Section 1. Short Title. — This Act shall be known as the
Zamboanga City Special Economic Zone Act of 1995.
Sec. 2. Declaration of Policy. — It is hereby
declared the policy of the State to encourage and promote the
attainment of a sound and balanced industrial, economic and social
development in the country through the promotion of private
enterprises. Towards this end, the State shall endeavor to
establish special economic zones in suitable and selected areas in the
country where enterprises will be given incentives to create an
environment conducive to business. This shall be the means to
attract local and foreign investors, general employment opportunities,
and encourage the regional dispersal of industries.
Sec. 3. Creation of the Zamboanga City Special
Economic Zone. — In accordance with the foregoing policy and subject to
the concurrence of the city government of Zamboanga affected by the
zone, there is hereby established a special economic zone in the City
of Zamboanga to be known as the Zamboanga City Special Economic Zone,
hereinafter referred to as the ZAMBOECOZONE. The specific metes
and bounds of the ZAMBOECOZONE shall be more particularly defined in a
presidential proclamation that shall be issued for this purpose.
Sec. 4. Governing Principles. — The Zamboanga City
Special Economic Zone shall be managed and operated under the following
principles:
(a) Within the framework and limitations of the
Constitution and the applicable provisions of the Local Government
Code, the ZAMBOECOZONE shall be developed into a decentralized,
self-reliant and self-sustaining agro-industrial, commercial,
financial, investment and tourist center and free port with suitable
retirement and residential areas. The ZAMBOECOZONE shall be provided
with transportation, telecommunications, and other facilities needed to
attract legitimate and productive foreign investments, generate linkage
industries and employment opportunities for the people of Zamboanga
City and its neighboring towns and cities.
(b) The ZAMBOECOZONE may establish mutually
beneficial economic relations with other entities within the country,
subject to the administrative guidance of the Department of Foreign
Affairs and/or Department of Trade and Industry with foreign entities
or enterprises.
(c) Foreign citizens and companies owned by
non-Filipinos in whatever proportion may set up enterprises in the
ZAMBOECOZONE, either by themselves or in joint venture with Filipinos
in any sector of industry, international trade and commerce within the
ZAMBOECOZONE.
(d) The ZAMBOECOZONE shall be managed and operated as
a separate customs territory to ensure and facilitate the free flow,
entry and movement of machinery and other goods. It shall be
vested with the authority to issue certificates of origin for products
manufactured or processed in the ZAMBOECOZONE in accordance with
prevailing rules of origin, and the pertinent regulations of the duly
recognized national bodies tasked to oversee all other ECOZONES in the
country.
(e) Business establishments within the ZAMBOECOZONE
shall be entitled to the existing fiscal incentives as provided for
under Presidential Decree No. 66, the law creating the Export
Processing Zone Authority, or those provided under Book VI of Executive
Order No. 226, otherwise known as the Omnibus Investment Code of 1987,
and such incentives, benefits or privileges presently enjoyed by
business establishments operating within the Subic special economic
zone pursuant to Republic Act No. 7227.
(f) Any provisions of existing laws, rules or
regulations to the contrary notwithstanding, no taxes, local and
national, shall be imposed on business establishments operating within
the ZAMBOECOZONE. In lieu of paying taxes, said business
establishments shall pay and remit to the national government two
percent (2%) of their gross income. In addition, they shall remit
to the city government of Zamboanga three percent (3%) of their gross
income, to be allocated as follows:
(1) Two percent (2%) to the City of Zamboanga; and
(2) One percent (1%) to the barangay special
development fund, which is hereby created, for the development and
improvement of the barangays within the City of Zamboanga.
(g) Except as otherwise provided herein, the local
government unit/s embraced within the ZAMBOECOZONE shall retain and
maintain their basic autonomy and identity. Zamboanga City shall
operate and function in accordance with Republic Act No. 7160,
otherwise known as the Local Government Code of 1991.
(h) Any foreign investor who establishes a business
enterprise within the ZAMBOECOZONE and who maintains capital investment
of not less than One hundred fifty thousand United States dollars
(US$150,000) shall be granted, along with his or her spouse,
dependents, and unmarried children below twenty-one (21) years of age,
a permanent resident status within the ZAMBOECOZONE.
Such foreign investor and his or her spouse, dependents and unmarried
children below the age of twenty-one (21) years, shall have freedom of
ingress and egress to and from the ZAMBOECOZONE without any need of any
special authorization from the Bureau of Immigration and Deportation.
Likewise, the Zamboanga City Special Economic Zone Authority shall
issue working visas renewable every two (2) years to foreign executives
and foreign technicians with highly specialized skills which no
Filipino possesses, as certified by the Department of Labor and
Employment.
The names of the foreigners granted permanent resident status and
working visas by the Zamboanga City Special Economic Zone Authority
shall be reported to the Bureau of Immigration and Deportation within
thirty (30) days from such grant.
The foregoing is without prejudice to a foreigner acquiring permanent
resident status in the Philippines in accordance with applicable
immigration, retirement, and other related laws.
(i) The provisions of any law to the contrary
notwithstanding, any foreigner, partnership, corporation, or any other
business association not created and existing under the laws of the
Republic of the Philippines, engaged in the business of retailing goods
and merchandise, shall be permitted to engage in the business in such
retail trade within the ZAMBOECOZONE after securing license for that
purpose from the Zamboanga City Special Economic Zone Authority:
provided, that only foreign nationals engaged in medium- and
large-scale retail trade may be permitted to engage in such business
within the ZAMBOECOZONE. The determination of the medium- and
large-scale retail trade operation shall be the responsibility of the
ZAMBOECOZONE Authority.
(j) Existing banking laws and Bangko Sentral ng
Pilipinas (BSP) rules and regulations shall apply on foreign exchange
and other current 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. 5. Creation of the Zamboanga City Special
Economic Zone Authority. — Subject to the concurrence of the local
government units that will be affected by the creation of the
ZAMBOECOZONE, there is hereby created a body corporate to be known as
the Zamboanga City Special Economic Zone Authority, hereinafter
referred to as the ZAMBOECOZONE Authority, which shall manage and
operate the ZAMBOECOZONE, in accordance with this Act. It shall
be organized within one hundred eighty (180) days after the effectivity
of this Act.
Sec. 6. Principal Office. — The ZAMBOECOZONE
Authority shall maintain its principal office in the City of Zamboanga,
but it may establish branches and agencies within the Philippines and
abroad as may be necessary for the proper conduct of its business.
Sec. 7. Powers and Functions of the ZAMBOECOZONE
Authority. — The ZAMBOECOZONE Authority shall have the following
functions:
(a) To operate, administer, and manage the
ZAMBOECOZONE according to the principles and provisions set forth in
this Act;
(b) To recommend to the President the issuance of a
proclamation to fix and delimit the site of the ZAMBOECOZONE;
(c) To register, regulate and supervise the
enterprises in the ZAMBOECOZONE in an efficient and decentralized
manner;
(d) To regulate and undertake the establishment,
operation and maintenance of utilities, other services and
infrastructure in the ZAMBOECOZONE such as heat, light and power, water
supply, telecommunications, transport, toll roads and bridges, port
services, etc., and to fix reasonable and competitive rates, fares,
charges and prices therefore;
(e) To construct, acquire, own, lease, operate and
maintain on its own or through others by virtue of contracts,
franchises, licenses, or permits under any of the schemes allowed in
Republic Act No. 6957 (the build-operate-transfer law), or in joint
venture with the private sector, any or all of the public utilities and
infrastructure required or needed in the ZAMBOECOZONE in coordination
with appropriate national and local government authorities and in
conformity with applicable laws thereon;
(f) To operate on its own, either directly or through
a subsidy entity, or license to other tourism related activities,
including games, amusements and recreational and sports facilities;
(g) Within the limitation provided by law, to raise
or borrow adequate and necessary funds from local or foreign sources to
finance its projects and programs under this Act, and for that purpose
to issue bonds, promissory notes, and other forms of securities, and to
secure the same by a guarantee, pledge, mortgage, deed of trust, or an
assignment of all part of its property or assets;
(h) To provide security for the ZAMBOECOZONE in
coordination with national and local governments. For this
purpose, the ZAMBOECOZONE Authority may establish and maintain its own
security force and firefighting capability or hire others to provide
the same;
(i) To protect, preserve, maintain and develop the
virgin forests, beaches, coral and functional units or offices within
the ZAMBOECOZONE.
(j) To create, operate and/or contract to operate
such agencies and functional units or offices of the ZAMBOECOZONE
Authority as it may deem necessary;
(k) 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; and
(l) To issue rules and regulations consistent with
the provisions of this Act as may be necessary to implement and
accomplish the purposes, objectives, and policies provided therein.
Sec. 8. Non-profit Character of the ZAMBOECOZONE
Authority. — The ZAMBOECOZONE Authority shall be non-profit and shall
devote the use of its returns from capital investments, as well as
excess revenues from its operations, for the development, improvement,
and maintenance and other related expenditures of the ZAMBOECOZONE
Authority to pay its indebtedness and obligations and in furtherance
and effective implementation of the policy provided in this Act.
In consonance with this, the ZAMBOECOZONE Authority is hereby declared
exempt from the payment of all taxes, duties, fees, imposts, charges,
costs and service fees in any court or administrative proceedings in
which it may be a party.
The foregoing exemptions may however be entirely or partially lifted by
the President of the Philippines upon the recommendation of the
Secretary of Finance, not earlier than five (5) years from the
effectivity of this Act, if the President shall find the Authority to
be self-sustaining and financially capable by then to pay such taxes,
customs duties, fees and other charges after providing for debt service
requirements of the ZAMBOECOZONE Authority and of its projected capital
and operating expenditures.
Sec. 9. Board of Directors of the ZAMBOECOZONE
Authority. — The powers of the ZAMBOECOZONE Authority 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) A chairman who shall, at the same time, be the
administrator of the ZAMBOECOZONE Authority;
(b) A vice-chairman who shall come from the national
agency tasked to coordinate and monitor special economic zones and the
like in the country;
(c) Six (6) members consisting of:
(1) The city's congressional representative;
(2) The mayor of the City of Zamboanga;
(3) One (1) representative of the city council;
(4) One (1) representative from domestic investors in
the ZAMBOECOZONE;
(5) One (1) representative from foreign investors in
the ZAMBOECOZONE; and
(6) One (1) representative from the labor sector
chosen from the workers in the ZAMBOECOZONE.
The city's congressional representative, the mayor of the City of
Zamboanga and the representative of the city council shall serve as ex
officio voting members of the Board.
The chairman and the members of the Board, except the ex officio
members, shall be appointed by the President of the Philippines to
serve for a term of six (6) years, unless sooner removed for cause or
dies or resigns voluntarily. 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 investment sectors
no person shall be appointed by the President of the Philippines as
member of the Board unless he is a Filipino citizen, of good moral
character and of recognized competence in some relevant fields of
business, banking, shipping, business or labor management, port
operations, engineering or law.
Members of the Board shall receive a reasonable per diem which shall be
fixed by the President of the Philippines once every six (6) years for
every Board meeting: provided, however, that the total per diem
collected each month shall not exceed the equivalent per diems for four
(4) meetings. Unless and until the President of the Philippines
has fixed a higher per diem for the members of the Board, such per diem
shall not be more than Ten thousand pesos (P10,000.00) for every Board
meeting.
SECTION 10. Powers and Duties of the
Chairman-Administrator. — The chairman-administrator shall have the
following powers and duties:
(a) To direct and manage the affairs of the Authority
in accordance with the policies of the Board;
(b) To establish the internal organization of the
Authority under such conditions that the Board may prescribe;
(c) To submit an annual budget and necessary
supplemental budget to the Board for its approval;
(d) To submit within thirty (30) days after the close
of each fiscal year an annual report to the Board and such other
reports as may be required; and
(e) To perform such other duties as may be assigned
to him by the Board.
SECTION 11. Promotion of Industrial Peace. — One
representative each from the Department of Labor and Employment (DOLE),
labor sector, cultural minorities, business and industry sectors shall
formulate a mechanism under a social pact for the enhancement and
preservation of industrial peace in the City of Zamboanga within thirty
(30) days after the effectivity of this Act.
SECTION 12. Capitalization. — The Zamboanga City
Special Economic Zone Authority shall have an authorized capital stock
of two billion (2,000,000,000) no par shares with a minimum issue value
of Ten pesos (P10.00) each. The national government shall
initially subscribe and fully pay three hundred million (300,000,000)
shares of such capital stock. The initial amount necessary to
subscribe and pay for the shares of stock shall be included in the
General Appropriations Act of the year following its enactment into law
and thereafter. The Board of Directors of the ZAMBOECOZONE
Authority may, from time to time and with the written concurrence of
the Secretary of Finance, increase the issue value of the shares
representing the capital stock of the ZAMBOECOZONE Authority. The Board
of Directors of the ZAMBOECOZONE Authority, with the written
concurrence of the Secretary of Finance, may sell shares representing
not more than forty per centum (40%) of the capital stock of the
ZAMBOECOZONE Authority to the general public with such annual dividend
policy as the Board and the Secretary of Finance may determine.
The national government shall in no case own less than sixty per centum
(60%) of the total issued and outstanding capital stock of the
ZAMBOECOZONE Authority.
SECTION 13. Supervision and Coordination of
Development Plans. — For purposes of policy direction and coordination,
the ZAMBOECOZONE Authority shall be under the direct control and
supervision of the Office of the President, in the meantime that the
agency tasked with the coordination of special economic zones is not
yet in place.
SECTION 14. Relationship with the Local Government
Units. — In case of any conflict between the ZAMBOECOZONE Authority and
the City of Zamboanga on matters affecting the ZAMBOECOZONE other than
defense and security matters, the decision of the ZAMBOECOZONE
Authority shall prevail.
SECTION 15. Auditing. — The Commission on Audit shall
appoint a representative who shall be a full time auditor of the
ZAMBOECOZONE Authority and assign such number of personnel as may be
necessary to assist said representative in the performance of his/her
duties. The salaries and emoluments of the assigned auditor and
personnel shall be in accordance with pertinent laws, rules and
regulations.
SECTION 16. Separability Clause. — If any provision
of this Act shall be held unconstitutional or invalid, the other
provisions not otherwise affected shall remain in full force and
effect.
SECTION 17. Repealing Clause. — All laws, executive
orders or issuance, or any parts thereof which are inconsistent
herewith, are hereby repealed or amended accordingly.
SECTION 18. Effectivity Clause. — This Act shall take
effect upon its publication in at least one (1) newspaper of general
circulation.
Approved: February 23, 1995
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