The Philippine Economic Zone Authority Economic Zones the Philippine Economic

8/14/2019 The Philippine Economic Zone Authority Economic Zones the Philippine Economic

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THE PHILIPPINE ECONOMIC ZONE AUTHORITYEconomic Zones

The Philippine Economic Zone Authority (PEZA) is an investment promotion agency and an incentivegiving body of the Philippine Government responsible for ensuring that foreign investors who wish to

put up their operations in the country will have readily available suitable locations in world-class,

environment-friendly economic zones. As an investment promotion agency, PEZA grants incentives toDevelopers of economic zones which include Industrial Estates, Export Processing Zones, I.T. Parks,

I.T. Buildings, and Tourism Oriented Economic Zones; Exporters of manufactured products and I.T.

services; Logistics enterprises; and Facilities enterprises.PEZA incentives for Developers include the following:

Income Tax Holiday (ITH) or Exemption from Corporate Income Tax for four years;

After the ITH, option to pay a special 5% Gross Income Tax, in lieu of all national and local taxes;

Permanent resident status for foreign investors and immediate family members; Employment of foreign nationals;

Incentives under the Build-Operate-Transfer Law; and Other incentives under Executive Order No.

226 (The Omnibus Investment Code of 1987 ), as may be determined by the PEZA Board

PEZA Incentives for Locator Companies such export enterprises and I.T. companies are the following:

Income Tax Holiday (ITH) or Exemption from Corporate Income Tax for four years, extendable to amaximum of eight years;

After the ITH period, the option to pay a special 5% Tax on Gross Income, in lieu of all national and

local taxes; Exemption from duties and taxes on imported capital equipment, spare parts, supplies, and raw

materials.

Domestic sales allowance of up to 30% of total sales;

Exemption from wharfage dues and export taxes, imposts and fees; Additional deduction of 50% of the total cost of manpower training

Permanent resident status for foreign investors and immediate family members;

Employment of foreign nationals and dependents; and Other incentives under Executive Order 226 (Omnibus Investment Code of 1987), as may be

determined by the PEZA Board.

Aside from these incentives, PEZA likewise registers 100% foreign-owned companies that are export-

oriented companies.

To date, PEZA has 137 proclaimed economic zones, I.T. Parks, and I.T. Buildings located in different

parts of the country. Locating in any of these zones will allow investor-companies to avail of theincentives granted by PEZA.T


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GOVERNING STRUCTURES

SECTION 11. The Philippine Economic Zone Authority (PEZA) Board. - There is hereby created a

body corporate to be known as the Philippine Economic Zone Authority (PEZA) attached to theDepartment of Trade and Industry. The Board shall have a director general with the rank of a

department undersecretary who shall be appointed by the President. The director general shall be at

least forty (40) years of age, of proven probity and integrity, and with a degree in economics, business,public administration, law, management or its equivalent.

The director general shall be assisted by three (3) deputy directors general each for policy and

planning, administration and operations, who shall be appointed by the PEZA Board, upon therecommendation of the director general. The deputy directors general shall be at least thirty-five (35)

years, old, with proven probity and integrity and with a degree in economics, business, public

administration, law, management or its equivalent. They must have career executive service eligibility.

The Board shall be composed of the director general as ex officio chairman with eight(8) members as

follows: the Secretaries or their representatives of the Department of Trade and Industry, the

Department of Finance, the Department of Labor and Employment, the Department of the Interior andLocal Government, the National Economic and Development Authority, and the Bangko Sentral ng

Pilipinas, one (1) representative from the investors/business sector in the ECOZONE.

The existing Export Processing Zone Authority (EPZA) created under Presidential Decree No. 66 shall

evolve into the PEZA in accordance with the guidelines and regulations set forth in an executive order

issued for this purpose.

Members of the Board shall receive a per diem of not less than the amount equivalent to the

representation and transportation allowances of the members of the Board and/or as may be determined

by the Department of Budget and Management: Provided, however, That the per diem collected per

month does not exceed the equivalent of four (4) meetings.

SECTION 12. Functions and Powers of PEZA Board.- The Philippine Economic Zone Authority

(PEZA) Board shall have the following functions and powers:

a)Set the general policies on the establishments and operations of the ECOZONES,

industrial estates, export processing zones, free trade zones, and the like;

b)Review proposals for the establishment of ECOZONES based on the criteria under

Section 6 and endorse the President the establishment of the ECOZONES , industrialestates, export processing zones, free trade zones and the like. Thereafter, it shall facilitate

and assist in the organization of said entities;

c)Regulate and undertake the establishment, operation and maintenance of utilities, other

services and infrastructure in the ECOZONE, such as heat, light and power, water supply,

telecommunications, transport, toll roads and bridges, port services, etc., and to fix just

reasonable and competitive rates, fares, charges and fees therefor;

d)Approve the annual budget of the PEZA and the ECOZONE development plans;

e)Issue rules and regulations to implement the provisions of this Act in so far as its powers


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and functions are concerned;f)Exercise its powers and functions as provided for in this Act; and

g)Render annual reports to the President and the Congress

SECTION 13. General Powers and Functions of the Authority.- The PEZA shall have the following

powers and functions:

a)To operate, administer, manage and develop the ECOZONE according to the principles and provisions set forth in this Act;

b)To register, regulate and supervise the enterprises in the ECOZONE in an efficient and decentralized

manner;c)To coordinate with local government units and exercise general supervision over the development,

plans, activities and operations of the ECOZONES, industrial estates, export processing zones, free

trade zones, and the like;d)In coordination with local government units concerned and appropriate agencies, to construct,

acquire, own, lease operate and maintain on its own or through contract, franchise, license, bulk

purchase from the private sector and build-operate-transfer scheme or joint venture, adequate facilities

and infrastructure, such as light and power sytems, water supply and distribution systems,telecommunications and transportation, buildings, structures, warehouses, roads, bridges, ports and

other facilities for the operation and development of the ECOZONE;

e)To create, operate and/or contract to operate such agencies and functional units or offices of the as itmay deem necessary;

f)To adopt, alter and use a corporate seal; make contracts, lease, own or otherwise dispose of personal

or real property; sue and be sued; and otherwise carry out its duties and functions as provided for inthis Act;

g)To coordinate the formulation and preparation of the development plans of the different entities

mentioned above;

h)To coordinate with the National Economic and Development Authority (NEDA), the Department ofTrade and Industry (DTI), the Department of Science and Technology (DOST), and the local

government units and appropriate government agencies for policy and program formulation andimplementation; and

i)To monitor and evaluate the development and requirements of entities in subsection (a) andrecommend to the local government units or other appropriate authorities the location, incentives, basic

services, utilities and infrastructure required or to be made available for said entities.

RESIDENTIAL DECREE No. 66 November 20, 1972

CREATING THE EXPORT PROCESSING ZONE AUTHORITY AND REVISING

REPUBLIC ACT NO. 5490

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


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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 operations of the export

processing zone in Mariveles, Bataan, and such other zones as may be established in thecountry, 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 virtueof 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 anddecree 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:

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, ofhastening 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 declaredgovernmental.

Section 3.Principal Office. The Authority shall maintain its principal office in the GreaterManila 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 theAuthority are as follows:

(a) To operate, administer and manage the export processing zone established in thePort 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;

(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 waterchannels intersecting or connecting therewith or contiguous to its works or any part


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thereof; and to undertake land reclamation; lawphi1.net

(c) To acquire and hold agricultural lands in excess of the areas permitted to private

corporations or associations by the Constitution; lawphi1.net

(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 domesticindustries 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 asdetermined 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 nowenforced or may hereafter be made by the Philippines with any foreign government

from time to time;

(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 concessionproperly 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 feesand charges to be levied shall not exceed that being collected by the Government for

similar services;

(f) Upon application, to grant such franchise to operate and maintain exclusivelywithin the Zone electric light, heat or power system, transportation, communication,

warehousing, iceplant or cold storage; and, under uniform and reasonable rates and

regulations made thereunder, permit to persons, firms, corporations or associationsthe 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 theGovernment, 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;

(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 notenumerated herein, the provisions of law to the contrary notwithstanding;

(h) For the due and effective exercise of the powers conferred by law and to theextend 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 theZone, including the movement therein, of all cargoes, wares, articles, machineries,


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equipment, supplies or merchandise of every type and description;

(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 setforth in Section 19 hereof;

(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 thefurtherance of any of the purposes of this Decree;

(k) To adopt, alter and use a corporate seal which shall be judicially noticed; makecontracts, 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


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Research inCustoms Laws 5

Renz Andrew L. LuposBSCA

Mr. Omondang professor

Documents

The Philippine Economic Zone Authority Economic Zones the Philippine Economic