WHEREAS, pending before Congress prior to
the promulgation of Proclamation No. 1081, dated September 21, 1972,
was House No. 4317, entitled "An Act to Revise the Charter of the
Foreign Trade Zone Authority Created Under Republic Act Numbered Five
Thousand Four Hundred and Ninety and For Other Purposes", which I have
certified as one of the urgent measures necessitating immediate
enactment; chanroblesvirtualawlibrary
WHEREAS, it is imperative that this measure be immediately made part of
the law of the land in order to assure the accelerated development and
efficient operations of the export processing zone in Mariveles,
Bataan, and such other zones as may be established in the country, and
thereby hastening the realization of the objectives of the Government
to create a new social and economic order for the national benefit;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution as
Commander-in-Chief of all the Armed Forces of the Philippines, and
pursuant to Proclamation No. 1081, dated September 21, 1972, and
General Order No. 1, dated September 22, 1972, as amended, do hereby
order and decree the following to the Revised Charter of the Foreign
Trade Zone Authority Created Under Republic Act No. 5490 and as part of
the law of the land:cralaw:red
Section 1. Declaration of Policy. — It is hereby
declared to be the policy of the Government to encourage and promote
foreign commerce as a means of making the Philippines a center of
international trade, of strengthening our export trade and foreign
exchange position, of hastening industrialization, of reducing domestic
unemployment, and of accelerating the development of the country, by
establishing export processing zones in strategic locations in the
Philippines.
Section 2. Creation of an Export Processing Zone
Authority. — To carry out the above policy, there is hereby created a
body corporate to be known as the Export Processing Zone Authority,
hereinafter referred to as Authority, which shall be under the direct
supervision of the Office of the President. The functions of the
Authority are hereby declared governmental.
Section 3. Principal Office. — The Authority shall
maintain its principal office in the Greater Manila area but it may
establish branches and agencies within the Philippines as may be
necessary for the proper conduct of its business.
Section 4. Purposes and Specific Powers. — The
purposes and specific powers of the Authority are as follows:cralaw:red
(a) To operate, administer and manage the export
processing zone established in the Port of Mariveles, Bataan, and such
other export processing zones as may be established under this Decree;
to construct, acquire, own, lease, operate and maintain infrastructure
facilities, factory building, warehouses, dams, reservoir, water
distribution, electric light and power system, telecommunications and
transportation, or such other facilities and services necessary or
useful in the conduct of commerce or in the attainment of the purposes
and objectives of this Decree;chanroblesvirtualawlibrary
(b) To take water from any public stream, river,
creek, lake, spring or waterfall in the Philippines as may be necessary
for the attainment of the purposes of this Decree; to alter,
straighten, obstruct or increase the flow of water in streams or in
water channels intersecting or connecting therewith or contiguous to
its works or any part thereof; and to undertake land reclamation;chanroblesvirtualawlibrary
(c) To acquire and hold agricultural lands in excess
of the areas permitted to private corporations or associations by the
Constitution;chanroblesvirtualawlibrary
(d) To determine and regulate the enterprises to be
established within an export processing zone in order not to adversely
affect the operations of existing domestic industries outside said
Zone; to operate such Zone as a public utility wherein all the rates
and charges for all services or privileges therein shall be fair and
reasonable as determined solely by the Authority, and the Authority
shall afford all who may apply for the use of the Zone and its
facilities and appurtenances uniform treatment under like conditions
subject to such treaties or commercial conventions as are now enforced
or may hereafter be made by the Philippines with any foreign government
from time to time;chanroblesvirtualawlibrary
(e) To grant the use or to rent, lease or let, for a
consideration and under such terms, arrangements and conditions it may
deem reasonable and proper, any and all port facilities, including
stevedoring and port terminal services, or any concession properly
incident thereto or in connection with the receipt, delivery, shipment
and transfer in transit, weighing, marking, tagging fumigating,
refrigerating, icing, storing, and handling of goods, wares and
merchandise: Provided, however, That where the port terminal facilities
are owned and operated by private persons, the fees and charges to be
levied shall not exceed that being collected by the Government for
similar services;chanroblesvirtualawlibrary
(f) Upon application, to grant such franchise to
operate and maintain exclusively within the Zone electric light, heat
or power system, transportation, communication, warehousing, ice plant
or cold storage; and, under uniform and reasonable rates and
regulations made thereunder, permit to persons, firms, corporations or
associations the use of the Zone and its facilities, or the privilege
to erect such buildings and other structures within the Zone as will
meet their particular requirements: Provided, That such franchise or
permission shall not constitute a vested right as against the
Government, nor interfere with or complicate the revocation of the
grant: Provided, further, That such franchise or permit shall not be
granted on terms that conflict with the public use of the Zone, as set
forth in this Decree;chanroblesvirtualawlibrary
(g) To fix, assess and collect storage charges and
fees, including rentals for the lease, use or occupancy of lands,
buildings, structure, warehouses, facilities and other properties owned
and administered by the Authority; and to fix and collect the fees and
charges for the issuance of permits, licenses and the rendering of
services not enumerated herein, the provisions of law to the contrary
notwithstanding;chanroblesvirtualawlibrary
(h) For the due and effective exercise of the powers
conferred by law and to the extend requisite therefor, to exercise
exclusive jurisdiction and sole police authority over all areas owned
or administered by the Authority. For this purpose, the Authority shall
have supervision and control over the bringing in or taking out of the
Zone, including the movement therein, of all cargoes, wares, articles,
machineries, equipment, supplies or merchandise of every type and
description;chanroblesvirtualawlibrary
(i) When essential to the proper administration of
its corporate affairs or when necessary for the proper transaction of
its business or for carrying out the purposes of this Decree, to
contract indebtedness and issue bonds, subject to the conditions set
forth in Section 19 hereof;chanroblesvirtualawlibrary
(j) To create and operate and/or contract to operate
such agencies, functional units, offices and departments of the
Authority as it may deem necessary or useful for the furtherance of any
of the purposes of this Decree;chanroblesvirtualawlibrary
(k) To adopt, alter and use a corporate seal which
shall be judicially noticed; make contracts, lease, own or otherwise
dispose of personal and real property; sue and be sued; and otherwise
do and perform any and all things that may be necessary or proper to
carry out the purposes of the Authority.
Section 5. Capitalization. — The capital of the
Authority shall consist of (1) its existing assets and such other
properties as may be contributed to the Authority by the Government to
form part of capital, (2) all capitalized surplus, and (3) cash
contribution by the Government in the amount of two hundred million
pesos, which is hereby appropriated out of any fund in the National
Treasury not otherwise appropriated, be they collection from any or all
taxes accruing to the general fund or proceeds from loans the issue of
bonds, treasury bills or notes, or derived from any other sources of
income, by or of the National Government, which amount shall be
programmed and released by the Budget Commission in accordance with the
schedule of development and expenditures to be prepared and submitted
by the Authority: Provided, however, That any budgetary outlay
allocated and released in favor of the Export Processing Zone Authority
and/or Foreign Trade Zone Authority shall be correspondingly credited
to the authorized capitalization herein provided.
Section 6. Board of Commissioners. — The corporate
powers of the Authority shall be vested in and exercised by the Board
of Commissioners, hereinafter referred to as the Board, to be composed
of seven members to wit: the Deputy Governor of the Central Bank of the
Philippines, the vice-Chairman of the Board of Investments, the
Undersecretary of Finance and the Undersecretary of the Department of
Trade and Tourism, who shall be ex-officio members, and the remaining
members shall be appointed by the President with the consent of the
Commission on Appointments. The President shall designate from among
the members of the Board its Chairman, who shall at the same time be
the Administrator of the Authority.
Section 7. Qualifications and Disqualifications of
Commissioners. — No person shall be appointed as a member of the Board
unless he is a citizen of the Philippines, of good moral character and
unquestionable integrity and responsibility and of recognized
competence in any of the fields of finance, economics, law, taxation,
commerce, industry, engineering, management or the like.
No member of the Board shall directly or indirectly engage in partisan
political activities or practice any profession or business dealing
with or related to the exercise of the Authority's functions and
powers; and be financially interested, directly or indirectly, in any
contract entered into by the Authority.
Section 8. Tenure of Office. — Except for the
ex-officio members, the tenure of office of the other members shall be
six years; Provided, That the term of office of the first appointees
shall be fixed as follows: the Chairman shall be for six years; one
member shall be for four years, and the last member shall be for two
years: Provided, finally, That no vacancy shall be filled except for
the unexpired portion of any term.
The Chairman and the members of the Board may be suspended or removed
for cause by the President of the Philippines.
Section 9. Meetings and Quorum. — The Board shall
meet regularly once a month and as often as the exigencies of the
service demand. The presence of at least four members shall constitute
a quorum, and the vote of four members shall be necessary for the
adoption of any rule, resolution or decision or any other act of the
Board.
Section 10. Compensation of Chairman and Members of
the Board. — The Chairman, who is also the Administrator of the
Authority, shall receive an annual salary of fifty thousand pesos and a
monthly commutable allowance of one thousand pesos. The members of the
Board shall receive a per diem of not to exceed two hundred pesos for
each board meeting actually attended by them: Provided, That such per
diems shall not exceed one thousand pesos during any month for each
member: Provided, further, That no other allowances or any form of
compensation shall be paid them, except actual expenses in traveling to
and from their residences to attend board meetings.
Section 11. Powers and Duties of the Board. — The
Board shall have the following powers and duties:cralaw:red
(a) To promulgate policies and to prescribe such
rules and regulations as may be necessary to implement the intent and
provisions of this Decree, which rules and regulations shall take
effect thirty (30) days following their publication in two (2)
newspapers of general circulation in the Philippines;chanroblesvirtualawlibrary
(b) To recommend the establishment of other export
processing zones as it may deem advisable, and to recommend to the
President the issuance of a proclamation to fix and delimit the site of
the Zone or Zones, which shall at all times remain to be owned by the
Authority. The site of the Zone or Zones, as proclaimed by the
President, shall be surveyed by the Bureau of Lands and conveyed
thereafter in absolute ownership to the Authority by the President of
the Philippines for the nominal sum of one peso for each parcel of
land. Upon receipt of said deed of conveyance, the proper Register of
Deeds shall register the same and issue the corresponding original
certificate of title to the Authority;chanroblesvirtualawlibrary
(c) To approve the annual budget and such
supplemental budgets which may be submitted to it by the Chairman;chanroblesvirtualawlibrary
(d) Upon the recommendation of the Administrator, to
organize, reorganize and determine the Authority's staffing pattern; to
fix their salaries and to define their powers and duties;chanroblesvirtualawlibrary
(e) Notwithstanding the provisions of law, rules and
regulations to the contrary, to enter by itself into any contract or
agreement as may be necessary for the proper, efficient and stable
administration of the Authority and for the attainment of the purposes
and objectives of this Decree;chanroblesvirtualawlibrary
(f) To recommend to the President the application of
compulsory arbitration in the settlement of any labor dispute affecting
any industry or business located inside the Zone. If in the opinion of
the President the labor dispute would seriously impair Zone operation,
he shall forthwith certify said labor dispute to the National Labor
Relation Commission or the Court of Industrial Relations for immediate
compulsory arbitration;chanroblesvirtualawlibrary
(g) To recommend to the Commissioner of Immigration
that entry into the Philippines of foreign nationals for employment as
authorized under Section 16 of this Decree;chanroblesvirtualawlibrary
(h) To render annual reports to the President and
such special reports as may be requested; and
(i) Generally, to exercise all the powers necessary
or incidental to attain the purposes of this Decree. chanroblesvirtualawlibrary
Section 12. Administrator and Deputy Administrators;
Powers and Duties. — The Chairman, who is also the Administrator of the
Authority, shall be assisted by two Deputy Administrators to be chosen
and may be removed by the Board upon recommendation of the Chairman.
The Administrator and the Deputy Administrators shall be required to
work full time in the Authority. Such deputies shall perform the
duties, functions and responsibilities as may be assigned to them by
the Administrator. The annual salary of each deputy shall be thirty
thousand pesos with a monthly commutable allowance of five hundred
pesos.
The Chairman-Administrator shall have the following powers and duties:cralaw:red
(a) To direct and manage the affairs of the Authority
in accordance with the policies of the Board;chanroblesvirtualawlibrary
(b) To assist registered Zone enterprises and
prospective investors to have their papers processed with dispatch by
all Government offices, agencies, instrumentalities and financial and
banking institutions;chanroblesvirtualawlibrary
(c) To prepare the agenda for the meeting of the
Board and submit for its consideration and approval the policies and
measures which he deems necessary and proper to carry out the
provisions of this Decree;chanroblesvirtualawlibrary
(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;chanroblesvirtualawlibrary
(e) To submit an annual budget and necessary
supplemental budgets to the Board for its approval;chanroblesvirtualawlibrary
(f) To establish the internal organization of the
Authority under such conditions that the Board may prescribe: Provided,
That any major reorganization shall be subject to the approval of the
Board; and
(g) To perform such other duties as may be assigned
to him by the Board.
Section 13. Non-applicability of the Civil Service
Law, and the Regulation of the Wage and Position Classification Office.
— All officials and employees of the Authority shall be selected and
appointed on the basis of merit and fitness based on a comprehensive
and progressive merit system to be established by the Authority
immediately upon its organization and consistent with Civil Service
rules and regulations. The recruitment, transfer, promotion, and
dismissal of all personnel of the Authority, including temporary
workers, shall be governed by such merit system.
Likewise, all personnel of the Authority shall be exempt from the
regulations of the Wage and Position Classification Office. chanroblesvirtualawlibrary
Section 14. Appointment by Board. — Department heads
and similar rank shall be appointed by the Board, upon the
recommendation of the Administrator.
Section 15. Appointment by Administrator. — Employees
and officials below the rank of department heads shall be appointed to
positions in the approved budget by the Administrator upon written
recommendation of the department head concerned using as guide the
standards set forth in the Authority's merit system: Provided, That the
Administrator shall submit a quarterly report to the Board regarding
personnel recruitment, placement and training.
Section 16. Foreign Enterprises. — The provisions of
law to the contrary notwithstanding, the Authority may authorize an
alien or an association, partnership, corporation or any other form of
business organization formed, organized, charactered or existing under
any law other than those of the Philippines, or which is not a
Philippine national, or the working capital of which is fully owned or
controlled by aliens to do business or engage in an industry inside the
zone.
Subject to the provisions of Section twenty-nine of Commonwealth Act
Numbered Six hundred thirteen, as amended, a zone enterprise whether
domestic or foreign may within five years from registration, employ
foreign nationals in supervisory, technical or advisory positions not
in excess of five per centum of its total personnel in each such
category: Provided, That in no case shall each employment exceed five
years. The employment of foreign nationals after five years from
registration, or within such five years but in excess of the proportion
herein provided, shall be governed by Section twenty of Commonwealth
Act Numbered Six hundred thirteen, as amended: Provided, furthermore,
That when the majority of the capital stock of the enterprise is owned
by foreign investors, the positions of president, treasurer and general
manager, or their equivalents, may be retained by foreign nationals. In
exceptional cases, the Board may allow employment of foreign national
in other positions that cannot be filled by Philippine nationals, but
subject to the limitations as herein provided.
Foreign national under employment contract within the purview of this
Decree, their spouses and unmarried children under twenty-one years of
age, who are not excluded by Section twenty-nine of Commonwealth Act
Numbered Six hundred thirteen, shall be permitted to enter in the
Philippines during the period of employment of such foreign nationals.
Section 17. Tax Treatment of Merchandise in the Zone.
— (1) Except as otherwise provided in this Decree, foreign and domestic
merchandise, raw materials, supplies, articles, equipment, machineries,
spare parts and wares of every description, except those prohibited by
law, brought into the Zone to be sold, stored, broken up, repacked,
assembled, installed, sorted, cleaned, graded, or otherwise processed,
manipulated, manufactured, mixed with foreign or domestic merchandise
or used whether directly or indirectly in such activity, shall not be
subject to Customs and internal revenue laws and regulations nor to
local tax ordinances, the provisions of law to the contrary
notwithstanding.
(2) Merchandise purchased by a registered zone
enterprise from the customs territory, if paid for in the United States
dollar or in any convertible foreign currency and subsequently brought
into the zone, shall be considered as exported, and the exporter
thereof shall be entitled to the benefits allowed by law for such
transaction.
(3) Domestic merchandise sent from the zone to the
customs territory shall, whether or not combined with or made part of
other articles likewise the growth, product or manufacture of the
Philippines while in the zone, be subject to internal revenue laws of
the Philippines as domestic goods sold, transferred or disposed of for
local consumption.
(4) Merchandise sent from the zone to the customs
territory shall, whether or not combined with or made part of other
articles while in the zone, be subject to laws and regulations
governing imported merchandise. The duties and taxes shall be assessed
on the value of imported materials (except when the final product is
exempt) and the internal revenue taxes on the value added. chanroblesvirtualawlibrary
(5) Domestic merchandise on which all internal
revenue taxes have been paid, if subject thereto, and foreign
merchandise previously imported on which duty or tax has been paid, or
which have been admitted free of duty and tax, may be taken into the
zone from the customs territory of the Philippines and be brought back
thereto free of quotas, duty or tax.
(6) Subject to such regulations respecting identity
and the safeguarding of the revenue as the Authority may deem necessary
when the identity of an article entered into the zone has been lost,
such article when removed from the zone and taken to the customs
territory shall be treated as foreign merchandise entering the country
for the first time, under the provisions of the Tariff and Customs Code.
(7) Articles produced or manufactured in the zone 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.
(8) Unless the contrary is shown, merchandise taken
out of the zone shall be considered for tax purposes to have been sent
to customs territory.
Section 18. Additional Incentives. — A zone
registered enterprise shall also enjoy the following incentives
benefits;chanroblesvirtualawlibrary
(a) Net-Operating Loss Carry Over. — A net-operating
loss incurred in any of the first five years of operation inside the
zone may be carried over as a deduction from taxable income derived in
such zone during the five years immediately following the year of such
loss. The entire amount of the loss and any portion of such loss which
exceeds the taxable income of such first year shall be deducted in like
manner from the taxable income of the next remaining four years. The
net-operating loss shall be computed in accordance with the provisions
of the National Internal Revenue Code, any provision of this Decree to
the contrary notwithstanding, except that income not taxable either in
whole or in part under this Decree or other laws shall be included in
gross income.
(b) Accelerated Depreciation. — Fixed assets may be
(1) depreciated to the extent of not more than twice the normal rate of
depreciation or depreciated at the normal rate of depreciation if the
expected life is ten years or less; or (2) depreciated over any number
of years between five years and expected life if the latter is more
than ten years; and the depreciation thereon allowed as a deduction
from taxable income: Provided, That the taxpayer notifies the Bureau of
Internal Revenue at the beginning of the depreciation period which
depreciation rate allowed by this subsection will be used by it.
(c) Exemption from Export Tax. — The provisions of
law to the contrary notwithstanding, foreign merchandise transhipped
through the zone or any article which has been processed, manufactured
or manipulated in said zone and exported therefrom, shall be exempt
from any export tax, imposts or fee, including the stabilization tax
imposed by Republic Act Numbered Sixty-one hundred twenty-five.
(d) Foreign Exchange Assistance. — The Central Bank
of the Philippines or any of its authorized agent banks shall extend to
zone registered enterprises, priority in the allocation of foreign
exchange and in the availment of the assistance and resources of the
Central Bank in a manner that would encourage and accelerate investment
in the zone.
(e) Financial Assistance. — Notwithstanding any
provisions of law to the contrary, zone registered enterprises shall be
entitled to at least the same privileges accorded to enterprises
approved by and registered with the Board of Investments under Republic
Act Numbered Four thousand eight hundred sixty, as amended by Republic
Act Numbered Six thousand one hundred forty-two, or under any existing
law, executive order, rule or regulation or which may hereafter be
enacted or promulgated, insofar as obtaining financial assistance by
way of loans, credits, guarantees or other forms of financial
accommodations from government financial institutions, whether directly
or indirectly through the medium of private banking or non-banking
financial institutions: Provided, That the proceeds derived from or
through such financial assistance shall be used in undertaking projects
approved by the Authority: Provided, further, That in order to
facilitate the payment of the foreign loans, credits and indebtedness
contracted by zone registered enterprises for such projects approved by
the Authority, the Central Bank shall, under such rules and regulations
as it may promulgate upon recommendation of the Authority, allow the
deduction of such portion of the foreign exchange earnings of said
enterprises sufficient to meet the foreign exchange requirements for
servicing foreign indebtedness incurred by them.
(f) Exemption from Local Taxes and Licenses. —
Notwithstanding the provisions of law to the contrary, any business
enterprise engaged in the production, processing, packaging, or
manipulation of export products shall, to the extent of their
construction, operation or production inside the zone, be exempt from
the payment of any and all local government imposts, fees, licenses or
taxes, except real estate taxes imposed under Commonwealth Act Numbered
Four Hundred seventy and Republic Act Numbered Fifty-four hundred
forty-seven: Provided, That said business enterprise shall pay in the
municipality where the zone is located real estate taxes on all its
real properties located therein.
Section 19. Power to Issue Bonds or Incur
Indebtedness. — Whenever the Board may deem it advisable and necessary
for the Authority to contract loans, credits and other indebtedness, or
to issue bonds, notes debentures, securities and other instruments of
indebtedness for the development and/or operation of the Zone, it shall
by resolution so manifest and declare stating the purpose for which the
indebtedness is to be applied and citing the project study devised for
the purpose. In order for such resolution to be valid, it shall be
passed by the affirmative vote of at least four members of such Board
and approved by the President of the Philippines upon the
recommendation of the Secretary of Finance, after consultation with the
National Economic Development Authority and the Monetary Board of the
Central Bank.
The total principal domestic indebtedness of the Authority payable in
the Philippine currency shall not at any one time exceed three hundred
million pesos, while the total principal indebtedness of the Authority
payable in foreign currency shall not at any one time exceed one
hundred million United States dollars or the equivalent thereof in
other foreign currencies qualified to form part of the international
reserves of the Central Bank: Provided, That such foreign indebtedness
may be contracted from foreign governments or any public or private
international banking and financial institution or fund sources. The
bonds and other instruments of indebtedness which the authority is
authorized to issue under this section and any income derived therefrom
shall, except those contracted with private international banking and
financial institution, be exempt from the payment of all taxes of
whatever kind and nature including withholding taxes imposed by the
Republic of the Philippines, its agencies, instrumentalities or
political subdivisions, which fact may be expressed on the face
thereof, and shall be eligible as collateral in any transaction with
the national or any local government, its agencies and
instrumentalities, including government-owned or controlled
corporations and government banking and financial institutions, in
which collateral is required. Any or all loans or instruments of
indebtedness which the Authority is authorized to contract or issue
under this section shall be unconditionally guaranteed both as to
principal and interest by the Government of the Republic of the
Philippines whenever the President of the Philippines, by himself or
through his duly authorized representative, may deem such guarantee by
the Government of the Republic of the Philippines to be advisable and
necessary, in which case, the President of the Philippines or his duly
authorized representative is hereby authorized to execute and deliver
said guarantee of the Government of the Republic of the Philippines.
The Central Bank of the Philippines or any of its authorized agent
banks shall extend to the Authority priority in the allocation of
foreign exchange and in the availment of the assistance and resources
of the Central Bank in a manner that shall facilitate the contracting
or issuance by the Authority of the loans or instruments of
indebtedness which the Authority is authorized to contract or issue
under this section or the repayment thereof. In any case, where the
Authority is required to surrender or sell to the Central Bank foreign
currencies qualified to form part of its international reserves, the
Authority is hereby given the right to repurchase any or all of said
foreign currencies as is necessary to meet all items of debt service
arising out of any and all loans and instruments of indebtedness
payable in foreign currency contracted or issued by it pursuant to this
section at the same rate or rates at which said foreign currencies were
respectively sold to the latter, subject to the payment of foreign
exchange premium or fees as the Central Bank may deem reasonable. chanroblesvirtualawlibrary
In the negotiation, contracting and issuance of any loan, credit and
evidence of indebtedness under this section, the President of the
Philippines may, if deemed by him upon recommendation of the Authority,
to be necessary or justified and when made a condition by the foreign
creditor to the issuance of such loans, credits, or instruments or
indebtedness, agree to waive the application of any law granting
preference or imposing restrictions on international competitive
bidding, such as, but not limited to, Act Numbered Forty-two hundred
thirty-nine, Commonwealth Act Numbered One hundred thirty-eight,
Commonwealth Act Numbered Five hundred forty-one, Republic Act Numbered
Nine hundred twelve, Republic Act Numbered Fifty-one hundred
eighty-three: Provided, however, That in every case where competitive
bidding is agreed upon in the purchase of machineries, equipment,
materials and supplies financed out of proceeds of such loans, credits
and instruments of indebtedness, preference may be granted in favor of
such machineries, equipment, materials and supplies produced, processed
or manufactured in the Philippines at such rate and in such manner as
may be agreed upon from time to time with the entity or institution
providing financing for the project.
Section 20. Sinking Fund. — The Authority is hereby
authorized to pay out of its appropriations, operating income, proceeds
from its borrowings or issuance of bonds and other instruments of
indebtedness, and from all other sources of funds, the amounts
necessary to meet its maturing obligations on the loans, credits or
indebtedness contracted by the Authority or on the bonds, notes, or
other instruments of indebtedness issued by it. For this purpose, a
sinking fund may be established out of said sources of funds of the
Authority in the Central Bank of the Philippines in such manner that
the total thereof at each due date of the bonds and other instruments
of indebtedness and the loans, credits or indebtedness contracted by
the Authority shall be equal to the aggregate maturing obligations or
amortization as of that date. Said fund shall be under the custody of
the Central Bank of the Philippines under a special account, which
shall invest the same in such manner as the Monetary Board may approve,
charging all expenses of such investments to said sinking fund and
crediting the same with interest on investments and other income
belonging to it. A standing appropriation is hereby made out of any
general fund in the National Treasury not otherwise appropriated, of
such sum as may be necessary to meet all obligations of the Government
of the Republic of the Philippines under all guarantees which may be
executed by it pursuant to this Decree, in case such sinking fund shall
be insufficient to fully pay the indebtedness of the Authority
guaranteed by the Government of the Republic of the Philippines or the
Authority to fully pay the same by some other means.
Section 21. Non-profit Character of the Authority;
Exemption from Taxes. — The Authority shall be non-profit and shall
devote and use all its returns from its capital investment, as well as
excess revenues from its operations, for the development, improvement
and maintenance and other related expenditures of the Authority to pay
its indebtedness and obligations and in furtherance and effective
implementation of the policy enunciated in Section 1 of this Decree. In
consonance therewith, the Authority is hereby declared exempt:cralaw:red
(a) From the payment of all taxes, duties, fees,
imports, charges, costs and service fees in any court or administrative
proceedings in which it may be a party, to the Republic of the
Philippines, its provinces, cities, municipalities and other government
agencies and instrumentalities;chanroblesvirtualawlibrary
(b) From all income taxes, franchise taxes, realty
taxes and all other kinds of taxes and licenses to be paid to the
National Government, its provinces, cities, municipalities and other
government agencies and instrumentalities; and
(c) From all tariff and customs duties, and advance
sales tax, on import of capital goods required for its operations.
The foregoing exemptions may however be entirely or partially lifted by
the President of the Philippines upon recommendation of the Secretary
of Finance, not earlier than five years from the approval of this
Decree, 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
Authority and its projected capital and operating expenditures. chanroblesvirtualawlibrary
Section 22. Road Networks in the Zone. — The road
network within the export processing zone are hereby declared to be
national roads and shall be eligible for allocation of monies coming
from the highway special fund to be used in the construction, repair or
maintenance of such roads therein, the provisions of law, executive
orders, rules and regulations to the contrary notwithstanding.
Section 23. Eminent Domain. — For the acquisition of
rights of way, or of any property for the establishment of export
processing zones, or of low-cost housing projects for the employees
working in such zones, or for the protection of watershed areas, or for
the construction of dams, reservoirs, wharves, piers, docks, quays,
warehouses and other terminal facilities, structures and approaches
thereto, the Authority shall have the right and power to acquire the
same by purchase, by negotiation, or by condemnation proceedings.
Should the authority elect to exercise the right of eminent domain,
condemnation proceedings shall be maintained by and in the name of the
Authority and if may proceed in the manner provided for by law.
Section 24. Title to Real Property. — The public
lands fixed and delimited as the site of the foreign trade zone under
Proclamation No. 629, series of 1969, Proclamation Nos. 899 and 939,
both series of 1971, of the President of the Philippines shall be
surveyed by the Bureau of Lands and conveyed thereafter in absolute
ownership to the Authority by the President of the Philippines for the
nominal sum of one peso for each parcel of land being conveyed under
this section. Upon receipt of said deed of conveyance the proper
Register of Deeds shall register the same and issue the corresponding
original certificate of title to the Authority. Likewise, the public
land fixed and delimited as the site of a low cost housing project for
workers in the Zone under Proclamation No. 740, series of 1970, as
amended by Proclamation No. 900, series of 1971, of the President of
the Philippines, shall be surveyed by the Bureau of Lands and conveyed
in absolute ownership by the President of the Philippines to the
Authority, the Government Service Insurance System and/or Social
Security System and in the manner hereinafter provided. Upon receipt of
the deed of conveyance, the proper Register of Deeds shall forthwith
register the same and issue the corresponding original certificate of
title thereof.
The public land mentioned herein shall be disposed of as follows: sixty
hectares to the Authority upon payment to the Government the nominal
sum of one peso, and the balance to the Government Service Insurance
System and/or Social Security System, in consideration for the
development of a portion thereof by the GSIS and/or SSS as may be
necessary to accommodate the construction of standard housing unit,
and/or condominium houses, which the GSIS and/or SSS shall sell and
convey, together with the title or interest over the land as it may
appear upon conveyance thereof to the bona fide residents of Barrio
Nassco and Barrio Camaya, both in the Municipality of Mariveles,
Bataan, as certified by the Authority: Provided, That the price at
which said housing units may be sold to the aforementioned bona fide
residents of Barrio Nassco and Barrio Camaya shall not include the site
development cost thereof: Provided, further, That the GSIS and/or SSS
shall undertake the complete development of the residual area,
including the area allotted to the Authority, into modern communities,
always taking into account the policy of low-cost housing as herein
enunciated: Provided, furthermore, That the land and/or housing units
constructed therein shall be sold to the regular workers in the Zone
who shall have worked therein continuously for a period of at least
five years, as certified by the Authority: Provided, moreover, That
where there are no persons qualified to own said land and/or housing
units, the GSIS and/or SSS may hold on the said properties for as long
as they are not sold or disposed of, notwithstanding the provisions of
law to the contrary: Provided, finally, That the Authority shall, in
coordination with the GSIS and/or SSS, administer, manage and operate
the housing project, and shall issue such rules and regulations as may
be necessary for the proper management and operation thereof, including
the utilization and disposition of the land and/or housing units. chanroblesvirtualawlibrary
Section 25. Relocation of Residents of Barrio Nassco
in the Municipality of Mariveles. — The residents of Barrio Nassco and
Barrio Camaya in the Municipality of Mariveles, which is within the
export processing zone, shall be relocated in the low-cost housing area
mentioned in Section twenty-four hereof: Provided, That only those
residential houses and buildings located within the Barrio Nassco,
which are constructed as of April 15, 1972, shall be entitled to
compensation based on their fair market value at such time, less
recoverable value, if any.
Section 26. Supplies and Services other than
Personal. — All purchases of supplies or contracts for services, except
for personnel services, entered into by the Authority, shall be done
through competitive public bidding: Provided, That bidding shall not be
required when (1) an emergency, as certified by the Chairman, requires
immediate delivery of the supplies or performance of the services, and
(2) the aggregate amount involved in any one purchase of supplies or
procurement of services does not exceed ten thousand pesos, in which
case, such purchase or procurement may be made in the usual course of
business: Provided, further, That the Authority's emergency purchase of
supplies and services shall not exceed the amount of fifty thousand
pesos for any one month: Provided, finally, That in comparing bids and
in making awards, the Authority shall consider such factors as the cost
and relative quality and adaptability of supplies or services: the
bidder's financial responsibility, skill, experience, integrity, and
ability to furnish repairs and maintenance services; the time of
delivery or performance offered; and the bidder's compliance with the
specifications desired.
Section 27. Auditing. — The Auditor General shall be
ex officio in charge of the auditing office of the Authority. He shall
appoint a representative who shall be the auditor thereof. The Auditor
General shall, upon recommendation of the Authority, appoint or remove
personnel of said auditing office in accordance with law. The operating
expenses of this office and the salaries and travelling expenses of the
officials and employees thereof shall be fixed by the Board and paid by
the Authority. Such representative shall render a semestral report on
the financial condition and operations of the Authority to the Auditor
General and the Board. The Auditor General shall submit to the
President and the Congress an annual report covering the financial
condition and operations of the Authority.
These auditing report shall contain a statement of the resources and
liabilities including earnings and expenses, reserves and profits, as
well as losses, bad debts and such other facts which, under the
auditing rules and regulations, are considered necessary to accurately
describe the financial condition and operations of the Authority:
Provided, That before such reports are made, the Authority shall be
given reasonable opportunity to examine the reports and make exceptions
to any criticisms of the Auditor of the Authority or the Auditor
General as the case may be, to point out, explain or answer any
inaccuracies therein, if any, and to file a statement which shall be
appended by the Auditor of the Authority and the Auditor General in
their respective reports. chanroblesvirtualawlibrary
Section 28. Penalties. — Any person violating any
provision of this Decree or any of the rules and regulations
promulgated under Sections four and eleven hereof, shall suffer the
penalty of imprisonment of not less than five years nor more than ten
years and a fine of not less than five thousand pesos nor more than ten
thousand pesos and in addition, such violations shall ipso facto
constitute a valid ground for the revocation of all privileges, permits
and authorization granted to such person under this Decree: Provided,
however, That if the offender is a corporation, firm, partnership or
association, the penalty shall be imposed upon the guilty officer or
officers, as the case may be, of the corporation, firm or association,
and if such guilty officer or officers be an alien or aliens, in
addition to the penalties herein prescribed, he or they shall be
deported without further proceedings on the part of the Deportation
Board.
Any officer or employee of the Government who, by himself or through
his agent, acting under his discretion and authority, shall connive,
abet, or tolerate the violation of the provisions of this Decree or any
rules and regulations promulgated under Sections four and eleven hereof
or who fails to report within thirty days any violation thereof to the
Authority shall suffer the penalties prescribed in the preceding
paragraph including perpetual disqualification to hold public office.
The foregoing penalties shall be without prejudice to the assessment
and collection of such taxes and duties as may be due on the
foreign-made articles or merchandise which have been landed in the Zone
and have not been reshipped to a foreign port at the time of the
revocation of the authority of the offender to operate within the Zone.
In the event such taxes and duties shall not, for any reason, be paid
upon demand by the collector of the district wherein the Zone is
located, the foreign-made articles or merchandise of the offender
remaining within such Zone at the time of revocation of its authority
to operate therein, including its physical plants, machinery and
equipment therein, shall, after due notice and hearing, be forfeited in
favor of the Government and may be disposed of by the Government in the
manner and for such purposes as it may so desire.
Section 29. Transitory Provisions. — The properties,
monies, assets, rights, chooses in action, obligations, liabilities,
records and contracts of the Foreign Trade Zone Authority under
Republic Act Numbered fifty-four hundred ninety shall continue to be
vested in and assumed by the Export Processing Zone Authority, as a
government corporation, pursuant to this Decree.
Likewise, all personnel of the Foreign Trade Zone Authority who are
occupying permanent positions shall be absorbed by Export Processing
Zone Authority and shall remain in their respective positions without
demotion in rank or reduction in salary: Provided, That employee who
shall be separated from the service shall be given by the Authority at
least one month gratuity for every year of service but in no case more
than twenty-four months salary, in addition to all benefits to which
they may be entitled under existing laws and regulations.
Section 30. Repealing Clause. — The provisions of
Republic Act Numbered Fifty-four hundred ninety and all other acts,
executive orders, proclamations, administrative orders, rules and
regulations or parts thereof which are inconsistent with provisions of
this Decree are either repealed or modified accordingly. chanroblesvirtualawlibrary
Section 31. Separability Clause. — The provisions of
this Decree are hereby declared to be separable, and in the event any
one or more of such provisions are held unconstitutional, the validity
of other provisions shall not be affected.
Section 32. Effectivity. — This Decree shall take
effect upon its approval.
Done in the City of Manila,
this 20th day of November, in the year of Our Lord, nineteen hundred
and seventy-two.
|