Bacsezfa: Super economic zone of Bulacan?

THE renewed push by Congress for the creation of the Bulacan Airport City Special Economic Zone and Freeport Area (Bacsezfa) has really turned a lot of heads and lit a lot of fire from both the business and government sectors, either for or against. It may be recalled that vetoing the past version of the bill creating the Bacsezfa was one of the first acts made by President Ferdinand Marcos Jr. right after he took office last July 2022.

In his veto message, the President pointed to many concerns regarding the bill, which includes substantial fiscal risks and overlapping jurisdictions or functions with other government agencies. The President also said that “fiscal prudence must be exercised particularly at times when resources are scarce and needs are abundant. While this administration recognizes the objective of the proposed measure to accelerate economic growth in its locality, I cannot support the bill.”

For one, this super economic zone is unprecedented both in area covered and powers and incentives since the Senate version SB 2572 proposes to include the airport and the Airport City project in Bulacan as well as the adjacent towns of the remaining land territories of the cities of Malolos and Meycauayan, and of the municipalities of Bulakan, Paombong, Guiguinto, Balagtas, Bocaue, Marilao, Obando and Sta. Maria, in the province of Bulacan, that are not yet included as component part of the airport and the Airport City project. Accordingly, it will comprise approximately 55,000 hectares of land, which are already being governed and managed by developed and functioning local government units and which are now faced with the possibility of losing or gaining in this mega project.

Also, it is important to note that the reading on the area of the scope of Bacsezfa would need to be understood with the earlier law that granted the franchise to San Miguel Aerocity Inc. (SMAI) through Republic Act 11506, Build, Operate and then Transfer the Bulacan Airport or the New Manila International Airport to the government. SMAI was granted 50 years to operate the airport and will enjoy a decade of tax breaks in the construction, development and maintenance of this airport, which would sit on 2,500 hectares of land in Bulacan.

More importantly, the franchise covers the development of the adjacent areas and properties as a modern and world-class Airport City. According to San Miguel, the conceptual master plan for its massive, green-designed, and future-ready aerocity development in Bulacan province is envisioned as the “pacesetter” and model for green urbanism in the country.

Included in this massive project is the right of way to be expropriated and developed as an integral part of the airport and Airport City project; this covers lands outside Bulacan that are leading to it. These are lands to be used as highways for going to the airport and Airport City.

Now, it is important to understand that the Bacsezfa bill wants to declare all of the areas included in the Airport and Airport City project, and since the right of way is also part of the project, then these areas, even outside of Bulacan could still be considered as part of the proposed economic zone. In my humble understanding, the area involved could more than exceed 55,000 hectares and even go beyond Bulacan.

It is important to note that Bacsezfa, as a freeport zone, is proposed to be a separate customs territory. This means it will be managed and operated as having a free flow or movement of goods and capital within and out of its territory. It shall likewise provide incentives such as tax and duty-free importation of raw materials and capital equipment to registered enterprises located therein.

Sen. Koko Pimentel, the then minority leader, raised concerns about the implementation of this provision in such a gargantuan area — that it could result in the placing of customs posts all over the LGUs included in the Bacsezfa.

Also, the land use planning of the entire economic zone could be a challenge as there are many different LGUs concerned. According to the Senate bill, the Bacsezfa shall establish the general framework for land use, planning and development for the area covered by the Bulacan Ecozone. Furthermore, it provided that local, regional, and national plans for the use and development of the areas covered by the Bulacan Ecozone shall be consistent with the framework established by Bacsezfa.

Accordingly, it will now be Bacsezfa that will have the upper hand in land use planning of these areas rather than the affected LGUs.

Finally, the incentives and breaks concerning taxes, permits and fees that will be given to locators will have an important impact on local government units, which will need to waive any fees or taxes for the time being. This is, of course, on the presumption that the development of their areas because of the Bacsezfa would greatly compensate for their initial sacrifices and losses. This is also in the hope that the basic services and infrastructure requirements for these affected LGUs would now be given, or at least be greatly offset, by Bacsezfa or its locators.

The President, despite vetoing the old version of the bill, says that he is still supporting the idea of the creation of the Bulacan Ecozone but is subject to his stated reservation on the veto. This is probably the general sentiment of many of us.

In my opinion, the Bacsezfa should also consider integrating with the overall plans of New Clark City and its airport since both areas belong in the same region. The last thing we need is for the creation of one to result in the detriment of the other.

As deliberations continue, the nation will watch closely the possible birthing of Bacsezfa.