IMPLEMENTATION OF RULES AND REGULATION FOR ECOZONE Thesis Repaired

AGONCILLO COLLEGE INC.
Poblacion, Agoncillo, Batangas
COLLEGE OF CUSTOMS ADMINISTRATION 45
APPROVAL SHEET
SIENA D. DEOMAMPO, MA.ED

Thesis Adviser
Approved in partial fulfillment of the requirements for the degree Bachelor of

Science in Customs Administration by the Committee on Oral Examination with a grade
of PASSED.
GREGORIA C. CABILES, ED.D
Chairman
Member
ANNA KRISTINA M. DE LEON, BS PSYCHOLOGY
Member
Accepted and approved in partial fulfillment of the requirements of the degree of

Bachelor of Science in Customs Administration.
GREGORIA C. CABILES, EdD.

Dean of Colleges
ACKNOWLEDGEMENT
The accomplishment of this study would have not been possible without the
following individuals who served as their motivation and inspiration;
_______ for the stimulation and endless support, for valuable advice and patience
in editing, correcting grammatical errors and her excellent suggestions in the preparation
of this work.
Families for the sacrifices, continuous support financially and physically to
achieve this success.
Friends and classmates, who helped bring this work into reality.
And most especially, the Almighty God for the guidance, good health, patience,
wisdom, perseverance, resiliency and extraordinary strength that keep them hopeful in
bearing the challenge of completing this study.
R.S.M.
P.A.H.
J.N.F
DEDICATION
The researchers dedicate this study to their beloved parents, brothers, sisters,
relatives, friends,AlmaMater Agoncillo College Incorporated, classmates, instructors, and
research adviser ________________
R.S.M.
P.A.H.
J.N.F
“IMPLEMENTATION OF RULES AND REGULATION FOR ECOZONE”
A Thesis
Presented to
The Faculty of College of Customs Administration
Agoncillo College Incorporated
Poblacion Agoncillo, Batangas
In the Partial Fulfillment
Of the Requirements for the Degree of
Bachelor of Science in Customs Administration
by:
Frelda Jerian Nichol
Marcial Reginne
Hernandez Plloyd
Chapter 1
THE PROBLEM AND ITS BACKGROUND
Introduction
As the result of the globalization, the world become smaller and smaller,
closer and closer, leading to the more interconnection of the economic activities
of the states and private institutions. There are substantial amount of
opportunities for the developing countries to enhance their economy and attract
investment form the developed countries both leading to the development of the
economy of the developing countries and gaining of the developed countries a
huge amount of profit. In the era of globalization, states are not able to stay away
from the international economy and trade. Therefore, the states has to pursue
appropriate foreign policy and conduct correct economic policy in order to both
animate external economic relations and achieve the protection of the domestic
economy. One way to gain the vitality of the national economy with help of the
external activities as the same time protecting the competitiveness of the
domestic economy is the introduction of the SEZS. However, the SEZs might
have negative impacts economy in case of shortages of deep analysis and
research. Hence, it is crucial to make clear and coherent research and analyze
the world experience before the formation of these zones.
One of the finest pieces of legislation passed by the Philippine Congress
is Republic Act (RA) 7916 or the Special Economic Zone Act of 1995 where in-
cumbent Philippine Economic Zone Authority (PEZA) Director General Charito B.
Plaza (former Butuan City representative) was one of the bill's principal authors
in the Lower House. Enacted into law on 21 February 1995, RA 7916 created the
PEZA and provided for the legal framework and mechanism for the creation, op-
eration, administration and coordination of special economic zones in the Philip-
pines. Through this law, PEZA was empowered with a broader mandate to de-
velop ecozones all over the country to generate incremental investments, jobs
and exports, and to spur industrialization and countryside development.
Prior to PEZA, there were the predecessor laws/agencies: the Foreign
Trade Zone Authority (FTZA) as mandated by RA 5490 of 1969 and the Export
Processing Zone Authority (EPZA) as created by Presidential Decree (PD) 66 of
1972. These pioneered the creation of ecozones as a government strategy to at-
tract FDIs and export-oriented industries into the country. The Philippines was
actually second to Taiwan in Asia that experimented with the freeports and ex-
port-processing zones (EPZs) in the 1960s when it was first introduced as a pol -
icy tool for development and export-oriented growth particularly for developing
economies.
Over the last five decades, the ecozones have proliferated in the region
and have become increasingly common in Latin America, Africa and more re-
cently in China, Russia, South Korea and the Middle East. Even the advanced
countries in the US, Canada and Europe have their own form of ecozone or zone
policy for the supply of goods and services to the global market. The creation of
ecozones is widely used across all economies because of the many benefits to
the host country of designating a Special Economic Zone (SEZ), which is treated
as foreign territory for trade operations, duties and tariffs. According to Investope-
dia, "The SEZ regulations tend to be conducive to FDIs. Conducting business in
an SEZ typically implies that the company will receive tax incentives and the op-
portunity to pay lower tariffs.”
In the Philippines, the ecozones continue to exist with great success.
Apart from PEZA, other ecozone/freeport authorities that are doing well include
the SBMA, CDC, BCDA, AFAB, CEZA, APECO, TIEZA, JHMC, PHIVIDEC and
ZFA. Among them, PEZA happens to be the biggest ecozone authority and the
largest contributor to the country's local and national development.
In fact, PEZA's growth over the last 25 years has been phenomenal. The
original 16 ecozones it inherited from EPZA has today multiplied to 404 operating
ecozones nationwide. Except for the 4 public ecozones, the rest are all owned,
developed and managed by the private sector. From EPZA's original 331 compa-
nies operating in the zones, PEZA now has a total of 4,478 locator companies as
of December 2019.
For its 2019 performance, under the helm of DG Plaza, PEZA has generated
P117.541 Billion investments and $54.597 Billion exports, 540 number of

projects, and employed 1,601,492 Filipino workers. In the same year, PEZA has
also remitted P750 million in annual dividends to the National Government.
Undoubtedly, PEZA's brand of service and package of fiscal incentives
have become a magnet for foreign investors to locate in the Philippines, allowing
the ecozones to grow by leaps and bounds over the years. Thus, the ecozone
program was adopted by the government as an important development strategy
despite changes in the administration.
Moreover, ecozone exports constitute 70% of the country's total commodity ex-
ports and 16% of the GDP. The ecozone locators generate huge employment
and quality jobs for the Filipinos, while the ecozone developers create pockets of
development and industry clusters nationwide stimulating growth in the country-
side.
Many LGUs hosting the ecozones have achieved a higher level of eco -
nomic and social progress compared to those LGUs with fewer or no ecozones
at all. Even the World Bank-IFC has cited PEZA as a success story in terms of
regulatory reform, besting the other 67 ecozones surveyed worldwide. If these
are not enough as proof of PEZA being relevant and critical to the country's eco -
nomic growth, no less than President Rodrigo Duterte has issued Administrative
Order (AO) 18 to accelerate rural progress through robust development of spe-
cial economic zones in the countryside in support of PEZA!

As such, in light of ongoing talks to rationalize the fiscal incentives for
ecozone investors which may erode the country's competitiveness, and to repeal
some critical provisions in the PEZA Charter which will render the agency ineffec-
tive in performing its mandate, PEZA Director General Plaza has appealed for
status quo so as to preserve the ecozone strengths and gains. This will also al-
low PEZA and other IPAs to be vibrant and competitive as they bring in the
needed FDIs and exports and promote further integration of the ecozones with
the domestic market through the retention of fiscal incentives and in pursuit of the
ecozone development program. These measures will contribute to the govern-
ment's efforts to reduce unemployment, address the development gaps in the re-
gions and narrow the trade deficit--which are all essential towards our bid to sus-
tain the Philippines' status as one of the fastest growing economies in the region
and in our transition to upper middle-income economy. PEZA s call for status quo
is, therefore, justified given the Authority s strategic role in nation building and
huge contributions to the economy for the past 25 years.
On the legal aspect, DG Plaza emphasized that "We cannot afford to
lose our gains nor damage the country's reputation with the international commu-
nity by allowing the changing of our rules in the middle of the game or introducing
new laws that apparently negate basic legal doctrines such as grandfather rule,
non-impairment of contracts, perspectivity in law application, and log-rolling legis-
lation."
DG Plaza added, "As far as we are concerned, PEZA incentives are
working and that we continue to generate investments, jobs, exports and other
economic opportunities for the country. The ecozone program is tried and tested,
and has proven to be an effective economic driver despite our inefficiencies and
many inadequacies."
As the old saying goesif it ain't broke, don't fix it! And more importantly, don't
kill the goose that lays the golden eggs!
This study focused on rules and regulations of Ecozones that
should be preserve and implemented. PEZA by the help of this research the
rules and regulations that should be implemented to protect the ecozones can
easily inform and understand ,the research gathered more information and
strengthen our information and we will apply it to the topic.

Theoretical Framework
The implementation of rules and regulations on ecozones should be
based on the principles of sustainability and environmental protection. Ecozones
shall refer to selected areas with highly developed or which have the potential to
be developed into agri-industrial, industrial, tourist, recreational, commercial,
banking, investment and financial centers whose metes and bounds are fixed or
delimited by Presidential Proclamations. ECOZONE Export Enterprise refers to
an individual, association, partnership, corporation or other form of business
organization which has been registered with the PEZA to engaged in
manufacturing, assembling or processing activity falling within the purview the
Act and resulting in the exportation of 100% of its production, unless a lower
percentage of its production for exportation is prescribed by the Board subject to
such terms and conditions as the latter may determine.
Conceptual Framework
The figure shows the input, process, and output of the study by the
proponent, the input inside includes the profile of the respondents in terms of
age, civil status, gender and respondent s category, The Implementation of rules
and regulation for ecozone. The process is the distribution of questionnaire made
by the researchers and the output are the information that are revealed in the
questionnaire answered by selected respondents.

INPUT PROCESS OUTPUT
1. What is the
demographic profile of
the respondents in
terms of
1.1 age
1.2 sex and;
1.3 civil status
2. What is the extent
of implementation of
rules and regulations
for ecozone as Assessment
assessed by the through survey
licensed customs questionnaire Propose Plan of
brokers. Activities
FEEDBACK
Figure 1
Conceptual Paradigm of the Study
The research paradigm shows the different variables that are pertinent to this
study. The researchers used the IPO which follows the step in doing the study.
These includes the input, process, and output.
The input frame consist of Profile of the Respondents which includes the
age, sex, civil status and respondents category, Implementing rules and
regulations for ecozone.
The process frame is considered as the survey variable of the
questionnaire.
The output frame are the propose plan of activities.
Statement of the Problem
This study aimed to determine and assess the implementation of rules and
regulation for ecozone
Specifically, this study endeavored to answer the following questions:
1. What is the demographic profile of the respondents in terms of
1.1 age
1.2 sex and;
1.3 civil status

2. What is the extent of implementation of rules and regulations for ecozone as
assessed by the licensed customs brokers?
3. Is there a significant relationship between the demographic profile and the
extent of implementation of rules and regulations for ecozone as assessed by the
respondents themselves?
4. What are the challenges encountered in the implementation of rules and
regulations for ecozone?
5. What plan of activities could be proposed to tighten the implementation of
rules and regulations for ecozone?
Assumptions of the Study
The researchers of the study entitled assumes the following;
1. That this study will be an endeavor to aspiring Customs Administration
to pursue their career.
2. That the respondents will collaborate on answering the questionnaire.
3. That the respondents will answer the questionnaire truthfully and
efficiently
4. That this will study will be a guide to the upcoming future license
brokers
Hypothesis of the Study
There is no significant difference/relationship between the demographic
profile of the respondents and The Implementation of rules and regulation for
ecozones.
Significance of the Study
The results of the study may help or benefited the educational Institutions.
The Future Researchers.
In a way that they can easily learn and understand the different rules and
regulations of ecozones that should be implemented. They can also determine
what are the different rules and regulations that must be followed on the different
economic zones.
The findings of this study will be their guide to assess themselves on how
they will pave the way for more expounded studies on similar field. This research
will serve as resource data for curriculum makers of the school for relevant
programs for an effective knowledge about the ecozones.

STUDENTS - In this study, students will identify the importance of the rules and
regulations of the ecozones.
FACILITATORS - Teachers will also learn from this study and can use the
knowledge they can get from this to asses their students knowledge and use it in
the educational field.
FUTURE RESEARCHERS - This may serve as the guide for future researchers
to gather information and this may serve as a stepping stone for their bigger
study.
RESEARCHERS - The researchers may improve their knowledge and skills. And
add ideas about implementing the rules and regulations of the economic zones.
Scope and Delimitations of the Study
The scope of this study is the implementation of rules and regulations in

ecozones. The analysis will only consider rules and regulations related to
environmental protection and sustainable development in ecozones. The
research will not include a comparative analysis of the implementation of rules
and regulations in different ecozones.
Definition of Terms
For clearer understanding of this study, the following terms were defined
conceptually:
Ecozone - refers to a geographic area designated for the purpose of trade and
economic cooperation. It typically includes a specific area within a country or
region that is designated as a free trade zone, where goods can be imported,
exported, or processed without tariffs or other trade restrictions.
Economy- refers to the system by which a society or country manages the
production, distribution, and consumption of goods and services. It encompasses
the activities that are related to the production, exchange, and consumption of
goods and services by individuals, businesses, and government
Import- the process of bringing goods or services into a country from another
country. It involves the transportation of goods across international borders, the
payment of tariffs or other import fees, and the compliance with various laws and
regulations. Imports are typically subject to customs inspections, and the
importer is responsible for ensuring that the goods meet all legal requirements
before they can be brought into the country.
Implementation- refers to the process of putting a plan, strategy, policy, or
program into action. It involves taking the necessary steps to turn an idea or
concept into a tangible reality.

Tariff- is a tax or duty imposed by a government on imported or exported goods.

It is typically used as a means of protecting domestic industries and raising
revenue for the government.
Trade- refers to the exchange of goods and services between individuals,

businesses, or countries. It involves buying and selling products and services,
both domestically and internationally.
Chapter 2
REVIEW OF RELATED LITERATURE AND STUDIES
This chapter provides the hub of relevant and significant piecework of
literature that serves to anchor the purposes on this study.
Related Literature
Foreign
* (Farole and Moberg, 2014).Special Economic Zones (SEZs) have become a

popular policy instrument around the world. Encouraged by the success stories
of SEZs in the 1980s and 1990s in East Asia, policymakers in the developing
world increasingly see them as a way to easily promote industrial development,
attract foreign investment, and stimulate job creation. However, results have not
always lived up to expectations for example, in most sub-Saharan countries,
SEZ policy has failed to generate significant upticks in investment, exports, or job
creation in recent years
* (Ida Kurnia and Imelda martinelli,2016) Regulation is the cornerstone for

utilizing marine fisheries resources, and thus Indonesian Government had
implemented its Constitution as basic laws and rules. Those regulations need
further elaboration. Therefore, Indonesian Government established sets of laws
related to the utilization of marine fisheries resources, and in its implementation,
those laws and regulations should never deviate from the Constitution of the
Republic of Indonesia. The utilization of marine fisheries resources in Indonesia s
Exclusive Economic Zone enables the possibility of cooperation and colaboration
with other countries. Therefore, Indonesia is required to seek by evaluating and
complementing the laws in accordance with its Constitution
* (Dao Ngoc TIEN,2020) Special economic zones (SEZs) are considered as one
of important regional industrial policies to attract foreign investment in developing
countries such as Viet Nam. The review of SEZs development in Viet Nam
including the comprehensive review of infrastructure and business environment

in SEZs are presented in this paper for the first time. Moreover, the paper gives
novel non-parametric evidence to indicate the positive causal linkage between
the zoning policies and the attraction of foreign investment at district-level in the
country during the period 20112015.
* (Gokarna Prasad Gyanwali,2020) The Special Economic Zone (SEZ) is that

specific geographical area which has economic and other business laws that are
more market-oriented than a countrys typical or national laws. It is the region
where government provides the special facilities by constructing separate rules
and regulations and wants to promote foreign investments and capital for export
oriented economy. National laws may be suspended inside a special economic
zone. This article describes the different aspects of SEZ in global and national
context, policies and present situations of SEZ in Nepal. The overall objective of
this article is to find out the present situation of special economic zones of Nepal.
The specific objective is to analyze the overall conditions of SEZ, their challenges
and opportunities in Nepal. the analytical and descriptive methods are applied in
this study. The data used in the study is quantitative which are collected from the
economic survey of the ministry of finance, ministry of industry, commerce and
supply, World Bank, OECD, SEZ office, published articles and newspapers
related to SEZ and reports. In conclusion, to achieve high speed of economic
development, to generate employment opportunities and to increase direct
foreign investment are the main goals of SEZ. The government of Nepal has
implemented formally the concept of Special Economic Zone in 2000 AD and
constructed laws, act and policies and implemented after 2017.
* (University of Oxford ,2015 )The exclusive economic zone (EEZ) and the
International Seabed Area constitute the main innovations of the new Law of the
Sea whose highest expression is the 1982 United Nations Convention on the
Law of the Sea (UNCLOS). Those two legal concepts are expressions of
antithetical approaches to the law of the sea. While the international seabed
area, finding its legal basis in the concept of common heritage of mankind,
represents the triumph of collectivism in international relations, the EEZ is the
most evident explication of individualism. It is the recognition of territorial claims
of coastal States over waters adjacent to their coasts, giving them sovereign
rights of economic character over a large area of sea (p. 178) that extends to 200
nautical miles (nm) from the baselines from which the breadth of the territorial
sea is measured This recognition of the claims of coastal States was not without
conflict: it has focused many of the tensions of the modern international society,
and many of the uncertainties arising from the search for a better world
organization and a proper economic order. In fact, the EEZ appears to be a
compromise, moreover unstable, between the concepts of sovereignty and
freedom; a compromise which, being reached with a negative method, i.e. with
the elimination of other possible solutions, means that the EEZ appears to be a
somewhat ambiguous legal concept. From: Oxford Public International Law
(http://opil.ouplaw.com). (c) Oxford University Press, 2015. All Rights
* ( Stephen Mwansa, Junaid M. Shaik and Philip Mabunga,2020) SEZs play

varied roles in facilitating national, regional, local economic development, and
global economic connections, with some remarkably successful in doing so.
Despite the prevalence of special economic zones worldwide, their performance
and impact on the economy and structural transformation are quite mixed.
Among the many lessons learned from successful special economic zone
programs, the key elements include a strategic location, integration of zone
strategy with the overall development strategy, understanding the market and
leveraging comparative advantage, and, most importantly, ensuring that zones
are special in terms of a business-friendly environment especially a sound
legal and regulatory framework and an embodiment of sustainability and
resiliency towards various external shocks. This paper offers a systematic review
of the international literature addressing the impact of the Special Economic
Zone model on local economic development. By identifying, critically assessing,
and compiling the most relevant and high-quality studies on the topic, the basic
conditions for the success or failure of this industrial policy model come to light.
As a result of the analysis of the effectiveness of SEZs in Poland, the article
concludes that the impact of SEZs on the Polish economy is positive, and
additionally they are the source of value added for the market. The analysis
shows that SEZs had a strongly positive impact upon the development of the
least developed regions in Poland, while the effect was weak or even negative in
relatively richer ones. The research on Special Economic Zones as regional
development enablers discusses the diverse and international track records in
the implementation of SEZs, the interplay of SEZ models and local institutional
infrastructure and stakeholders, and the SEZ models that can best fit certain
development states and/or settings. As the locational advantages change, the
emphasis and the objectives of the SEZ must also change. Reliance on generic
locational advantages must necessarily diminish, and greater emphasis needs to
be placed on developing specialized locational advantages. Another key finding
is that the benefits of a SEZ must intentionally leak beyond the perimeter of the
zone. The pervasiveness of the direct, indirect, and induced extra-SEZ effects
beyond the geographically bounded space of the SEZ determines its success or
failure. (Iryna Z. Storonyanska and Khrystyna O. Patytska,2022) 7 Special
Economic Zones are geographical areas allocated and designated to attract
foreign investment, enhance industrialization, and spur economic development of
the identified jurisdiction. The trade laws applicable in the Economic Zone are
different from those used by the rest of the country. Investors are offered tax and
several other incentives to set up businesses. It is envisaged the Zones can be

effective special purpose vehicles to deliver industrialization and structural
transformation. However, the aims of the Zones are achievable only if the
development program was properly crafted and correctly implemented.
Worldwide, for over 50 years many countries have established and experimented
the concept of Economic Zones albeit with, mixed results. This preliminary article
based on an active research attempts to present the interim results of the Lusaka
South Multi Facility Economic Zone (LS-MFEZ) in Zambia. There have been
variations in terms of progress and performance of the projects undertaken,
some of which are at the formative stage. The objectives of the study among
others is to establish the reasons behind the slow uptake of investment space in
LS-MFEZ. The study focuses on businesses that have invested in the Lusaka
South Multi Facility Economic Zone, and those that have expressed interest to
invest. This study embraces a mixed-methods model comprising qualitative and
quantitative research approaches. The interim findings indicate that investors
face several challenges in starting businesses in the Zone, besides the
inappropriate Zone infrastructure. Furthermore, some incentives the government
had put in place are not the primary factors attracting Investors
( Md. Mahmudul Alam, Rafiqul Islam Molla and Md Wahid Murad,2019)
Economic zone or export processing zone in a country is a purpose-built
industrial park with infrastructure designed to suit the needs of foreign as well as
local investors. In order to tempt foreign investors into the zones the host
developing countries offer a variety of incentives. By encouraging and motivating
the multinational companies to settle their Greenfield investments in developing
countries, the economic zone scheme acts as a tool for empowering the local
economy to gain multiple capabilities and go global increasingly to facilitate
income convergence between the industrialized and the developing countries
through equitable sharing of the gains from trade. Nonetheless, it is not a magic
wand. Its experiences in Malaysia and Bangladesh clearly show that it can create
wonder only when it is appropriately designed and managed. It is suggested that
Bangladesh borrows a leaf from the rich experiences of Malaysia s economic
zone model, to restructure and revitalize her economic zone scheme for greater
success
* (Elizaveta Gromova,2018) Free economic zones have become an essential

part of the world economy in recent history. The voluntary entry of the Peninsula
of Crimea into the Russian Federation as one of its constituent regions, lead to
the adoption of the social and economic development commitments of this region
by our state. For this reason, one of the most important goals for authorities of
the Russian Federation is to develop the social, economic, and other spheres of
the society. The establishment of the free economic zone in the Republic of
Crimea and the Federal City of Sevastopol became one of solutions to this
problem. This article analyzes the issues of legislation on the free economic zone
in the territories of the Republic of Crimea and the Federal City of Sevastopol
and aims to find solutions of these issues. This research is based on the
application of comparative, retrospective and formal juridical analysis of the
legislation and research papers dedicated to questions of the free economic
zones and other territories with a special legal regime for conducting
entrepreneurial activity (territories of advanced social and economic
development, the Free Port of Vladivostok, special economic zones in the
Russian Federation). In particular, the norms of current legislation on goals and
terms of creation of the free economic zone in the territories of the Republic of
Crimea and the Federal City of Sevastopol, the management of the free
economic zone and the implementation of entrepreneurial activities within its
borders were analyzed. We conclude that it is necessary to improve the current
legislation on the free economic zone in the territory of the Republic of Crimea
and makes several suggestions for optimization its provisions. The results
achieved can be used both in the lawmaking process and as a foundation for
further researches.
* ( Yam Kumari Khatiwada) Nepal initiated the concept of Special Economic

Zone (SEZ) since 1980s. However, the process of construction of infrastructure
development and operation of such zone is very slow. Now there is only one SEZ
is in operation partially and one is ready for operation. SEZ can play an important
role to uplift the economic condition of Nepal as it is in the process of graduating
to developing country from least developed countries (LDCs) in near future and
meeting the 2030 agendas of SDGs. Investment in productive sector increase
the production and productivity that leads towards the import substitution and
export promotion. To attract both foreign and domestic investment SEZ is an
important mechanism. This article has focused on how the role of economic zone
can be enhanced in development of Nepal. It has identified some challenges to
be addressed and the opportunities that need to be grasped. Based on the
analysis of the status of SEZ in Nepal this study has recommended some areas
of reforms for effective operation of on-going SEZ and upcoming SEZ in Nepal.
Reforms of existing legal, institutional and procedures mechanism related to SEZ
are required to create conducive environment to attract domestic, foreign and
multinational companies inside the zone. Adequate research and development
on the sector of comparative advantage and competitiveness is necessary and at
the same time, public private dialogue and international networking in this regard
is also equally important.
Local
* ( Mayvelin U. Caraballo and Anna Leah E. Gonzales,2022) The Philippine

Economic Zone Authority (PEZA) has been found to be uninformed about actual
investments made by locators who benefit from tax benefits, the Department of
Finance (DoF) reported on Wednesday. PEZA, however, denies the claims. In a
statement, the agency said the Fiscal Incentives Review Board (FIRB)
Secretariat reported to its chairman, Finance Secretary Carlos Dominguez 3rd,
that PEZA has not tracked the inflow of actual investments made by its registered
business enterprises (RBEs) since the implementation of the Corporate
Recovery and Tax Incentives for Enterprises (Create) Act to determine if they are
commensurate with the value of fiscal incentives that such ecozone locators
enjoy each year. When the PEZA was ordered to report data to the FIRB as part
of the compliance of investment promotion agencies (IPAs) with the provisions of
Create, the FIRB Secretariat said PEZA presented inadequate information
regarding the investment capital and market orientation of its locators.
* (Mercurio, 2017) In the Philippines, economic zones were instituted in the late 1960s as
part of the export-oriented industrialization strategy. The first export processing zone,
Bataan Export Processing Zone (BEPZ) was established in 1972 and four more economic
zones were created in the succeeding years: Baguio City Export Processing
Zone(BCEPZ) and Mactan Export Processing Zone(MEPZ) in Cebu in 1979, and Cavite
Export Processing Zone(CEPZ) in 1986. From 1970s to early 1990s, economic zones
were created and operated by the central government. In 1995, the development and
management of economic zones were opened to the private sector through the enactment
of Special Economic Zones of 1995. The same act also established the Philippines
Economic Zone Authority (PEZA), the government agency that manages public
economic zones and administers incentives to developers and locators within the special
economic zones. As of 2016, the number of economic zones stood at 348 zones and
majority of these zones are developed and managed by the private sector. The current
Duterte administration aims to create additional special economic zones all over the
country. PEZA is currently considering the plan to establish two new public economic
zones per region.
* Shortage and Overage - In case of failure to account for shortages on raw

materials, machineries, equipment, supplies or goods for personal usage,
imported tax and duty free pursuant to the Act, the same shall constitute prima
facie proof that such goods or merchandise were illegally sent out of the
restricted areas of the ECOZONE and/or to the customs territory. In such case,
the enterprise concerned shall be imposed the corresponding fines, taxes and
duties in accordance with the applicable provisions of these Rules, Customs and
Internal Revenue Laws. In case of overages, it shall be presumed that the
excesses were introduced illegally into the restricted areas of the ECOZONES
and shall be subject to the imposition of fines and / or to confiscation or forfeiture
pursuant to the provisions of these Rules and of the Tariff and Customs Code of
the Philippines. (Romeo, 2019) In both cases, however, the PEZA shall take into
account the reasonable percentage of allowance based on established materials
usage formula and other relevant factors applicable to specific industry groups.
* Length of Employment - An ECOZONE Enterprise may employ foreign

nationals for a period not exceeding five (5) years from its registration, extending
within limited periods depending upon the need of the ECOZONE Enterprise as
determined by PEZA: Provided, That the ECOZONE Enterprise seeking such
extension must have satisfactorily complied with the training program required
under this section: Provided, however, That when the majority of the capital stock
of an ECOZONE Enterprise is owned by foreign nationals, the positions of
president, treasurer and general manager or their equivalents may be retained by
foreign nationals. (2019)
* Procurement of equipment for environmental monitoring was canceled. Since

there were few environmental monitoring and testing companies at the time of
appraisal, the management capability of PEZA had to be strengthened to ensure
environmental soundness in the ECOZONEs. However, many such companies
with experience and skills are now in operation and it was believed that
outsourcing environmental monitoring to a private third party ensures impartiality
and objectivity. Locators contract private specialized companies to conduct
regular environmental monitoring and the results are submitted to PEZA for
review. No serious problems have been reported. (jica 2017)
* In Mactan, PEZA has issued a third tender and successfully invited competitive
bids to improve the drainage pipe system, with completion expected within the
year. In Baguio, a portion of the drainage pipeline system was also not
completed, and thus, the amount of collected sewage was low. However, with the
completion of the drainage collection pipes in 2007, the amount of sewage
doubled due to direct connections of many locator firms although the total volume
collected remains low. In Bataan, construction of the sewage collection pipe
network is also needed. (Jica 2017) The detailed design was completed in 2006
and construction bids have already been received. The construction is expected
to be completed next year. Thus, the treated volume at the facilities and the
operating rate are expected to improve shortly.
Related Studies
Foreign
* (David wong,2022)Recently, Shenzhen passed the "Shenzhen Special

Economic Zone Foreign Investment Regulations" (Regulations) to enhance the
driving force of foreign investment in economic development. The law will take
effect on November 1, 2022. According to data from the Shenzhen Commerce

Bureau, in 2021, nearly 6,000 foreign enterprises were established in Shenzhen,
a year-on-year increase of over 30%. At present, Shenzhen has brought together
companies from more than 160 countries or regions around the world, including
nearly 300 Fortune 500 companies. Shenzhen has approved more than 100,000
foreign direct investment projects. The actual use of foreign capital in 2021 was
10.965 billion US dollars, a year-on-year increase of 26.3% and a record high. In
the first quarter of this year, Shenzhen's actual utilization of foreign capital
exceeded 2.1 billion US dollars, a year-on-year increase of 32%.
* (Fairouz Mosleh, Malek Bakhit and Eleyan Aqaba,2012) This research aimed to
examine the main factors that influence the successful adoption of Decision
Support Systems (DSS) in the Aqaba Special Economic Zone Authority
(ASEZA). It investigated a set of factors which are; System Characteristics
(Perceived Ease of Use (PEOU) & Perceived usefulness (PU)), Technical
Aspects (information technology infrastructure & information systems
interoperability), and Organizational Aspects (top management support (TMS),
management style (MS), & organizational structure (OS)). A questionnaire was
distributed to a sample of (161) respondents to collect primary data, & based on
a convenience sample the response rate was about 79%. Furthermore, the
findings were analyzed using the Statistical Package for Social Software (SPSS),
with an R2 of 35.3%, linear Multiple Regression analysis revealed that all
research variables have significant effect on successful adoption of DSS.
* Place-based policies, including SEZ programs, in many advanced and

emerging countries focus on development of economically depressed areas
(Neumark and Simpson, 2015). Empirical evidence in the case of Cambodia,
however, suggests that locations with higher incomes and more educated labor
tend to attract more SEZs. Differences in SEZ assignment strategies may reflect
countries’ objectives of establishing an SEZ program. Whereas employment and
income convergence across geographic locations is one of the key objectives of
place-based policies in advanced and emerging economies, export diversification
may play a bigger role in low-income and developing countries like Cambodia. In
the latter case, availability of infrastructure and established trade routes plays a
more important role for SEZs’ location decisions.
* In the presence of labor mobility, policies targeting specific locations may result
in unintended consequences, including rising land prices and increasing school
drop out rates, as shown in this paper. While the former issue is endemic to
place-based policies irrespective of the level of development of a country
implementing these policies as shown in Moretti (2014), the latter issue is more
endemic to developing countries. In addition, literature studying the impact of
place-based policy has so far failed to demonstrate self-sustaining economic
gains in the long run. While SEZs could provide a momentum in attracting foreign
investment in the short run, deeper structural reforms are needed to sustain
diversification and economic growth in the long run. The supply chain channel is
explored in the World Bank and Asian Development Bank’s study on investment
climate in Cambodia (Moretti 2014). The study finds that firms located within
Cambodian SEZs are significantly less likely to source inputs domestically—only
12 percent of inputs are purchased domestically by firms within SEZs compared
to 62 percent by non-SEZ firms.
* This implies that SEZ firms have weak links to the domestic economy, which is
consistent with the large share of SEZs specializing in assembly of imported
inputs and re-exporting of final goods. Limited backward linkages can in part be
explained by low productivity of domestic firms and proximity of foreign firms to
their existing suppliers predominantly from parent companies (Brussevich and
Tan, 2020). Therefore, promoting productivity of domestic firms by improving
governance and transparency of the tax and business registration systems,
investing in human capital and infrastructure are key policy priorities for
strengthening input-output linkages with domestic economy and generating
positive productivity spillovers from SEZs.
* Foregone revenues, effectiveness of tax holidays has been shown to be limited

(IMF 2015; Ghazanchyan. 2018). In addition, tax holidays may encourage
investment by predominantly labor-intensive firms that exit upon expiration of the
preferential treatment. Moving away from tax holidays and instead providing
incentives which are more directly linked to the size of investment may be a more
effecyive way to attract long-term investment with higher potential for bringing
positive socio-economic spillovers. Tax incentives linked directly to the size of the
investment bears additional benefits in that it allows for less discretion at the
granting stage and discourages rent-seeking behavior linked to the temporary
nature of tax holidays (Ghazanchyan et al., 2018) Tax incentives are also shown
to be less effective in countries with poor investment climate (James, 2013).
Gains from improving the overall business climate for both foreign and domestic
firms are far greater than those brought by the tax incentives when it comes to
promoting competition and diversification (Warr and Manon, 2016). Policies
ranging from increasing investment.
* This study investigates local socio-economic effects of Cambodia’s SEZ

program. The identification strategy relies on the variation in location of SEZs
and timing of their entry. While SEZ entry is non-random and is largely driven by
the availability of infrastructure and access to trading partners, this paper
employs several identification strategies and robustness checks to establish
causal effects of SEZs on local economies. First, it uses district characteristics in
the beginning of the sample period to construct propensity score weights.
Secondly, it specify an alternative control group that shares similar

characteristics with the treated districts. An alternative control group includes
districts.
local
* The Economist (2015a) writes that, in addition to the foregone tax revenues,
SEZs also “create distortions inside economies, are increasingly a haven for
money-laundering through, for instance, the misinvoicing of exports.” Farole and
Akinci (2016, 4), argue that although some SEZs “have been successful in
generating exports and employment and come out marginally positive in cost-
benefit assessments,” others, however, turn into virtual “white elephants.” As
such, investors are “taking advantage of tax breaks without producing substantial
employment or export earnings,” becoming unsustainable because of rising labor
costs or loss of preferential trade access, and failing “to extend benefits outside
their enclaves or to contribute to upgrading of skills and the production base.”
* Further validation of the above assessments of SEZs was provided by the 2019
UNCTAD World Investment Report, which devoted a whole chapter to SEZs. The
report stated that “the performance of many zones remains below expectations,
failing either to attract significant investment or to generate economic impact
beyond their confines” and that “the continued enthusiasm for SEZs among
governments around the world belies the impact of these zones, which is often
mixed” (UNCTAD 2019, 3–4). It then further noted that although “there are many
examples of highly successful SEZs [in] developing economies that followed
export-oriented development strategies [and] played key role in industrial
transformation, […] examples abound, […] even in those economies, […] of
zones that did not attract the anticipated influx of investors or did so only late”
(UNCTAD 2019).
* The import-dependent nature of SEZ firms resulted in low value-added

electronic products, which are mainly in the assembly of electronic components
—given that the processes and designs of original manufactured products are
done by the foreign-based mother company. Manasan observes that Filipino
firms in the electronics sector are merely subcontracted to undertake low
technology and low value-added operations. As with other SEZs in Masan, South
Korea; Jakarta, Indonesia; Penang, Malaysia; Sri Lanka; and Shenzen, China;
Manasan (2013, 6) concludes that for Philippine SEZs, the “costs outweigh their
benefits,” as exemplified by the Bataan Export Processing Zone (BEPZ) and the
Aurora Pacific Economic Zone and Freeport Authority (APECO), in which “costs
(consisting primarily of infrastructure development costs) exceeded the benefits
(as) measured in terms of employment and associated wage income of workers
in the ecozone, exports and associated foreign exchange earnings, local input
purchases by ecozone enterprises, and government revenues” (Manasan 2013,
6).
Chapter 3
RESEARCH METHOD AND PROCEDURE
This chapter present the research design used, the respondents of
the study, instruments used, preparation and validation of questionnaire, proce-
dure in gathering data, scoring and interpretation and statistical treatment of the
data employed in the study.
Respondents of the Studyl
Respondents are the person who gives responses or answer to the
given question.
The respondents of the study were thirty (30) License Customs Bro-
ker.
Research Instrument
The researchers used the questionnaire as the main tool for gathering the
needed data. The first part was the demographic profile of the respondents and
the second part was the extent of implementation of rules and regulations for
ecozone as assessed by the licensed customs brokers

Preparation and Validation of Questionnaires.
The researchers made a series of consultation on several references
such as books, and internet which were applicable to their study. Using the
reading materials, they were able to come up to a well written question.
The researchers organized the material and prepared the first draft of
the questionnaire. It was submitted to the research adviser for correction and
suggestions. Necessary corrections and other revisions for the improvements
were made. All irrelevant items were omitted as suggested.
After asserting the substantiated content of the questionnaire, it was
referred to three experts who were requested to validate the questionnaire. The
three (3) select experts were the validators namely Research instructors and a
Customs Brokers.
Data Gathering Procedure.
The researchers made a letter of request to followed a definite
procedure. First, the researchers formulated questionnaires and submit to their
research adviser for approval and for validation to the select validators.
Next, upon approval from the research adviser, the researchers sent
the questionnaires and have them on print.

Lastly, the questionnaires were administered through a photocopy for
easy response of the respondents . After a week, the researchers collect the
answers of the respondents, analyzed, and interpreted the data gathered.
Scoring and Interpretation of Respondents.
The ratings for each item were added and the average for each of the aspects
was sought.
After the retrieval of the questionnaires, the response of the respon-
dents were tallied, tabulated, analyzed and interpreted using the scale indi-
cated.
The interval and its corresponding descriptive value used in deter-

mining the extent of technological advancement in the service offered of bureau
of customs
Weigh Range Verbal Interpreta-

t tion
4 3.26-4.00 Very Great Extent
(VGE)
3 2.51-3.25 Great Extent (GE)
2 1.76-2.50 Less Extent (LE)
1 1.00-1.75 No Extent (NE)

Statistical Treatment Data
To qualify the data gathered, the following statistical tools were utilized:
For clarification and understanding of data gathered, the statistical
measures used were percentage, weighted mean, ranking and pearson - r.
Percentage. It was used in order to determined the percentage in
the profile of respondents. The following formula was used.
P= F/n x 100%
Where:
P= percentage
F= frequency
N= total number of respondents
100= constant multiplier
Weighted Mean. Weighted mean is a technique which takes consideration the
proper weights assigned value according to their relative importance. The for-
mula used was:
X= Fx/n
Where:
WM= Weighted Mean F= Frequency
X= Weighted point
N= Total number of respondents
Ranking. This was employed to determine the importance of responses with the
use of frequency count, percentage and ranking of obtained weighted means.
Pearsons R. Pearsons R is a bivariate analysis that mea -
sures the strength of association between two variables and the direc-
tion of the relationship between two continuous variables.
Where:
r = correlation coefficient
x_ = values of the x-variable in a sample
\bar = mean of the values of
the x-variable y_ = values of
the y-variable in a sample
\bar = mean of the values of the y-variable

Chapter 4
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
This chapter presented the analysis and interpretation of data gathered about
age, sex, and civil status of the respondents. It covered also the perceived prospects and
opportunities for individual growth of customs administration students and its relation-
ship of age, sex, and civil status to prospects and opportunities.
TABLE 1
Table 1 presented the
TABLE 2
Table 2 presented the
TABLE 3
Table 3 displays the

TABLE 4
Perceived Prospects and Opportunities for Individual growth of Customs Adminis-
tration Students
Table 4 displayed the
Table 5
Difference /Relationship between __________
Table 5 showed the
Table 6
Difference/Relationship between
Table 6 showed the degree
Table 7
Difference/ Relationship between Respondents
Table 7 presented the degree
Action Plan
Areas to be Objectives Strategies Time Evidence &

enhanced Frame Outcome
An action plan to strengthen
Chapter 5
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
This chapter states the summary of findings, conclusion and recommendation
which were deemed in this study. The information derive from the output of this study
may help the researchers in understanding their study.
Summary
This study aimed to determine

Findings
Conclusion
Recommendations
BIBLIOGRAPHY
A.BOOKS
B.PERIODICALS/JOURNALS
C.INTERNET
CURRICULUM VITAE
I.PERSONAL BACKGROUND
Name:
Address:
Email address:
Age:
Birthdate:
Birthplace:
Civil Status:
Gender:
Citizenship:
Religion:
Mothers Name:
Fathers Name:
II.ACADEMIC BACKGROUND
Tertiary:
Senior High School:
Junior High School:
Elementary School:
III. SEMINARS AND TRAININGS ATTENDED

APPENDIX A
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AGONCILLO COLLEGE INC.

Poblacion, Agoncillo, Batangas

COLLEGE OF CUSTOMS ADMINISTRATION 45

SIENA D. DEOMAMPO, MA.ED

Approved in partial fulfillment of the requirements for the degree Bachelor of

GREGORIA C. CABILES, ED.D

ANNA KRISTINA M. DE LEON, BS PSYCHOLOGY

Accepted and approved in partial fulfillment of the requirements of the degree of

GREGORIA C. CABILES, EdD.

COLLEGE OF CUSTOMS ADMINISTRATION 46

following individuals who served as their motivation and inspiration;

Families for the sacrifices, continuous support financially and physically to

achieve this success.

bearing the challenge of completing this study.

COLLEGE OF CUSTOMS ADMINISTRATION 47

relatives, friends,AlmaMater Agoncillo College Incorporated, classmates, instructors, and

research adviser ________________

COLLEGE OF CUSTOMS ADMINISTRATION 48

“IMPLEMENTATION OF RULES AND REGULATION FOR ECOZONE”

The Faculty of College of Customs Administration

Agoncillo College Incorporated

Poblacion Agoncillo, Batangas

In the Partial Fulfillment

Of the Requirements for the Degree of

Bachelor of Science in Customs Administration

Frelda Jerian Nichol

COLLEGE OF CUSTOMS ADMINISTRATION 49

THE PROBLEM AND ITS BACKGROUND

of the states and private institutions. There are substantial amount of

economy of the developing countries and gaining of the developed countries a

external activities as the same time protecting the competitiveness of the

have negative impacts economy in case of shortages of deep analysis and

the world experience before the formation of these zones.

One of the finest pieces of legislation passed by the Philippine Congress

COLLEGE OF CUSTOMS ADMINISTRATION 50

cumbent Philippine Economic Zone Authority (PEZA) Director General Charito B.

eration, administration and coordination of special economic zones in the Philip-

and exports, and to spur industrialization and countryside development.

Prior to PEZA, there were the predecessor laws/agencies: the Foreign

Processing Zone Authority (EPZA) as created by Presidential Decree (PD) 66 of

1972. These pioneered the creation of ecozones as a government strategy to at-

COLLEGE OF CUSTOMS ADMINISTRATION 51

dia, "The SEZ regulations tend to be conducive to FDIs. Conducting business in

portunity to pay lower tariffs.”

In the Philippines, the ecozones continue to exist with great success.

largest contributor to the country's local and national development.

P117.541 Billion investments and $54.597 Billion exports, 540 number of

COLLEGE OF CUSTOMS ADMINISTRATION 52

also remitted P750 million in annual dividends to the National Government.

Undoubtedly, PEZA's brand of service and package of fiscal incentives

program was adopted by the government as an important development strategy

despite changes in the administration.

development and industry clusters nationwide stimulating growth in the country-

regulatory reform, besting the other 67 ecozones surveyed worldwide. If these

Order (AO) 18 to accelerate rural progress through robust development of spe-

cial economic zones in the countryside in support of PEZA!

COLLEGE OF CUSTOMS ADMINISTRATION 53

As such, in light of ongoing talks to rationalize the fiscal incentives for

ecozone development program. These measures will contribute to the govern-

huge contributions to the economy for the past 25 years.

On the legal aspect, DG Plaza emphasized that "We cannot afford to

non-impairment of contracts, perspectivity in law application, and log-rolling legis-

COLLEGE OF CUSTOMS ADMINISTRATION 54

The researchers of the study entitled assumes the following;