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

WHEREAS, for the purpose of accelerating industrial
dispersal, employment generation and export promotion, LOI 1033 as amended the
development of twelve (12) more export processing zones in strategic locations
in the Philippines;

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 l. Gross receipts of or from 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. All merchandise, raw materials, supplies,
articles, equipment, machineries, spare parts and wares of every description
brought into the zones by the zone enterprises in connection with registered
operation shall be exempted from all dues, fees, charges and rates, including
wharfage and storage dues, collectible under Title VII of the Tariff and Customs
Code.

SECTION 4. Production equipment used directly or indirectly
in production, assembly or manufacture of the registered export products of
registered zone enterprises shall be exempt from real property tax.

SECTION 5. Utility companies, including the National Power
Corporation, Philippine Long Distance Telephone Company, water supply and telex
companies shall extend priority service to export processing zones, 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 6. 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 such 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 Building Officials under the National Building Code shall accrue to the
Authority.

SECTION 7. 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 8. 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 9. 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 violations 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 10. 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 am a segregated
shall be subject to such terms end conditions as may be prescribed by the
Authority.

SECTION 11. With respect to, and for expeditious
implementation of EPZA infrastructure projects, the power to approve detailed
engineering documents, awards and contracts executed as a result of competitive
public biddings, negotiated contracts, assignment of contracts, adjustment or
contract prices and change orders, extend work orders now vested in the Minister
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 12. All laws, executive orders, rules and
regulations or part thereof inconsistent with this Decree are hereby repealed
and/or modified accordingly.

SECTION 13. 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