Establishment of an Export Processing Zone for the Electronics Industry

July 25, 1979

LETTER OF INSTRUCTIONS NO. 900

WHEREAS, the development and promotion of Philippine exports is essential to sustain economic growth;

WHEREAS, the Philippine electronics industry has an excellent potential among all export industries in terms of foreign exchange and employment generation;

WHEREAS, it is a policy of the Government to provide the export sector with all the necessary support in terms of simplified administrative procedures, upgraded infrastructure, utilities and other support services; and incentives comparable to those offered in advanced developing countries in Asia, with a view of improving our competitive position in the world market;

WHEREAS, it is a policy of the Government to establish an advanced technology base for the integrated development of the electronics industry to serve as a nucleus for the eventual dispersion of the industry and its allied industries in the countryside;

WHEREAS, the aforesaid electronics technology base can become a vanguard for the development of our own indigenous technology by (1) generating a favorable business-economic environment for the expansion of the burgeoning class of Filipino entrepreneurs and investors, (2) acquiring appropriate foreign technology through cooperative technical agreements characterized by the participation of Filipino venture capital, and (3) establishing a system of technology transfer among Filipino scientists, engineers and technologists in both public and private sectors; casia

WHEREAS, it is a stated goal of the Government to provide the citizens with adequate housing facilities and other support services to enhance the quality of life of the Filipino, and to that end has instituted the BLISS and PAG-IBIG programs;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order the following:

SECTION 1. An Export Processing Zone (hereafter referred to as Zone) for the electronics industry shall be established to serve as an industrial base of the industry in an area of no less than twenty (20) hectares covering a portion of land belonging to the Food Terminal Incorporated together with a portion of public land in its immediate vicinity, in the Municipality of Taguig, Metro Manila.

SECTION 2. The Zone shall be complemented with adequate housing facilities and other support services for the employees, and their families, of companies that shall be situated in the Zone.

SECTION 3. The Export Processing Zone Authority and the Ministry of Human Settlements in consultation with the Philippine Export Council, specifically its Permanent Committee on Electronics, Electrical and Allied Industries, shall enter, within sixty (60) days after the effectivity of this Letter of Instructions, into a Memorandum of Agreement that shall include, among others, the terms of their cooperation, the method of conveyance of the land properties that shall be covered by the Zone, and the fund requirements and sourcing to implement the integrated project as well as the management of the Zone and the human settlements component thereof as discussed in Section 4: Provided, further, that:

a) The Memorandum of Agreement shall define the mechanism to integrate the Zone with the BLISS and PAG-IBIG programs of the Government to ensure the provision of adequate housing facilities for the workers, and their families, of the electronics and allied firms to be located in the Zone, as well as those residents who may be displaced by the establishment of the Zone.

b) The said PEC Committee shall in a consultative capacity, assist the Zone in formulating specific guidelines based on the policy statements in this Letter of Instructions, clarify the objectives, formulate strategies and provide the direction for the accelerated growth of the industry as it is based in the Zone; and by such initiatives provide leadership in advancing the development of the electronics industry and the electronics technology in this country.

SECTION 4. The establishment of an administration for the Zone shall be the responsibility of the Export Processing Zone Authority; while the establishment of an administration of the human settlements component shall be the responsibility of the Ministry of Human Settlements. The particular details shall be defined in the Memorandum of Agreement stated in Section 3.

SECTION 5. All the rights and privileges and the corresponding duties and obligations, as defined in Presidential Decree 66, as amended by P.D. 1449, shall be conferred on all enterprises, both business and non-profit, that shall be established in the Zone. cdt

SECTION 6. Priority to establish business operations in the Zone shall be given to companies with at least sixty (60) percent Filipino equity and considerably more if the technology involved is existing in the country. Exceptions to the above are companies with more advanced technology than is available locally, in which case equity ownership by Filipinos shall at least be thirty (30) percent: Provided, however, that after a certain period of time, Filipino ownership of the company shall be increased. Priority shall likewise be extended to government or non-profit private organizations engage in research and development activities as well as in areas of standards/testing, human resource development, marketing and information systems, and other such activities that will contribute to the growth and development of the industry. aisa dc

SECTION 7. In the attainment of its objectives, the Zone shall be assisted by the following agencies:

a) Human Settlements Development Corporation

b) Food Terminal Incorporated

c) National Home Mortgage Finance Corporation

d) Metals Industry Research and Development Center

e) Philippine Long Distance Telephone Company

f) Republic Telephone Company

g) Manila Electric Company

h) Metropolitan Waterworks and Sewerage System

SECTION 8. The provisions of this Letter of Instructions shall take effect immediately.

DONE in the City of Manila, this 25th day of July, in the year of Our Lord, Nineteen Hundred and Seventy-Nine. cd i