Bohol ecozone in Jagna eyed

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Bohol ecozone in Jagna eyed

Topic |  

As “a bustling port town in the eastern coast of Bohol”, Jagna fits to host the economic zone to capture investments initially aimed at already progressive metropolitan areas.

Establishing an ecozone in the eastern part of the province will balance the economic growth to be shared to rural areas.

In line with this, Third District Rep. Arthur Yap filed a bill proposing the establishment of an ecozone in Jagna.

“The Bohol Ecozone in Jagna shall be developed into and operated as a decentralized, self-reliant and self-sustaining industrial, commercial or trading, agro-industrial, tourist, banking, financial and investment center with suitable residential areas. It shall be provided with transportation, telecommunications and other facilities needed to attract legitimate and productive investments. It would generate linkage industries and employment opportunities for the people of the Province of Bohol,” according to Yap.


Yap noted that “Metropolitan Manila and Cebu, have been, and continue to be, the choice areas for investors. With its progressive infrastructure, modern utilities, including power, water and telecommunications, and of course, abundant supply of highly technical and skilled manpower, there is no need for enticements for capitalists to locate in said two areas. As a result thereof, progress and development in the country have been confined to these two main areas”.

He also cited that ecozones had been established in the early 90’s to promote the countryside “as alternative areas of investments”.

It was intended to “spur development” in the far-flung areas and rural areas in the provinces “through industrialization”.

Aside from uplifting the welfare of the rural folks, the ecozones were also aimed at decongesting and “arrest the cramming of the people to the cities”, Yap explained.

The government offered incentives to prospective locators when ecozones were established in the provinces.

The fiscal incentives included tax holidays, tax exemptions, duty free importations and exportation of goods produced in the zones.


Non-fiscal incentives included permit-free project expansion and product diversification; off-shore, local and international banking facilities; freedom from national import policy restrictions, liberal allowance of expatriate employment, and the disallowance of the formation of labor unions and, or, strikes.


Business grew in “new, secured and protected industrial areas, with the necessary infrastructure, buildings, power, telecommunications, gas, and water facilities”.

“Lately however, in direct contravention to the said objective of countryside development, ecozones are being established even in the cities. Individual buildings, and not land facilities, situated in the middle of commercial centers, are being accredited as ecozones. Enterprises, long doing the same nature of business in the metropolis, are still being qualified as a locator of ecozones, thereby entitling them to the incentives provided.  Thus, the metropolitan areas continue to capture investments and enjoy progress.  On the other hand, however, the countryside wallows in poverty,” according to Yap.

On this, he said new and more ecozones must be created in the provinces.


“And, one such province in dire need of an ecozone is the Province of Bohol,” he said.

Jagna would be a strategic location for the ecozones in Bohol.


“Jagna is a bustling port town in the eastern coast of Bohol. This municipality was first settled by immigrants from Loboc who transformed the wide valley into rice paddies. It became a rather prosperous community,” according to Yap.

He also noted that Jagna hosts “one of the busiest seaports in Bohol”.

“The Jagna Seaport is considered as the gateway portal to Mindanao. It was once the main hub of maritime activities in Bohol. However, due to the upgrading of other ports of Bohol, the volume of passengers dwindled. Lately however, the Jagna Port was expanded. It is now part of the Strong Republic Nautical Highway (SRNH) system conceptualized by the government to interconnect by land and sea the island provinces of the country through RORO, cargo vessels, ferry boats, and fast crafts. Because of its bustling port, Jagna is suitable to become the industrial center of the province. It is ready to become the catalyst of the development of this province, which economy is mostly anchored on tourism,” Yap pointed out.

He already filed House Bill 192 for the purpose in the preceding Sixteenth Congress but was overtaken by time. He filed a new bill for this purpose this time to achieve the objective.

If approved into law, it shall be called the “Bohol Special Economic Zone Act of 2016”.

It is proposed to be entitled “An Act Establishing the Bohol Special Economic Zone in the Province of Bohol, Creating for the Purpose the Bohol Special Economic Zone Authority, Appropriating Funds therefore and for other purposes”.

Through the measure, Yap proposed that it be declared a policy of the State to “to actively encourage, promote, induce and accelerate the sound and balanced industrial, economic and social development of the country in order to provide jobs to the people, especially those in rural areas, increase their productivity and their individual and family income, and thereby improve the level and quality of their living conditions through the establishment, among others, of special economic zones in suitable and strategic locations in the country and through measures that shall effectively attract legitimate and productive foreign investments”.

It is in consonance with this policy that the Bohol Ecozone will be established in the municipality of Jagna with the concurrence of the local government unit.

Yap proposed that the “Bohol Special Economic Zone shall be managed and operated by the Bohol Special Economic Zone Authority (BEZA)” that would be created for the purpose.

“Within the framework and limitations of the Constitution and applicable provisions of the Local Government Code, the Bohol Ecozone shall be developed into and operated as a decentralized, self-reliant and self-sustaining industrial, commercial/trading, agro-industrial, tourist, banking, financial and investment center with suitable residential areas,” Yap cited one of the proposed provisions to be included in the proposed law.

Another proposed provision is that the “Bohol Ecozone shall be provided with transportation, telecommunications and other facilities needed to attract legitimate and productive investments, generate linkage industries and employment opportunities for the people of the Province of Bohol”.

Yap said that he also proposed a provision that “The Bohol Ecozone may establish mutually beneficial economic relations with other entities or enterprises within the country or, subject to the administrative guidance of the Department of Foreign Affairs (DFA), the Philippine Economic Zone Authority (PEZA) and, or, the Department of Trade and Industry (DTI), with foreign entities or enterprises”.

“Foreign citizens and companies owned by non-Filipinos in whatever proportion may set up enterprises in the Bohol Ecozone, either by themselves or in joint venture with Filipinos in any sector of industry, international trade and commerce within the Bohol Ecozone,” another proposed provision states.

Yap also proposed that the “areas comprising the Bohol Ecozone may be expanded or reduced when necessary” and “for this purpose, the BEZA, in consultation with the LGUs, shall have the power to acquire either by purchase, negotiation or condemnation proceedings, any private land within or adjacent to the Bohol Ecozone for the following purposes: (1) consolidation of lands for Bohol Ecozone development; (2) acquisition of right of way to the Bohol Ecozone; and (3) the protection of watershed areas and natural assets valuable to the prosperity of the Bohol Ecozone”.

There also other proposed provisions that states, “Goods manufactured by a Bohol Ecozone enterprise shall be made available for immediate retail sale in the domestic market, subject to the payment of corresponding taxes on raw materials and other regulations that may be formulated by the BEZA, together with the PEZA, the Bureau of Customs and the DTI. However, in order to protect domestic industries, a negative list of industries shall be drawn up and regularly updated by the PEZA. Enterprises engaged in industries included in such negative list shall not be allowed to sell their products locally”.

“The national government shall maintain its ability to coordinate with the Bohol Ecozone and the local government units,” another proposed provision states.

Under the category of registered enterprises, income tax holiday will be granted.

A registered domestic enterprise located in highly developed areas, as determined by the Board of Investments (BOI), shall be entitled to a four-year income tax holiday from the start of their commercial operations.

Registered domestic enterprise located in less developed areas as defined by the BOI; or those producing or rendering new products or services or having strong backward or forward linkages shall be entitled to a six-year income tax holiday from the start of their commercial operations.

Registered export enterprise shall be entitled to a six-year income tax holiday it complies with the following: (1) large capital investments or sizeable employment generation; or (2) use high level of technology; or (3) located outside Metro Manila, it shall be entitled to an eight-year income tax holiday (ITH).

Registered enterprises embarking on new investments that are listed in the current Investment Priorities Plan (IPP) shall be entitled to these incentives pertaining to the new investments and subject to such terms and conditions as the BOI may determine.

“Registered enterprise” will then be defined “as any person, natural or juridical, licensed to do business in the Philippines and registered with the BEZA to transact business within the Bohol Special Economic Zone.

“Registered export enterprise”, on the other hand, will then be defined “as any registered enterprise engaged directly or indirectly in the production, manufacture or trade of products or services which earns at least 70 percent of its normal operating revenues from the sale of its products or services abroad for foreign currency”.

“A registered domestic enterprise, meanwhile, shall be defined as any registered enterprise not falling under the definition of a registered export enterprise”.

It is also proposed that “additional investments in the project shall be entitled to the income tax holidays corresponding to such investments as may be determined by the BOI. Additional income tax holiday may be granted for as long as the investment is made on the same project: Provided, that the project is listed in the IPP at the same time the additional investment in the project is made: Provided, further, that the entitlement period for additional investments shall not exceed three times the period provided under this subsection: Provided, however, that the total ITH period for an export enterprise availing of an eight-year ITH shall not exceed twenty (20) years. Any unused incentives shall therefore be deemed forfeited if not used during the incentive period”.

It is also elaborated in the proposed provision that enterprises to be registered with the BEZA will be required to share in the special development fund of the BOI for investment promotion projects of the government equivalent to one percent of the ITH granted for every application.

It is also proposed that “the Bureau of Internal Revenue (BIR) shall require a registered enterprise availing of ITH or Net Operating Loss Carryover (NOLCO) to secure a certificate of eligibility from the BEZA before submitting its income tax return (ITR) with the BEZA for validation.  Failure to secure certification and, or, to file the ITH or Net Operating Loss Carryover (NOLCO) availment for validation by the BEZA within 45 days from the last day of each statutory filing date for ITR shall cause the forfeiture of the availment for the taxable period”.

“Registered enterprises availing of the ITH shall not be entitled to avail of the NOLCO”.

It is explained that NOLCO refers to the “net operating loss of the business or enterprise during the first three years from the start of commercial operations which have not been previously offset as deduction from gross income shall be carried over as a deduction from gross income for the next five consecutive years immediately following the year of such loss: Provided, however, that operating loss resulting from availment of incentives to be provided in the proposed law shall not be entitled to NOLCO”.

It is also proposed that “except for real property tax on land, no local and national taxes” under “The National Internal Revenue Code of 1997, as Amended” such as income tax, excise tax and franchise taxes, shall be imposed on registered enterprises operating within the Bohol Ecozone.

“In lieu thereof, five percent of the gross income earned shall be paid as follows: three percent to the national government; and two percent shall be remitted by the business establishments to the treasurer’s office of the municipality or city where the enterprise is located. All persons and service establishments in the Bohol Ecozone shall be subject to national and local taxes under the National Internal Revenue Code of 1997, as amended, and the Local Government Code”.

It is also proposed that “importations of raw materials and capital equipment shall be treated as in the Omnibus Investments Code. Registered export-oriented enterprise shall have access to the utilization of the bonded warehousing system in accordance with the rules and regulations of the Bureau of Customs”. Any foreign national of legal age and of good standing covered under this provision who invests an amount of US $150,000- -either in cash and, or, equipment- -in a registered enterprise shall be entitled to an investor’s visa.

“The Bohol Special Economic Zone Authority shall maintain its principal office in the Municipality of Jagna, but it may establish branches within the Philippines as may be necessary for the proper conduct of its business”, as proposed in the Bill.

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