FURTHER AMENDING PRESIDENTIAL DECREE NO. 66 DATED NOVEMBER 20, 1972 CREATING THE EXPORT PROCESSING ZONE AUTHORITY

WHEREAS, in order to make export processing zones more
competitive and attractive to potential investors, and to increase the
capability and effectiveness of the Export Processing Zone Authority (EPZA) in
the attainment of its objectives, it has become necessary to update and amend
the incentive schemes for enterprises within the zone:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and decree the further amendment of Presidential Decree No 66 dated
November 20, 1972, as amended, as follows:

SECTION 1. Gross receipts of registered zone enterprises
shall be exempt from the contractor’s tax under Section 205 of the Tax Code of
1977, as amended.

SECTION 2. A net operating loss incurred in any of the first
ten years of operation as a registered zone enterprise may be carried over as a
deduction from taxable income for the six years immediately following the year
of such loss. The entire amount of the loss shall be carried over to the first
of six taxable years following 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 five 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.

SECTION 3. Utility companies, including the National Power
Corporation, Philippine Long Distance Telephone Company, water supply and telex
companies shall extend priority service to export processing zone, and shall
extend to EPZA, and/or the registered zone enterprises the most preferred terms
and rates possible. EPZA shall have the option, within any zone or area
administered by it, to install, manage and operate facilities, utilities and
systems necessary for its operation.

SECTION 4. The administration and enforcement of the
provisions of Presidential Decree No. 1096, otherwise known as the National
Building Code of the Philippines in all zones and areas owned or administered by
the authority shall be vested in the Administrator or his duly authorized
representative. He shall appoint EPZA qualified personnel as may be necessary to
act as Building Officials who shall be charged with the duty of issuing Building
Permits in the different zones. All fees and dues collected by the National
Building Code shall accrue to the Authority.

SECTION 5. Foreign nationals employed under the provisions
of Presidential Decree No. 66, their respective spouses, and unmarried children
under twenty-one years of age shall be issued a multiple entry special visa,
valid for a period of one year, to enter and leave the Philippines without
further documentary requirements other than valid passports or other travel
documents in the nature of passports. The validity of the multiple entry special
visa shall be extendible yearly. Foreign nationals who have been issued multiple
entry special visas under this provision, as well as their respective spouses
and dependents, shall be exempt from obtaining alien certificates of
registration and emigration clearance certificates and all types of clearances
required, by any government department or agency. For this purpose, the
Commission on Immigration and Deportation and the EPZA shall jointly issue the
necessary implementing rules and regulations.

SECTION 6. Any provision of law to the contrary,
notwithstanding, the EPZA, in consultation with the Bureau of Customs shall
adopt procedures which would facilitate the rapid movement of raw materials,
components, goods, commodities and finished products to and from export
processing zones, taking into account the need to attain the objectives of
customs and internal revenue regulations and the need to facilitate export
activities within the zone.

SECTION 7. The EPZA, in the exercise of its sole police
authority over export processing zones and areas owned or administered by the
Authority, shall have the power to receive and investigate complaints relative
to violation of penal laws committed inside the zones and areas owned or
administered by the Authority, and when the evidence warrants, to file and be
deputized herein to prosecute the corresponding criminal cases before the
appropriate court or body.

SECTION 8. The authority, through its Board of Commissioners
may segregate not more than twenty per cent (20%) of the land area of each zone
to be sold, leased or otherwise disposed of primarily for housing and community
purposes. The disposition and development of the area segregated shall be
subject to such terms and conditions as may be prescribed by the authority.

SECTION 9. With respect to, and for expeditious
implementation of EPZA infrastructure projects, the power to approved detailed
engineering documents, awards and contracts executed as a result of competitive
public biddings, negotiated contracts, assignment of contracts, adjustment of
contract prices and change orders extend work orders now vested in the Ministry
of Public Works, Transportation and Communication, the Minister of Public
Highways or the Minister of Energy by Presidential Decree No. 1594 and its
implementing rules and regulations, are hereby vested in the Minister of
Industry.

SECTION 10. All laws, executive orders, rules and
regulations or part thereof inconsistent with this Decree are hereby repealed
and/or modified accordingly.

SECTION 11. This Decree shall take effect immediately

Done in the City of Manila, this 21st day of August, in the year of Our Lord,
nineteen hundred and eighty.

			(Sgd.) FERDINAND E. MARCOS President of the Philippines
	By the President:
	(Sgd.) JOAQUIN T. VENUS JR.
		Presidential Assistant