Law Summary
Declaration of Policies
- Accelerate conversion of military reservations at Clark and Subic and their extensions into productive civilian uses.
- Raise funds via sale of Metro Manila military camps.
- Use funds to promote economic and social development, particularly of Central Luzon.
Creation of Bases Conversion and Development Authority (BCDA)
- Established as a body corporate with perpetual succession and corporate powers.
- Organized within 30 days of Act's approval.
- Term of 50 years unless dissolved by Congress.
- Principal office in Metropolitan Manila with possible branches.
Purposes of the Conversion Authority
- Own, hold, administer specified military reservations and transferred Metro Manila camps.
- Prepare and implement comprehensive development plans consistent with ecological standards.
- Encourage private sector participation in base conversion.
- Serve as holding company of subsidiaries and invest in Special Economic Zones (SEZs).
- Manage projects via private sector companies outside subsidiary jurisdiction.
- Coordinate with local governments for consultation on projects.
- Plan and undertake relocation or resettlement as necessary.
Powers of the Conversion Authority
- Sue and be sued in corporate name; have corporate seal.
- Amend bylaws.
- Enter contracts and loans, including from foreign institutions.
- Execute guarantees, mortgages for financing projects.
- Construct, own, operate public utilities and infrastructure.
- Undertake reclamation projects.
- Acquire, lease, mortgage, and sell properties at fair market value.
- Receive grants and donations, invest funds excluding SEZ assets.
- Exercise eminent domain.
- Oversight on SEZs.
- Promulgate rules and regulations.
- Other necessary powers to fulfill objectives.
Capitalization
- Authorized capital of ₱100 billion, subscribed by government.
- Initial operating capital of ₱70 million appropriated from National Treasury.
Transfer of Properties
- President to transfer specified military reservations and Metro Manila camps to the Conversion Authority.
- Military reservations to be delineated and proclaimed by President.
Funding Scheme
- Capital from sale/transfer of Metro Manila military camps and specified lands.
- Certain lands exempt from sale (military, police, housing, educational, etc.).
- Sales conducted only after approved development plan.
- Distribution of sales proceeds:
- 32.5% for AFP transfer, housing, modernization, medical facilities.
- 50% for Clark and Subic conversion projects.
- 5% for housing assistance to homeless in affected areas.
- Remaining balance to National Treasury for economic upliftment.
- Fort Bonifacio sales portion shared with local municipalities.
- Farmers affected entitled to compensation.
Board of Directors Composition
- Nine members: Chairperson (also president) plus eight members; two from labor sector.
- Appointed by President with Commission on Appointments consent.
- Terms staggered; chairman and president fixed six years.
- Members must be natural-born Filipinos with integrity and competence.
- Per diem for meetings capped.
Board Functions
- Policy making, organizational structuring, define employee roles and benefits.
- Appointments based on merit, consistent with civil service laws.
- Prepare annual budgets and reports.
- Attend to conversion projects, favoring BOT schemes.
- Initiate privatization/divestment from fourth operational year.
Duties of the President of BCDA
- Chief Executive Officer.
- Implement Board policies.
- Supervise operations and administration.
- Represent BCDA in government and private dealings.
- Prepare Board meeting agendas.
Subic Special Economic Zone (SEZ)
- Created with local government concurrence.
- Covers City of Olongapo, Municipality of Subic, parts of Zambales and Bataan.
- Develop as self-sustaining industrial, commercial, investment center.
- Operate as separate customs territory with tax exemptions.
- Remit 3% gross income as payments to national government and LGUs.
- Liberalize banking, finance, and foreign exchange.
- Permanent resident status for qualifying investors and families.
- National government responsible for defense and security.
- LGUs retain autonomy except in conflicts where Subic Authority prevails.
Subic Bay Metropolitan Authority (SBMA)
- Body corporate as implementing arm for Subic SEZ.
- Powers:
- Manage ship repair, container port, oil storage, air base.
- Accept investments, regulate utilities and infrastructure.
- Own property, sue/be sued, exercise eminent domain.
- Raise funds, borrow, issue securities.
- Operate tourism and preserve forest/national park areas.
- Establish educational and medical institutions.
- Enforce environmental standards.
- Board composition includes LGU reps, national government, private sector.
- Chairman/Administrator appointed by President, initial year led by Olongapo mayor.
- Authorized capital ₱20 billion with government contributions.
Relationship with BCDA and Local Governments
- SBMA exercises administrative powers over Subic SEZ subject to BCDA oversight.
- SBMA decisions prevail over LGUs on zone matters except defense and security.
Clark and Other Special Economic Zones
- Clark SEZ created by President’s proclamation with LGU concurrence.
- Governed similarly to Export Processing Zone Authority.
- Policies to be determined with local consultations within six months.
- Other SEZs may be created in Wallace Air Station, John Hay, and other municipalities upon recommendations.
Subsidiaries
- BCDA may organize subsidiary corporations with at least 51% ownership.
- Subsidiaries exempt from Civil Service laws.
- BCDA holds majority board control of subsidiaries with designated directors.
Supervision
- BCDA under direct Office of the President control for policy and coordination.
Legal Counsel
- Government Corporate Counsel is ex officio legal counsel for BCDA and related entities.
- May designate full-time representative.
Auditor
- Commission on Audit appoints full-time auditor for BCDA and subsidiaries.
- Pre-audit required on major sales and transfers.
- Must report to Congress every 60 days.
Interim Capacity
- Board members serve in interim capacity until July 31, 1992, or successors appointed.
Injunction and Restraining Order
- Conversion projects urgent; restrained only by Supreme Court order.
Separability Clause
- Unconstitutional provisions do not affect validity of remaining provisions.
Repealing Clause
- Laws or issuances inconsistent with this Act are repealed or amended.
Effectivity
- Effective upon publication in a newspaper of general circulation.