eLegis Sangguniang Panlungsod ng Olongapo

22 August 2007

2007 O - 36 - ENACTING THE OLONGAPO CITY INVESTMENT CODE OF 2007

EXCERPTS FROM THE MINUTES OF THE REGULAR SESSION OF THE SANGGUNIANG PANLUNGSOD OF OLONGAPO, HELD ON AUGUST 22, 2007 AT THE CITY HALL.

PRESENT:

Hon. Cynthia G. Cajudo - - - - - - - - - - - - - - - - - City Vice-Mayor & Presiding Officer Hon. Gina Gulanes-Perez - - - - - - - - - - - - - - - - City Councilor
Hon. John Carlos G. Delos Reyes- - - - - - - - - - - “ “
Hon. Rodel S. Cerezo - - - - - - - - - - - - - - - - - - - “ “
Hon. Marey Beth D. Marzan- - - - - - - - - - - - - - - “ “
Hon. Sarah Lugerna Lipumano-Garcia - - - - - - - - “ “
Hon. Edwin J. Piano- - - - - - - - - - - - - - - - - - - - - “ “
Hon. Angelito W. Baloy - - - - - - - - - - - - - - - - - - “ “
Hon. Aquilino Y. Cortez, Jr.- - - - - - - - - - - - - - - - “ “
Hon. Anselmo A. Aquino- - - - - - - - - - - - - - - - - - “ “
Hon. Elena C. Dabu- - - - - - - - - - - - - - - - - - - - - - “ “
Hon. Carlito A. Baloy- - - - - - - - - - - - - - - President, Liga ng mga Barangay
Hon. Robine Rose C. Buenafe- - - - - - - - - - - - - - - SK Federation President
ABSENT:

None.

In the interest of public service and on motion of Councilor Gina Gulanes-Perez, with the unanimous accord of the Members of the Sangguniang Panlungsod present,

RESOLVED, AS IT IS HEREBY RESOLVED, by the Sangguniang Panlungsod in session assembled, to enact the following Ordinance:


ORDINANCE NO. 36
(Series of 2007)

AN ORDINANCE ENACTING THE OLONGAPO CITY INVESTMENT CODE OF 2007


CHAPTER I
TITLE AND DECLARATION OF POLICY

SECTION 1. Title of the Ordinance. - This ordinance shall be known and cited as the OLONGAPO CITY INVESTMENT CODE OF 2007.

SECTION 2. Declaration of Investment Policy. – To accelerate the sound and holistic development of Olongapo City in accordance with the city development plan and the national development plan, it is hereby declared to be the policy of the City Government to attract, promote and encourage domestic and foreign investments or business expansions in the City of Olongapo, which will provide employment opportunities, raise the standard of living of the people of Olongapo City, and provide for an equitable distribution of wealth. Along this line, the following specific policies are hereby promulgated:


a. Encourage investment projects that would utilize local labor, indigenous raw materials and other resources of the city;
b. Attract investments in preferred areas or activities such as tourism and recreation, transshipment facilities, light manufacturing, property development, information and communication technology, and agriculture and food processing business;
c. Promote “Gawang Gapo” products to encourage local entrepreneurship and attain self-sufficiency;
d. Promote and encourage the active participation and collaboration of the private sector and non-government organizations in the economic development of the city; and
e. Support programs that promote an investor-friendly business climate without necessarily resulting to environmental and ecological degradation.


CHAPTER II
DEFINITION OF TERMS

SECTION 3. Definition of Terms. – When used under this Code, the following terms and phrases shall mean as follows:

a. “Board” shall refer to the Olongapo City Investment Board created under this Code.
b. “City” shall refer to the City of Olongapo covering all the areas within its territorial jurisdiction as provided for by law and its charter.
c. “Code” shall refer to the Olongapo City Investment Code of 2007.
d. “Existing Enterprises” shall refer to those establishments or enterprises whose places of operation or production are located within the territorial jurisdiction of Olongapo City existing prior to the enactment of this code.
e. “Local Labor” shall refer to those workers or personnel who are bona fide residents of Olongapo City.
f. “New Investors or Enterprises” shall refer to those prospective investors who have not engaged in any kind or type of business in Olongapo City and is interested in establishing its places of operation or production in the City.
g. “Preferred Investment Areas” shall mean the economic activities that the Board shall have approved and declared as such after a thorough study and evaluation.
h. “Registered enterprises” shall mean those enterprises/businesses registered in accordance with the provisions of this Code.


CHAPTER III
OLONGAPO CITY INVESTMENT BOARD

SECTION 4. The Olongapo City Investment Board. – There is hereby created an Olongapo City Investment Board (“Board”) to implement the provisions of this Code.

SECTION 5. Composition of the Board. – The Board shall be composed of the following:

a. City Mayor, as the Board Chairperson;
b. City Vice-Mayor, as the Board Co-Chairperson
c. City Administrator, as the Board Vice-Chairperson;
Members of the Board:
d. Chairperson, City Council Committee on Business & Economic Enterprises
e. Chairperson, City Council Committee on Ways and Means;
f. Chairperson, City Council Committee on Tourism;
g. Provincial Director of the Department of Trade and Industry;
h. City Director of Department of Interior and Local Government (DILG);
i. Chairperson of the Olongapo City Tourism Council;
j. Chairperson of the Small & Medium Enterprises Development (SMED) Council
k. President of the Subic Bay Freeport Chamber of Commerce; and
l. President, Liga ng mga Barangay
m. 3 representatives from accredited Non-Government Organizations to be appointed by the City Mayor.

The Olongapo City Investment Center shall serve as the secretariat of the Board.

The membership of the Board may be increased by the Sangguniang Panlungsod through the recommendation of the Board as it deems necessary for the effective implementation of the provisions of the Code.

SECTION 6. Meetings and Quorum of the Board. - The Board shall meet at least once every month or as often as may be necessary, on such a day and time as it may fix. The presence of at least a majority of its members shall constitute a quorum and a majority of the quorum of a meeting, validly held, shall be required for the Board to exercise its powers and perform its functions.

SECTION 7. Powers and Functions of the Board. – The primary function of the Board shall be to establish a favorable and stable policy on business climate which will encourage and support private sector investment and in the operation of business activities consistent with the development needs of Olongapo City. Pursuant to this, the Board shall be vested with the following powers:

a. To draw up and promulgate the governing implementing rules and regulations in the implementation of the provisions of this Code subject to the approval of the Sangguniang Panlungsod;
b. To commission economic and technical research for the purpose of identifying priority investment areas and/or activities to be promoted as well as appropriate incentives and support measures which should be extended to new investors, to attract investors into these areas and/or activities;
c. To prepare a short and medium term investment development program, which shall specify the list of priority investment areas and activities and corresponding incentives and support measures to be used to attract targeted investors;
d. To organize and designate the Olongapo City Investment Center to act as the Secretariat and to consequently supervise the same in its operations specifically in the implementation of the provisions of this Code and its implementing rules and regulations promulgated thereof;
e. To approve or disapprove the application of proposed investment subject to the provisions of this code as well as suspend or revoke any registration for due course;
f. To secure additional funding and other resources to supplement the budgetary support provided by the Olongapo City Government for the operation of the Secretariat in its implementation of the Code; and
g. To enlist the assistance of local government offices, national agencies and private sector organizations, as may be necessary, useful and incidental to the effective and efficient implementation of this ordinance.

h. To establish trade and investment liaison offices in places to be determined by the Board as may be necessary to promote the City’s business climate; and
i. Such other powers and functions which are necessary and incidental to the exercise and performance of the aforesaid functions.

SECTION 8. Olongapo City Investment Center. - There shall be created an Olongapo City Investment Center (“Center”), which shall be initially composed of the following:

a. One (1) City Investment Development Officer, as Head of the Center;
b. Two (2) Investment Development Specialists;
c. One (1) Economic Researcher; and
d. Two (2) Administrative Staff.
e. One (1) Representative from the City Planning and Development Office;
f. One (1) Representative from the City Engineering Office;
g. One (1) Representative from the Environmental Sanitation and Management Office;

The Center shall be created as a Special Service Unit under the Office of the City Mayor.

SECTION 9. Powers and Duties of the Center. – The Center shall act as the Technical Secretariat of the Board, which shall implement its policies and guidelines, and shall specifically perform the following duties:

a. Accept, process and evaluate applications for registration for availment of local incentives and submit recommendations for action by the Board;
b. Provide the necessary support services to investors as guaranteed under the Code;
c. Establish and maintain networking relations with other offices and agencies whenever appropriate and necessary;
d. Collate, analyze and compile pertinent data and information and conduct studies concerning areas that have been or may be declared as “Preferred Areas of Investments” by the Board;
e. Recommend to the Board modifications/amendments to existing legislations and procedures on local investments when the need warrants;
f. Prepare agenda for meetings of the Board and submit for the latter’s consideration and approval the policies and measures which are deemed necessary to carry out the provisions of the Code;
g. Submit reports quarterly to the Board about its activities relative to the implementation of the Code; and
h. Perform such other functions that are necessary and incidental for the effective implementation of the Code.

SECTION 10. Technical Functions of the Center. – The Olongapo City Investment Center, in addition to its powers and duties as provided for:

a. Investor Assistance and Servicing. Assist prospective investors by providing assistance, among others:

1. One-stop documentation services (e.g. facilitating business permits);
2. Investment counseling; and
3. Business matching.

b. Investment or Trade Promotion and Generation. Handle promotional activities that will directly influence infusion of investments and influx of trade and tourism, such as:

1. Trade and investment missions;
2. Investment seminars;
3. Direct investment marketing;
4. Trade fairs and exhibits;
5. Investment briefings and orientations;
6. Setting-up of a showroom or exhibition area; and
7. Preparation and dissemination of investment promotional materials.

c. Information Management and Development. In the area of information and development, shall:

1. Handle data generation, processing and packaging;
2. Handle data storage and retrieval;
3. Support direct investor servicing through an information assistance desk;
4. Review existing incentives and prepare recommendations and / or policy papers for its improvement; and
5. Prepare project profiles, pre-investment studies, viability and feasibility, industry profiles and situationers.

SECTION 11. Reporting. – The City Investment Development Officer shall report to the Board matters affecting the plans, programs and performance of the Center.


CHAPTER IV
PREFERRED AREAS OF INVESTMENT AND
APPROPRIATE INCENTIVES AND SUPPORT MEASURES

SECTION 12. Preferred Investment Areas. - Incentives will be provided to new, expansion or diversification projects in the following investment areas:

a. Infrastructure and Property Development

This covers the development of infrastructures, telecommunications, logistics, transshipment facilities, transport systems, warehouses, commercial complex and mass housing. This also covers infrastructure projects under the Build-Operate-Transfer (BOT) Law.

b. Tourism and Recreation

This covers the development of tourism zones, tourist estates, eco-tourism facilities and the establishment of tourist accommodation facilities. This also covers historico-cultural heritage projects and services provided by tourist operators as endorsed by the Department of Tourism (DOT).

c. Light Manufacturing

This covers manufacturing activities of environmentally-friendly or non-polluting products such as but not limited to garments, footwear, handicrafts, souvenirs & toys.

d. Healthcare and Wellness Products and Services

This covers hospital services, medical and dental services, other human health and wellness products/services, retirement villages, medical zones and related services.

e. Information and Communications Technology

This covers IT and IT-enabled services and ICT support services like Business Process Outsourcing (e.g. call centers).

f. Agri-business and Food Processing

This covers the commercial production and commercial processing of agricultural and fishery products including their by-products.

SECTION 13. Determination of Additional Investment Areas. – In consultation with other government and private sector leaders of Olongapo City, the Center may recommend to the Board additional investment areas for inclusion in the list of preferred investment areas which upon due deliberation and approval shall then be adopted for implementation under the Olongapo City Investment Program with the concurrence of the Sangguniang Panlungsod. The inclusion of additional investment areas shall be based on the following factors:

a. Generation of high level of employment;
b. High degree of value-added features;
c. Creation of linkages with local industries; and
d. No deleterious effect on the environment.

SECTION 14. Removal or Deletion of a Preferred Investment Area. - Upon the recommendation of the Center, the Board may remove an area or activity from the list of preferred areas for investments. Bases for the removal of a preferred investment area are as follows:

a. Sufficient investments in the area or activity have been attained;
b. The continued extension of incentives or support measures for the specific investment area is no longer to the interest of Olongapo City; or
c. The investment area or activity cannot attract investors within reasonable time and cost or may result in unfavorable business climate.


CHAPTER V
REGISTRATION OF ENTERPRISES

SECTION 17. Qualifications of a New Enterprise. – New investors who intend to avail of the incentives pursuant to Section 14 of this Code must meet the following qualifications:

a. That the business enterprise must have complied with all the requirements mandated under existing local and national laws and the Constitution;
b. That the prospective investor’s place of operation or production be located within the territorial jurisdiction of Olongapo City;
c. That the prospective investment must engage in activities in preferred areas of investments as declared and approved by the Board;
d. The new enterprise must have a capitalization of at least Three Million Pesos but not more than Fifteen Million Pesos in case of a small-scale enterprise; at least Fifteen Million Pesos but not more than One Hundred Million Pesos in case of a medium-scale enterprise; and more than One Hundred Million Pesos in case of a large industry; Provided, that the amount of capitalization shall be based on the total project cost as stated in the investor’s project study submitted to and approved by the Board; and
e. That the new enterprise will provide out of the labor force an employment of no less than ten (10) persons in case of a small-scale enterprise; at least twenty (20) persons in case of a medium-scale enterprise; and at least one hundred (100) persons in case of a large industry who are bona fide residents of Olongapo City.

SECTION 18. Qualifications of an Existing Enterprise. – An existing enterprise may avail of the incentives under this Code provided that it meets the following requirements:

a. That the business enterprise must have complied with all the requirements mandated under existing local and national laws and the Constitution;

b. That the expansion or diversification must engage in activities mentioned in Section 2 hereof or in other preferred areas of investments as may hereafter be declared by the Board;

c. That the existing enterprise whose place of operation or production is already located within the territorial jurisdiction of Olongapo City, but which will undertake any of the following activities/projects:

1. Relocate its principal office from other places in the Philippines to Olongapo City, or
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 will result in an increase in production capacity;

d. That the expansion or diversification shall have a capitalization in reference provided under Section 17, item (d); Provided, that the amount of capitalization shall be based on the total project cost of such expansion/diversification as stated in the investor’s project study submitted to and approved by the Board; and

e. That the expansion/diversification shall provide out of the labor force an employment of no less than ten (10) persons in case of a small-scale enterprise; at least twenty (20) persons in case of a medium-scale enterprise; and at least one hundred (100) persons in case of a large industry, who are bona fide residents of Olongapo City.

SECTION 19. Application Requirements. – Application shall be filed with the Board, recorded in a registration book and the date appearing therein and stamped on the application shall be considered the date of official receipt thereof.

A non-refundable filing fee of five thousand pesos (P5,000.00) shall be paid together with the following documents for registration:

a. Three (3) copies of completed application form to be provided for by the Board in accordance with the provisions of this Code;

b. A copy of the complete project study of the proposed investment showing the project is economically, technically, and financially feasible and viable;
c. In case of corporation, a copy of its Articles of Incorporation and By-laws as approved by the Securities and Exchange Commission, and the Board of Investments, as the case may be;
d. A certified true copy of its Certificate of Registration with the Securities and Exchange Commission, the Board of Investments, and the Department of Trade and Industry, as the case may be; and
e. Resolution of the applicant’s Board of Directors, in case of a corporation, authorizing the filing of application.

SECTION 20. Approval and Registration Procedures. – The Board is authorized to adopt rules and regulations to facilitate action on applications filed with it; prescribe criteria for the evaluation of several applications filed in one preferred area; and devise standard forms for use of applicants.

SECTION 21. Certificate of Registration. – A registered enterprise under this Code shall be issued a Certificate of Registration with the signature of its Chairman and/or such other officer of the Board as it may empower and designate for the purpose. The Certificate of Registration shall be in such form and style as the board may determine.

SECTION 22. Cancellation of Registration. – Registration will be automatically cancelled for failure to commence operation within 6 months from approval of the application, unless formally extended by the Board for due course but in no case, shall be more than one (1) year from approval of the application.


CHAPTER VI
RIGHTS AND PRIVILEGES

SECTION 22. Rights and Privileges by the City Government. – All investors and registered enterprises are entitled to the rights and guarantees provided by law and the Constitution. In addition to such rights and guarantees, and to enhance investor confidence in the incentives program, the City Government, thru the Olongapo City Investment Board, shall:

a. Provide a concise and comprehensive information to prospective investors on the economic priorities of the City Government, including target investment areas and the general conditions applicable to incoming direct private investments;
b. Communicate investment evaluation criteria and procedures to enhance transparency in the process of granting government incentives;
c. Take the fullest possible account of the need of the investors for stability, growth and profit in their operations in the formulation or modification of policies and ordinances that effect investments;
d. Not interfere or modify arrangements with the investors after the details of 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;
e. Avoid undue distortion of competition between or among enterprises operating within its territorial jurisdiction, whether domestic or foreign, when granting any special exemptions or incentives aimed at encouraging investments in the identified target areas;


f. In accordance with law and where no local personnel or worker is capable and available, allow the employment of qualified personnel outside of Olongapo City where this is necessary for the efficient operation of the enterprises or for technology transfer; and
g. Resolve all doubts concerning the benefits and incentives granted under the ordinance enacted for the purpose of encouraging investments, in favor of the investors.


CHAPTER VII
INCENTIVES TO REGISTERED ENTERPRISES

Section 23. Fiscal Incentives to Registered Enterprises. – In addition to the incentives provided by law and by the Local Government Code of 1991, a registered enterprise qualified under this Code shall enjoy the following fiscal incentives:

a. Within three (3) years from the start of commercial operations, a registered enterprise under this Code shall be fully exempt from the Mayor’s permit fees, building permit fees, business taxes, and charges imposed under existing city ordinances. However, all participants to the Incentive Program are still required to secure the Mayor’s Permit and such other permits necessary to operate their business; and
b. Exemption from the basic real property tax due the City, excluding the barangay share, under the Tax Code for a period of two (2) years from the accrual of the real property tax.

SECTION 24. Non-Fiscal Incentives to Registered Enterprises. – Registered enterprises shall be granted the following non-fiscal incentives:

a. Full support of the city government in maintaining industrial peace and security;
b. Assistance in the labor recruitment or manpower sourcing;
c. Assistance in the selection of business site or location;
d. Assistance in dealing with other government agencies; and
e. Other non-fiscal incentives as may be approved by the Board.

SECTION 25. Appropriate Incentives and Support Measures. – The Board shall identify and recommend for the approval of the Sangguniang Panlungsod appropriate incentives and support measures which it shall be willing to extend to targeted investors, to promote priority investment areas and activities.

SECTION 26. Effectivity of Appropriate Incentives and Support Measures. The Board shall review the package of appropriate incentives and support measures every year, provided that the Board may remove an area or activity from the list, at any point, as provided for under Section 13 of this Code.


CHAPTER VIII
APPROPRIATIONS

SECTION 27. Appropriations. – To defray the expenses for personal services, maintenance and other operating expenses and capital outlay necessary for the implementation of the provisions of this Ordinance, an amount of Two Million Pesos (PhP2,000,000.00). Funds shall be sourced through a Supplemental Budget from the General Fund and/or from the 20%

Annual Development Fund of the current fiscal year. Appropriations for the succeeding years shall be included in the regular Annual Budget, upon the recommendation of the Board.


CHAPTER IX
FINAL PROVISIONS

SECTION 28. Penal Clause. – Any violation of the provisions of this Code, existing laws, ordinances, rules and regulations, 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 29. Separability Clause. – The provisions of this Code are hereby declared to be separable and in the event that one or more of the other provisions are held illegal or unconstitutional, the validity of the other provisions shall not be affected.

SECTION 30. Repealing Clause. – Ordinances, executive orders and other local legislation inconsistent with this Ordinance are hereby modified or repealed accordingly.

SECTION 31. Effectivity. – This Ordinance shall take effect immediately upon its approval.

APPROVED UNANIMOUSLY, August 22, 2007.


CYNTHIA G. CAJUDO
City Vice-Mayor & Presiding Officer


GINA GULANES - PEREZ JOHN CARLOS G. DELOS REYES
City Councilor City Councilor


RODEL S. CEREZO MAREY BETH D. MARZAN
City Councilor City Councilor


SARAH LUGERNA LIPUMANO-GARCIA EDWIN J. PIANO
City Councilor City Councilor
(Abstained)

ANGELITO W. BALOY AQUILINO Y. CORTEZ, JR
City Councilor City Councilor


ANSELMO A. AQUINO ELENA C. DABU
City Councilor City Councilor


CARLITO A. BALOY ROBINE ROSE C. BUENAFE
President, Liga ng mga Barangay SK Federation President

ATTEST:

ELFLIDA S. SALMON
Council Secretary

APPROVED BY HIS HONOR, THE CITY MAYOR ON______________________.


JAMES GORDON, JR.
City Mayor
ATTEST:

DELFIN A. JUICO, JR.
Secretary to the City Mayor

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