[FROM THE JOURNAL OF THE REGULAR SESSION OF THE SANGGUNIANG PANLALAWIGAN OF PAMPANGA HELD ON FEBRUARY 7, 2005 AT THE SESSION HALL, CAPITOL BUILDING, CITY OF SAN FERNANDO, PAMPANGA]
PRESENT:
Hon. Joseller "Yeng" M. Guiao (Vice Governor) - Presiding Officer
Hon. Ceferino C. Laus - Member
Hon. Prospero T. Lagman - Member
Hon. Aurelio "Dong" D. Gonzales, Jr. - Member
Hon. Nestor O. Tolentino - Member
Hon. Liberty G. Lim - Member
Hon. Tars DC. Halili - Member
Hon. Nelson T. Calara - Member
Hon. Johnny "JQ" T. Quiambao - Member
Hon. Nilo M. Caballa - Member
Hon. Cesar Y. Magat - Member
ABSENT:
Hon. Lilia G. Pineda - Member (OB)
Hon. Salvador F. Dimson III - Member (OB)
ORDINANCE NO. 2
AN ORDINANCE ENACTING THE PAMPANGA INVESTMENT CODE OF 2005.
Sponsor: Hon. Nestor O.Tolentino
BE IT ORDAINED BY THE SANGGUNIANG PANLALAWIGAN OF PAMPANGA, in session assembled:
CHAPTER 1. TITLE AND DECLARATION OF POLICY
SECTION 1. Title. This ordinance shall be known and cited as the Pampanga Investment Code of 2005.
SECTION 2. Declaration Of Investment Policy. It is hereby declared as a policy of the Provincial Government to attract, promote and encourage domestic and foreign investments in the Province of Pampanga, as well as develop a business environment that will keep and sustain said investments. Along this line, the following are the investment policies of the province:
a) To encourage investment projects that would utilize local labor, substantial amount of indigenous raw materials, and other natural resources of the province;
b) To promote Pampanga products in order to maximize production, attain self-sufficiency and optimal productivity;
c) To attract and encourage investments in priority areas such as agri-business, manufacturing, eco-tourism, and other economic activities that will significantly contribute to the socio-economic development of the province;
d) To promote Pampanga Province as a favorable investment destination with adequate electricity and water resources, free of urban congestion and pollution and easily accessible to Asia Pacific region and other global markets;
e) To encourage investments in business activities that will provide livelihood and employment opportunities to improve the quality of life and assure that the benefits of development accrue to the people of Pampanga; and
f ) To promote the active participation of non-government organizations and the private sector as partners and catalysts in achieving the development goals of the province;
g) To fully support the Global Gateways project of the region through:
1) the promotion of ancillary projects that will support the Subic-Clark-Tarlac Expressway Project (SCTEP);
2) building of spur roads from key cities/municipalities in the province leading to SCTEP; and
3) active participation and cooperation to the initiatives of Bases Conversion Development Authority (BCDA) Management and Holding, Inc., who is responsible for the management and implementation of SCTEP
h) To ensure the improvement of infrastructure facilities and mitigate issues on flooding, traffic and other impediments to the development of the province;
i) To promote investor-friendly programs such as the streamlining of critical procedures of government frontline agencies and initiate transparency in their undertakings with their commitments.
SECTION 3. Scope and Coverage. These rules shall apply to all persons, entities or enterprises, government and non-government organization and instrumentalities to the extent provided in the Code and within the territory of the province.
Provided, however, this rule shall not apply to financing or banking institutions and other enterprises which are governed by the Central Banking Act and under the supervision of the Bangko Sentral ng Pilipinas (BSP).
CHAPTER 2. DEFINITION OF TERMS
SECTION 4. Definition of terms. When used in this Code, the following terms and phrases shall mean as follows:
a) "PIPO" shall refer to Pampanga Investment Promotion Office created under this Code that serves as the Secretariat and implementing arm of the Board;
b) "Board" shall refer to the Pampanga Investment Board (PIB);
c) "Code" shall refer to the Pampanga Investment Code of 2005;
d) "Province" shall refer to the Province of Pampanga covering all the areas within its territorial jurisdiction now existing or hereinafter acquired, as provided by law and its charter;
e) "Existing enterprises" shall refer to those establishments or enterprises whose places of operation or production are physically located within the territorial jurisdiction of Pampanga;
f) "Expansion projects" include modernization, rehabilitation, increase of existing volume or value of production, upgrading the quality of registered product or utilization of inefficient or idle equipment under such guidelines as the Board may adopt;
g) "Incentives" shall refer to fiscal and non-fiscal incentives as provided for in this Code;
h) "Local Personnel or Worker" refers to a person of legal age who is a bonafide resident of Pampanga employed in an enterprise registered under this Code;
i) "New investors/enterprises" shall refer to investors or enterprises that have not or are not currently engaged in any kind or type of business in Pampanga but intend to actually establish their place of operation or production in Pampanga;
j) "Preferred areas of investment" refer to economic activities or sectors declared as priority investment areas by the Board in accordance with the provisions of this Code;
k) "Registered enterprises" refer to enterprises or businesses registered in accordance with the provisions of the Code;
CHAPTER 3. PAMPANGA INVESTMENT BOARD
SECTION 5. Creation of the Pampanga Investment Board. There is hereby created a body to be known as the Pampanga Investment Board (PIB) to implement the provisions of this Code.
SECTION 6. Composition of the Board. The Board shall be composed of the following:
Chairman: Provincial Governor
Co-Chairman: President, Pampanga Chamber of Commerce and Industry
Members:
a) Provincial Vice-Governor
b) Provincial Planning and Development Coordinator
c) Provincial Director, Department of Trade and Industry
d) Representative, Tourism Industry
e) Representative, Manufacturing Sector
f) Representative, Agricultural Sector
g) Representative of accredited Non-Government Organizations (NGOs)
h) President or authorized representative of Metro Angeles Chamber of Commerce and Industry
The representatives from the tourism, manufacturing and agricultural sectors and the accredited Non-Government Organization (NGO) shall be appointed for a minimum of two (2) years extendable at the option of the nominating sector subject to the approval of the Provincial Governor.
The membership of the Board may be increased or decreased by the Sangguniang Panlalawigan upon the recommendation of the Board for the effective implementation of the Code.
The Pampanga Investment Promotion Office (PIPO) shall serve as the secretariat of the Board.
SECTION 7. Board Meetings and Quorum. Within sixty (60) days upon approval of this Code, the Provincial Governor, in his capacity as Chairman, shall convene the Board after appointing the members mentioned in Section 6 hereof. The Board shall meet at least once in every quarter or as often as may be necessary, on such a day and time as it may fix. The presence of majority of its voting members shall constitute a quorum and a majority of the quorum of a meeting shall be required to exercise its powers and perform its functions.
SECTION 8. Powers and Functions of the Board. The primary function of the Board shall be to establish a favorable and stable business climate that will encourage, support additional private sector investments, continuous undertaking of business activities consistent with the development needs and environment objectives of the province. Pursuant to this, the Board shall be vested with the following powers and functions:
a) To formulate the rules and regulations to implement the intent and provisions of this Code and to create other technical working committees to facilitate the effective implementation of this Code;
b) To initiate the conduct of technical researches on the priority investment areas to be promoted as well as the appropriate incentives and support measures to be extended to registered enterprises;
c) To formulate and adopt a long-range investment promotions program and the corresponding incentives and support measures to be used to attract targeted investors taking into consideration the existing investment code of the different municipalities of the province;
d) To supervise the operations and activities of the Pampanga Investment Promotion Office (PIPO) for the effective implementation of the provisions of this Code;
e) To review and update the fiscal and non-fiscal incentives granted registered enterprises under this Code;
f ) To promote Pampanga as an investment and environment-friendly destination;
g) To process and approve any application for registration with the Board imposing such terms and conditions as it may deem necessary to attain the objectives of this Code;
h) After due notice, suspend the enjoyment of incentives or benefits or cancel the registration of any registered enterprise for
(1) failure to maintain the qualifications required under this Code for the registration with the Board, or (2) violation of any provision of this Code and its implementing rules and regulations or of the terms and conditions of registration and the availment of incentives; provided, registration of an enterprise whose project timetable as set by the Board is delayed by one year shall be considered automatically cancelled unless reinstated as a registered enterprise by the Board; provided, further, that the Board may also impose or require the refund of incentives and impose fines and penalties;
i ) To enter into agreement with any entity for the purpose of simplifying systems, procedures, and requirements on investments and business operation in the Province of Pampanga.
CHAPTER 4. THE PAMPANGA INVESTMENT PROMOTION OFFICE
SECTION 9. Creation of the Pampanga Investment Promotion Office (PIPO). There is hereby created a Pampanga Investment Promotion Office, hereinafter referred to as PIPO which shall be headed by Chief Industry and Investment Development Officer with SG-24 and shall be supported by three (3) Technical Staff: one (1) Senior Industry and Investment Development Specialist with SG-18, one (1) Industry and Investment Development Specialist with SG-15 and one (1) Industry and Investment Development Researcher with SG-10. Further, it shall serve as the Secretariat of the Board. In addition, PIPO shall have the following duties and functions:
a) To undertake pro-active and re-active market development and investment promotion activities;
b) To assist in (1) securing licenses and permits, (2) arranging for the availment of local and national government incentives, and (3) providing a listing of joint venture partners, raw materials suppliers, possible business sites and other requirements of existing and potential investors and enterprises;
c) To establish and maintain a data bank of general business information, information on economic activities, available technology, financing sources and other relevant data or information;
d) To network with counterpart investment promotion organizations and coordinate with support agencies of government, LGUs and the private sector in investment promotion efforts; and
e) To organize and train PIPO's staff with the competence to conduct investment and environment management promotion functions.
SECTION 10. Pampanga Investment Promotion Office Services. Pursuant to its duties and functions, the Pampanga Investment Promotion Office (PIPO) shall provide the following services, among others:
a) Provide information on investment opportunities, business procedures, permit requirements, government regulations and other data required by the investor;
b) Assist investors in completing the requirements of government regulatory agencies;
c) Make referrals to relevant government bodies, support organizations, service providers and important contacts;
d) Organize appointments, itineraries and site visits including arrangement for logistical support;
e) Report updates regarding major infrastructure projects in the province both existing and planned, as well as the other programs and developments that will impact the business environment;
f) Undertake an active advocacy campaign to push infrastructure programs aimed at providing necessary facilities, as well as policy reforms to enhance Pampanga investment climate.
CHAPTER 5. INVESTMENT PRIORITIES PLAN
SECTION 11. Criteria in Determining Investment Priority Areas. Economic activity that shall be included in the Investment Priorities Plan must be environmentally, socio-economically, technically and financially sound after thorough investigation and analysis by the Board. The determination of preferred areas of investment to be listed in the Investment Priorities Plan shall be based on the following:
a) long-run comparative advantage
b) economic soundness
c) extent of contribution of the activity to a specific development goal
d) market and technical considerations
e) value of social objectives
f) the job generation potential of the enterprise
g) utilization of the available raw materials of the province
h) other indicators of comparative advantage.
SECTION 12. Preferred Investment Areas. The following shall be adopted as priority investments areas by the Board:
a) Eco-Tourism
- Accommodation Facilities
- Nature Parks/Mountain Resorts
- Transportation Services
- Restaurants/Food Outlets
- Other tourism related services
d) Agri-business
- Post harvest facilities
- High value crop production
- Feed mills
- Aquaculture
e) Services
- Media/Advertising
- Medical services/facilities
- Information & Communications Technology
- Financial Services
- Engineering/architectural services
- Training and sports facilities
- Dev't of Indigenous Power Sources
- Human Resource Development
SECTION 13. Determination of Additional Investment Areas.
(a) Additional economic activities may be included in the list of priority investment areas by the Board and shall then be adopted for implementation under the Pampanga Investment Promotion Program. The inclusion of investment priority areas shall be based on the following factors:
(1) generation of high level of employment
(2) high degree of value-added features
(3) creation of linkages with local industries, and
(4) no deleterious effect on the environment.
(b) The Board, however, may remove an area or activity from the list, at any point, when any of the following conditions are present: (1) sufficient investments in the areas or activity have been attained, (2) continued extension of incentives or support measures for the specific investment area is no longer to the interest of Pampanga or may place the government and the public in adverse position, (3) the investment area or activity cannot attract investors within reasonable time and cost or may result in unfavorable business climate, and (4) lack of progress in the implementation of an environmental management plan.
SECTION 14. Review of Investment Incentives and Support Measures. To promote the growth of investments in the province particularly in the preferred investment areas, the Board shall review the package of incentives and support measures once in every three (3) years and recommend for approval of the Sangguniang Panlalawigan the appropriate specific fiscal and non-fiscal incentives that the government shall grant to targeted investors and enterprises. Nothing in this Section shall also prevent the Board from reviewing the provisions of this Code and recommend revisions of the same to the Sangguniang Panlalawigan. The Sangguniang Panlalawigan by itself may also make such revisions.
CHAPTER 6. REGISTRATION OF ENTERPRISES
SECTION 15. Qualifications for New Enterprises. All new enterprises intending to avail of the incentives as provided for in this Code must be able to meet the following requirements:
a) The business enterprise must have complied with all the requirements mandated under existing laws, local and national under the Philippine Constitution;
b) The prospective investor's place of operation or production shall be located within the province of Pampanga;
c) The prospective investment must engage in any of the areas or activities cited in the priority areas of investments as may hereafter be declared by the Board;
d) The new enterprise must have a capitalization of at least P15 million but not more than P100 million for a medium-scale enterprise and more than P100 million for a large scale business project; provided that the amount of capitalization shall be based on the total additional project cost, excluding the value of the land where the entity's office, plant and equipment are situated, as stated in the investor's project study submitted to and approved by the Board;
e) The new enterprise will actually employ qualified bonafide residents of the province equivalent to at least 50% of its total labor/manpower requirements;
f) Foreign companies intending to apply for registration must comply with Foreign Investments Act of 1991;
g) Project must not negatively impact the environment, whether in terms of pollution or resource use;
h) Registered with Securities and Exchange Commission (SEC) in the case of a corporation and association, Department of Trade and Industry (DTI) in the case of a single proprietorship or Cooperative Development Authority (CDA) in the case of a cooperative.
SECTION 16. Qualifications for Existing Enterprises. Any existing enterprise may avail of the incentives under this Code provided that the following qualifications are met:
a) The business enterprise must have complied with all the requirements mandated under the existing laws, rules and regulations;
b) The intended expansion or diversification of the existing enterprise must engage in economic activity identified as an investment priority area by the Board;
c) The existing enterprise whose place of operation or production is already located within the territorial jurisdiction of the province, but which intends to undertake any of the following activities:
1) Relocate its principal office to Pampanga;
2) Expand its existing production capacity or construct new buildings and other civil works for the installation of new machinery and equipment or improvements thereof which result in an increase in production capacity.
d) The expansion or diversification shall have an additional project cost in the scale as provided for in Section 15 (d), provided that the amount of capitalization shall be based on the total additional project cost and such expansion or diversification as stated in the investor's project study submitted to and approved by the Board;
e) The expansion or diversification project will provide employment to bonafide residents of the province, and
f) The expansion or diversification will include an environmental management plan.
SECTION 17. Registration Requirements. New or existing enterprises shall file their application for registration with the Board through the Pampanga Investment Promotion Office. A registration book shall be used to record all applications filed. The date appearing and stamped on the application shall be considered the date of official acceptance. The following documents shall likewise be submitted:
a) Three (3) copies of duly completed application form to be provided by the Pampanga Investment Promotion Office (PIPO) in accordance with the provisions of this Code;
b) A copy of the Certificate of Registration issued by the Securities and Exchange Commission, the Department of Trade and Industry, Board of Investments or the Cooperative Development Authority, as the case may be;
c) For existing enterprises, a copy of the latest financial statement of the applying firm; and
d) For corporate type of ownership, a board resolution authorizing the person to file the application.
SECTION 18. Registration Procedures and Approval of Applications. The Board shall formulate appropriate rules and regulations to facilitate action on applications filed, prescribe criteria for the evaluation of applications with payment of corresponding fees/charges, and devise standard forms for use by applicants. The Chairman of the Board shall approve all applications processed by the PIPO.
SECTION 19. Certificate of Registration. Under this Code, an enterprise is considered registered upon removal of its application by the Board, and as such, is legally entitled to fully avail of any or all of the incentives provided in this Code. A registered enterprise shall be issued a Certificate of Registration duly signed by the Board's Chairman in such style and form as the Board may determine.
CHAPTER 7. RIGHTS AND PRIVILEGES
SECTION 20. Rights and Privileges. The Provincial Government of Pampanga, through the Pampanga Investment Board, guarantees all registered enterprises their full entitlement of the rights and privileges provided under this Code and other laws and shall:
a) Provide concise and comprehensive information to prospective investors regarding the economic priorities of the province, target investment areas, and the general conditions applicable to incoming direct private investments;
b) Disseminate to investors and the general public, the investment evaluation criteria and registration procedures to enhance government transparency in the process of granting incentives;
c) Take into full account the need of investors for industrial peace, stability, growth and profit in their operations whenever policies are to be formulated and modified affecting investments in the province;
d) Facilitate implementation of the investment project;
e) Not interfere or modify arrangements with investors after the details for the implementation of an investment project has been accepted and approved, and the ownership and management structure of the enterprise has been established, unless the law provides otherwise;
f) Avoid and/or prevent undue distortion of competition between or among enterprises operating within the territorial jurisdiction of the province, whether domestic or foreign, when granting any special exemptions or incentives aimed at encouraging investment in the identified target areas;
g) Resolve all doubts and/or conflicts concerning the benefits, privileges, and incentives granted under this Code or in other local ordinances enacted for the purpose of encouraging investment, in favor of the investor.
CHAPTER 8. FISCAL AND NON-FISCAL INCENTIVES
SECTION 21. Tax Incentives to Registered Enterprises. In addition to the incentives provided under Republic Act 7160, otherwise known as the "Local Government Code of 1991," other special local incentives granted by pertinent LGUs within province and Republic Act 7916, known as "The Special Economic Zone Act of 1995," and other pertinent laws, registered enterprises under this Code shall enjoy the following tax incentives:
a) Tax credit equivalent to ten percent (10%) of the total cost of approved infrastructure projects to be deducted from the future real property tax liability of the registered enterprise within a period of five (5) years starting on the date of the expiration of the tax exemption of the registered enterprise; provided, that said infrastructure project shall be open for public use;
b) Exemption from application of real property taxes to any incremental increase in the valuation of real properties (i.e., from agricultural to commercial or residential, etc.). Said exemption shall apply for a period of three (3) years either from the date of approval by the Board or from the expiration of the registered enterprise's tax exemption as provided under other national laws, whichever is applicable; provided, that the said exemption shall pertain only to the 35% share to the province.
SECTION 22. Non-fiscal Incentives. Registered enterprises and investors shall be granted the following non-fiscal incentives:
a) Assistance in the documentation procedure of exports;
b) Consistent support of the Provincial Government for industrial peace and security;
c) Assistance in securing direct source of electric power and water supply connection;
d) Assistance in the negotiation of special rates for industries with a minimum load of at least 1000 kilowatts;
e) Assistance in site selection and negotiation for right way of way;
f) Assistance in labor recruitment and arbitration;
g) Other non-fiscal incentives as may be determined by the Board.
CHAPTER 9. FINAL PROVISIONS
SECTION 23. Appropriations. Appropriations covering the current operating Expenditures for the Board and the personal services of that shall cover the salaries of the Pampanga Investment Promotion Office (PIPO) shall be included in the annual provincial budget.
SECTION 24. Monitoring and Evaluation. The PIPO shall monitor and evaluate project implementation for purposes of ensuring that the objectives of the projects are accomplished.
SECTION 25. Penal Provisions. Any violation of the provisions of this Code, existing laws, ordinances, rules and regulations by any registered enterprise, shall be ground for the cancellation or revocation of the registration of the business and the withdrawal of all the incentives granted under this Code.
SECTION 26. Separability Clause. It is declared that the provisions of this Code are separable, and in the event that one or more of the provisions are declared illegal or unconstitutional by a competent court, the validity of the other provisions shall not be affected and shall continue to be in force and in effect.
SECTION 27. Repealing Clause. All ordinances, executive orders, rules and regulations inconsistent or in conflict with the provisions of this Code are hereby repealed, amended or modified accordingly.
SECTION 28. Effectivity. This ordinance shall take effect immediately upon its approval.
APPROVED.
I HEREBY CERTIFY to the correctness of the above-quoted Ordinance.
LUIS A. RIVERA
Secretary to the Sanggunian
ATTESTED:
JOSELLER "YENG" M. GUIAO
(Vice-Governor) Presiding Officer
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