, a registered 
enterprise shall be entitled to reimbursement for expenses 
incurred in undertaking feasibility studies of projects deemed by 
the Board to be critical to development objectives. Such 
reimbursement shall be given by the Department with authority 
over the specific project. 
(h) For the first ten (10) years from registration, a registered 
enterprise may carry over its net operating loss as a deduction 
from its gross income earned for the next three (3) consecutive 
years immediately following the year of such loss. 
(i) Private agricultural lands that have not been distributed and 
upon which no Certificates of Land Ownership Award have been 
issued shall be exempt from the coverage of Republic Act No. 
6657, known as the Comprehensive Agrarian Reform Law 
(“CARL”); Provided, that such lands shall be directly and 
exclusively used by registered enterprises within the Region. 
In cases where the lands have been subjected to the CARL, by 
voluntary offer to sell, or commercial farms deferment or notices of 
compulsory acquisition, a simple and absolute majority of the actual regular 
workers or tenants must consent to the exemption within one (1) year from 
the effectivity of this Act. Should the workers or tenants not agree to this 
10 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
1s 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
3s 
exemption, the lands shall be distributed collectively to the worker- 
beneficiaries or tenants who shall form a cooperative or association to 
manage the same. 
The provisions of 
Republic Act 
No. 
6657 to the contrary 
notwithstanding, land subjected to CARL may be mortgaged, leased, sold or 
otherwise disposed of in favor of a registered enterprise. 
In cases where the lands have not been subjected to the CARL, the 
consent of the farm workers shall no longer be necessary. However, the 
provision of Section 32-A of Republic Act No. 7881 on incentives shall apply. 
SECTION 11. Labor Relations. The Region shall uphold industrial 
peace, harmony and productivity to establish a sound and peaceful 
investment climate and simultaneously promotes and enhances the lives and 
dignity of all workers. 
Unless otherwise provided by law, all Philippine law and social 
security laws shall apply within the Region pursuant to the above-stated 
policy, all laws on strikes and lockouts will be strictly enforced. 
MlDA shall establish a Labor Center which center shall be responsible 
for studying and amicably settling professional and labor relations and 
disputes, interpretation of employment contracts and monitoring work, 
hygiene and safety standards within the Region. 
Subject to existing labor laws, as may be specified in employment 
contracts or collective bargaining agreements, all labor disputes must be 
brought before the Labor Center which will attempt to amicably settle the 
case. In case the Labor Center cannot settle the dispute amicably, it will 
certify the dispute for mediation or arbitration before the proper office of the 
Department of Labor and Employment or the Secretary of Labor and 
Employment for compulsory arbitration or assumption of jurisdiction. 
SECTION 12. Government Assistance. Upon the recommendation of 
the MlDA Board and subject to the qualifications under its relevant charters, 
the Development Bank of the Philippines, Land Bank of the Philippines and 
similar government financial institutions are mandated to render financial 
assistance to registered enterprises in the Region which may be secured by 
an undertaking from the Government, through the Department of Finance, to 
11 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
issue a guarantee in favor of the aforementioned registered enterprise 
whenever warranted by the circumstances. 
Depending on the nature of the registered enterprise, line departments 
shall be required to extend interest assistance to the extent determined by 
the appropriate Secretary for loans availed of by the registered enterprise 
pursuant to this Act. 
SECTION 13. Other Zncentiues. The expatriates employed by the 
registered enterprises shall be entitled to the following incentives: 
(a) Upon submission of all necessary documents, the Bureau of 
Immigration shall issue the multiple entry special visa to foreign 
personnel of registered enterprises, their respective spouses and 
unmarried children under 21 years of age, if accompanying them 
or if following to join them after their admission into the 
Philippines as non-immigrant within seventy-two (72) hours upon 
submission of all required documents. This is without prejudice to 
the authority of the Department of Foreign Affairs to issue visas. 
The visa shall be valid for a period of five (5) years to 
enter the Philippines. The admission and stay shall be co- 
terminus with the validity of the multiple entry visa. The stay, 
however, is extendible to five (5) years upon submission to the 
Bureau of Immigration of a sworn certification by a responsible 
officer of the registered enterprise that is licensed to operate or 
registration remains valid and subsisting and that the registered 
enterprise has withheld tax due on compensation and the same 
has been paid to the Bureau of Internal Revenue. 
Non-immigrants who have been admitted under the 
multiple entry special visa, as well as their respective spouses and 
dependents, shall be exempt from: the payment of all fees due 
under immigration and alien registration laws; securing alien 
certificates of registration; and obtaining emigration clearance 
certificates, except reasonable administrative cots. They are also 
exempt from all types of clearances required by any government 
department or agency, except that upon final departure from the 
Philippines the employer of the said non-immigrants shall so 
advise in writing the Bureau of Immigration at least five (5) 
12 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
working days prior to the immigrant's departure and the finally 
departing non-immigrant employee shall be required to submit to 
the said office a tax clearance from the Bureau of Internal 
Revenue. 
Alien executives occupying managerial and technical positions 
employed by the registered enterprise shall be subject for each 
taxable year upon their g-ross income received as salaries, wages, 
annuities, compensations, remuneration and emoluments to a 
final tax equal to fifteen percent (15%) of such gross income. 
The same tax treatment is applicable to Filipinos employed and 
occupying the same positions as those aliens employed by 
registered enterprises, regardless of whether or not there is an 
alien executive occupying the same position. 
(b) 
Qualified Filipino employees shall have the option to be 
taxed at either 15% of gross income or at the regular tax rate on 
their taxable income in accordance with the National Internal 
Revenue Code of 1997. 
An alien executive of the registered enterprise shall enjoy tax and 
duty free importation of personal and household effects as 
provided for under Section +105(h) of the Tariff and Customs Code 
as amended, and Section 109 (I) of the National Internal Revenue 
Code, as amended; Provided, That the personal and household 
effects shall arrive in the Philippines within ninety (90) days 
before or after conversion of the alien executive's admission 
category to multiple entry visa issued under this Act. 
Foreign personnel of registered enterprises and the dependents of 
such foreign personnel if joining them during the period of their 
assignment in the Philippines shall be exempted from the 
payment of travel tax imposed under Section 1 of Presidential 
Decree No. 1183, as amended. 
(c) 
(d) 
SECTION 14. Simplified Public Bidding. As a general rule, 
contracts for infrastructure development, construction, repair, rehabilitation, 
improvement or maintenance should be conducted through public bidding 
pursuant to Republic Act No. 6957, as amended. However, in the exigency of 
public service and national interest as may be determined by the President, 
13 


I 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
and in order to achieve the objectives of this Act, simplified bidding through 
sealed canvass of at least three (3) pre-qualified investors may be resorted to. 
The process of selecting the prospective lessees and private investors shall be 
transparent, where procedures and selection process adapted are made public 
through newspaper advertisements and similar other means. 
SECTION 15. Authority to Declare Economic Zones. The 
President is authorized to declare certain areas within the Region as 
economic, free trade, agro-industrial, agricultural, agri-tourism, or industrial 
zones qualified and eligible for all incentives provided for under this Act and 
other existing laws. The President i s  further authorized to declare areas 
within the Region as underdeveloped and therefore entitled to incentives and 
support over and above those provided in this Act. 
SECTION 16. Applicability to Existing Enterprises in the 
Region. The basic rights incentives granted under this Act may be availed of 
existing business enterprises within the Region provided that these 
enterprises possess the minimum qualification as set forth in Section 8 and 
they register with the MlDA within six (6) months from the effectivity of the 
rules implementing this Act. 
SECTION 
17. 
Coordination 
with 
Various 
Government 
Organizations. - The Board shall consult and coordinate with existing 
government organizations including the Autonomous Region of Muslim 
Mindanao, Mindanao Economic Development Council, Southern Mindanao 
Development Authority, Special Zone of Peace and Development in 
formulating policies and programs. 
SECTION 18. Implementing Rules and Regulations. - To 
implement the provisions of this Act, the Department of Agriculture, the 
Department of Trade and Industry and the Department of Finance shall 
formulate the implementing rules and regulations of this Act within thirty 
(30) days after its approval. Such rules and regulations shall take effect 
fifteen (15) days after their publication in a newspaper of general circulation 
in the Philippines. 
14 


1 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
SECTION 19. Separability Clause. - If any part or section of this 
Act is declared unconstitutional for any reason or whatsoever, such parts not 
so declared shall remain in full force and effect. 
SECTION 20. Repealing Clause. - All laws, decrees, orders, rules 
and regulations or issuances or parts thereof inconsistent with the provisions 
of this Act are hereby repealed or modified accordingly. 
SECTION 21. Effectivity Clause. -This Act shall take effect after 
fifteen (15) days following its full publication in at least two (2) newspapers of 
general circulation in the Philippines. 
Approved, 
15