MANILA - A legislative measure converting the Bataan Economic Zone into a free port has lapsed into law, with the attendant incentives adding to the government’s tally of forgone revenues.

A Palace document showed that President Gloria Macapagal Arroyo allowed the bill, which has been designated as Republic Act (RA) 9728, to become a law by virtue of not affixing her signature to it. Under the Constitution, the President has 30 days to sign or veto a measure approved by Congress.

The measure was ratified by Congress in September and was enrolled for the Mrs. Arroyo’s signature in the same month.

RA 9728 will liberalize the entry of goods within the Bataan freeport as even consumer items will be exempt from the payment of duties. This incentive does not apply in economic zones, where only goods to be used in production are exempted from tariffs.

The Finance department had opposed the measure, claiming it will result in annual foregone revenues of P5 billion.

Sought for comment, Finance department policy and planning director Teresa F. Habitan said they would continue to ask Congress to pass revenue measures to offset tax perk-caused losses.

"We need new sources of revenue because of the reduction in the tax base" she said.

Lourdes B. Recente, Finance department research director, said the law’s implementing rules could help trim the loss.

House ways and means committee vice-chairman and Camarines Norte Rep. Liwayway P. Vinzons-Chato, who had opposed the bill, called for strict monitoring.

Bataan Rep. Albert S. Garcia (2nd district) and Sen. Richard J. Gordon, the law’s principal author and sponsor, respectively, were not immediately available for comment.