6th & 7th Floors, Tower 1 +632.249.5900 loc.

704
Double Dragon Plaza
Double Dragon Meridian Park legal@tieza.gov.ph
Macapagal Avenue corner
www.tieza.gov.ph
Edsa Extension Bay Area
Pasay City 1302

MEMORANDUM
TO : ATTY. KAREN MAE G. SARINAS-BAIDO
ACOO, TEZ Management Sector

FROM : ATTY. AL CONRAD ESPALDON

OIC, Legal Department

SUBJECT : DRAFT MEMORANDUM OF UNDERSTANDING

DATE : 14 October 2019

This refers to the letter dated 07 October 2019 requesting comments and/or
inputs on the draft Memorandum of Understanding (MOU) between TIEZA and the
Philippine Chamber of Commerce and Industry (PCCI).

Upon review of the provisions contained in the MOU as regards TIEZA’s

participation and undertakings, the Legal Department finds no legal impediments to its
accomplishment. In fact, the MOU is congruent with DOT and TIEZA’s efforts to increase
the participation of the private sector in the development of the country’s tourism
industry.

As a backgrounder, on August 29, 2019, in line with DOT’s commitment to

increase involvement of the private sector in its tourism projects, the TIEZA’s board, as
chaired by the DOT, approved its joint venture guidelines for private sector
partnerships. Such guidelines cover the private sector’s participation in the areas of
development, operation, management, and disposition of TEZs, where joint venture
partners will be chosen through competitive selection. However, potential partners may
also be chosen through a negotiated competitive challenge, where investors may submit
their proposed projects, which in turn, may be outbid by other parties as evaluated by
the TIEZA Joint Venture Selection Committee.

In addition, in a recently concluded meeting on 09 October 2019, the TIEZA

Board likewise approved the inclusion of all TIEZA assets and TEZ development
projects in the Public Private Cooperation Program (PPCP), adopting Joint Venture (JV)
and Management Contract as additional modalities for privatization, in support of the
agency’s goal to generate more private sector partners. Through the proposed JV, TIEZA
will retain control and supervision of the assets but will be able to tap on private sector
expertise on the day-to-day operations of the assets as well as private sector funding of
necessary improvements of the assets.

As may be gleaned from TIEZA’s recent initiatives, its policy is now geared
towards a more assets-based investment while promoting a more inclusive growth of
tourism across the country through Public-Private Cooperation. As such, the
 6th & 7th Floors, Tower 1 +632.249.5900 loc. 704
Double Dragon Plaza
Double Dragon Meridian Park legal@tieza.gov.ph
Macapagal Avenue corner
www.tieza.gov.ph
Edsa Extension Bay Area
Pasay City 1302

Memorandum of Agreement with PCCI -- which has also committed to supporting

government initiatives in developing the tourism industry, shall serve as a vital step in
ensuring active participation by the private sector in TIEZA’s future tourism projects.

Coming now to the terms of the MOU between TIEZA and PCCI, all of the
proposed undertakings that shall be committed by TIEZA are within its functions and
mandate. Pursuant to RA 9593, TIEZA is mandated to designate, regulate, and supervise
TEZs toward the primary objective of encouraging investments therein. In addition,
TIEZA is likewise tasked to ensure that the approved development plans within the
designated TEZs are strictly complied with by its operators and investors.
Consequently, to ensure the sustainable development of TEZs and to entice potential
investors, the TIEZA Board is given the authority to enter into contracts of every class,
which are necessary or incidental to the realization of TIZA’s mandate with the private
sector, among others.

By organizing and holding business and investment fora in collaboration with

PCCI, potential private business investors will familiarize themselves with the policies
and regulations of TIEZA within its contolled TEZs, thereby formulating their project
proposals more effectively around it. These fora will serve as a platform to improve the
relations between the public and private sector, and the overall quality of products and
services within the tourism industry. It shall also raise the levels of demand nationally,
regionally, and internationally to invest in the country’s tourism spots; promote
competiveness within the industry; and, provide valuable and reliable information on
quality standards required of every potential private investors. On the other hand,
through constant coordination with PCCI, TIEZA will be able to effectively formulate a
regulatory framework for the sustainable development and management of tourism,
protection and conservation of natural and cultural resources; and, facilitation of the
involvement of private sector and local communities in tourism development activities.

Overall, the MOU is in accord not only with TIEZA’s mandate and authority, but
also with its policy of a more inclusive tourism development. To conclude, successful
public and private collaborations are those providing a benefit to all stakeholders
involved. Demonstrating tangible outcomes is important in not only encouraging
participation but also maintaining momentum and ensuring the sustainability of the
projects. Cooperation among all the different stakeholders within the tourism industry,
which come together for mutual economic benefit from providing the best service for
tourists, should always be considered, as it enables them to accomplish collectively
what they are unable to achieve individually.

Should you have further questions, do let us know.

 6th & 7th Floors, Tower 1 +632.249.5900 loc. 704
Double Dragon Plaza
Double Dragon Meridian Park legal@tieza.gov.ph
Macapagal Avenue corner
www.tieza.gov.ph
Edsa Extension Bay Area
Pasay City 1302

Prepared by:

ATTY. JESUS R. LAPUZ, JR.

Legal Services Division

Noted by:

ATTY. AL CONRAD B. ESPALDON

Legal Department