Special Economic Zone Act of 1995, Republic Act No. 7916

The passage of Republic Act No. 7916, known as the Special Economic Zone Act of 1995, was a turning point in strengthening the Philippines’ position in the global economy. Establishing the framework for special economic zones (ecozones), the law created environments where industries could thrive through world-class facilities, streamlined regulations, and competitive incentives.

What is RA 7916?

RA 7916 established the Philippine Economic Zone Authority (PEZA) and authorized the creation of special economic zones across the country. The ecozones ranging from industrial parks and IT hubs to tourism estates were designed to attract investment, generate employment, and stimulate balanced regional development.

For investors, ecozones mean lower operational costs, efficient systems, and strategic locations. For communities, they translate to new jobs, skills development, and opportunities that extend beyond urban centers.

What RA 7916 Provides?

The Special Economic Zone Act serves as a catalyst for industrial growth by establishing a framework that enables both foreign and local investors to operate in globally competitive environments. Through the incentives and policies it outlines, RA 7916 provides enterprises with income tax holidays, duty-free importation of capital equipment and raw materials, and simplified export-import procedures that lower operational costs. It empowers businesses through PEZA’s one-stop shop system, reducing red tape and ensuring fast approvals for registrations, licenses, and permits.

The Act also authorizes the creation of ecozones in strategic locations nationwide whether industrial, IT, tourism, agricultural, or medical, allowing diverse industries to flourish in areas with the right infrastructure and connectivity. Institutionalizing strong governance under PEZA guarantees that ecozones are managed with transparency, consistency, and investor confidence. These provisions collectively make the Philippines a more attractive destination for investment, while ensuring that development extends beyond major urban centers.

Why Does RA 7916 Matter?

RA 7916 serves as a catalyst for industrialization and global competitiveness. It has fueled the growth of manufacturing hubs, IT-BPO centers, and export-driven industries, while also dispersing economic activity to the countryside. The law not only attracts foreign and local investment but also uplifts communities by creating jobs, fostering innovation, and promoting regional progress.

At PRIME Philippines, we recognize RA 7916 as a powerful driver of sustainable growth. Helping businesses tap into ecozone opportunities, bridging investor goals with national development, and ensuring that progress benefits both industries and people alike.