An Act Further Strengthening the Powers and Functions of the Authority of the Freeport Area of Bataan (AFAB), Amending for this Purpose Republic Act No. 9728, Otherwise Known as the "Freeport Area of Bataan (FAB) Act of 2009"

Seventeenth Congress
Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand eighteen.

REPUBLIC ACT No. 11453

An Act Further Strengthening the Powers and Functions of the Authority of the Freeport Area of Bataan (AFAB), Amending for this Purpose Republic Act No. 9728, Otherwise Known as the "Freeport Area of Bataan (FAB) Act of 2009"

Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:

Section 1. Section 3 of Republic Act No. 9728 is hereby amended to read as follows:

Section 2. Section 4 of Republic Act No. 9728 is hereby amended to read as follows:

Section 3. Section 6 of Republic Act No. 9728 is hereby amended to read as follows:

Section 4. Section 7 of Republic Act No. 9728 is hereby amended to read as follows:

Section 5. Section 13 of Republic Act No. 9728 is hereby amended to read as follows:

Section 6. Section 14 of Republic Act No. 9728 is hereby amended to read as follows:

Section 7. Section 15 of Republic Act No. 9728 is hereby amended to read as follows:

Section 8. Section 16 of Republic Actt No. 9728 is hereby amended to read as follows:

Section 9. Section 17 of Republic Act No. 9728 is hereby amended to read as follows:

Section 10. Section 19 of Republic Act No. 9728 is hereby amended to read as follows:

Section 11. Section 21 of Republic Act No. 9728 is hereby amended to read as follows:

Section 12. A new provision is inserted in the Act as Section 30 and the succeeding provisions are renumbered accordingly and amended as follows:

Section 13. Transitory Provision.— The incumbent chairman and administrator of the AFAB shall continue to serve as administrator of the AFAB for the remaining term of his appointment without prejudice to his reappointment to the same position upon the expiration of his term at the discretion of the appointing authority.

Section 14. Separability Clause.— Any portion or provision of this Act that may be declared unconstitutional shall not have the effect of nullifying other portions or provisions hereof as such remaining provisions can still subsist and be given effect.

Section 15. Repealing Clause.— Proclamation No. 740, as amended by Proclamation No. 900 and Presidential Decree No. 545, insofar as these laws convey the balance of the public land mentioned therein in favor of the GSIS and the SSS. and mandate said agencies to develop the land for construction of housing units and/or condominium houses, are hereby repealed. All other laws, decrees, executive orders, rules and regulations or parts thereof, inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

Section 16. Effectivity.— This Act shall take effect after fifteen (15) days following its complete publication in the Official Gazette or in two (2) newspapers of general circulation whichever is earlier.

Approved,

(Sgd) GLORIA MACAPAGAL-ARROYO
Speaker of the House of Representatives

(Sgd) VICENTE C. SOTTO III
President of the Senate

This Act which is a consolidation of Senate Bill No. 2133 and House Bill No. 6524 was passed by the Senate of the Philippines and the House of Representatives on June 3, 2019.

(Sgd) DANTE ROBERTO P. MALING
Acting Secretary General
House of Representatives

(Sgd) MYRA MARIE D. VILLARICA
Secretary of the Senate

(Sgd) RODRIGO ROA DUTERTE
President of the Philippines

Approved: August 30, 2019.

"Sec. 3. Conversion of the Bataan Economic Zone (BEZ) into the Freeport Area of Bataan.— The existing Bataan Economic Zone located in the Municipality of Mariveles, Province of Bataan is hereby converted into a special economic zone and freeport, and along with other territories indicated in this Act, shall be known as the Freeport Area of Bataan (FAB).

"The FAB shall cover the (a) land territories in the Municipality of Mariveles, Province of Bataan formerly part of the BEZ comprising an area of approximately one thousand seven hundred forty-two and 48⁄100 (1,742.48) hectares (the ‘FAB main zone’), and (b) all other expansion areas within the Province of Bataan which may be declared as part of the FAB in compliance with Section 4(g) of this Act, including all municipal waters within the FAB main zone and of the expansion areas located at the coastline of the Province of Bataan (the ‘other FAB zones’).

"The metes and bounds of the FAB main zone, and the other FAB zones, which shall be fenced and include the establishment of an administrative office for ease of customs administration and border control, shall be determined based on the technical description and coordinates verified and approved by the Land Management Bureau, the National Mapping and Resource Information Authority, and other government agencies as may be provided by pertinent law.

"Prospective developers and locators may choose to register with the AFAB, PEZA or such other investment promotion agency: Provided, That in no case shall a registered enterprise enjoy incentives from two (2) or more investment promotion agencies: Provided, further That in no case shall an AFAB-registered enterprise be located within an ecozone administered or managed by another investment promotion agency."

"Sec. 4. Governing Principles.— The FAB shall be managed and operated under the following principles:

"Sec. 6. Imposition of a Tax Rate of Five Percent (5%) on Gross Income Earned.— No taxes, local and national, shall be imposed on registered business establishments operating within the FAB. In lieu thereof, and subject to Section 10 of this Act, said business establishments shall pay a five percent (5%) final tax on their gross income earned in the following percentages:

"Sec. 7. Incentive to Investors.— Any foreign national who invests an amount of Seventy-five thousand US dollars (US$75,000.00), either in cash and/or equipment, in a registered enterprise shall be entitled to an investor’s visa: Provided, That he has the following qualifications:

"As a holder of investor’s visa, an alien shall be entitled to reside in the Philippines while his investment subsists. For this purpose, he should submit an annual report, in the form duly prescribed for the purpose, to prove that he has maintained his investment in the country, should said alien withdraw his investments from the Philippines, then the investor’s visa issued to him shall automatically expire."

"Sec. 13. Powers and Functions of the AFAB.— The AFAB shall have the following functions:

"Sec. 14. Board of Directors of the FAB.— The powers of the AFAB shall be vested in and exercised by a Board of Directors, hereinafter referred to as the Board, which shall be composed of the following:

"Provided, That all members of the Board shall be Filipino citizens.

"The administrator and the members of the Board, shall be appointed by the President of the Philippines to serve for a term of six (6) years, unless sooner separated from service due to death, voluntary resignation or removal for cause. In case of death, resignation or removal for cause, the replacement shall serve only the unused portion of the term.

"No person shall be appointed by the President of the Philippines as a member of the Board unless he is a Filipino citizen, of good moral character, of proven probity and integrity, and a degree holder in any of the following fields: economics, business, public administration, law, management or their equivalent, and with at least ten (10) years relevant working experience preferably from the field of management or public administration.

"The members of the Board shall each receive per diem at rates to be determined by the Department of Budget and Management (DBM) in accordance with existing rules and regulations: Provided, however, That the total per diem collected each month shall not exceed the equivalent per diem for four (4) meetings."

"Sec. 15. Powers and Duties of the Administrator.— The administrator shall have the following powers and duties:

"Sec. 16. Organization and Personnel.— The AFAB Board of Directors shall provide for an organizational structure and appoint employees, subject to the Civil Service Law. Upon the recommendation of the administrator, the Board shall appoint and fix the remuneration and other emoluments of its officers and employees in accordance with existing laws on compensation and position classification: Provided, That the salary and other compensation of the administrator shall be comparable with the president and chief executive officer of Clark Development Corporation: Provided, further, That the Board shall exercise administrative supervision on their employees.

"The officers and employees of the AFAB, including all members of the Board, shall not engage directly or indirectly in partisan activities nor take part in any election, except to vote.

"No officer or employee of the AFAB, subject to civil service laws and regulations, shall be removed or suspended except for cause, as provided by law."

"Sec. 17. Labor Center, Health and Housing Facilities.— (a) A labor center shall be established within the FAB. This center shall be responsible for studying and amicably settling professional and labor relations and disputes, interpretation of employment contracts, and monitoring work, hygiene 'and safety standards within the FAB. The labor center shall comprise a labor office, an industrial health and safety office, and an inspection and disputes office.

"Except as otherwise provided in this Act, labor and management relations in the FAB shall be governed by applicable rules and regulations under the Labor Code of the Philippines, as amended. Employees and personnel in the registered enterprises shall receive salaries and benefits, and shall enjoy working conditions provided under the Labor Code and other relevant laws and issuances of the Philippine Government and the DOLE. The AFAB shall allow the visitorial power of the Secretary of the DOLE or his duly authorized representative, and/ or may assign its personnel to join the DOLE Regional Office III in the conduct of labor inspection.

"(b) The Department of Health shall establish, fund, operate and maintain a tertiary hospital in the FAB.

"(c) The National Housing Authority, pursuant to its mandate, shall undertake vertical and horizontal housing development for the marginalized informal settlers and low income earners within the FAB, and shall source the necessary funds thereof through National Government subsidy."

"Sec. 19. Remittances.— In the case of foreign investments, a registered enterprise in the FAB shall have the right to remit earnings from the investment in favor of the investor and/or intended beneficiary, subject to the provisions of Republic Act No. 7653, otherwise known as the ‘New Central Bank Act’, the manual of regulations on foreign exchange transactions, as well as other relevant rules and regulations."

"Sec. 21. Capitalization.— The capital stock to be contributed by the government, shall be (a) Two billion five hundred million pesos (₱2,500,000,000.00) with option to increase capitalization upon the discretion of the AFAB, (b) all lands embraced and covered by the FAB, including those properties conveyed to the Government Service Insurance System (GSIS) and/or the Social Security System (SSS) under Proclamation No. 740, as amended by Proclamation No. 900, as well as permanent improvements and fixtures upon proper inventory not otherwise alienated, conveyed or transferred to another government agency, and (c) all other assets which the President may transfer to the AFAB as part of the equity contribution of the government."

"Sec. 30. Non-Impairment of Contracts/Permits/Licenses.— All existing contracts, permits and licenses duly granted by the AFAB before the date of effectivity of this Act shall remain valid, and unimpaired, and shall be recognized by the government."