The congressional approval of a measure creating the CamSur Free Trade Zone will energize the Bicol region and help President Marcos meet his vital goal of creating a Philippine environment much more conducive to generating investments and creating quality jobs, CamSur Rep. and National Unity Party (NUP) president LRay Villafuerte has told the House ways and means committee.
At a recent public hearing of this panel chaired by Albay Rep. Joey Salceda, Villafuerte stressed that the measure—House Bill (HB) 3681—seeking to create this special economic zone (SEZ) in CamSur’s capital of Pili and the municipality of Milaor, meets all of the government requisites for the establishment of an SEZ.
Villafuerte said the proposed ecozone area is already highly developed, and has 355 hectares of vacant lands available for the SEZ within the Provincial Capitol complex that are close to the highway.
Villafuerte, who authored HB 3681 with three more CamSur legislators, said: “The proposed SEZ site has all that it takes to become a major investment hub, given that its ideal features meet the standards of the PEZA (Philippine Economic Zone Authority) for ecozones, including existing infrastructure in broadband connectivity, road network, water supply facilities, standby electricity supply and available workforce.”
HB 3681, which seeks the establishment of an SEZ at the Provincial Capitol Complex in Pili and in Milaor, was also authored by CamSur Reps. Miguel Luis Villafuerte and Tsuyoshi Anthony Horibata along with the Bicol Saro partylist.
The former CamSur governor told the committee that the proposed SEZ is expected to overcome all the difficulties faced by other areas that had previously sought SEZ declaration, because “CamSur already has two operational and successful economic zones and an information technology (IT) park plus tourism zone in place that are home to, among others, international corporations like Microsoft and AT&T, which have created jobs, generated income, attracted investments and engendered technology transfer for our province.”
Moreover, the proposed SEZ meets all the requirements for the establishment of economic zones, under Section 6 of Republic Act (RA) 7916 or the PEZA Law, as amended by RA 8748 or the SEZ Act, he said.
These requisites for an SEZ include, he said, a strategic location, existence of other ecozones in the area, good accessibility via air and land transport, availability of developed and vacant lands for the investors’ buildings and facilities plus their workers’ housing projects, presence of a knowledge and innovation industry, and a ready pool of skilled, semi-skilled and non-skilled trainable labor force.
Salceda said at the hearing that, “I personally associate with the comments made by Congressman LRay. I’m sure that this will be a one big step forward in achieving the CamSur dream.”
Villafuerte said that, “I would like to emphasize that this bill creating the CamSur Free Trade Zone, strictly meets all the legal requisites for establishing a special economic zone. I have fully supported similar measures on creating SEZs elsewhere because I believe that the creation of ample jobs through economic zones is vital for rapid economic development.”
He said the proposed SEZ site already has operational PEZA zones. “Meron ng existing IT park, that is PEZA approved, that has currently 3,000 employees. It’s the first, it’s the first LGU (local government unit)-run IT park and ang mga clients po dyan are AT&T, Microsoft and other distinguished companies in the US and all over the world.”
“This area we want to propose over and above the IT zone, meron na rin pong PEZA-approved tourism zone, meaning there’s already an existing 400-room facility, convention centers, training centers, and other facilities to support businesses,” he said.
As for the PEZA requirement for SEZs on workforce availability, Villafuerte informed the committee that CamSur has a population of over 2 million and, as of 2015, has an estimated and vibrant, mainly young labor force of 1.2 million workers of 18 to 35 years of age.
The proposed SEZ is also strategically located, he said. “Economic growth is rapidly developing outside Metro Manila and moving towards the South. As CamSur is at the Southern tip of Luzon, the proposed CamSur Free Trade Zone would logically be the next economic center of the country.”
This is because, he said, that “a majority of our ecozones that are successful are located within the Calabarzon (Cavite-Laguna-Batangas-Rizal-Quezon) subregion. So, the natural direction and growth of ecozone is further South—and that is Bicol.”
“This area that we’re trying to propose is part of the site of one of the priority infrastructure flagship projects of the former Duterte Administration and current Marcos administration, as it is very close to the proposed Naga Airport Development Project, which is already NEDA (National Economic and Development Authority)-approved,” he said. “Within the area that encompasses the proposed ecozone, may proposed area po tayo doon that is within the PNR (Philippine National Railways) North-South Railway Project, again a flagship project of the government.”
He said another flagship project that will pass through the proposed CamSur Free Trade Zone is the CamSur Expressway Project. “So in terms of this priority infrastructure project ng gobyerno, dinadaanan po yan. So, the area is really a strategic location.”
As regards the PEZA requirement on the existence of an information highway, Villafuerte said, “Meron ng call center doon, may direct fiber optic link from the Pasacao fiber optic underground submarine cable directly to the ecozone, state-of-the-art connectivity infrastructure with current capacity of STM1, 77xE1 or 155 mbps, expandable to 10 gigabytes transport capacity. So, the proposed location may existing infrastructure for bandwidth internet.”
He said there are also superior and abundant facilities and sources for ground and surface waters, and numerous hydroelectric potential resources close to the SEZ area.
There is likewise a guarantee of 24/7 security in the area because the proposed site is already government center that is owned by the CamSur provincial government, he said.
He said the proposed ecozone area is already highly developed, and has 355 hectares of vacant lands available for the SEZ within the Provincial Capitol complex that are close to the highway.
At the hearing, Villafuerte recalled having filed similar bills in the 17th and 18th Congresses, but both failed to gain traction at that time because the then-Duterte Administration had prioritized fiscal rationalization under RA 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, such that the Department of Finance (DOF) was cool to the establishment of new SEZs.
Questioned by Villafuerte, one of the authors of the CREATE Law, during the hearing, DOF Assistant Secretary Karlo Fermin Adriano revealed that the initial amount of investments generated by CREATE was not as big as had been originally expected.
Salceda, the principal author of CREATE, then explained that the lower-than-expected foreign direct investment (FDI) inflows from CREATE was because of the inconsistencies between the law and its implementing rules and regulations (IRR)—as implemented by the Bureau of Internal Revenue (BIR)—on the transitory provision allowing registered export enterprises to continue availing for 10 years of the zero-Value Added Tax (VAT) privilege granted to them before RA 11534 took effect.
The law’s implementation was “mangled” by the BIR, Salceda said, because this transitory provision was ignored, hence the need for the DOF to amend the IRR to allow exporters to continue having VAT zero-rating throughout the transition period.
“I would like to emphasize that this bill creating the CamSur Free Trade Zone, strictly meets all the legal requisites for establishing a special economic zone. I have fully supported similar measures on creating SEZs elsewhere because I believe that the creation of ample jobs through economic zones is vital for rapid economic development.”
Villafuerte then pointed to the necessity for the government to create “an environment more investor-friendly for foreigners and local businessmen, to which Salceda responded, “I agree with that actually.”
Last March, at a joint hearing of the House committees on economic affairs and on trade on HB 3681, Villafuerte pointed out that CamSur has been recognized as the country’s most business-friendly province for three consecutive years, and is considered one of its top economic performers—thus promising to be the “center of development” in Bicol once an SEZ is put up there.
And in creating jobs in CamSur and the rest of Bicol, Villafuerte said the proposed SEZ would not only boost the region’s growth and development, but would also encourage Bicolanos to stay put in their home-provinces instead of flocking to Metro Manila—thereby helping the national government attain its twin goals of decongesting the National Capital Region (NCR) and stimulating growth in the countryside.
He said his bill failed to advance in the past two Congresses because the establishment of new ecozones was at cross purpose with one priority then of the DOF, which was to raise more revenue by rationalizing tax breaks that PEZA and other investment promotion agencies (IPAs) have granted for decades to investors or locator-companies in ecozones.
He said the IT park and tourism zones he was referring to in HB are the CamSur Information Technology Park (CSTIP), which is the first IT Park in the country owned and managed by an LGU; and the Tourism Ecozone Zone, as set up by Presidential Proclamation 1932 in October 2009, which designated several areas within the Capitol Complex in Cadlan in Pili, Milaor and Maycatmon as part of this tourism zone.
The CSTIP is likewise the first IT Park in Bicol declared by PEZA as an SEZ under Presidential Proclamation No. 850 issued in May 2005.
He said this five-hectare park located at the Provincial Capitol Complex in Cadlan, Pili, and its flagship enterprise is the first LGU-run digital animation center—CamSur Animation Studio (CAS)—that produced the first full-length Filipino digital animation film “Dayo” in 2008.
This IT park is currently doing international projects, including Hollywood animation productions.
The tourism zone, meanwhile, is home to the CamSur Watersports Complex (CWC), which is considered the “best wakeboard park in the world,” Villafuerte said.
CamSur is hailed as the “sports and adventure tourism capital” of the Philippines.
