The recent move by President Marcos Jr. vetoing a measure approved by both Houses of Congress creating the Bulacan Airport City Special Economic Zone has raised a number of legal issues, not to mention concerns that the old powers-that-be had something to do with it.
House Bill 7575 or the Bulacan Airport City Special Economic Zone and Freeport Act was passed by the House of Representatives of the 18th Congress on Sept. 15, 2020, amended by the Senate on May 26, 2022, which amendments were later concurred in by the House on May 31, 2022. The bill also creates the Bulacan Airport City Special Economic Zone and Freeport Authority (BACSEZFA), which shall manage and operate the ecozone.
Article VI, Sec. 27(1) of the 1987 Constitutions provides that “every bill passed by the Congress shall, before it becomes a law, be presented to the President. If he approves the same, he shall sign it; otherwise, he shall veto it and return the same with his objections to the House where it originated, which shall enter the objections at large in its journal and proceed to reconsider it.”
If the President vetoes a bill, the House may overturn the presidential veto by two-thirds vote. Meanwhile, if the President does not act on a proposed law submitted by Congress, it will lapse into law after 30 days of receipt.
The bill was presented to then President Duterte who had 30 days or until July 3, 2022 to act on it, otherwise such enrolled bill lapses into law.
PBBM took his oath on June 30 and the following day, he sent a letter addressed to the Senate President and House Speaker of the 18th Congress rejecting the proposed measure.
The question as to why Duterte did not veto the bill despite former finance secretary Carlos Dominguez sending a memorandum to the former president to reject it has not been answered.
PBBM’s veto now raises the issue of whether a new President can act on bills presented to a previous President and whether the new President can veto the acts of a previous Congress.
There seems to be no legal precedent that is on all fours regarding this matter although Albay Rep. Joey Salceda, in an aide memoire sent to incoming House Speaker Martin Romualdez, is saying that in one case, the Supreme Court held that “it will indulge every intendment in favor of the constitutionality of a veto, and the burden shifts on those questioning the validity thereof to show that its use is a violation of the Constitution.”
Another legal question that has sprung from PBBM’s veto is whether the new Congress can override a veto of a bill enacted by the previous Congress.
In the same letter, Salceda said should the 19th Congress decide to override PBBM’s veto, this would break all time-established precedents about bills dying when they are not enacted during the previous Congress.
He noted that while the death of incomplete measures is not explicitly provided in the Constitution, the danger is that it sets another precedent for binding the members of the new Congress to incomplete acts of a prior Congress, some of whose members may no longer hold the support of the people, especially those who have been replaced or retired.
Salceda emphasized that the path that affords the least resistance while moving the objectives of the bill forward is to simply craft a new bill that addresses PBBM’s concerns.
On the concern that the provisions of the enrolled bill poses fiscal risks to the country, he proposed that the bill explicitly state that the ecozone shall be fully subject to the CREATE Act which amended the Tax Code.
It will be recalled that the CREATE Act harmonized the different fiscal incentives given by various laws and agencies, aside from making these incentives time-bound and performance-based.
He proposed that the power of the Bulacan ecozone authority to grant incentives be a delegated power from the Fiscal Incentives Review Board to address the President’s concern about the lack of the bill’s coherence with existing laws and regulations.
On another concern that the bill infringes on or is conflict with other agencies mandates and authorities when it gives the Bulacan ecozone authority rulemaking power over ecological protection in the Bulacan ecozone, the power to issue rules and regulations of the Act, among others, Salceda recommended that the powers and functions of the BACSEZFA be the same as the powers and functions to other investment promotion agencies such as the Philippine Economic Zone Authority. He added that the ecozone authority should be made explicitly subject to COA audit.
Whether the new Congress will override PBBM’s veto or whether it will be refiled with the proposed amendments remains to be seen.
But what is clear is the fact that the country needs this new ecozone.
According to San Miguel Corp. president Ramon Ang, “we respect and abide by the government’s decision and we look forward to working with his administration towards further improving and perfecting the proposed Freeport Bill.”
SMC is fully financing and building the P740-billion New Manila International Airport (NMIA) project in Bulacan, and according to the company, it remains committed to building the NMIA itself as well as the adjacent Airport City, even with the veto of the bill that will make the said city and ecozone.
It said that as a dedicated investment promotion agency (IPA) for the planned Bulacan Ecozone, the proposed BACSEZFA may only grant fiscal incentives as authorized by the CREATE Law to qualifying locators. But if the said dedicated IPA is not created, SMC emphasized that locators seeking to invest in the Airport City may still avail of incentives by going through other IPAs such as the Board of Investments and PEZA, and that it is committed to helping potential investors navigate the IPA application process via a one-stop shop which is already underway.
Ang has also emphasized that with the ecozone, they will help create science and technology export hubs with the cheapest logistics cost, being close to the airport and seaport, adding that they are looking to attract world-class semiconductor manufacturers, battery power storage system manufacturers, electric vehicle makers, and even modular nuclear power assemblies and other new and emerging tech industries to locate in the Bulacan ecozone.
These industries alone, he said, will add some $200 billion in annual exports which will be a big boost to the country’s GDP.
SMC’s top executive added that he firmly believes that the long-term benefits to the country of the ecozone would far outweigh and outnumber any supposed losses due to the grant of incentives to potential locators, which benefits include the hundreds of thousands of new jobs to be generated, the transfer of knowledge and technology from foreign investors and locators, access to world-class education and healthcare services which are among the industries the ecozone looks to attract, and the trillions in tax revenues that will accrue to the government.
We should never let politics get in the way of progress.
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