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Sarangani Special Economic Zone and Freeport Authority, and Appropriating Funds Therefor

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EIGHTEENTH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) Second Regular Session datc SENATE NDEX S.B. No. 1957 INTRODUCED BY: SENATOR EMMANUEL D. PACQUIAO AN ACT ESTABLISHING THE SPECIAL ECONOMIC ZONE AND FREEPORT IN THE PROVINCE OF SARANGANI, CREATING FOR THIS PURPOSE THE SARANGANI SPECIAL ECONOMIC ZONE AND FREEPORT AUTHORITY, AND APPROPRIATING FUNDS THEREFOR EXPLANATORY NOTE Article II, Section 20 of the 1987 Constitution provides that, “The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.” In accordance with the foregoing State policy and with the mission to promote the countryside as alternative areas for investments, Republic Act No. 7916, otherwise known as “The Special Economic Zone Act of 1995” was created. The Special Economic Zones (SEZs) have significantly generated employment to over two (2) million Filipinos and investments worth billions of pesos. In this regard, this bill seeks to establish the establishment of the Special Economic Zone and Freeport in the province of Sarangani. Lying at the southernmost tip of Mindanao Island, Sarangani is a province located in the South Cotabato-Cotabato-Sultan Kudarat-Sarangani-General Santos (SOCCSKSARGEN) region. It comprises the seven (7) municipalities of Alabel, Gian, Kiamba, Maasim, Maitum, Malapatan, and Malungon and has a total of 141 barangays with a population of over 544,261 as of 2015 Census of Population. Sarangani’s favorable investment climate is evidenced by a number of agro-industrial investments manifested by the presence of high value crop production, industrial crops and tree plantations of mango, banana, pineapple, and asparagus. The province’s aqua-marine sector is likewise flourishing with its abundant commercial fishponds, high value fin fishes production and processing, and deep sea fishing, accompanied by vibrant support services. Livestock production and processing, manufacturing and processing trade, support and allied services, as well as tourism development are also thriving in the province. In addition these economic activities have shown sufficient potential for further strengthening of exportation options. According to the Bureau of Local Government Finance, the province’s annual regular revenue for the fiscal year of 2016 was at P945,631,028.72. The municipality of Alabel, in particular, is a home of the corporation producing the world-renowned Sarangani Bay Prime Bangus (milkfish). Its long stretch of coastline allows the municipality’s aquaculture venture to prosper while its vast lands make it ideal for the expansion of agro-industrial opportunities, eco-tourism as well as upscale and mass housing. In this regard, this bill seeks to establish the Sarangani Special Economic and Freeport Zone in the province of Sarangani, particularly in the municipalities of Alabel and Gian, to further boost a sound and balanced economic, industrial, and social development not only in the province or the whole region of SOCCSKSARGEN but also in the country. Not only will this measure increase foreign investments and encourage economic growth in the area, the establishment of the ECOZONE therein will guarantee the decrease, if not eradicate, the underemployment and unemployment rate in the province, thereby uplifting the living condition of the residents. In view of the foregoing, approval of this bill is earnestly sought. EMMANUEL D. PACQUIAO EIGHTEENTH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) Second Regular Session TIME SENATE INDEX S.B. No. 1957 INTRODUCED BY: SENATOR EMMANUEL D. PACQUIAO AN ACT ESTABLISHING THE SPECIAL ECONOMIC ZONE AND FREEPORT IN THE PROVINCE OF SARANGANI, CREATING FOR THIS PURPOSE THE SARANGANI SPECIAL ECONOMIC ZONE AND FREEPORT AUTHORITY, AND APPROPRIATING FUNDS THEREFOR Be it enacted by the Senate and House ofRepresentatives ofthe Philippines in Congress assembled: CHAPTER I GENERAL PROVISIONS 4 SECTION 1. Short Title. This Act shall be known as the “Sarangani Special Economic Zone 5 and Freeport Act.” 6 7 Sec. 2. Declaration ofPolicy. It is hereby declared the policy of the State to actively encourage, 8 promote, induce and accelerate a sound and balanced industrial, economic, and social 9 development of the country in order to provide jobs to the people especially those in rural areas, 10 increase their productivity and their individual and family income, and thereby improve the 11 level and quality of their living condition through the establishment, among others, of special 12 economic zones and free ports in suitable and strategic locations in the country and through 13 measures that shall effectively attract legitimate and productive foreign investments. 14 15 CHAPTER II 16 CREATION OF ECONOMIC ZONE 17 18 Sec. 3. The Sarangani Special Economic Zone and Freeport (SSEZF). In accordance with the 19 foregoing declared policy, there is hereby established a special economic zone to be known as 1 the Sarangani Special Economic Zone and Freeport, herein referred to as the Sarangani 2 Ecozone. The Sarangani Ecozone shall particularly cover the municipalities of Alabel and 3 Gian. 4 5 Sec. 4. Creation of the Sarangani Special Economic Zone and Freeport Authority (SSEZFA). 6 — There is hereby created a body corporate to be known as the “Sarangani Special Economic 7 Zone and Freeport Authority” hereinafter referred to as the SSEZFA, which shall manage and 8 operate the Sarangani Ecozone, in accordance with the provisions of this Act. This corporate 9 franchise shall expire in fifty (50) years and counted from the first year after the effectivity of 10 this Act, unless otherwise extended by Congress. It shall be organized within one hundred 11 eighty (180) days after the effectivity of this Act. 12 13 Sec. 5. Governing Principles. - The Sarangani Special Economic Zone and Freeport (SSEZF) 14 shall be managed and operated by SSEZFA under the following principles: 15 16 (a) Within the framework and limitations of the Constitution and the applicable provisions 17 of Republic Act No. 7160, or the Local Government Code of 1991, the Sarangani 18 Ecozone shall be developed into and operated as a self-sustaining industrial, 19 commercial/trading, financial and investment center, banking, agro-industrial, 20 tourism/recreational center and free port with suitable retirement/residential areas, in 21 order to create employment opportunities in and around the Zone, and to effectively 22 encourage and attract legitimate and productive foreign investments therein; 23 24 (b) The Sarangani Ecozone shall be provided with transportation, telecommunications and 25 other facilities necessary to attract legitimate and productive investments, generate 26 linkage industries and employment opportunities for the people of Sarangani and its 27 neighboring cities and provinces; 28 29 (c) The Sarangani Ecozone may establish mutually beneficial economic relations with 30 other entities or enterprises within the country or, subject to the administrative guidance 31 of the Department of Foreign Affairs (DFA), the Philippine Economic Zone Authority 32 (PEZA), and/or the Department of Trade and Industry (DTI), with foreign entities or 33 enterprises; 34 35 (d) Foreign citizens and companies owned by non-Filipinos in whatever proportions may 36 set up enterprises in the Sarangani Ecozone, either by themselves or in joint venture 37 with Filipinos or domestic corporations in any sector of industry, or international trade 38 and commerce within the Sarangani Ecozone; 39 40 (e) The Sarangani Ecozone shall be managed and operated as a separate customs territory 41 thereby ensuring the free flow or movement of goods and capital within, into and out 42 of its territory, and shall likewise provide incentives such as tax and duty-free 43 importations of raw materials, capital and equipment to registered enterprises located 44 therein. However, exportation or removal of goods from the territory of the Sarangani 1 Ecozone to other parts of the Philippine territory shall be subject to customs duties and 2 taxes under Republic Act No. 10863 or the Customs Modernization and Tariff Act and 3 other relevant tax laws of the Philippines; 4 5 (f) Goods manufactured by a Sarangani Ecozone enterprise shall be made for immediate 6 retail sale in the domestic market, subject to the payment of corresponding taxes on raw 7 materials and other regulations that may be formulated by the SSEZFA, together with 8 the PEZA, Bureau of Customs (BOC), and the DTI. However, in order to protect 9 domestic industries, a negative list of industries shall be drawn up and regularly updated 10 by the PEZA. Enterprises engaged in industries included in such negative list shall not 11 be allowed to sell their products locally; 12 13 (g) The defense of the Sarangani Ecozone and the security of its perimeter fence shall be 14 the responsibility of the National Government in coordination with SSEZFA and the 15 corresponding local government units affected by the territory of the Ecozone; 16 17 (h) The National Government shall strengthen and maintain its ability to coordinate with 18 the Sarangani Ecozone and the local government units for the obtainment of the 19 purposes of this Act. 20 21 Sec. 6. Capitalization. The SSEZFA shall have an authorized capital stock of Two billion 22 (2,000,000,000.00) without par shares with a minimum issue of Ten pesos (PI 0.00) each, the 23 majority shares of which shall be subscribed and paid for by the national government and the 24 local government units embracing the Sarangani Ecozone. The Board of Directors of the 25 SSEZFA may, with the written concurrence of the Secretary of Finance, sell shares, 26 representing not more than forty per centum (40%) of the capital stock of SSEZFA to the 27 general public under such policy as the Board and the Secretary of Finance may determine. 28 The national government and the local government units shall, in no case, own less than sixty 29 per cent (60%) of the total issued and outstanding capital of the SSEZFA. 30 31 The amount needed to subscribe and pay for the shares of the national government to 32 the capital stock of the SSEZFA shall be included in the annual General Appropriations Act.
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