PRESIDENTIAL DECREE NO. 66, November 20, 1972
CREATING THE EXPORT PROCESSING ZONE AUTHORITY AND REVISING REPUBLIC ACT NO. 5490
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;
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 operation 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;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of
the Philippines, by virtue of the powers in me vested 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 be the .Revised Charter of the
Foreign Trade Zone Authority Created Under Republic Act No. 5490 and as
part of the law of the land:
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.
SEC. 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.
SEC. 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.
SEC. 4. Purposes and Specific Powers. — The
purposes and specific powers of the Authority are as follows:
- 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; - 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; - To acquire and hold agricultural lands in excess of the areas
permitted to private corporations or associations by the Constitution; - 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; - 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 arc 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; - 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; - 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; - For the due and effective exercise o’ 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; - 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; - 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; - 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.
SEC. 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 expenditure 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.
SEC. 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.
SEC. 7. Qualifications and Disqualifications of
Commissioners. — No person shall be appointed as 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.
SEC. 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.
SEC. 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.
SEC. 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.
SEC. 11. Powers and Duties of the Board. —
The Board shall have the following powers and duties:
- 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; - 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; - To approve the annual budget and such supplemental budgets
which may be submitted to it by the Chairman; - 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; - 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; - 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
Relations Commission or the Court of Industrial Relations for immediate
compulsory arbitration; - To recommend to the Commissioner of Immigration the entry into
the Philippines of foreign nationals for employment as authorized under
Section 16 of this Decree; - To render annual reports to the President and such special
reports as may be requested; and - Generally, to exercise all the powers necessary or incidental
to attain the purposes of this Decree.
SEC. 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 the
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:
- To direct and manage the affairs of the
Authority in accordance with the policies of the Board; - 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; - 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; - 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; - To submit an annual budget and necessary supplemental budgets
to the Board for its approval; - 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 - To perform such other duties as may be assigned to him by the
Board.
SEC. 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.
SEC. 14. Appointment by Board. — Department
heads and similar rank shall be appointed by the Board, upon the
recommendation of the Administrator.
SEC. 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.
SEC. 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, chartered 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 nationals in other positions that cannot be filled by
Philippine nationals, but subject to the limitations as herein provided.
Foreign nationals under employment contract within the purview of
this Decree, their spouses and unmarried children under twenty-one years
of age, who arc not excluded by Section twenty-nine of Commonwealth Act
Numbered Six hundred thirteen, shall be permitted to enter and reside
in the Philippines during the period of employment of such foreign
nationals.
SEC. 17. Tax Treatment of Merchandise in the
Zone. —
- 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. - Merchandise purchased by a registered zone enterprise from
the customs territory, if paid for in 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. - 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. - 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. - 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. - 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. - 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. - Unless the contrary is shown, merchandise taken out of the
zone shall be considered for tax purposes to have been sent to customs
territory.
SEC. 18. Additional Incentives. — A zone
registered enterprise shall also enjoy the following incentive benefits:
- 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 - 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. - 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. - Foreign Exchange Assistance. — The Central Bank of the
Philippines or any or 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. - 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. - 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.
SEC. 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 lo 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
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 ace 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.
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.
SEC. 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 a count, 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 fails to fully pay the same by some other means.
SEC. 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:
- From the payment of all taxes, duties, fees,
imposts, charges, costs and service lees 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; - 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 - 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 he 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.
SEC. 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.
SEC. 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 it may proceed in the manner provided for
by law.
SEC. 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 units,
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 alloted 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 to 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.
SEC. 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 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.
SEC. 26. Supplies and Services other than
Personnel. — All purchases of supplies or contracts for services,
except for personal 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.
SEC. 27. Auditing. — The Auditor General
shall be ex officio auditor 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 traveling 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 reports 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.
SEC. 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 it 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 Section 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.
SEC. 29. Transitory Provisions. — The
properties, monies, assets, rights, choses 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 the Export Processing
Zone Authority and shall remain in their respective positions without
demotion in rank nor reduction in salary: Provided, That
employees 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,
SEC. 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 the provisions
of this Decree are either repealed or modified accordingly.
SEC. 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.
SEC. 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.
(Sgd.) FERDINAND E. MARCOS
President
Republic of the Philippines
By the President: (Sgd.) ALEJANDRO MELCHOR Executive Secretary