Final Report

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TABLE OF CONTENTS
A. Background ………………………………………………….. 1
• •

Objective …………………………………………………………….. 1 Activities ……………………………………………………………… 2

B. Economic Baseline and Investment Potentials Analysis ……... 3
1. Background in Silay’s Industry, Trade and Tourism Performance …… 3 1.1 Industry: Sugar Production …………………………………….… 3 1.2 Trade: Commercial Establishments ……………………….…….. 4 1.3 Tourism: Paris de Negros …………………………………….….. 5 2. Competitiveness Ranking ………………………………………….…. 6 3. Investment Potentials Analysis ……………………………………….. 9 3.1 Airports as National and Regional Economic Motors …………… 10 3.2 The Creative Industries ……………………………………….…. 11 3.3 Cultural-Historical and Adventure Tourism …………………….. 12 3.4 Medical and Health Tourism ………………………………….…. 12 3.5 Ethanol Production ………………………………………...…….. 13 3.6 Conclusions …………………………………………………...…. 13

C. Proposed Economic Development Strategy …………………..

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1. Strategic Goals ……………………………………………………..…. 14 2. Agro-Industrial Development ………………………………………… 15 3. Tourism Development …………………………………………..……. 15 4. Technology Promotion …………………………………………….…. 16

D. Suggested Types of Investment ………………………………. E. Fiscal and Non-Fiscal Incentives ……………………………...

17 18

Investments-Incentives Matrix ……………………………………..…. 19

Annexes ……………………………………………………………………...20
1. Draft Investment Incentive Code …………………………………………..20 2. Proposal for a Special Economic Zone …………………………………….55

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A. BACKGROUND
Ciy will be I n 2007, Silaynew Bacolod home to the

Airport which is now under construction. In preparation for this, the Silay City Government has formulated a long-term development framework plan to guide the city’s further growth especially around the airport site. With the completion of the airport, the Silay City Government also anticipates the emergence of related challenges, particularly: 1. The need to be selective in accommodating new investments and economic enterprises that would be attracted by the airport, in order to secure those which offer the best potentials for generating employment and local economic prosperity without damaging the natural environment; and 2. The further intensification of growth in the city’s established as well as emerging activity centers, which will need to be guided in order to maximize economic and social benefits and to mitigate the negative effects of unplanned growth. In view of these challenges and to reinforce the development framework plan, the Silay City Government has decided to establish an economic development strategy, a Special Economic Zone (SEZ), and a city-wide investments incentives code. This report contains the recommendations relative to these, as well as the basis for these recommendations.

Objectives

at T his report is based upon the result of a comprehensive study aimedthe analyzing the social and economic benefits from new investments that new

airport is anticipated to attract, while ensuring that at the same time these are environment-friendly. Its specific objective is to formulate an economic development strategy, a Special Economic Zone (SEZ) proposal and an investments incentives code in order to attract the kinds of investments and investors with the highest potentials for generating employment and local economic prosperity to locate in Silay City.
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Activities

T he study comprised of several streams of activities given the required outputs:
1. Analysis of Silay’s economic potentials and competitiveness; 2. Formulation of an economic development strategy based on the above analysis; 3. Identification of the range of preferred economic enterprises as well as those that are expected to be attracted by the new airport, and the factors that would likely influence their decision on where to locate; 4. Review and analysis of the incentives programs of the Board of Investments (BOI), Philippine Economic Zone Authority (PEZA), and other national agencies as to their applicability to the enterprises identified above, and identify gaps; 5. Prepare the necessary proposal for submission to PEZA for approval of Silay Agro-Industrial Ecozone; 6. Support to Silay City Government and Silay Agro Industrial Ecozone for PEZA processing and evaluation of application; 7. Support to Silay City Government in the preparation and submission of documentary requirements for Presidential Proclamation; 8. Drafting of a preliminary list of incentives which Silay City may provide based on the information derived from the above; 9. Organization and conduct of consultation workshops with Sangguniang Panglunsod, potential investors and city officials concerned to discuss and agree on the preliminary list of incentives; 10. Review and analysis of neighboring and/or competing cities’ investments incentives codes to determine nature and extent of possible competition; and 11. Preparation of the draft Economic Development Strategy and Investments Incentives Code of Silay City, and submission to the Sangguniang Panglunsod for approval and adoption.

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B. ECONOMIC BASELINE AND INVESTMENT POTENTIAL ANALYSIS 1. Background on Silay’s Industry, Trade and Tourism Performance
1.1 Industry: Sugar Production
Negros on the S ilay City, just like the restitsofeconomicOccidental,is is highly reliantthe gensugar industry. Therefore, situation determined by eral performance of the sugar industry in both national and international markets. In terms of business profitability in the city, the peak season of the sugar industry or during the milling season could prove to be highly profitable and could cover up losses of the past off-peak season.

One of Silay’s many sugarcane fields.

Figure 1 describes the production of raw sugar by mills located in Negros Occidental where Hawaiian-Philippines Company, located in Silay City, is among the top five producers. In particular, Table 1 displays the sugar production of HawaiianPhilippines Company from crop years 2000 to 2005.

Figure 1. Final Raw Sugar Production by Mills, 1999-2004
Metric Tons 1,200,00 1,000,00 800,00 600,00 400,00 200,00 0 1999-2000
Negros Occidental

2000-2001

2001-2002

2002-2003
Lopez

2003-2004
Victorias

Biscom

Hawaiian-Philippines

La Carlota

Source: Sugar Regulatory Administration 3

Table 1. Sugar Production, Hawaiian-Philippine Company, 2000-2005
Crop Year Tons Milled 2000-2001 1,088,079 2001-2002 1,004,385 2002-2003 1,136,184 2003-2004 1,143,405 2004-2005 1,130,955 Source: AHSSI Bulletin and CPDO-Silay City Sugar Produced 1,847,415 1,814,060 2,042,228 2,113,102 2,315,222 Lkg/TC 1.70 1.81 1.80 1.85 2.05

1.2 Trade: Commercial Establishments

there are manufacturing subA side from the sugar industry of Silay City, Food Processing, Metalworksectors that are existent, namely: Ceramics,

ing, Garments and Fish Processing. These sub-sectors are mostly home-based and micro-asset-sized firms (PhP1.5 Million and below) and are unregistered (informal). In 2005, trade in Silay City had a total of 2,190 commercial establishments according to the City License Division (CLD) and City Planning and Development Office (CPDO). A large number of the said establishments are in the retail trading business mostly based in the Poblacion area. Figure 2 shows the growth of commercial establishments registered with the Silay City’s CLD and CPDO. Continuous growth is observed with constant increase of registered businesses. This growth of business in Silay City simply implies that there are huge investment potentials in the City.
Figure 2. Commercial Establishments Registration, 2001-2005

250 0 200 0 150 0 100 0 50 0 0 2001 2002 2003 2004 2005

Number of Commercial Establishments

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1.3 Tourism: Paris de Negros
tourist resources that are characterized by I n the tourism sector, Silay City haswell as its natural environmental amenities. its rich history, culture and arts, as Known as the “Paris de Negros”, Silay City boast of a number of ancestral houses, the historic San Diego parish church, and cultural activities, all of which providing a great potential to attract prospective domestic and foreign tourists. In addition, the natural amenities and historic sites in the outlying barangays of Kapitan Ramon and Patag present potentials for adventure tourism, such as whiteriver rafting, mountain trekking, and camping. Patag in particular has a rich diversity of flora and fauna as well as numerous springs and waterfalls. A number of caves The Balay Negrense used by Japanese soldiers during World War II can also be found in Patag’s forested mountains. But in spite of all these tourism potentials, Silay City has not been able to generate substantial share of tourist arrivals. Table 2 compares the tourist accommodation and other related facilities of different Negros Occidental LGUs including that of Silay City. The apparent lack of a tourism development program, tourist accommodations and other related facilities in Silay City poses a hindrance to further development of the tourism industry potentials of Silay City.
Table 2. Tourist Accommodation and Other Facilities, Selected LGUs, 2003 LGUs Bacolod City San Carlos City Sagay City Silay City Talisay City 4 6 0 0 1 Resorts Hotels 11 1 0 0 0 Pension/Lodging Houses 10 7 4 2 0 8 2 0 0 0 Tourist Inn

Source: National Statistics Coordination Board 5

2. City Competitiveness Ranking

was included in the PCCRP under the Small Cities category. The PCCRP assesses the general ability of the city to attract investments, entrepreneurs, and residents and, through this, establishes benchmarks that can aid individual cities in measuring its competitiveness. It uses seven (7) indicators or “drivers” in its assessment: 1) cost competitiveness; 2) Dynamism of local economy; 3) Linkages and accessibility; 4) Human resource and training; 5) Infrastructure; 6) Responsiveness of LGU; and 7) Quality of life.

year, of Management (AIM) Every Cities the Asian InstituteRanking Project (PCCRP).conducts the Philippine Competitiveness In 2005, Silay City

Silay City was one of 37 small cities included, where San Fernando City, La Union was considered the most competitive in 2005. The following discussions delve into each driver/variable providing the quantitative and qualitative bases for the ranking result of Silay City. For each driver, the raw Score and current Ranking of Silay City are given (the Score of 10 and the Rank of 1 means that it is the most competitive) and notable quantitative or qualitative variables are highlighted accordingly.

2.1 Cost of Doing Business (Score: 6.35 & Rank: 6)
for S ilay City’s attractivenessrent business is good. Some quantitative factors, particularly, the average of commercial space and the average cost of acquiring telephone services, contributed largely to the City’s pull for businesses. Moreover, the non-existence of informal fees (bribes) for securing business permits, licenses and clearances, specifically, in national government agencies and local government offices in the City posted points for the City’s appeal to businessmen.

However, a qualitative factor which pertains to the general profitability of doing business in the City is very high only ranked 18th out of the 37 cities that were ranked. This implies that Silay City is not readily the top choice of local businessmen thinking about investing in the City. But with the completion of the New Bacolod Airport, this particular economic feature of the Survey for Silay City will definitely change.

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2.2 Dynamism of Local Economy (Score: 4.52 & Rank: 26)
economic vigor, there is and I n terms ofitSilay City’srest of Negros Occidental, much promisesugar potential. Although is like the reliant on the industry,

the completion of the New Bacolod Airport in Barangay Bagtic, Silay City poses the opportunity for economic diversification and vitality. It must be stressed that Silay City’s economic performance is highly determined by the performance of the sugar industry, both in the national and world markets. Business profitability in the City is profitably high during peak seasons for the sugar industry, or during the milling season that could readily cover-up for certain losses of the previous off-season. Out of the seven drivers, this variable on local economic vigor is the lowest. But, it must be seen that certain quantitative factors such as the local inflation rate and the growth of registered businesses from 2003 to 2004, provided the City some bright spots in this driver of the Survey. This easily implies the promise and potential of Silay City for further growth and energy of its economy. Furthermore, this bright qualitative feature on tourism as an industry is a vibrant sector apparently establishes tourism as one of the cornerstones of Silay City’s future development and economic vitality.

2.3 Linkages and Accessibility (Score: 6.14 & Rank: 12)
th

feature on raw inputs are T he qualitativethe city ranked 6 materials37and other productionthe accessiamong cities. This implies located near

bility of major inputs for production for firms in the City. This further entails another one of the cornerstones of Silay City’s future economic development and economic vigor, i.e., agro-industrial production.

Another qualitative factor on international entry and exit points such as airports, seaports, and other transshipment points located near the City ranked 16th among other cities. This feature will definitely change as soon as the New Bacolod Airport is completed and completely operational.

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2.4 Human Resources and Training (Score: 6.13 & Rank: 19)
th

ported by the qualitative feature workers from the local pool are eager to develop skills with a score and rank of 7.07 and 18th, respectively. These factors imply the rich potential of human resource in Silay City. With proper training and educational support, human resources in Silay City can be further developed and improved and thus sustain the economic and social benefits of the New Bacolod Airport. It is also worthwhile to emphasize that in terms of the quantitative factor number of tertiary educational institutions per population ranks Silay City at 34th with a low score of 2.00. This can be attributed to the proximity of Silay City to the capital city of Bacolod where there are a lot of tertiary schools that Silaynons can enroll in. However, it would be very important to supplement the current number of tertiary educational institutions in Silay City to spread and further extend human resource development in the area.

feature vocational institutions per T he quantitativehigh at 4number ofdriver for Silay City. This 100,000 population ranked in this is further sup-

2.5 Infrastructure

(Score: 6.26 & Rank: 16)

qualitative features such I n terms of Infrastructure,roads are not congested as the city’s traffic management is well managed, during peak hours and the city’s waste management program works very well rank considerably high for Silay City at 2nd, 3rd and 4th, respectively. These factors suggest that Silay City has been relatively successful in traffic and waste management. City programs, therefore, should be continued and improved even as the completion of the New Bacolod Airport will definitely pose challenges to the City’s traffic and waste management programs. Although the qualitative factor of internet service providers are reliable ranked a modest 19th for Silay City, another qualitative factor on cellular phone signals in the city are always adequate ranked a low 35th. This entails the further development of cellular sites in the City to improve celluJunction of National Highway and McKinley Road lar phone signals.
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2.6 Responsiveness of LGU to Business Needs
a business permit is Q ualitative features such as securingregular forums to elicitsimple andofefficient, the local government holds opinions its

(Score: 6.45 & Rank: 9)

constituents, business taxes imposed by the city are reasonable, and local government programs to assist unemployed constituents are existent ranked Silay City at 3rd, 5th,1st, and 5th, respectively. These are good indications of the City’s receptiveness and sensitivity in developing business and addressing businessrelated needs.

2.7 Quality of Life (Score: 6.65 & Rank: 7)

of Quality of theft I n the areapopulation and Life, quantitative factors such as incidence ofranks per 100,000 incidence of murder per 100,000 population Si-

lay City at number 1 for both features. These variables indicate the livability of Silay City.

2.8 Conclusions

City’s scores in the 2005 Competitiveness suggest that the S ilay room for improvement, particularly in the Study of (1) Dynamismcity has areas of the local economy; (2) Human resources and training; and (3) Infrastructure. Therefore, to further strengthen Silay City’s competitiveness, it needs to focus its efforts on these areas, even as the new airport is expected to catalyze new economic activities.

3. Investment Potentials Analysis

F

or a more focused analysis of investment potentials for Silay City, it is recognized that airports, in general, have a considerable economic and social impact on their surrounding regions. The importance of transport to economic growth has been stressed by the European Commission in their Transport White Paper: “It is difficult to conceive of vigorous economic growth which can create jobs and wealth without an efficient transport system that allows full to be taken of the internal market and globalized trade.” With the completion of the New Bacolod Airport in Silay City by 2007, Silay City is in the best position to take advantage of the opportunities for vigorous economic growth and social transformation. Thus, the big question that needs to be addressed is: What are the investment potentials of Silay City that would help catapult Silay City to greater economic development heights?
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3.1 Airports as National and

Regional Economic Motors

powerful magnets for potential investors. In a study in the United Kingdom (UK), there are thirteen (13) economic sectors (out of 35) that make most intensive use of air transport for passengers or freight. These are: Insurance; Banking and Finance; Communication; Coke, Petroleum and Nuclear Fuel; Printing and Publishing; Extraction; Transport; Computer Activities; Precision and Optical Instruments; Research and Development; Other Means of Transport; and, Other Business Activities.

said to T he presence of airports are Airportsbe “absolutely essential” to businesses making location decisions. that have good connectivity can act as

Emerging from all these possible industries that would prosper with the completion of the New Bacolod Airport, Petroleum (through ethanol production) and the Creative Industries (such as Printing and Publishing, Computer Activities through Multimedia) would be possible investment priorities for the City. In any nation, air transport is the principal means by which tourists, both domestic and foreign, access the country and various attractions in the country. Tourism is a major growth sector for both developed and developing countries. Therefore, the completion of the New Bacolod Airport poses numerous tourism development opportunities for Silay City. The succeeding discussion will focus on potential industries that could be successful once the New Bacolod Airport is completed and fully functioning.

Silay’s urban land use and road network plan. 10

3.2 The Creative Industries
of “Creative T he conceptcame about Industries” in

Australia in the early 1990s, but was given much attention by policy makers in the United Kingdom in the late 1990s. The UK Creative Industries Taskforce defines Creative Industries as “those industries which have their origin in individual creativity, skills and talent and which have a potential for wealth and job-creation through the generation and exploitation of intellectual property”. The United Nations notes that industries or areas of activity that constitute Creative Industries can be identified as the following: the recording industry; music and theatre production; the motion picture industry; music publishing; book, journal and newspaper publishing; the computer software industry; photography; commercial art; and the radio, television and cable broadcasting industries. In terms of economic contribution, Creative Industries are globally estimated to have contributed about more than seven (7) percent of the world’s gross domestic product (GDP) and are expected to grow at an average of ten (10) percent annually. In terms of numbers, Creative Industries actually contributed about US$1.4 trillion to the world’s economy. However, data on the economic contribution of Creative Industries in the Philippines is yet to be created and established. The goal of attracting Creative Industries to Silay City would be a good complement to Silay’s reputation as “Paris de Negros”. As the “Intellectual Center” of Negros Occidental, the location of Creative Industries would revive and boost the production of local talents in various fields, such as in the music, arts, architecture and journalism. To induce Creative Industries to locate in Silay City, the provision of a special economic zone that is geared toward attracting these industries should be in place. The said economic area should be presented and marketed along the lines of Silay as the “Paris de Negros” and/or the “Intellectual Center” of Negros Occidental.
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3.3 Cultural - Historical and Adventure Tourism

tage Institute (NHI) as a “Museum City” because of the existence of thirty-one (31) accredited ancestral homes. Particularly, the Benardino-Jalandoni Museum and the Balay Negrense are two of the major cultural show cases of Silay City. In addition, there is the historic San Diego Pro-Cathedral, which has been serving a vital role in the spiritual development of Silaynons since the late 1800s. There are also caves and artillery bunkers in Silay’s mountains which the Japanese soldiers of World War II left behind. Apart from these rich historical and heritage spots, Silay City is also host to the Hawaiian-Philippine Company where a locomotive railroad still exists. The further revival of this said mode of transportation could be the center-piece of a major tourist attraction tour that gives guests an idea of how “Negros, Sugar Bowl of the Philippines” title came to be. Furthermore, Silay City’s barangays such as Kapitan Ramon and Patag have significant natural assets that have all the makings of an adventure tourism destination. It is in this tourism niche that Silay has a distinct comparative advantage. Its potentials include spelunking, jingle trekking, rappelling, mountain biking, white-river rafting and camping.

with national treasures and cultural N egros Occidental is a province teemingbeen declared by the National Heriheritage sites. In fact, Silay City has

3.4 Medical & Health Tourism

cited Silay City, the general GuimA sbalaon in the Development Visionforforretirement communities area of can be presents good potentials which

further developed together with golf courses or leisure farms. The area of Patag, on the other hand, offers good potential for mountain resorts and related tourist activities. Health-related industries, such as spa, relaxation and health recovery centers and clinics, have great potentials due to the fact that our neighboring countries’ population, such as South Korea, Japan and China, are quickly ageing. Thus, with greater accessibility of Silay City through the New Bacolod Airport, these potential tourists from the abovemenBgy. Guimbalaon would be good for resorts. tioned nations would definitely consider coming to Silay City’s health rejuvenation attractions.
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3.5 Ethanol Production
are mixed the Philippine sugar industry in A lthough thereproduction ofprospectsasaboutadditive to gasoline is fast becomgeneral, the ethanol an

ing a necessity because of the continuing rise of crude oil prices in the world market fanned by the instability in the Middle East. Sugarcane, being one of the cheapest feedstock among other possible crops capable for ethanol production, is seen as the most ready raw material to provide the required supply. House Bill 4629 filed by Bukidnon Rep Juan Miguel Zubiri was earlier approved by the Lower House and is expected by the Sugar Regulatory Administration (SRA) and industry stakeholders to be passed within 2006. This proposed bio-ethanol program will bring economic benefits to the country since it is cheaper compared to imported fuel. It is also found out to be compatible with almost all car engines especially after 1986 model at 10% blend keeping the environment clean. Once this program is implemented, it will create jobs in the countryside.

3.6 Conclusions
completion of the New is poised to beW ith theone of the fastest risingBacolod Airport, Silay City This report has come new cities in the country.

outlined the current economic situation of Silay City and its investment potentials and probable economic development priorities. Hinged on the opportunity of hosting the New Bacolod Airport, Silay City’s investment and economic development opportunities are outlined in the proposed economic development strategy. Note that investment priorities are apart from industries that are inherent to the functions of an airport such as logistics and cargo hauling activities that will definitely and eventually bring revenues to the City. The industries outlined above, on the other hand, are good targets for the City to develop due to the proximity and competitive advantage of major inputs to these industries.

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C. PROPOSED ECONOMIC DEVELOPMENT STRATEGY
1. Strategic Goals
has three main strategic T he proposed economic development strategyenvironmental goals. Thegoals namely: economic, poverty alleviation, and spe-

cific goals are the following: 1) to increase Gross Domestic Product (GNP)/ output of Silay City (economic); 2) to generate more jobs for the people of Silay (poverty alleviation); and, 3) to improve the livability of the City (environmental).

These goals are hinged on two (2) basic strategies. These are: 1) to provide incentives to landowners who will initiate urban development in their properties (must be based on the Comprehensive Land Use Plan or CLUP in terms of land use and location); and, 2) to provide incentives to locators who will bring investments to Silay City. This distinction is being made because of the difference between the inputs of landowners and of locators/investors, although a landowner may also be an investor. As part of this proposed economic development strategy, there is a need to align with the National Government’s (NG) development priorities for complementarity. It must be pointed out that the 2006 State of the Nation Address (SONA) of President Gloria Macapagal-Arroyo (PGMA) outlined the enhancement of the competitive advantage of natural “Super Regions” of the Philippines. These Super Regions are: 1) North Luzon Agribusiness Quadrangle; 2) Metro Luzon Urban Beltway; 3) Central Philippines; 4) Mindanao; and, 5) Cyber Corridor. Silay City is located within the Central Philippines Super Region that is poised to be developed as a major tourism area with various airports being constructed including the Silay City airport. There will be a total of PhP1.71 trillion, 4.45% of the total GDP of the Philippines, slated for numerous infrastructure spending. The establishment of the Silay City Special Economic Zone (SEZ) will direct and focus efforts at economic development in the City. The SEZ will facilitate significant economic benefits while addressing social and environmental implications. Therefore, the immediate identification and approval of the site for an SEZ will key to reaping actual economic gains. The succeeding discussions focus on the three strategic investment areas that are being proposed to form the backbone of Silay’s Economic Development Strategy.
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2. Agro-Industrial Development

nomic base, agri-business firms should be encouraged to locate in the SEZ or in other areas slated for agro-industrial development. Given the City’s traditional sugarcane-based economy, it is appropriate to build upon this base, as a resource complement, in enhancing the city’s economy. Value-added sugar-based products, like ethanol, ethyl alcohol, rum and confectionary are possible industries that could be accommodated in the City.

City, as earlier pointed, S ilaythe sugarcane industry. Tohas been a mono-crop economy solely reliant on help Silay City diversify its mono-crop eco-

Aside from taking advantage of the abundant resource like sugarcane, other agroindustrial enterprises and various small-scale industries should as well be encouraged. These industries such as cut-flower production and pot-making should be further supported and developed to help the economy diversify into other agro-based enterprises.
A Special Economic Zone would boost Silay’s Economy.

3. Tourism Development

Dubbed as the “Paris de Negros”, Silay City is among already major tourism spots in the Philippines like Boracay in Aklan, Panglao in Bohol, Cebu City, Iloilo City, as well as Bacolod City itself. With the new airport of international standards, Silay City should be ready to accept an increased number of visitors and tourists. Therefore, tourism-related businesses and firms should be encouraged in the City.

City is strategically located, C entral Philippines Super Region, where Silaydestination in the Philippines. is poised to be developed as a major tourism

A growing trend of tourism is the need for medical, health and retirement facilities in the area. It is a fact that a lot of developed countries like South Korea, Japan and Australia have demographic trends where these nations’ populations are quickly aging. Thus, the demand for medical, health and retirement-related services are continuously growing. With these major trends, Silay City must focus on the development of these types of facilities.
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Silay City needs to develop and implement a pro-active tourism development program, capitalizing on its rich potentials in at least two tourism areas of attraction, namely: (1) cultural-historical; and (2) adventure and eco-tourism. The presence of the new airport will also likely open new opportunities for retirement havens and health/medical tourism.

Silay’s mountain barangays provide many tourism potentials.

4. Technology Promotion
technology industries should H ighencouraged in Silay City and be should be invited to locate within the future SEZ. IT-related firms – including IT products, information services, software development, and telecommunications – should be the specific targets of the City. In order to support long-term economic development in Schools for IT are good investments. the Silay City, it is crucial to attract universities, colleges, schools and relevant training centers into the City. The establishment of these educational and training hubs will greatly guarantee the sustainability of Silay’s drive for increased and further economic gain.

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D. SUGGESTED TYPES OF INVESTMENTS
of specific investment types T he following are the liststrategy discussed previously: under each proposed economic development 1. Agro-Industrial Investments 1.1 Sugarcane By-Products (Sweets, Candies, Condiments, Confectionary) 1.2 Cut-flower Production 1.3 Wines and Spirits Distillery 1.4 High-Value Crops 2. Tourism Investments 2.1 Retirement Villages 2.2 Hotels and Pension Houses 2.3 Mountain Resort Development 2.4 Adventure and Eco-Tourism Facilities 3. Technology Promotion Investments 3.1 Information Technology (IT) related products 3.2 Information Services (Business Process Outsourcing) 3.3 Software Development 3.4 Telecommunications 3.5 Creative Industries (Animation, Publishing) 3.6 Schools, Colleges, and Universities 3.7 Special Skills Learning Centers (English Training)
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E. FISCAL AND NON-FISCAL
both potential and locators, including inT o attractthe City, a list ofinvestorsand non-fiscal incentives landowners, toFor vest in fiscal are presented. the fiscal incentives, the following may be offered: 1. Exemption from Local Licenses, Fees, and Dues – such as the Mayor’s Permit Fee, Building Permit Fee, Business Sales Tax, Transfer Tax and other kinds of local licenses, dues, imposts, except for the regulatory fees. 2. Exemption from Real Property Tax - Full exemption from payment of Real Property Tax shall be granted to an eligible enterprise for machinery and equipment or devices or other investments for pollution control, environment protection and fire protection equipment, for a period of three (3) years from the starting date of operation. 3. Land that is classified, either commercial or residential and used exclusively for parking purposes, shall be exempted from the payment of Real Property Tax covering the first five (5) years of operation. There are non-fiscal incentives that are being offered as well. To wit: A. Urban Planning and Zoning Privileges 1. Technical support by the City to the enterprise in land use conversion process, initial validation by the City of site development plans to fast track approvals, and special review of specific details by concerned City departments to facilitate permits, etc.; 2. Facilitation of requests for zoning revisions in sites zoned as areas in transition; and, 3. Exemption from New Development Fees imposed on strategic areas earmarked, or being considered by the City for development. B. Infrastructure and Utilities Support 1. Prioritization of City infrastructure and utilities provision for concerned area development; and, 2. Special arrangements for negotiated link with, or joint use of, existing City infrastructure/utility.

INCENTIVES

C. Site Development Construction Support 1. Joint venture development with the City for prospective public infrastructure (roads, drainage, bridge, etc.) features within the private en18

terprise’s project area; 2. Facilitation of negotiations for site resettlement requirement/s; 3. Facilitation of negotiations with concerned parties for specific development trade-off proposals (such as common facilities like sewage treatment plants, parking, etc.) and rights-of-way; and, 4. Technical support in negotiations for land consolidation and/or readjustment requirement. There are other incentives that may be offered aside from fiscal and non-fiscal incentives already stated. This is with regard to donation of land or real property. For example, persons donating land or real property to the City for its priority projects shall be entitled to tax credits which can be used to pay tax obligations to the City Government. Priority projects contemplated herein include but not limited to: housing projects, resort and spa projects, public markets, bus terminals, health and other recreation projects, educational institutions, government centers, and other sports facilities.

Investments – Incentives Matrix (showing examples only)
INVESTORS Landowners
• • • •

SAMPLE PROJECTS Hotels Industrial Estate Retirement Villages Agri-Business

FISCAL INCENTIVES • Deferment of permit fees • Real estate tax deferment • Tax holiday from development improvement fees
• Tax holidays • Discount on permit

NON-FISCAL INCENTIVES • Prioritization of city infrastructure to the area concerned • Certification of land use conversion (For CARP exemption) • Facilitation of permits
• Facilitation of

Locators

• Factories • Warehouses • Retail outlets • Service shops

fees

PEZA, BOI, etc. incentives • Support for provision of special business-related facilities • One-stop-shop service for permits

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Annex 1
Draft Investment Incentive Code
Republic of the Philippines City of Silay OFFICE OF THE SANGGUNIANG PANLUNGSOD

PROPOSED SILAY CITY INVESTMENT INCENTIVES CODE OF 2006 WHEREAS, many developing countries, and developing cities within these countries, have adopted compensating investment codes or other investment incentive laws for several reasons, with intent of encouraging and stimulating increased private investments, both domestic and foreign, helping remove market distortions; WHEREAS, most countries provide specialized incentives for exporters in order to be more competitive with other market players in other countries with less distorted economic environment; WHEREAS, investment incentive legislation is a global phenomenon being offered by developing countries to help integrate domestic economies with the global economy, and better compete in the world market; incentive grants are prerogatives of the Sangguniang Panlungsod (SP) under 192 of Republic Act 7160 (RA 7160) or the Local Government Code of 1991; WHEREAS, it is a deep desire of the Silay City Government and the People of Silay to catapult the City to a better and competitive economic position, especially that the opening of the New Bacolod Airport provides an opportune time to improve economic activities, resulting from the stimulation and encouragement of more domestic and foreign investments; NOW, THEREFORE, be it enacted by the Sangguniang Panglungsod session assembled:

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CHAPTER I TITLE, POLICY STATEMENT, DECLARATION AND PURPOSE SECTION 1 – TITLE – This Ordinance shall be known as “SILAY CITY INVESTMENT INCENTIVES CODE OF 2006”. SECTION 2 – POLICY STATEMENT – To further our determined effort and deep desire to hasten economic growth and development of our City, we, the People of Silay, welcome new investments, expand existing businesses, diversify industries and other business endeavors that will create employment opportunities and increase economic activities which will eventually uplift the economic conditions and improve further the quality of life of all the People of Silay. In our vision for economic development based on Tourism, AgroIndustrial, Human Resources, and IT-Related Development, we encourage domestic and foreign capital to establish enterprises that would utilize substantial amount of labor, raw materials and natural resources in a manner that are not disruptive to ecology and is in accordance with the City’s Development Vision and Local Economic Development Plan. SECTION 3 – DECLARATION OF INVESTMENT PRINCIPLES AND POLICIES: It is hereby declared as a policy of the City Government to attract local and foreign investors by the creation of a competitive climate for investments and the provision of incentives for investments that will promote development, income generation and employment for the People of Silay City. It is the City’s policy to encourage investments that will adhere to the mutual benefits of its citizens and the investors embracing the principles of sustainable development and complete human development. The City recognizes the important role of the private sector as the prime mover of economic progress with the City Government. The City acknowledges its responsibility to promote and provide industrial peace, security and infrastructure implementation, and the cultivation of a responsible citizenry. SECTION 4 – PURPOSE, INTENT AND OBJECTIVES – It is the purpose, intent and objective of this Code to: 1. Lay down the legal framework and mechanism for integrating the investment
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incentives laws of the National Government with the local development initiative; 2. Promote and enhance the image of Silay City as a preferred investment destination; 3. Create a competitive investment atmosphere by setting up a one-stop processing center to assist investors; 4. Promulgate investment policy guidelines for investors to have access to information on local investment priority areas and corresponding tax exemptions, privileges and incentives; and, 5. Transform selected areas of Silay City into highly developed Tourist, AgroIndustrial, Human Resources and IT-related Centers of the Province of Negros Occidental, the Region and the country.

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CHAPTER II DEFINITION OF TERMS SECTION 1 – DEFINITION OF TERMS WHEN USED IN THIS CODE – Other definitions notwithstanding the following words and phrases for the purpose of the Ordinance shall mean: 1. CODE/ORDINANCE – shall refer to the Silay Investment Incentives Code of 2006. 2. CITY – shall refer Silay City covering all the areas within its territorial jurisdiction as provided for by law and its charter. 3. BOARD/SCIB – shall refer to the Silay City Investment Board created under this Ordinance. 4. SILAY INVESTMENT PROMOTIONS CENTER (SIPC) – shall refer to a one-stop investment action center. It shall assist the investor in its dealings with the Local Government Unit (LGU) with regard to his/her business operations and shall facilitate other pertinent business needs. 5. BONA FIDE RESIDENT – shall refer to a person with at least six (6) months residency in Silay City. 6. INVESTMENT – shall mean money, equipment of properties, professional services or rights expressed in monetary value put in for the purpose of engaging in a business activity. 7. CAPITALIZATION – shall refer to the total assets of the company excluding the value of the land. 8. NATIONAL LAWS – shall refer to decrees, executive orders (EO) and all laws passed by the National Congress such as the following: EO 226 – Omnibus Investment Code of 1987 (OIC of 1987) RA 7844 – Export Development Act of 1994 RA 7916 – Special Economic Zone of 1995 RA 7718 – Build-Operate-Transfer Law or BOT Law (Enacted on May 1994) RA 8289 – Magna Carta for Small Enterprises RA 7160 – Local Government Code of 1991 9. BOI – shall refer to the Board of Investments under Executive Order No. 226, otherwise known as the OIC of 1987. 10. DTI – shall refer to the Department of Trade and Industry.
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11. SEC – shall refer to the Securities and Exchange Commission. 12. CDA – shall refer to the Cooperative Development Authority. 13. PRA – shall refer to the Philippine Retirement Authority 14. PEZA – shall refer to the Philippine Economic Zone Authority 15. SMALL-SCALE ENTERPRISE – shall refer to a business endeavor with an asset size of PhP3 million up to PhP15 million excluding the value of the land, as defined by the Small and Medium Development (SMED) Council, Resolution No. 02, and series 2001 dated April 06, 2001. 16. MEDIUM-SCALE ENTERPRISE – shall refer to a business endeavor with an asset size over PhP15 million excluding the value of the land, as defined by SMED Council, Resolution No. 02, and series 2001 dated April 06, 2001. 17. LARGE-SCALE ENTERPRISE – shall refer to a business endeavor with an asset size over PhP100 million excluding the value of the land, as defined by SMED Council, Resolution No. 02, and series 2001 dated April 06, 2001. 18. PIONEER ENTERPRISE – shall refer to a registered enterprise engaged in the manufacture, processing or production, and not merely in the assembly or packaging of goods, products, commodities or raw materials that have not been or are not being produced in the Philippines on a commercial scale. 19. NON-PIONEER ENTERPRISE – shall refer to a registered enterprise engaged in the manufacture, processing or production, and not merely in the assembly or packaging of goods, products, commodities or raw materials that have been or are being produced in the Philippines on a commercial scale. 20. INCENTIVE – shall mean benefits or privileges granted by Silay City to encourage and promote domestic and foreign investments. 21. FISCAL INCENTIVES – shall mean direct financial or monetary benefit to the investor. 22. NON-FISCAL INCENTIVES – shall mean non-monetary value of incentive that provides indirect benefit to an investor like special assistance and promotions. 23. NEW INVESTOR – shall refer to a single proprietorship, partnership, cooperative or corporation organized and existing under Philippine laws who has not engaged in any kind or type of business in Silay City and is interested in establishing their place of operation or production in the City after the adoption of this Ordinance. 24. EXISTING ENTERPRISE – shall refer to a single proprietorship, partnership, cooperative or corporation organized and existing under Philippine laws that is already engaged in any kind or type of business whose place of operation
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or production is located within the territorial jurisdiction of Silay City prior to the adoption of this Ordinance. 25. ENTERPRISE UNDER EXPANSION/DIVERSIFICATION – shall refer to an existing enterprise that shall establish its expansion project on another location within the City preferably on a low growth area. 26. REGISTERED ENTERPRISES – shall refer to single proprietorship, partnership, cooperative or corporation organized and existing under Philippine laws that is registered with the BOI and is already availing of national incentives. 27. APPLICANT – shall refer to a new investor, an existing enterprise or a registered enterprise that is applying for the availment of incentives as provided for in this Code. 28. ELIGIBLE ENTERPRISE – shall refer to a new investor, existing enterprise or registered enterprise whose application for the availment of incentives as provided for under this Code has been approved by the SCIB and after the payment of the registration fee and the issuance of a Certificate of Eligibility, is officially registered with the Board. 29. CERTIFICATE OF REGISTRATION – shall refer to a document issued by a national agency such as the DTI, the SEC or the CDA stating and certifying that such a business enterprise is duly registered in their respective agency. 30. CERITIFICATE OF ELIGIBILITY – shall refer to a document issued by the SCIB to an applicant whose application has been approved, stating the incentives granted as provided for in this Code.

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CHAPTER III THE INVESTMENT BOARD SECTION 1 – THE CREATION OF THE SILAY CITY INVESTMENT BOARD (SCIB) – The Silay City Investment Board is hereby created to implement the provisions of this Code. SECTION 2 – COMPOSITION OF THE BOARD – The SCIB shall be composed of the following: Chairman: City Mayor Vice-Chairman: City Vice-Mayor Members: SP Member, Committee Chairman on Trade and Industry Two (2) Representatives from the Private Sector duly accredited by the SP Provided, that in the absence of an SP Committee Chairman, Department Head, or any other Member of the Board, he/she shall be represented by their Vice-Chairman, Assistant Department Head or Authorized Representative from their respective SP Committee and Department. Provided further, that the two (2) Private Sector representatives and their alternates shall be recommended by the sectors and organizations they represent and shall be appointed by the City Mayor for a term of two (2) years. SECTION 3 – MEETING AND QUORUM OF THE BOARD – The SCIB shall hold an organizational meeting upon the approval and publication of this Code. The Board shall meet as often as necessary, the frequency of which shall be determined by the Board member themselves. The Quorum shall be fifty percent (50%) plus one of the total memberships of the Board. A special Board meeting maybe called upon the request of the majority of the Board. The Chairman of the Board is included on the determination of the quorum. The meeting venue shall also be decided upon by the Board. SECTION 4 – POWERS AND DUTIES OF THE BOARD – The SCIB shall be responsible for the regulation and promotion of investments in Silay City. The Board having constituted a quorum shall have the following powers and duties: 1. Prescribe, recommend and promulgate the rules, regulations and guidelines to implement this Ordinance; 2. Identify prioritized/preferred types of investments and/or activities to be promoted as well as appropriate incentives and support measures which shall be extended to new investors or existing enterprises so as to be able to attract investment in those areas;
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3. Establish and oversee the Silay Investment Promotions Center (SIPC); 4. Accept, process, appraise, evaluate and approve or disapprove application for incentives availment and its extension based on the following criteria: a. The eligible enterprise suffered operational force majeure that has impaired its viability; b. The eligible enterprise has not fully enjoyed the incentive granted to it for a reason beyond its control; and, c. The eligible enterprise has not commenced its commercial operation. 5. Decide on any controversy or issues that may arise from the grant of tax incentives, relief and privileges provided for in this Code and its decision shall be final and executory; 6. Design, create and publish promotional materials and brochures to promote Silay City as a preferred investment destination; 7. Make arrangements with the National Government Agencies and/or Private Organizations for the purpose of making Silay City more competitive in business and investment promotion; 8. Review and implement the Silay City Local Economic Development Plan; 9. Submit to the SP applications for incentives as recommended by the Board for approval pursuant to the provisions of Book II, Section 458 (xii) of the Local Government Code of 1991; 10. Conduct periodic review of all eligible enterprises; 11. Render an Annual Report to the SP; 12. Recommend to the SP through the Chairman budget and/or identifying funding alternatives for the effective implementation of the provisions of this Code; and, 13. Exercise and assume all powers and duties necessary or incidental to attain the purpose of this Code. SECTION 5 – POWERS AND DUTIES OF THE CHAIRMAN OF THE SCIB – The Chairman of the SCIB shall have the following powers and duties: 1. Call and preside over the regular and special meetings of the Board; 2. Appoint new Members subject to the approval of the majority of the Members of the Board in case of vacancy due to resignation of incapacity of any Member; 3. Sign all warrants/disbursements pertaining to the operations of the Board; 4. Sign all Certificates of Eligibility in behalf of the Board;
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5. Render an Annual Report to the Board and such other reports as may be requested by the City Government; 6. Oversee the implementation of this Code; 7. Exercise general supervision over the operations of the SIPC; 8. Act as liaison between investors and other government agencies; 9. Submit to the SP for appropriation and approval in the form of a resolution or amendment of the Code budgetary requirements, over-and-above the mandatory appropriation needed or required for the effective implementation of the projects and operation of the SIPC; 10. Recommend to the Board such policies and measures he/she may deem necessary to carry out the objectives of this Code; and, 11. Exercise such other powers and perform such duties as the Board may direct or authorize from time to time. SECTION 6 – DUTIES, RESPONSIBILITIES AND FUNCTIONS OF THE BOARD SECRETARY – The Secretary of the SCIB shall have the following duties and responsibilities; 1. Keep a journal and complete record of all proceedings of every meeting in the form of minutes duly approved by the majority of the Members present; 2. Keep and act as custodian of the records of the minutes of the Board meeting and other official records of the Board; 3. Take responsibility on the production, printing and maintenance of a substantial number of application forms for incentive availment, promotional brochures, flyers and other literature regarding investment; 4. Prepare budgetary requirements for the operations of the Board; 5. Serve as liaison between SCIB and DTI-BOI especially on matters of new investment marketing techniques, and other perks in luring investment; and, 6. Assist in the implementation of this Code and to perform their functions as directed by the Board.

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CHAPTER IV SILAY INVESTMENT PROMOTIONS CENTER (SIPC) SECTION 1 – SILAY INVESTMENT PROMOTIONS CENTER – The SIPC is hereby created that will serve as an official office of the SCIB. It shall be headed by the Investment Promotions Center Officer (IPCO) and shall be designated or hired by the Chairman, and at the same time, shall act as the Secretary of the Board. The SIPC shall have the following functions: 1. Serve as a one-stop documentation and processing center; 2. Serve as an investment information center; 3. Serve as business center between SCIB and those who wish to transact official business with the SCIB; 4. Assist the Board in the promotional aspect of the Code such as: establish business linkages and networking, conduct and coordinate investment missions and economic briefings, and prepare trade and investment promotion collateral; 5. Provide pre-counseling/advice to prospective applicants and answer particular queries; 6. Receive applications of firms/establishments, seeking to avail of incentives under this Code; 7. Evaluate applications on the basis of documents submitted. The Center shall forward complete applications of qualified investors to the Board. Otherwise, it shall inform applicants of rejection of their applications and the reason/s thereof; 8. In the event the application is approved by the Board, furnish the City Treasurer and the City Assessor, copies of the Board resolution granting incentives and Certificate of Eligibility, for their information and guidance in the implementation thereof; 9. Have custody and responsibility of filing and safekeeping of all records and documents; 10. Provide administrative and secretariat services to the Board; 11. Provide the “investors-after-care-services” that refers to the assistance to investors after approval of applications or even after the incentives granted to the investor in this Code has long expired. The following responsibilities are: a. Assistance in registration needs, permits and licenses of the business; b. Facilitation of application for utilities; c. Identification of physical sites;
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d. Business-matching with local partners; e. Introduction to suppliers and important service providers; f. Give access to local databank; and, g. Facilitation and resolution of other business start-up problems. 12. When appropriate, as when a registered business has violated the Code, recommend the cancellation or revocation of the Certificate of Eligibility and withdrawal of all incentives initially granted; and, 13. Perform other functions and responsibilities as may be authorized.

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CHAPTER V TECHNICAL ASSISTANCE STAFF (TAS) SECTION 1 – TECHNICAL ASSISTANCE STAFF – The TAS, which will be composed of the City Planning and Development Officer, as TAS Coordinator, and its staff, City Engineer, City Legal Officer, City Administrator, City Assessor, and City Treasurer shall render technical and other pertinent assistance that are within their mandated functions. SECTION 2 – DUTIES AND RESPONSIBILITIES OF THE TAS – The TAS shall have the following duties and responsibilities: 1. Conduct studies and research, gather data, provide and supply pertinent data to the Board and SIPC for reference and input into future decision-making; 2. Assist the Board and SIPC in technical and legal matters; and, 3. Perform other functions and responsibilities as may be directed by the Board.

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CHAPTER VI PRIORITIZED/PREFERRED TYPES OF INVESTMENTS SECTION 1 – LOCAL INVESTMENT PRIORITIES – Local investment priorities and preferred investment types shall be identified by the Board with reference to the Development Vision and Local Economic Development Plan of Silay City. SECTION 2 – PRIORITIZED/PREFERRED TYPES OF INVESTMENT – The Board shall prepare a list of priority/preferred types of investments and activities to be promoted to prospective investors based on the findings and recommendations of economic and technical researchers and consultants including consultations with the private sector in the City, the Province and the Region. The SCIB through the SIPC shall carefully consider the following as prioritized/preferred types of investments: 1. Agro-Industry-based products such as but not limited to: • Sugarcane By-Products (Sweets, Candies, Condiments, Confectionary) • Canned Food Products • Fruit Juice and Other Bottled Products • Food Processing Plant (Meat, Poultry, Seafood) • Dried Food Products • High-Value Crops • Cut-Flower Production • Feed Milling • Wall Board Factory Wines and Spirits Distillery 2. Tourism-Related Businesses such as but not limited to: • Retirement Villages • Residential Area Development • Convention Centers • Adventure and Eco-Tourism Facilities • Hotels and Pension Houses • Beach and Mountain Resort Development • Recreation Facilities like Parks, Restaurants and Marina • Theme Parks Tourist Transport Facilities and Other Tourism-Related Industries 3. IT-Related Businesses such as but not limited to: • Manufacture of Integrated Circuit (IC) Chips and other related electronic products • Information Technology (IT) related products • Information Services (Business Process Outsourcing) • Software Development
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• Telecommunications Creative Industries (Animation, Publishing) 4. Human Resources Development-Related Businesses such as but not limited to: • Schools, Colleges, and Universities • Private Hospitals/Lying-in Clinics • Private Colleges/Universities • Special Skills Learning Centers (English Training) Education-Related entities but not limited to new educational facilities and bookstores SECTION 3 – OTHER PREFERRED INVESTMENTS – Incentives will be provided to new, expanding or diversifying projects of the following enterprises that are: 1. Registered under the following National Special Laws: a. EO 226 otherwise known as the Omnibus Investment Act of 1987; b. RA 7844 otherwise known as the Export Development Act of 1994; c. RA 7716 otherwise known as the Special Economic Zone Act of 1995; d. RA 7718 otherwise known as the BOT Law; e. Other investments encouraged under the Philippine Retirement Authority; and, e. Other Laws that shall be promulgated hereafter that give incentives. Provided that: a. The investor must submit the Certificate of Registration; and, b. He/she must comply with all the requirements under the existing national and local laws or guidelines issued by the accredited agencies. 2. Labor-intensive enterprises; 3. Enterprises established in less developed areas as determined by the zoning ordinance; 4. Manufacturing enterprises using raw materials available locally; 5. General merchandising or consumer-oriented firm; and, 6. Services-oriented enterprises. SECTION 4 – ADDITIONAL PRIORITIZED/PREFERRED INVESTMENT TYPES – The Board may include in the list of additional priority/preferred areas of investment from time to time, subject to the approval by the SP. Additional prioritized/preferred investment types are the following:

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1. Manufacture of Handicraft Products such as but not limited to: • Toys • Pottery and Ceramics • Furniture-making (Lumber, Bamboo, Plastics, Metals and Others) Garments 2. Other Manufacturing Enterprises such as but not limited to: • Manufacture or Assembly of Agricultural Machineries Metal Fabrication and Foundry Shops 3. Property Development Projects such as but not limited to: • Office and Commercial Buildings • Residential Area Development • Private Industrial Estate • Special Economic Zones • Irrigation and Dams • Agricultural Food Terminals • Harvest and Storage Facilities Memorial Parks 4. Service-Oriented/Consumer-Oriented Businesses such as but not limited to: • Water Treatment • Water Distribution Center • Power/Electric Plant • Irrigation System • Cold Storage and Warehousing Freight Forwarding Services 5. Trans-Shipment Facilities such as but not limited to: • Airport and Seaport Infrastructure and Expansion • Common and Bonded Warehouses • Shipping Facilities/Seaport Infrastructure Ship-Building/Ship-Breaking and Repair/Dry-Docking 6. Miscellaneous Activities such as but not limited to: • Footwear • House Wares • Education-Related entities but not limited to new educational facilities and bookstores Enhancement of local commerce & tourism (such as re-painting of buildings along major thoroughfares, restoration of cultural houses, etc.) Provided that the Board shall review these additional investment areas every two (2) years and may remove an area from the list if it deems sufficient investment in the area has been attained and when extension would adversely affect the interest of the City and the Public.

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SECTION 5 – DELISTING OF PRIORITIZED/PREFERRED TYPES OF INVESTMENT – The Board may likewise remove, subject to approval of the SP, any areas from the list of existing preferred areas of investment, if: 1. Sufficient investment in the preferred area of the activity has been attained as determined by the Board; 2. The continued expansion of incentives for the specific investment is no longer to the interest of the City; and, 3. The investment or the activity does not attract investors within a reasonable length of time or may result in an unfavorable and uncompetitive business climate. SECTION 6 – INVESTMENT OF AN EXISTING ENTERPRISE UNDER EXPANSION AND DIVERSIFICATION – An existing enterprise that is diversifying or expanding its business shall be granted incentives provided that all the following conditions are complied with: 1. The expansion or diversification must be in line with the preferred areas of investment listed under the preceding section including existing industries such as sugar mills for manufacture of raw and refined sugar and/or sugar-related business; 2. The expansion shall be preferably located in low growth areas of the City; and, 3. The expansion or diversification shall have a minimum capitalization in pesos or its equivalent value in dollars prescribed below: a. PhP3 million for small-scale enterprises; b. PhP15 million for medium-scale enterprises; and, c. PhP100 million for large-scale enterprises.

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CHAPTER VII INVESTOR/INVESTMENT QUALIFICATION SECTION 1 – INVESTOR/INVESTMENT QUALIFICATION – This Code shall apply to any person or entity with following qualifications: 1. All Filipinos and foreign nationals not otherwise disqualified by law; 2. Single proprietorship registered under the DTI, partnership or corporation registered under SEC and cooperatives registered under CDA. Provided, that banks and financing institutions that are governed by banking laws shall be excluded; 3. Other investors with initial capital investment of not less than three million pesos (PhP3,000,000.00) for Filipino investors and one hundred thousand dollars (US$100,000.00) for foreign investors. Provided it must be proven that the required investment has been remitted to a bank in Bacolod City and/or in any other bank in Silay. Provided further that in case of a corporation, capitalization shall mean fully paid-up capital of a minimum of five million pesos (PhP5,000,000.00).

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CHAPTER VIII QUALIFICATIONS FOR NEW INVESTORS AND EXISTING ENTERPRISES SECTION 1 – QUALIFICATIONS OF A NEW INVESTOR – New investor who intends to avail of the incentives provided in this Code shall meet the following requirements: 1. Compliance with requirements mandated under existing local and national laws and the Philippine Constitution; 2. Place of operation/production shall be located within the territorial jurisdiction of Silay City; 3. Prospective investment must engage in prioritized/preferred investments as the Board may hereinafter declare; 4. The expansion shall be a capitalization of: a. At least three million pesos (PhP3,000,000.00), but not more than fifteen million pesos (PhP15,000,000.00) for small-scale enterprises; b. At least fifteen million pesos (PhP15,000,000.00), but not more than one hundred million pesos (PhP100,000,000.00) for medium-scale enterprises; and, c. More than one hundred million pesos (PhP100,000,000.00) for largescale enterprises. Provided, in case of a corporation, that the capitalization shall mean fully paid-up capital of a minimum of five million pesos (PhP5,000,000.00); and, 5. The new enterprise shall have at least fifty percent (50%) of its labor force hired from bona fide residents of Silay City. SECTION 2 – QUALIFICATION OF AN EXISTING ENTERPRISE – An existing enterprise may avail of the incentives under this Code provided it meets the following qualifications: 1. The business enterprise must have complied with all the requirements mandated under existing local and national laws and the Philippine Constitutions; 2. The expansion or diversification must be within the prioritized/preferred types of investments as provided for in this Code; 3. The existing enterprise whose place of operation or production is already located in Silay City, but will undertake the any of the following activities: a. Relocate its principal office from other places in the Philippines to Silay City; and,
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b. Expand its existing production capacity or construct new buildings or other civil works which will result in an increase in production capacity or output. 4. The expansion shall have a capitalization of: a. At least three million pesos (PhP3,000,000.00), but not more than fifteen million pesos (PhP15,000,000.00) for small-scale enterprises; b. At least fifteen million pesos (PhP15,000,000.00), but not more than one hundred million pesos (PhP100,000,000.00) for medium-scale enterprises; and, c. More than one hundred million pesos (PhP100,000,000.00) for largescale enterprises. Provided, in case of a corporation, that the capitalization shall mean fully paid-up capital of a minimum of five million pesos (PhP5,000,000.00); and, 5. The expansion shall have at least fifty percent (50%) of its labor force hired from bona fide residents of Silay City.

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CHAPTER IX REGISTRATION REQUIREMENTS, APPLICATION AND APPROVAL PROCESS SECTION 1 – REGISTRATION REQUIREMENTS – For an applicant to avail of the incentives under this Code, they must comply with the requirements by submitting the following documents (Common to Single Proprietorship, Partnership, Corporations and Cooperatives): 1.Three (3) copies of duly accomplished official application form provided by the SIPC; 2. A certified copy of the following: a. SEC Registration for corporations and partnerships; b. Registration with the DTI for single proprietorships; c. Articles of Cooperation for cooperatives; d. Articles of Incorporation and By-Laws for corporations and partnerships; e. Board Resolution or Secretary’s Certificate authorizing a representative to file for the application of incentives on behalf of the corporation or partnership; f. Zoning Clearance; and, g. Environment Compliance Certificate (ECC), Building Permit, Occupancy Permit, and others, when and if applicable; 3. Certification of Registration for those enterprise enjoying incentives under national laws; 4. A copy of the complete project study of the proposed investment showing that the said project is economically, technically and financially feasible and should include particular anti-pollution strategies, when and if applicable; 5. Latest audited financial statements for existing enterprises; and, 6. Interim financial statements for new investors. SECTION 2 – REGISTRATION PROCEDURES – The Board is authorized to adopt rules and regulations to facilitate action on all applications filed with it, prescribe criteria for the evaluation of applications, and devise standard forms for use of applicants. To ensure an orderly manner of registration, the following procedures shall be observed: 1. Period of filing of applicants – All applicants shall file before start of construction or commencement of business operation, but in no case later than six (6) months after commencement of business operation;
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2. Venue for filing of applicants – All applicants shall be filed with the Board through the SIPC; 3. Filing Fee – A non-refundable filing fee of two thousand pesos (PhP2,000.00) shall be paid to the City Treasurer; and, 4. Processing Time – The Board shall act upon the application, ten (10) working days from the official acceptance of the said application. Otherwise, the application shall be deemed approved; 5. Procedure for filing, processing, evaluation, and approval: a. The SIPC Officer provides pre-counseling/advice to prospective applicants as to the various provisions of this Code; b. The SIPC gives a checklist of requirements and forms for the applicant to accomplish; c. The applicant submits all the required documents to the SIPC. All applicants submissions shall be recorded accordingly in a registration book and all documents shall be stamped “Received” with the corresponding date of submission. Thereafter, the applicant is required to pay the nonrefundable filing fee of two thousand pesos (PhP2,000.00); d. The SIPC forwards the application and its initial evaluation and recommendation report to the Board, through the Chairman. The Board shall deliberate and decide on the application within ten (10) working days from the date of official acceptance; e. The SIPC records the approval or disapproval of the Board in the application and registration book; f. If disapproved, the Board shall in writing officially inform the applicant the reasons for the disapproval; and, g. If approved, the SIPC informs the applicant of the decision of the Board and the application shall be forwarded to the Chairman for his/her signature. Once signed by the Chairman, a Certificate of Eligibility shall be issued to the applicant and shall be required to pay the registration fee as provided in Section 3 hereof. SECTION 3 – The approved eligible enterprise shall pay a one-time registration fee as follows:
INVESTMENT COST (PhP) 3.0M – 10.5M Over 10.5M – 15.0M Over 15.0M – 30.0M Over 30.0M – 45.0M Over 45.0M – 60.0M Over 60.0M – 100.0M Over 100.0M – 150.0M Excess of 150.0M REGISTRATION FEE (PhP) 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00 30,000.00 35,000.00 40,000.00 plus 1/10 of 1% in excess of PhP150.0M 40

SECTION 4 – CERTIFICATE OF ELIGIBILITY – A Certificate of Eligibility shall be issued to an applicant whose application has been approved by the Board. This Certificate shall then serve as the applicant’s proof in availing the incentives and privileges granted in this Code. It shall clearly state the incentives and privileges granted. The Certificate shall be in such form and style as the Board may determine and shall state among others the following: a. Name of the eligible enterprise; b. Preferred type of investment the enterprise will be engaged in; c. Incentives granted; and, d. Other terms and conditions to be observed by the enterprise by virtue of its eligibility. SECTION 5 – CANCELLATION – The Certificate of Eligibility duly issued to the qualified business enterprise can be cancelled by the Board based on the following grounds: a. Violation of any provision of this Code; b. Non-compliance with anti-pollution laws or ordinances and such other regulatory measures passed thereon by the local and national government; c. Non-submission of the periodic requirements that the Board require necessary for the constant review of all eligible enterprises such as the latest annual audited financial statements and others; and, d. Non-compliance with labor laws, Social Security System, Bureau of Internal Revenue requirements, and other national issuances relevant thereto. SECTION 6 – DISQUALIFICATION – An existing enterprise that has retired and recognized for the purpose of availing of privileges/incentives under this Code is automatically disqualified. The Board reserves the right to disapprove any application on valid grounds, taking into consideration the enhancement of the environment and welfare of the inhabitants.

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CHAPTER X DUTIES AND RESPONSIBILITIES SECTION 1 – DUTIES AND RESPONSIBILITIES OF THE CITY GOVERNMENT TO THE ELIGIBLE – All eligible enterprises are entitled to the rights and guarantees provided by the Law and the Philippine Constitution. In addition to such rights and guarantees, and enhance investor confidence in the incentives program, the City Government through the Board shall: 1. Provide concise and comprehensive information to prospective investors on the economic priorities of the City Government, including target investment areas and the general conditions applicable to incoming direct private investors; 2. Communicate investment evaluation criteria and procedures to enhance transparency in the process of granting government incentives; 3. Take the fullest possible account of the need of the investors for stability, growth and profit in the operations in the formulation or modifications of policies and ordinances that effect investment; 4. In accordance with law and where no local personnel or worker is capable and available, allow the employment of qualified foreign personnel where it is necessary for the efficient operation of the enterprise or for technology transfer; and, 5. Resolves all doubts concerning the benefits and incentives granted under the ordinances enacted for the purpose of encouraging investment, in favor of the investor. SECTION 2 – DUTIES AND RESPONSIBILITIES OF THE ELIGIBLE ENTERPRISE TO THE BOARD – All eligible enterprises shall submit to the Board the following reports and/or documents within the time herein prescribed: 1. Amendment of Articles of Incorporation of By-Laws, or Articles by Partnership, or Articles of Corporation, within thirty (30) days from the date of submission of the said documents with the SEC or the CDA; 2. Change of the Directors within thirty (30) calendar days from the change; 3. Report of alien officers or employees within thirty (30) days from the date of registration or from the appointment of their alien/replacements. Provided that such aliens are registered as such with the Bureau of Immigration and Deportation (BID) and with the Department of Labor and Employment (DOLE); 4. Latest audited annual financial statements within thirty (30) calendar
42

days after its submission to the Bureau of Internal Revenue (BIR); and, 5. Submission of quarterly report on operations.

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CHAPTER XI INCENTIVES FOR REGISTERED ENTERPRISES SECTION 1 – REGISTERED ENTERPRISES AVAILING INCENTIVES UNDER NATIONAL LAWS – Registered Enterprises enjoying incentives under EO 226 (OIC of 1987), RA 7844, RA 7916, RA 7718 and RA 8289 shall be exempted from the following: 1. Exemption from Local Licenses, Fees, and Dues – Payment of Mayor’s Permit Fees, Building Permit Fee, Business Sales Tax, Transfer Tax and other fees and charges imposed by existing City Ordinances except those as mentioned in Section 2 of Chapter XII. The exemption shall be for a maximum period of five (5) years form the date of the approval of the Board; 2. Exemption from Real Property Tax – Payment of basic Real Property Tax imposed by existing City Ordinances on improvements introduced by the registered enterprise. In the case of an already existing improvement, the exemption shall apply only the increase in the assessment because of the rehabilitation, adaptation, expansion, or introduction of machinery and equipment. The exemption shall be for a maximum period of five (5) years from the date of approval by the Board. A registered enterprise enjoying incentives under OIC of 1987 shall be exempted from payment of the fees and taxes as enumerated under 1 and 2 in Section 1 of Chapter XI, for a maximum period of four (4) years for pioneer industries. A registered enterprise must show compliance with all requirements under existing national and local laws or guidelines issued by the accrediting agencies and present the Certificate of Registration showing the grant of incentive by the appropriate national agency. The period, during which the incentives shall be valid, shall not extend beyond the period granted in the Certificate of Registration issued by the national agency. Exemptions granted shall be effective only under this Chapter and shall not be subject to refund. Neither shall exemptions granted include fees and taxes already accrued prior to approval of the application.

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CHAPTER XII INCENTIVES AND PRIVILEGES SECTION 1 – FISCAL AND NON-FISCAL INCENTIVES – An eligible enterprise under this Code shall enjoy the local incentives, privileges, tax exemptions and reliefs, and other economic perks as provided for in the following provisions. These shall be, however, subject to the provisions of DTI rules and regulations, Foreign Investment Act of 1991 (RA 7042), Local Government Code of 1991 (RA 7160), Omnibus Investment Code of 1987 (EO 226), Internal Revenue Regulations and other pertinent national laws granting incentives. SECTION 2a – FISCAL INCENTIVES – In addition to the incentives provided by law and by the Local Government Code of 1991, an eligible enterprise qualified under this Code should enjoy the following fiscal incentives: 1. Exemption from Local Licenses, Fees, and Dues – From the start of commercial operation, an eligible enterprise under this Code shall be fully exempt from the Mayor’s Permit Fee, Building Permit Fee, Business Sales Tax, Transfer Tax and other kinds of local licenses, dues, imposts, except for the regulatory fees: However, all eligible enterprises are still required to secure licenses and permits necessary to operate their business. 2. Exemption from Real Property Tax – From the start of commercial operation, the eligible enterprise shall be fully exempted from paying the basic Real Property Tax. Full exemption from payment of Real Property Tax shall be granted to an eligible enterprise for machinery and equipment or devices or other investments for pollution control, environment protection and fire protection equipment, for a period of three (3) years from the starting date of operation. Land classified, either commercial or residential and used exclusively for parking purposes, shall be exempted from the payment of Real Property Tax covering the first five (5) years of operation. Provided, however, that there is a necessity for a parking space in that certain area. Provided further, that the mode of the construction for the payment shall meet standard requirements set by the Office of the Building Official, duly certified by the City Planning and Development Office (CPDO) and approved by the SP. SECTION 2b – NON-FISCAL INCENTIVES - An enterprise eligible and qualified under the Code will be a preferred client of the City for potential non-fiscal incentives. Particularly for the required physical planning and construction of their businesses, the enterprise could apply for the City’s non-fiscal incentives such as described below and as required by them to boost their competitiveness in the market. These incentives are directly related to the official de45

velopment and building policies (Silay Urban Development Guidelines) which have been adopted, or yet to be to be adopted by the SP. A. Urban Planning and Zoning Privileges Technical support by the City to the enterprise in land use conversion process, initial validation by the City of site development plans to fast track approvals, and special review of specific details by concerned City departments to facilitate permits, etc.; Facilitation of requests for zoning revisions in sites zoned as areas in transition; and, Exemption from New Development Fees imposed on strategic areas earmarked, or being considered by the City for development. B. Infrastructure and Utilities Support Prioritization of City infrastructure and utilities provision for concerned area development; and, Special arrangements for negotiated link with, or joint use of, existing City infrastructure/utility. C. Site Development Construction Support Joint venture development with the City for prospective public infrastructure (roads, drainage, bridge, etc.) features within the private enterprise’s project area; Facilitation of negotiations for site resettlement requirement/s; Facilitation of negotiations with concerned parties for specific development trade-off proposals (such as common facilities like sewage treatment plants, parking, etc.) and rights-of-way; and, Technical support in negotiations for land consolidation and/or readjustment requirement. SECTION 3 – INCENTIVES GIVEN TO AN ELIGIBLE ENTERPRISE UNDER PREFERRED TYPES OF INVESTMENTS – An eligible enterprise under this category shall be exempted from the payment of the City Business Tax and License and Real Property Tax as defined in Section 2 of Chapter XII, provided that the following capitalization and employment generation requirements are complied with at the start of its commercial operations:

TYPE OF ENTERPRISE Small-Scale Medium-Scale Large-Scale

CAPITALIZATION (PhP) 3.0M to 15.0M Over 15.0M to 100.0M Over 100.0M

EMPLOYMENT At least 10 to 29 workers At least 30 to 99 workers At least 100 workers and over

INCENTIVE DURATION 3 years 4 years 5 years

It must be the priority of the eligible enterprise to hire bona fide residents of Silay City whenever additional workers would be needed.
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SECTION 5 – ADDITIONAL INCENTIVES – An eligible enterprise shall likewise be granted additional exemptions if it shall relocate its main office to Silay City, depending on the amount invested and employment generated. For labor-intensive eligible enterprises that exceed the employment generation range presented, additional exemption shall be granted which shall be at the discretion of the Board.

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CHAPTER XIII OTHER INCENTIVES SECTION 1 – TAX CREDIT FOR PERSONS DONATING PROPERTY TO THE CITY – Persons donating land or real property to the City for its priority projects shall be entitled to tax credits which can be used to pay tax obligations to the City Government. Priority projects contemplated herein include but not limited to: housing projects, resort and spa projects, public markets, bus terminals, health and other recreation projects, educational institutions, government centers, and other sports facilities. Land swapping and pure donations contemplated under Batas Pambansa 220 and Presidential Decree 957 are excluded in the coverage of the above Section. SECTION 2 – BASIS OF TAX CREDIT – The amount of tax credit shall be 10% of the fair market value of the property as determined by the Office of the City Assessor and/or an assessment team organized by the Board. SECTION 3 – RULES ON DONATION – The following shall govern the implementation of Sections 1 and 2 of Chapter XIII: 1. For the determination of qualification under Section 1, the prospective donor shall submit to the Board through the SIPC, his/her intent to donate; 2. The Board shall submit the resolution approving the grant of incentive together with the Deed of Donation to the SP for ratification; and, 3. The donors shall avail of the tax credits within five (5) years from the date the donation is ratified by the SP.

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CHAPTER XIV MANDATE APPROPRIATION To defray the expenses necessary for or incidental to the implementation of the provision of this Ordinance, the City shall appropriate annually the funding requirements based on a budget presented by the Board, for the continued implementation of the provisions of the Code, subject to the usual government accounting and auditing rules and regulations.

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CHAPTER XV TRANSITORY PROVISIONS SECTION 1 – NEW INVESTORS – New investors may apply with the SCIB for incentives availment before or within ninety (90) calendar days after its commercial operations. After the lapse of the said period, the enterprise is considered to have waived its rights to avail of the incentives as provided for under Section 2 of Chapter XII of this Code. SECTION 2 – EXISTING ENTERPRISES – Existing enterprises may avail of the incentives with the SCIB as provided for in Section 2 of Chapter XII if the enterprise has been existent with commercial operations six (6) months prior to the enactment of this Code. SECTION 3 – REGISTERED ENTERPRISES AVAILING INCENTIVES FROM NATIONAL LAWS – Registered eligible enterprises already enjoying the benefits under the existing national laws may apply with the SCIB for incentives availment within ninety (90) calendar days after the effectivity of this Code. Provided, that they are still within five (5) years from the date of registration and the said enterprises are only qualified to avail of the incentives for the remaining years of their eligibility. Further, the registered enterprises should comply with the following: 1. Submission of the Certificate of Registration issued by the concerned national agency; 2. Submission of the terms and conditions in the issuance of the Certificate of Registration issued by the concerned national agency; and, 3. Certification that the application has complied with all the requirements of the concerned national agency.

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CHAPTER XVI MISCELLANEOUS PROVISIONS SECTION 1 – VISITORIAL POWER OF THE BOARD – The Board, or any duly authorized member thereof, is hereby authorized to conduct ocular inspections of the premises or examination of the business activity of any enterprise, including the records and books of the enterprise concerned, registered or applying for registration at any reasonable time of the day, during office hours, for verification or ascertaining, the enterprise’s strict compliance with the provisions of this Code, or when the Board or the SIPC deems it necessary in or incidental to the effective exercise and performance of its powers and functions. SECTION 2 – OTHER MISCELLANEOUS PROVISIONS – These are the following other miscellaneous provisions of this Code: 1. Existing enterprises that are ratified for the purpose of availing this incentive program shall not be allowed to apply under this Ordinance; and, 2. The incentives and the privileges granted to eligible enterprises are not transferable except that in the event of death and permanent incapacity where the privileges shall be transferred to the heir of the descendant in accordance with the law of succession.

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CHAPTER XVII FINAL PROVISIONS SECTION 1 – CONFIDENTIALITY OF APPLICATION – All applications and their supporting documents filed under this Ordinance shall be confidential and shall not be disclosed to any person, except with the consent of the applicant or on order of a court of competent jurisdiction. SECTION 2 – JUDICIAL RELIEF – All orders or decisions of the City Government in cases involving the provisions of this Ordinance shall immediately be executory after due process has been given. The business enterprise adversely affected by any decision of the Board may within fifteen (15) days from the receipt of such decision, appeal the same to the City Mayor, whose decision shall be final and executory. SECTION 3 – SANCTIONS FOR LATE SUBMISSION OF REPORTORIAL REQUIREMENTS – For late submission of the reportorial requirements, these are the following penalties: 1. 1st Violation – PhP3,000.00 for every violation plus PhP300.00 per day of continued non-compliance; 2. 2nd Violation – PhP10,000.00 for every violation plus PhP500.00 per day of continued non-compliance; and, 3. 3rd Violation and Subsequent Violation – PhP30,000.00 for every violation plus PhP1,000.00 per day of continued non-compliance.

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CHAPTER XVIII REPEALING AND SEPARABILITY CLAUSE AND PENAL PROVISIONS SECTION 1 – REPEALING CLAUSE – This Ordinance hereby repeals all other local ordinances, resolutions and rules and regulations or part thereof, inconsistent or in conflict with any of the provisions of this Code. SECTION 2 – SEPARABILITY CLAUSE – The provisions of this Code are hereby declared seperable. Should any provision herewith be declared unconstitutional and unlawful, the other provisions, which are not affected hereby, shall remain in force and effect. SECTION 3 – PENAL PROVISIONS – Any violation of the provisions of this Code whether in part or in whole, shall be a ground for the cancellation of the business registration with the Board and the immediate withdrawal of all the incentives granted under this Code. The Certificate of Eligibility, as provided under the Code, may also be cancelled or revoked due to failure to commence actual project development within one (1) year from registration as an eligible enterprise under this Code. Cancellation or revocation of the Certificate of Eligibility shall mean the withdrawal of incentives granted under the Code, and all remaining unpaid fees and charges because of the exemption shall become due and demandable, which shall be on a pro-rated basis. The Board may cancel or revoke the Certificate of Eligibility of the concerned business enterprise through a formal written notice. The revocation shall become effective on the 16th day from receipt of such written notice.

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CHAPTER XIX AMENDMENTS SECTION 1 – Amendment/s to any provisions of this Code shall only be done through an act by the SP. The SCIB, through its Chairman, may propose an amendment to the Code if they find it necessary to spur or increase bigger economic activities. Such review and updating of this Code and its provisions should be carried out every three (3) years or as maybe required. Any amendments made to this Code in the future shall and will not affect the incentives already granted to eligible enterprises prior to the amendment. However, eligible enterprises may claim the additional benefits/incentives made available with the approval of the amendment/s through a written formal request. Approval, therefore, will be subject to the deliberation and proper recommendation of the Board to the SP for their final approval.

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Annex 2
Proposal for a Special Economic Zone
Background
Development Strategy and Investment Incentives Code T he Economic potentials for the establishment of a Special EconomicStudy explored the Zone (SEZ). This study showed that indeed a SEZ in Silay would be advantageous especially in providing investors with a specific site within which to establish specific economic activities and, by doing so, be entitled to incentives from national government agencies such as BOI and PEZA.

SEZ Accreditation Process
the establishment T he requirements forthat entails: of the Special Economic Zone (SEZ) involves a process 1. Assessment by PEZA of the proposal and, if found worthy, endorsement of the Secretary of the Department of Trade and Industry (DTI) for further review; 2. Review of the Office of the Secretary of DTI of PEZA’s recommendations, and, if deemed worthy, endorsement to the Office of the President for proclamation; 3. Review by the Office of the President of the DTI Secretary’s recommendation, and issuance of the Presidential Proclamation for the SEZ. This process can begin only when a specific site (minimum 25 hectares) has been identified because the details of the proposal relate specifically to such site (for example, commitment of landowner and developer, and management system for the SEZ itself). As of the moment, no specific landowner has specified any interest in having his/ her property developed into a SEZ. However, the owners of Hacienda Naga mentioned their intention to develop their property into a light industrial zone which is in accordance with the updated Silay City Comprehensive Land Use Plan (CLUP). Said owners may be interested in having their property accredited as a SEZ.

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Recommendation

on the it recommended that preparation of the proposal Basedthe Silayabove,SEZisbe held in abeyance.the the meantime, the city govfor City In

ernment should dialogue further with landowners who might be interested in having their properties developed as the SEZ. Special discussions with owners of Hacienda Naga should also be pursued. Once a particular landowner signifies genuine interest and a specific site is identified, the preparation of the SEZ proposal can resume. The following pages present the Rationale for the proposed Silay City Special Economic Zone proposal, its general location and land area requirement, and procedures/guidelines for registration together with the pro-forma Application for Ecozone Approval.

Rationale

A ccording to the State of the Nation Address (SONA) of President Gloria Macapagal-Arroyo (PGMA) last July 2006, the Philippines’ competitive

advantage will be enhanced through major infrastructure investment in the natural “super regions” of the country. These super regions are the following: the North Luzon Agribusiness Quadrangle, the Metro Luzon Urban Beltway, Central Philippines, Mindanao and the Cyber Corridor. In particular, Central Philippines, where Silay City, Negros Occidental is strategically located, will receive equal attention from the National Government (NG) developing the area into a major tourist destination with airports, seaports and roll-on-roll-off (roro) networks. The construction of New Bacolod Airport on Barangay Bagtic in Silay City that will replace the existing airport in Bacolod City poses numerous economic development issues and opportunities for Silay City. Therefore, it is fitting that the Local Government of Silay City undertake and spearhead the development of a Special Economic Zone (SEZ) within the vicinity of the New Bacolod Airport. The SEZ, as one of the local development strategies to be employed by the City of Silay, will help enhance and take advantage of the many economic opportunities offered by the relocation of the Bacolod Airport into the City.

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Location of the Silay Special Economic Zone
location to within a (3) T he the New of the SEZ is proposedlandbearea of thethree SEZkilometeraradius of Bacolod Airport. The said will be minimum of twenty-five (25) hectares.

Nature of the Ecozone

SEZ is proposed Silay T he nameItof thecombination of an to be: “TheEstate, City Special Economic Zone.” is a Industrial Agro-Industrial Estate, Free Trade Zone or Export Processing Zone.

Procedures and Guidelines for SEZ Registration
Stage 1 – Pre-Qualification Clearance
Filing of Application 1. Owner/s of private lands or other person/s or entity/ies duly authorized by the landowner/s intending to develop the area as Ecozone shall file the application to PEZA / EDD by submitting the following: a. Application Form (notarized) b. Anti-Graft Certificate (notarized) c. SEC Registration and Articles of Incorporation d. Audited Financial Statements (for the last three years of operation, where applicable) e. Board Resolution / Special Power of Attorney designating the company’s authorized representative to PEZA f. Project Description (Development Plan and Timetable) g. Vicinity map reflecting the various land uses and important verifiable landmarks within one (1) kilometer radius of the project site h. Proof of land ownership or nay perfected contract / document confirming the applicant’s authority / clearance to use the land for economic zone development and related purposes If the applicant is not the registered owner, a perfected contract / document confirming the applicant’s authority / clearance to apply for and use the land for ecozone and related purposes is required. i. Endorsement from the Sangguniang Bayan / Panglunsod for the development of the proposed economic zone (i.e. all local government units of all municipalities and cities with areas included in the proposed economic zone)
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j. Certification form the Department of Agriculture that the area for the proposed economic zone is not or has ceased to be economically feasible and sound for agricultural purposes (i.e. the area is marginal for agricultural use) k. DAR Conversion Clearance or Exemption Certificate (or HLURB Zoning Cerification, whichever is applicable) and if the proposed area is zoned as agricultural on or before 15 June 1988, a DAR Conversion Clearance / Order is required. However, if the zoning of the area is non-agricultural on or before said date, a DAR Exemption Certificate or HLURB Zoning Certification shall be required l. Other documents as may be required by PEZA 2. EDD checks completeness of documents. a. If document is complete, EDD receives the application and issues the corresponding Order of Payment. b. If document is not complete, application shall not be received. 3. The proponent brings the Order of Payment to the PEZA Cashier and pays the application / processing fee. 4. The proponent informs EDD of the payment and EDD takes note of the Official Receipt No., date and amount paid. Processing and Evaluation 5. The EDD Manager assigns the application to the Evaluator. 6. The Evaluator inspects the proposed area, if necessary, and prepares the evaluation report. 7. The EDD Division Head reviews evaluation report and endorses the same to the Group Manager / Deputy Director General for final comments. 8. Manager reviews the evaluation report and endorses the same to the Group Mangaer / Deputy Director General for final comments. Approval Process 9. MISCPED Group Manager / DDG endorses the recommendation, is endorsed by the Director General to the PEZA Board of Directors. 10. The final evaluation report, together with the recommendation, is endorsed by the Director General to the PEZA Board of Directors. 11. The Deputy Director General presents the recommendation to the Board for approval.
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12. If the recommendation is approved, the PEZA Corporate Secreatry issues the corresponding Board Resolution within a reasonable period of time. 13. EDD informs the proponent of the Board decision and correspondingly advises the applicant to take the appropriate course of action: a. If action on the application is deferred, the applicant is advised of the reason/s for deferment; b. If the application is approved, the applicant is advised to submit the documentary requirements for Presidential Proclamation.

Stage 2 – Presidential Proclamation
Submission of Documents 14. Proponent submits the following documentary requirements for Presidential Proclamation: a. Proof of land ownership or long-term lease agreement on the whole area of the proposed economic zone b. Verified Survey Returns and technical description of the area for the proposed economic zone c. Certification from the National Water Resources Board that the identified source(s) of water for the economic zone shall not cause water supply and related problems in adjacent communities d. Environment Compliance Certificate issued by the Department of Environment and Natural Resources e. Other documents as may be required by PEZA 15. EDD Checks completeness of documents. a. If documents are not complete, EDD notifies proponent using PEZA EDD Form NO. 004 b. If documents are complete, EDD evaluates and prepares the draft Presidential Proclamation and the corresponding requests for Certifications of Concurrence from concerned government agencies, as follows: i. Local Government Unit/s where the ecozone is located ii. Department of Agrarian Reform; iii. Department of Environment and Natural Resources; iv. Housing and Land Use Regulatory Board; and v. Land Registration Authority 16. The Certifications of Concurrence from concerned agencies are obtained pursuant to the requirement of Completed Staff Work mandated under a Presidential Memorandum dated 10 June 1999 Manager for final review.

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17. EDD Manager, upon final review, endorses all documents to DDG for endorsement to the Director General for signing. 18. Director General signs endorsement letter and forward it to the DTI Secretary for endorsement to the President. 19. President signs proclamation. 20. Office of the President transmits a copy of the Presidential Proclamation to the Office of the Director General. Office of the Director General furnishes the proponent a copy of the Presidential (Annex D). 21. EDD Division Head reviews draft proclamation and submits to EDD Proclamation.

Stage 3 – Registration
22. Proponent submits the following documentary requirements for the signing of the Registration Agreement: a. Development plans of the economic zone; and b. Other documents as may be requires by PEZA. 23. EDD checks completeness of documents a. If documents are not complete, EDD notify proponent using PEZA EDD Form No. 004 (Annex B-6). b. If documents are complete, EDD issues the Order of Payment (PEZA-EDD Form No. 002, Annex B-4) for the registration fee and the proponent shall pay the fee prior to the actual signing. 24. EDD requests the Legal Services Group (LSG) for the preparation of the Registration Agreement. 25. LSG prepares the draft Registration Agreement and provides EDD with a draft to be forwarded to the developer / operator for comments. 26. EDD arranges the date of signing of the Registration Agreement with the Office of the Director General and the proponent.

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PEZA EDD Form No. 001A-1

APPLICATION FOR ECOZONE APPROVAL
(SPECIAL ECONOMIC ZONE) ____________________________ Date Hon. LILIA B. DE LIMA Director General Philippine Economic Zone Authority Madam: Pursuant to sections 5 and 6 of Republic Act 7916, otherwise known as the Special Economic Zone Act of 1995, as amended by RA 8748, I am applying for the development of an area of _________________________________________________________________ square meters located at ______________________________________________________________________ into a special economic zone to be known as __________________________________________ The undersigned attest that the documents/information submitted are true and are correct and that I assume full responsibility for any misrepresentation and/or violation thereof. Attached hereto are: a.Notarized application and anti-graft certificate (R.A. 3019); b.SEC Registration Certificate and Articles of Incorporation, if applicable; c.Audited financial statements for the last three (3) years (if applicable); d.Board Resolution/Special Power-of-Attorney designating the company’s authorized representative to PEZA; e.Project Description (Development Plan and Timetable); f.Vicinity map reflecting the various land uses/landmarks within one (1) kilometer radius of the project site; g.Proof of land ownership or any perfected contract/document authorizing the applicant to use the land for ecozone purposes; h.Endorsement from the Sangguniang Bayan/Panglunsod; i.Certification from the Department of Agriculture re: suitability for agriculture; and j.DAR Conversion clearance/exemption certificate or HLURB Zoning Certification, whichever is applicable.

Very truly yours, __________________________________ President/CEO

TIN No.
61

Republic of the Philippines PHILIPPINE ECONOMIC ZONE AUTHORITY Roxas Blvd. cor. San Luis Street Pasay City, Metro Manila Philippines

PEZA-EDD Form No. 001A-2

APPLICATION FOR ECOZONE APPROVAL
Application No. Date Filed O.R. No

A. NATURE OF ECOZONE Name of Ecozone Type of Ecozone Industrial Estate Agro-Industrial Estate Information Technology Park Other (please specify) B. APPLICANT Developer Name Address Telephone No. Fax No. Email Address Name of Company Address Telephone No. Fax No. Email Address C. AUTHORIZED REPRESENTATIVE Name Address Telephone No. Fax No. Email Address
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Tourist and Recreational Free Trade Zone Export Processing Zone

Operator

Developer/Operator

PROJECT BRIEF
The Proponent 1. 2. 3. Name of Company Company Address SEC Registration

Cert. of Registration No. Date Amendment (if any) Nature : Date :

4. 5.

Nature of Business Incorporators NAME OF INCORPORATORS

NATIONALITY

AMOUNT OF

AMOUNT OF PAID-UP

Use separate sheet/s if necessary 6. Principal Officers NAME POSITION Chairman of the Board President

Use separate sheet/s if necessary 7. Capital Structure a. Authorized b. Subscribed c. Paid-Up

8.

Affiliate Company NAME OF COMPANY

CAPITALIZATION

Use separate sheet/s if necessary
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9.

Other Project Involvements NAME OF PROJECT

YEAR

DESCRIPTION

Use separate sheet/s if necessary The Land 1. 2. 3. Location Land Area Existing Land Uses a. Agricultural (indicate crops planted)

b. Non-Agricultural

barren/idle land others

grassland

4.

Zoning Classification on or before 15 June 1988 Residential Industrial Topography Flat Hilly North East West South

Commercial Others Slightly sloping Very steep

5.

6.

Boundaries

(Natural boundaries or land uses abutting the area) 7. Ownership/Right Over Land Full Ownership MOA Others Tenanted Lease Contract Joint Venture Agreement

8. 9.

Tenancy Status Proximity to major ports NAME OF SEAPORT/AIRPORT

Non-tenanted

DISTANCE

64

10. Off-Site Infrastructure, Facilities & Utilities (brief description) a. Accessibility and Mode of Transportation:

b. Telecommunication System i.) Telephone provider ii.) Other communication services c. Power System i.) Power source : ii.) Power franchisee iii.) Power transmission and distribution : d. Water System

The Project 1. Proposed/Existing Land Uses COMPONENT Industrial Area Common Utility Area Buffer Zone/Open Space Others

AREA

PERCENT

TOTAL Use separate sheet/s if necessary 2. Status of Development a. If existing If fully developed i.) date established ii.) status of occupancy iii.) line of business of occupants : If under development i.) percentage completion ii.) date started iii.) expected date of completion b. if new development i.) date of commencement ii.) expected date of completion
65

Existing Fully developed

New development Under development

3.

Proposed/Existing On-Site Facilities and Utilities a. Internal Road Network ROW Width (m) i.) Main Road ii.) Secondary Road iii.) Tertiary Road TYPE OF PAVEMENT

b. Power System i.) Power source : ii.) Power Franchisee iii.) Power transmission and distribution : iv.) Back-up power generation 1.) Source 2.) Capacity c. Telecommunication System i.) Telephone provider : d. Water Supply System i.) Source : ii.) Distribution system

e. Sewerage and Drainage System: f. Sewage Collection, Treatment and Disposal i.) Wastewater collection

ii.) Wastewater treatment

iii.) Wastewater disposal

iv.) Wastewater recycling

g. Solid Waste Disposal System:

h. Fire Fighting System

i. Other Facilities and Utilties

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4.

Proposed Community Development Project

5.

Proposed Improvements (for existing industrial estate, if any)

6.

Support Institutions within 1 kilometer radius

7.

Estimated Project Cost Breakdown COMPONENT Land Acquisition Cost Land Development Cost Horizontal development cost Vertical development cost Other costs

AMOUNT

TOTAL 8. Sources of Funds SOURCE PERCENT SHARE

Use separate sheet/s if necessary 9. Preferred Industries/Locator

10. Prospective Locators (if any)

11. Marketing Program/Promotional Strategies :

12. Environmental Management Program a. Liquid Waste Management Program

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b. Solid Waste Management Plan

c. Toxic and Hazardous Waste Management Plan

d. Prevention and Abatement of Pollution (air, noise, water)

IV.           OTHER INFORMATION

Use separate sheet/s if necessary

Done in the City/Province of this day of 20

Affiant

Designation Republic of the Philippines ) ) S.S. Municipality/City/Province of Subscribed and sworn to before me this in the Municipality/City/Province of Affiant exhibit to me his Residence Tax Certificate No issued at on day of 20

20

_________________________________ Notary Public Until December 31, 20______ Doc. No. Page No. Book No. Series of

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A. BACKGROUND

1

B. ECONOMIC BASELINE AND INVESTMENT POTENTIALS ANALYSIS

1

C. PROPOSED ECONOMIC DEVELOPMENT STRATEGY

1

D. SUGGESTED TYPES OF INVESTMENT

1

E. FISCAL AND NON-FISCAL INCENTIVES

1

ANNEXES

1

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