Article XII
Economy and Patrimony
Section 1. Regional Economy and Conservation of Patrimony.—Consistent with the Constitution and existing laws, the Regional Assembly may enact laws pertaining to the regional economy and patrimony that are responsive to the needs of the region. The Regional Government may not lower the standards required by the central government or national government for the protection, conservation, and enhancement of the natural resources.
Sec. 2. Economic Zones, Centers and Ports.—The Regional Government shall encourage, promote, and support the establishment of economic zones, industrial centers, ports in strategic areas, and growth centers to attract local and foreign investments and business enterprises.
Sec. 3. Incentives for Investors.—The Regional Assembly may by law grant incentives to investors in the autonomous region. The central government or national government may likewise grant incentives to investors in the autonomous region in addition to those provided by the Regional Government.
Sec. 4. Regional Economic Zone Authority; Freeports.—The Regional Government may establish a regional economic zone authority in the autonomous region. The Regional Economic Zone Authority shall have similar powers as the Philippine Economic Zone Authority and consistent with the Special Economic Zone Act of 1995. The Regional Assembly may provide such additional powers and functions to the Regional Economic Zone Authority as may be necessary to meet the special circumstances of the autonomous region.
Once the Regional Economic Zone Authority is created by a Regional Assembly legislation, the Philippine Export Zone Authority shall no longer authorize any other economic zone within the autonomous region. Any corporation, firm, or entity established within the autonomous region, by authority of the Philippine Export Zone Authority, shall be placed under the jurisdiction of the Regional Economic Zone Authority and shall continue to enjoy the benefits granted to it by the Philippine Export Zone Authority.
Sec. 5. Use, Development of Mines, Minerals, and Other Natural Resources, Revenue Sharing; Exceptions.—(a) Regional Supervision and Control. The control and supervision over the exploration, utilization, development, and protection of the mines and minerals and other natural resources within the autonomous region are hereby vested in the Regional Government in accordance with the Constitution and the pertinent provisions of this Organic Act except for the strategic minerals such as uranium, petroleum, and other fossil fuels, mineral oils, all sources of potential energy, as well as national reserves and aquatic parks, forest and watershed reservations already delimited by authority of the central government or national government and those that may be defined by an Act of Congress within one (1) year from the effectivity of this Organic Act.
(b) Sharing Between Central Government or National Government and Regional Government in Strategic Minerals Revenues, Taxes, or Fees.—Fifty (50%) percent of the revenues, taxes, or fees derived from the use and development of the strategic minerals shall accrue and be remitted to the Regional Government within thirty(30) days from the end of every quarter of every year. The other fifty (50%), shall accrue to the central government or national government.
(c) Sharing Between Regional Government and Local Government Units in Strategic Minerals Revenues, Taxes, or Fees.—The share of the Regional Government mentioned above is hereby apportioned as follows: thirty percent (30%) to the Regional Government; twenty percent (20%) to all the provinces; fifteen percent (15%) to all the cities; twenty percent (20%) to all the municipalities; and fifteen percent (15%) to all the barangays. If there are no cities in the autonomous region as of the date the sharing above mentioned is done, the share of the cities shall be divided equally by all the provinces, municipalities, and barangay in the autonomous region.
(d) Regional Assembly Authority to Grant Franchises and Concessions and Empower Regional Governor to Grant Leases, Permits, and Licenses.—The Regional Assembly shall by law have the authority to grant franchises and concessions and may by law empower the Regional Governor to grant leases, permits, and licenses over agricultural, forest, or mineral lands. The said leases, permits, franchises, or concessions shall, however, cover areas not exceeding the limits allowed by the Constitution and shall subsist for a period not exceeding twenty-five (25) years. Except as provided in this Organic Act, existing leases, permits, licenses, franchises, and concessions shall be respected until their expiration unless legally terminated earlier as provided by law enacted either by Congress or by the Regional Assembly.
(e) Consultation with Cultural Communities, Needed.—The permits, licenses, franchises, or concessions over the natural resources located within the boundaries of an ancestral domain shall be issued by the Regional Assembly only after consultants are conducted with the cultural community concerned.
Sec. 6. Use and Development of Natural Resources Open to Citizens.—The exploration, development, and utilization of natural resources, except those referred to in the first paragraph of Section 5 of this Article, shall be allowed to all citizens and to private enterprises, including corporations, associations, cooperatives, and such other similar collective organizations with at least sixty percent (60%) of their capital investment or capital stocks directly controlled or owned by citizens.
Sec. 7. Preferential Rights of Citizen-Inhabitants of Autonomous Region.—Subject to the exceptions provided in this Organic Act, citizens who are inhabitants of the autonomous region shall have preferential rights over the exploration, utilization, and development of natural resources of the autonomous region. Existing rights over the exploration, utilization, and development of natural resources shall be respected subject to the exceptions specified in this Organic Act.
Sec. 8. Rules, Regulations and Fees.—The Regional Assembly shall by law regulate the exploration, utilization, development, and protection of the natural resources, including the mines and minerals, except the strategic minerals as provided in this Organic Act. The Regional Government shall, pursuant to the said law, shall prescribe the rules and regulations and impose regulatory fees in connection therewith. Upon the enactment of the said law and the effectivity of such rules and regulations, the fees imposed by the Regional Government shall replace those that had been imposed by the central government or national government.
Sec. 9. Regulation of Small-Scale Mining.—Small-scale mining shall be regulated by the Regional Government to the end that the ecological balance, safety and health, and the interests of the indigenous cultural communities, the miners, and the people of the place where such operations are conducted are duly protected and safeguarded.
Sec. 10. Regional Economic and Development Planning Board; Composition and Functions.—There is hereby created a Regional Economic and Development Planning Board. The Board shall be chaired by the Regional Governor. The members of the Board shall be composed of all the provincial governors and the city mayors of the provinces and cities within the autonomous region; the Speaker, and two (2) members of the Regional Assembly appointed by the Speaker, one (1) of whom shall be nominated by the opposition; and, five (5) representatives elected by the private sector as prescribed by the Regional Assembly.
The Board shall serve as the planning, monitoring, and coordinating agency for all development plans, projects, and programs intended for the autonomous region. It shall evaluate and recommend for approval by the Regional Assembly, the annual work programs and comprehensive development plans of the autonomous region. Once approved, it shall be the duty of the Regional Governor to ensure the proper implementation of the said annual work programs and comprehensive development plans.
The Board shall formulate a master plan for a systematic, progressive, and total development of the region. The master plan shall take into account the development plans of the province, city, municipality, and barangay concerned as mandated by Republic Act No. 7160, the Local Government Code 1991.
After due notice in writing, the attendance at meetings of the Board by one-third (1/3) of its members with the Regional Governor or the Regional Vice Governor and three (3) of the representatives of the private sector being present, shall be a sufficient quorum for the board to transact business.
The Board shall adopt its own rules of procedure for the conduct of its meetings.
Sec. 11. Pioneering Public Utilities and Cooperatives.—The Regional Assembly may, in the interest of regional welfare and security, establish and operate pioneering public utilities. Upon payment of just compensation, it may cause the transfer of the ownership of such utilities to cooperatives or other collective organizations.
Sec. 12. Proclamation of State of Calamity; Operation of Public Utilities.—(a) Temporary take-over of operations. The Regional Government may, in times of regional calamity declared by the Regional Governor, when the public interest so requires and under such reasonable terms and safeguards as may be prescribed by the Regional Assembly, temporarily take over or direct operation of any privately-owned public utility or business affected with public interest. The public utility or business concerned may contest the take over of its operations by the Regional Government by filing a proper case or petition with the Court of Appeals.
(b) Proclamation of state of calamity.—The Regional Governor may proclaim a state of calamity over the region or parts thereof whenever typhoons, flash floods, earthquakes, tsunamis, or other natural calamities cause widespread damage or destruction to life or property in the region. The state of calamity proclaimed by the Regional Governor shall only be for the purpose of maximizing the efforts to rescue imperiled persons and property and the expeditious rehabilitation of the damaged area. The state of calamity proclaimed shall in no way suspend any provision of the Constitution or this Organic Act, as well as, the pertinent laws promulgated by the central government or national government or the Regional Government.
Sec. 13. Legislation Benefits, Compensation for Victims of Mining and Mining Operations; Rehabilitation of Affected Areas.—The Regional Assembly shall enact laws for the benefit and welfare of the inhabitants injured, harmed or adversely affected by the harnessing of natural and mineral resources in the autonomous region. Such laws may include payment of just compensation to and relocation of the people and rehabilitation of the areas adversely affected by the harnessing of natural and mineral resources mentioned above.
The Regional Assembly may by law require the persons, natural or juridical, responsible for causing the harm or injury mentioned above to bear the costs of compensation, relocation and rehabilitation mentioned above wholly or partially.
Sec. 14. Reforestation; Support for Lumads or Tribal Peoples.—The Regional Government shall actively and immediately pursue reforestation measures to ensure that at least fifty percent (50%) of the land surface of the autonomous region shall be covered with trees, giving priority to watershed areas, strips of land along the edges of rivers and steams and shorelines of timber concessions, licenses, contracts, or agreements mentioned in paragraph above.
The Regional Government shall adopt measures for the development of lands eighteen percent (18%) in slope or over by providing infrastructure, financial and technical support to upland communities specially the lumads or tribal peoples.
The Regional Government shall also adopt measures to employ the people who may be displaced by the cancellation or revocation of timber concessions, licenses, contracts, or agreements mentioned in paragraph above.
Sec. 15. Prohibition Against Toxic or Hazardous Substances.—The Regional Government shall prohibit the use, importation, deposit, disposal, and dumping of toxic or hazardous substances within the autonomous region.
Sec. 16. Business Ownership.—The Regional Government shall adopt policies to promote profit sharing and broaden the base of ownership of business enterprises.
Sec. 17. Incentives, Tax Rebates and Holidays.—The Regional Assembly may by law, and with the approval of the absolute majority of all its members, grant incentives, including tax rebates and holidays, for investors in businesses that contribute to the development of the autonomous region. It may provide similar incentives to companies doing business in the autonomous region which reinvest at least fifty percent (50%) of their net profits therein, and to cooperatives which reinvest at least ten percent (10%) of their surplus into socially-oriented projects in the autonomous region.
Sec. 18. Transport and Communication Facilities, Priority Projects.—The Regional Government shall give priority to the establishment of transportation and communication facilities to expedite the economic development of the autonomous region.
Sec. 19. Power Services Priority.—In the delivery of power services, priority shall be given to provinces and cities in the autonomous region which need but do not have direct access to such services.
Sec. 20. Pioneering Firms.—The Regional Assembly may create pioneering firms and other business entities to boost economic development in the autonomous region.
Agriculture, Fisheries and Aquatic Resources
Agriculture, Fisheries and Aquatic Resources
Sec. 21. Farming and Fishing Cooperatives.—The Regional Government shall recognize, promote, and protect the rights and welfare of farmers, farm-workers, fisherfolk, and fish-workers, as well as cooperatives and associations of farmers and fish-workers.
Sec. 22. Agricultural Productivity; Organic Farming.—The Regional Government shall encourage agricultural productivity and promote diversified and organic farming.
Sec. 23. Soil and Water Conservation.—The Regional Government shall give top priority to the conservation, protection, utilization, and development of soil and water resources for agricultural purposes.
Sec. 24. Aquatic and Fisheries Code.—The Regional Assembly may enact an aquatic and fisheries code which shall enhance, develop, conserve, and protect marine and aquatic resources, and shall protect the rights of subsistence fisherfolk to the preferential use of communal marine and fishing resources, including seaweeds. This protection shall extend to offshore fishing grounds, up to and including all waters fifteen (15) kilometers from the coastline of the autonomous region but within the territorial waters of the Republic, regardless of depth and the seabed and the subsoil that are included between two (2) lines drawn perpendicular to the general coastline from points where the boundary lines of the autonomous region touch the sea at low tide and a third line parallel to the general coastline.
The provinces and cities within the autonomous region shall have priority rights to the utilization, development, conservation, and protection of the aforementioned offshore fishing grounds.
The provinces and cities concerned shall provide support to subsistence fisherfolk through appropriate technology and research, adequate financial, production, marketing assistance, and other services.
The Regional Assembly shall enact priority legislation to ensure that fish-workers shall receive a just share from their labor in the utilization, production, and development of marine and fishing resources.
The Regional Assembly shall enact priority legislation to develop science, technology, and other disciplines for the protection and maintenance of aquatic and marine ecology.
Sec. 25. Agriculture and Fisheries Bureau.—The Regional Assembly shall by law, create a Bureau on Agriculture and Fisheries and define its composition, powers and functions.
Trade and Industry
Sec. 26. Private Sector.—The Regional Government recognizes the private sectors as the prime mover of trade, commerce, and industry. It shall encourage and support the building up of entrepreneurial capability in the autonomous region and shall recognize, promote, and protect cooperatives.
Sec. 27. Cottage Industries.—The Regional Government shall promote and protect cottage industries by providing assistance such as marketing opportunities, financial support, tax incentives, appropriate and alternative technology and technical training to produce semi-finished and finished products. Deserving small and medium-scale cottage industries may be provided priority assistance.
Sec. 28. Banks and Financial Institutions.—The Regional Government shall, subject to the supervision of the Bangko Sentral ng Pilipinas, encourage the establishment in the autonomous region of:
(a) Banks and financial institutions and their branches; and
(b) Off-shore banking units of foreign banks.
Sec. 29. Islamic Banks.—The Bangko Sentral ng Pilipinas shall establish an Islamic Bank and authorize the establishment of its branches in the autonomous region.
The members of the board of directors or trustees of the Islamic Bank shall be appointed by the President upon recommendation of the Regional Governor. The persons recommended by the Regional Governor shall possess educational qualifications and sufficient experience in the management and operation of Islamic banking and shall be subject to confirmation by the Regional Assembly before they are recommended to the President. The board of directors or trustees of the bank shall elect from among their members the chair, the vice chair and the president of the bank. Other bank officials and employees shall be appointed by the president of the bank.
Sec. 30. Bangko Sentral Regional Bank.—The Bangko Sentral ng Pilipinas shall establish a Bangko Sentral Regional Bank with full banking services in the capital city or any suitable municipality in the autonomous region within one (1) year from the approval of this Organic Act. The Regional Governor shall submit a list of qualified persons to the appropriate Bangko Sentral authority from which the staff of the regional office may be chosen. The rights of the Bangko Sentral personnel who are occupying positions in the Bangko Sentral Regional Office as of the date of the approval of this Organic Act to continue as such shall be respected.
Sec. 31. Barter and Counter-Trade.—Subject to existing laws, the Regional Government shall regulate traditional barter trade and counter-trade with Indonesia, Malaysia, or Brunei. The goods or items that are bartered or counter-traded with the said countries shall not be sold elsewhere in the country without payment of appropriate customs or import duties. The Department of Finance shall, in consultation with the Regional Government, promulgate the rules to govern barter and counter-trade within six (6) months from the approval of this Organic Act.
Sec. 32. Consumer Education and Welfare.—The Regional Government shall promote consumer education and protect the rights, interests, and general welfare of the consumers.
Sec. 33. Local Labor and Goods.—The Regional Government shall promote the preferential use of local labor and locally produced goods and materials by adopting measures to increase their competitiveness.
Sec. 34. Foreign Investments.—Subject to the provisions of the Constitution, the Regional Government shall regulate and exercise all other function as may be provided within its jurisdiction. The central government or national government may intervene in such matters only if national security is involved.
Tourism Development
Sec. 35. Regional Tourism.—The Regional Government shall have primary jurisdiction in the promotion of tourism within the autonomous region. In promoting tourism, the diverse cultural heritage, and the moral and spiritual values of the people in the autonomous region shall be upheld, respected, and maintained.
Sec. 36. Tourism Office.—The Regional Assembly may, by law, create a regional tourism office, and define its composition, powers and functions.
The Department of Tourism of the central government or national government shall, whenever feasible, extend financial and technical support to the tourism program of the Regional Government.
This work is in the public domain because it is a work of the Philippine government (see Republic Act No. 8293 Sec. 176).
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