Preferential Tax.docx

Republic of the Philippines CONGRESS OF THE PHILIPPINES Metro Manila

Further declares that it is the duty of the family to take care of its elderly members while the State may design programs of social security for them.

Fourteenth Congress Third Regular Session

"Consistent with these constitutional principles, this Act shall serve the following objectives:

Begun and held in Metro Manila, on Monday, the "(a) To recognize the rights of senior citizens to take twenty-seventh day of July two thousand nine. their proper place in society and make it a concern of the family, community, and government; Republic Act No. 9994 "(b) To give full support to the improvement of the total AN ACT GRANTING ADDITIONAL BENEFITS AND well-being of the elderly and their full participation in PRIVILEGES TO SENIOR CITIZENS, FURTHER society, considering that senior citizens are integral part AMENDING REPUBLIC ACT NO. 7432, AS of Philippine society; AMENDED, OTHERWISE KNOWN AS "AN ACT TO MAXIMIZE THE CONTRIBUTION OF SENIOR "(c) To motivate and encourage the senior citizens to CITIZENS TO NATION BUILDING, GRANT contribute to nation building; BENEFITS AND SPECIAL PRIVILEGES AND FOR OTHER PURPOSES" "(d) To encourage their families and the communities they live with to reaffirm the valued Filipino tradition of Be it enacted by the Senate and House of caring for the senior citizens; Representatives of the Philippines in Congress assembled: "(e) To provide a comprehensive health care and rehabilitation system for disabled senior citizens to Section 1. Title. - This Act Shall be known as foster their capacity to attain a more meaningful and the "Expanded Senior Citizens Act of 2010." productive ageing; and Section 2. Section 1 of Republic Act No. 7432, as "(f) To recognize the important role of the private sector amended by Republic Act No. 9257, otherwise known in the improvement of the welfare of senior citizens and as the "Expanded Senior Citizens Act of 2003", is to actively seek their partnership. hereby further amended to read as follows: "In accordance with these objectives, this Act shall: "SECTION 1. Declaration of Policies and Objectives. As provided in the Constitution of the Republic of the "(1) establish mechanisms whereby the contributions of Philippines, it is the declared policy of the State to the senior citizens are maximized; promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free "(2) adopt measures whereby our senior citizens are the people from poverty through policies that provide assisted and appreciated by the community as a whole; adequate social services, promote full employment, a rising standard of living and an improved quality of life. "(3) establish a program beneficial to the senior citizens, In the Declaration of Principles and State Policies in their families and the rest of the community they serve: Article II, Sections 10 and 11, it is further declared that and the State shall provide social justice in all phases of national development and that the State values the "(4) establish community-based health and dignity of every human person and guarantees full rehabilitation programs for senior citizens in every respect for human rights. political unit of society." "Article XIII, Section 11 of the Constitution provides that the Sate shall adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all the people at affordable cost. There shall be priority for the needs of the underprivileged, sick, elderly, disabled, women and children. Article XV, Section 4 of the Constitution

Section 3. Section 2 of Republic Act No. 7432, as amended by Republic Act No. 9257, otherwise known as the Expanded Senior Citizens Act of 2003", is hereby further amended to read as follows: SEC. 2. Definition of terms. - For purposes of this Act, these terms are defined as follows:

"(a) Senior citizen or elderly refers to any resident "(a) the grant of twenty percent (20%) discount and citizen of the Philippines at least sixty (60) years old; exemption from the value -added tax (VAT), if applicable, on the sale of the following goods and "(b) Geriatrics refer to the branch of medical science services from all establishments, for the exclusive use devoted to the study of the biological and physical and enjoyment or availment of the senior citizen changes and the diseases of old age; "(1) on the purchase of medicines, including the "(c) Lodging establishment refers to a building, edifice, purchase of influenza and pnuemococcal vaccines, and structure, apartment or house including tourist inn, such other essential medical supplies, accessories and apartelle, motorist hotel, and pension house engaged in equipment to be determined by the Department of catering, leasing or providing facilities to transients, Health (DOH). tourists or travelers; "The DOH shall establish guidelines and mechanism of "(d) Medical Services refer to hospital services, compulsory rebates in the sharing of burden of professional services of physicians and other health discounts among retailers, manufacturers and care professionals and diagnostics and laboratory tests distributors, taking into consideration their respective that the necessary for the diagnosis or treatment of an margins; illness or injury; "(2) on the professional fees of attending physician/s in "(e) Dental services to oral examination, cleaning, all private hospitals, medical facilities, outpatient clinics permanent and temporary filling, extractions and gum and home health care services; treatments, restoration, replacement or repositioning of teeth, or alteration of the alveolar or periodontium "(3) on the professional fees of licensed professional process of the maxilla and the mandible that are health providing home health care services as necessary for the diagnosis or treatment of an illness or endorsed by private hospitals or employed through injury; home health care employment agencies; "(f) Nearest surviving relative refers to the legal spouse who survives the deceased senior citizen: Provided, That where no spouse survives the decedent, this shall be limited to relatives in the following order of degree of kinship: children, parents, siblings, grandparents, grandchildren, uncles and aunts;

"(4) on medical and dental services, diagnostic and laboratory fees in all private hospitals, medical facilities, outpatient clinics, and home health care services, in accordance with the rules and regulations to be issued by the DOH, in coordination with the Philippine Health Insurance Corporation (PhilHealth);

"(g) Home health care service refers to health or supportive care provided to the senior citizen patient at home by licensed health care professionals to include, but not limited to, physicians, nurses, midwives, physical therapist and caregivers; and

"(5) in actual fare for land transportation travel in public utility buses (PUBs), public utility jeepneys (PUJs), taxis, Asian utility vehicles (AUVs), shuttle services and public railways, including Light Rail Transit (LRT), Mass Rail Transit (MRT), and Philippine National Railways (PNR);

"(h) Indigent senior citizen, refers to any elderly who is frail, sickly or with disability, and without pension or permanent source of income, compensation or financial assistance from his/her relatives to support his/her basic needs, as determined by the Department of Social Welfare and development (DSWD) in consultation with the National Coordinating and Monitoring Board."

"(6) in actual transportation fare for domestic air transport services and sea shipping vessels and the like, based on the actual fare and advanced booking; "(7) on the utilization of services in hotels and similar lodging establishments, restaurants and recreation centers;

Section 4 Section 4 of Republic Act No. 7432, as amended by Republic Act No. 9257, otherwise known "(8) on admission fees charged by theaters, cinema as the "Expanded Senior Citizens Act of 2003", is houses and concert halls, circuses, leisure and hereby further amended to read as follows: amusement; and "SEC. 4. Privileges for the Senior Citizens. The senior citizens shall be entitled to the following:

"(9) on funeral and burial services for the death of senior citizens;

"(b) exemption from the payment of individual income taxes of senior citizens who are considered to be minimum wage earners in accordance with Republic Act No. 9504;

"(j) to the extent possible, the government may grant special discounts in special programs for senior citizens on purchase of basic commodities, subject to the guidelines to be issued for the purpose by the Department of Trade and Industry (DTI) and the "(c) the grant of a minimum of five percent (5%) discount Department of Agriculture (DA); relative to the monthly utilization of water and electricity supplied by the public utilities: Provided, That the "(k) provision of express lanes for senior citizens in all individual meters for the foregoing utilities are commercial and government establishments; in the registered in the name of the senior citizen residing absence thereof, priority shall be given to them; and therein: Provided, further, That the monthly consumption does not exceed one hundred kilowatt "(l) death benefit assistance of a minimum of Two hours (100 kWh) of electricity and thirty cubic meters thousand pesos (Php2, 000.00) shall be given to the (30 m3) of water: Provided, furthermore, That the nearest surviving relative of a deceased senior citizen privilege is granted per household regardless of the which amount shall be subject to adjustments due to number of senior citizens residing therein; inflation in accordance with the guidelines to be issued by the DSWD.1avvphi1 "(d) exemption from training fees for socioeconomic programs; "In the availment of the privileges mentioned above, the senior citizen, or his/her duly authorized representative, "(e) free medical and dental services, diagnostic and may submit as proof of his/her entitled thereto any of laboratory fees such as, but not limited to, x-rays, the following: computerized tomography scans and blood tests, in all government facilities, subject to the guidelines to be "(1) an identification card issued by the Office of the issued by the DOH in coordination with the PhilHealth; Senior Citizen Affairs (OSCA) of the place where the senior citizen resides: Provided, That the identification "(f) the DOH shall administer free vaccination against card issued by the particular OSCA shall be honored the influenza virus and pneumococcal disease for nationwide; indigent senior citizen patients; "(2) the passport of the senior citizen concerned; and "(g) educational assistance to senior citizens to pursue pot secondary, tertiary, post tertiary, vocational and "(3) other documents that establish that the senior technical education, as well as short-term courses for citizen is a citizen of the Republic and is at least sixty retooling in both public and private schools through (60) years of age as further provided in the provision of scholarships, grants, financial aids, implementing rules and regulations. subsides and other incentives to qualified senior citizens, including support for books, learning materials, "In the purchase of goods and services which are on and uniform allowances, to the extent promotional discount, the senior citizen can avail of the feasible: Provided, That senior citizens shall meet promotional discount or the discount provided herein, minimum admission requirements; whichever is higher. "(h) to the extent practicable and feasible, the continuance of the same benefits and privileges given by the Government Service Insurance System (GSIS), the Social Security System (SSS) and the PAG-IBIG, as the case may be, as are enjoyed by those in actual service; "(i) retirement benefits of retirees from both the government and the private sector shall be regularly reviewed to ensure their continuing responsiveness and sustainability, and to the extent practicable and feasible, shall be upgraded to be at par with the current scale enjoyed by those in actual service;

"The establishment may claim the discounts granted under subsections (a) and (c) of this section as tax deduction based on the cost of the goods sold or services rendered: Provided, That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted: Provided, further, That the total amount of the claimed tax deduction net of VAT, if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code (NICR), as amended." Section 5. Section 5 of the same Act, as amended, is hereby further amended to read as follows:

"SEC. 5. Government Assistance. - The government "The national health program for senior citizens shall, shall provide the following: among others, be harmonized with the National Prevention of Blindness Program of the DOH. "(a) Employment "Throughout the country, there shall be established a "Senior citizens who have the capacity and desire to "senior citizens' ward" in every government hospital. work, or be re-employed, shall be provided information This geriatric ward shall be for the exclusive use of and matching services to enable them to be productive senior citizens who are in need of hospital confinement members of society. Terms of employment shall by reason of their health conditions. However, when conform with the provisions of the Labor Code, as urgency of public necessity purposes so require, such geriatric ward may be used for emergency purposes, amended, and other laws, rules and regulations. after which, such "senior citizens' ward" shall be "Private entities that will employ senior citizens as reverted to its nature as geriatric ward. employees, upon the effectivity of this Act, shall be entitled to an additional deduction from their gross "(d) Social Services income, equivalent to fifteen percent (15%) of the total amount paid as salaries and wages to senior citizens, "At least fifty percent (50%) discount shall be granted subject to the provision of Section 34 of the NIRC, as on the consumption of electricity, water, and telephone amended: Provided, however, That such employment by the senior citizens center and residential care/group shall continue for a period of at least six (6) months: homes that are government-run or non-stock, non-profit Provided, further, That the annual income of the senior domestic corporation organized and operated primarily citizen does not exceed the latest poverty threshold as for the purpose of promoting the well-being of determined by the National Statistical Coordination abandoned, neglected, unattached, or homeless senior Board (NSCB) of the National Economic and citizens, subject to the guidelines formulated by the Development Authority (NEDA) for that year. DSWD. "The Department of Labor and Employment (DOLE), in coordination with other government agencies such as, but not limited to, the Technology and Livelihood Resource Center (TLRC) and the Department of Trade and Industry (DTI), shall assess, design and implement training programs that will provide skills and welfare or livelihood support for senior citizens. "(b) Education "The Department of Education (DepED), the Technical Education and Skills Development Authority (TESDA) and the Commission on Higher Education (CHED), in consultation with nongovernmental organizations (NGOs) and people's organizations (POs) for senior citizens, shall institute programs that will ensure access to formal and nonformal education. "(c) Health "The DOH, in coordination with local government units (LGUs), NGOs and POs for senior citizens, shall institute a national health program and shall provide an integrated health service for senior citizens. It shall train community-based health workers among senior citizens and health personnel to specialize in the geriatric care and health problems of senior citizens.

"(1) "self and social enhancement services" which provide senior citizens opportunities for socializing, organizing, creative expression, and self-improvement; "(2) "after care and follow-up services" for citizens who are discharged from the homes or institutions for the aged, especially those who have problems of reintegration with family and community, wherein both the senior citizens and their families are provided with counseling; "(3) "neighborhood support services" wherein the community or family members provide caregiving services to their frail, sick, or bedridden senior citizens; and "(4) "substitute family care " in the form of residential care or group homes for the abandoned, neglected, unattached or homeless senior citizens and those incapable of self-care. "(e) Housing "The national government shall include in its national shelter program the special housing needs of senior citizens, such as establishment of housing units for the elderly. "(f) Access to Public Transport

"The Department of Transportation and Communications (DOTC) shall develop a program to assist senior citizens to fully gain access to public transport facilities. "(g) Incentive for Foster Care "The government shall provide incentives to individuals or nongovernmental institution caring for or establishing homes, residential communities or retirement villages solely for, senior citizens, as follows:

appointed by the mayor for a term of three (3) years without reappointment but without prejudice to an extension if exigency so requires. Said appointee shall be chosen from a list of three (3) nominees as recommended by a general assembly of senior citizens organizations in the city or municipality. "The head of the OSCA shall be appointed to serve the interest of senior citizens and shall not be removed or replaced except for reasons of death permanent disability or ineffective performance of his duties to the detriment of fellow senior citizens.

"(1) realty tax holiday for the first five (5) years starting "The head of the OSCA shall be entitled to receive an from the first year of operation; and honorarium of an amount at least equivalent to Salary "(2) priority in the construction or maintenance of Grade 10 to be approved by the LGU concerned. provincial or municipal roads leading to the aforesaid "The head of the OSCA shall be assisted by the City home, residential community or retirement village. Social Welfare and Development officer or by the Municipal Social Welfare and Development Officer, in "(h) Additional Government Assistance coordination with the Social Welfare and Development Office. "(1) Social Pension "Indigent senior citizens shall be entitled to a monthly stipend amounting to Five hundred pesos (Php500.00) to augment the daily subsistence and other medical needs of senior citizens, subject to a review every two (2) years by Congress, in consultation with the DSWD.

"The Office of the Mayor shall exercise supervision over the OSCA relative to their plans, activities and programs for senior citizens. The OSCA shall work together and establish linkages with accredited NGOs Pos and the barangays in their respective areas.

"(2) Mandatory PhilHealth Coverage

"The OSCA shall have the following functions:

"All indigent senior citizens shall be covered by the national health insurance program of PhilHealth. The LGUs where the indigent senior citizens resides shall allocate the necessary funds to ensure the enrollment of their indigent senior citizens in accordance with the pertinent laws and regulations.

"(a) To plan, implement and monitor yearly work programs in pursuance of the objectives of this Act; "(b) To draw up a list of available and required services which can be provided by the senior citizens;

"(c) To maintain and regularly update on a quarterly basis the list of senior citizens and to issue national "(3) Social Safety Nets individual identification cards, free of charge, which "Social safety assistance intended to cushion the shall be valid anywhere in the country; effects of economics shocks, disasters and calamities shall be available for senior citizens. The social safety "(d) To serve as a general information and liason center assistance which shall include, but not limited to, food, for senior citizens; medicines, and financial assistance for domicile repair, shall be sourced from the disaster/calamity funds of "(e) To monitor compliance of the provisions of this Act LGUs where the senior citizens reside, subject to the particularly the grant of special discounts and privileges to senior citizens; guidelimes to be issued by the DSWD." Section 6. Section 6 of the same Act, as amended, is "(f) To report to the mayor, any individual, establishments, business entity, institutions or agency heeby further amended to read as follows: found violating any provision of this Act; and SEC. 6. The Office for Senior Citizens Affairs (OSCA). There shall be established in all cities and municipalities "(g) To assist the senior citizens in filing complaints or an OSCA to be headed by a senior citizen who shall be charges against any individual, establishments,

business entity, institution, or agency refusing to comply with the privileges under this Act before the Department of Justice (DOJ), the Provincial Prosecutor's Office, the regional or the municipal trial court, the municipal trial court in cities, or the municipal circuit trial court."

"(a) Chairperson - the Secretary of the DSWD or an authorized representative; "(b) Vice Chairperson - the Secretary of the Department of the Interior and Local Government (DILG) or an authorized representative; and

Section 7. Section 10 of the same Act, as amended, is hereby further amended to read as follows: "(c) Members: "SEC. 10. Penalties. - Any person who refuses to honor "(1) the Secretary of the DOJ or an authorized the senior citizen card issued by this the government or representative; violates any provision of this Act shall suffer the following penalties: "(2) the Secretary of the DOH or an authorized representative; "(a) For the first violation, imprisonment of not less than two (2) years but not more than six (6) years and a fine "(3) the Secretary of the DTI or an authorized of not less than Fifty thousand pesos (Php50,000.00) representative; and but not exceeding One hundred thousand pesos (Php100,000.00); (4) representatives from five (5) NGOs for senior citizens which are duly accredited by the DSWD and "(b) For any subsequent violation, imprisonment of not have service primarily for senior citizens. less than two (2) years but not more than six (6) years Representatives of NGOs shall serve a period of tree and a fine of not less than One Hundred thousand (3) years. pesos (Php100,000.00) but not exceeding Two hundred thousand pesos (Php200,000.00); and "The Board may call on other government agencies, NGOs and Pos to serve as resource persons as the "(c) Any person who abuses the privileges granted need arises. Resource person have no right to vote in herein shall be punished with imprisonment of not less the National Coordinating and Monitoring Board." than six (6) months and a fine of not less than Fifty thousand pesos (Php50,000.00) but not more than One Section 9. Implementing Rules and Regulations. hundred thousand pesos (Php100,000.00). Within sixty (60) days from theeffectivity of this Act, the Secretary of the DSWD shall formulate and adopt "If the offender is a corporation, partnership, amendments to the existing rules and regulations organization or any similar entity, the officials thereof implementing Republic Act No. 7432, as amended by directly involved such as the president, general Republic Act No. 9257, to carry out the objectives of this manager, managing partner, or such other officer Act, in consultation with the Department of Finance, the charged with the management of the business affairs Department of Tourism, the Housing and Urban shall be liable therefor. Development Coordinating Council (HUDCC), the DOLE, the DOJ, the DILG, the DTI, the DOH, the "If the offender is an alien or a foreigner, he/she shall DOTC, the NEDA, the DepED, the TESDA, the CHED, be deported immediately after service of sentence. and five (5) NGOs or POs for the senior citizens duly accredited by the DSWD. The guidelines pursuant to "Upon filing of an appropriate complaint, and after due Section 4(a)(i) shall be established by the DOH within notice and hearing, the proper authorities may also sixty (60) days upon the effectivity of this Act. cause the cancellation or revocation of the business permit, permit to operate, franchise and other similar Section 10. Appropriations. The Necessary privileges granted to any person, establishment or appropriations for the operation and maintenance of the business entity that fails to abide by the provisions of OSCA shall be appropriated and approved by the LGUs this Act." concerned. For national government agencies, the requirements to implement the provisions of this Act Section 8. Section 11 of the same Act, as amended, is shall be included in their respective budgets: Provided, hereby further amended to read as follows: That the funds to be used for the national health program and for the vaccination of senior citizens in the "SEC. 11. Monitoring and Coordinating Mechanism. - A first year of the DOH and thereafter, as a line item under National Coordinating and Monitoring Board shall be the under the DOH budget in the subsequent General Appropriations Act (GAA): Provided, further, That the established which shall be composed of the following:

monthly social pension for indigent senior citizens in the first year of implementation shall be added to the regular appropriations of the DSWD budget in the subsequent GAA. Section 11. Repealing Clause. - All law, executive orders, rules and regulations or any part hereof inconsistent herewith are deemed repealed or modified accordingly. Section 12. Separability Clause. - If any part or provision of this Act shall be declared unconstitutional and invalid, such 18 declaration shall not invalidate other parts thereof which shall remain in full force and effect. Section 13. Effectivity. - This Act shall take effect fifteen (15) days its complete publication n the Official Gazette or in at least two (2) newspapers of general circulation, whichever comes earlier. Approved

(Sgd.) PROSPERO C. (Sgd.) JUAN PONCE NOGRALES ENRILE Speaker of the House of President of the Senate Representatives This Act which is a consolidation of Senate Bill No. 3561 and House Bill No. 6390 was finally passed by the Senate and the House of Representatives on January 27, 2010.

(Sgd.) MARILYN B. (Sgd.) EMMA LIRIOBARUA-YAP REYES Secretary General Secretary of Senate House of Represenatives

Approved: FEB 15, 2010 (Sgd.) GLORIA MACAPAGAL-ARROYO President of the Philippines

IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9994, ALSO KNOWN AS THE "EXPANDED SENIOR CITIZENS ACT OF 2010," AN ACT GRANTING ADDITIONAL BENEFITS AND

PRIVILEGES TO SENIOR CITIZENS, FURTHER Section 2. Consonant with these constitutional policies AMENDING REPUBLIC ACT NO. 7432 OF 1992 AS and RA 9994, these Rules shall serve the following AMENDED BY REPUBLIC ACT NO. 9257 OF 2003 objectives: RULE I TITLE, PURPOSE AND CONSTRUCTION

a) To recognize the rights of senior citizens to take their proper place in society and make them a concern of the family, community, and government;

Article 1. Title. - These Rules shall be known and cited as the Implementing Rules and Regulations of Republic b) To give full support to the improvement of the total Act No. 9994, otherwise known as the "Expanded well-being of the elderly and their full participation as an Senior Citizens Act of 2010." integral part of Philippine society; Article 2. Purpose. - Pursuant to Section 9 of RA No. 9994 (hereinafter referred to as the Act), these Rules and Regulations are promulgated to prescribe the procedures and guidelines for its implementation, in order to facilitate compliance with the Act and to achieve its objectives.

c) To motivate and encourage the senior citizens to contribute to nation building;

Article 3. Construction. - These Rules shall be construed and applied in accordance with and in furtherance of the policies and objectives of the law. In case of conflict or ambiguity, the same shall be construed liberally and in favor of the senior citizens.

e) To provide a comprehensive health care and rehabilitation system for senior citizens with disability to foster their capacity to attain a more meaningful and productive ageing; and

RULE II DECLARATION OF POLICIES AND OBJECTIVES

d) To encourage their families and the communities they live in to reaffirm and apply the valued Filipino traditions of caring for the senior citizens;

f) To recognize the important role of the private and the non-government sector in the improvement of the welfare of senior citizens and to actively seek their partnership.

Article 4. Declaration of Policies and Objectives. Section 3. In conformity with these objectives, these Section 1. As provided in the Constitution of the Rules shall: Philippines: a) Establish mechanisms whereby the contributions of a) It is the declared policy of the State to promote a just the senior citizens are maximized; and dynamic social order that will ensure the prosperity and independence of the nation and free the people b) Adopt measures whereby our senior citizens are from poverty through policies that provide adequate assisted and appreciated by the community as a whole; social services, promote full employment, a rising standard of living, and an improved quality of life for all. c) Establish programs beneficial to the senior citizens, their families and the rest of the community that they b) It is further declared that the State shall promote serve; and social justice in all phases of national development and values the dignity of every human person and d) Establish community-based health and rehabilitation guarantees full respect for human rights. programs in every political unit of society. c) In all matters relating to the care, health, and benefits RULE III of the elderly, the State shall adopt an integrated and DEFINITION OF TERMS comprehensive approach to health development which shall endeavor to make essential goods, health and Article 5. Definition of Terms. - For purposes of these other social services available to all people at affordable Rules, the terms are defined as follows: costs giving priority for the needs of the underprivileged sick, elderly, disabled, women and children. 5.1 SENIOR CITEZEN OR ELDERLY - refers to any Filipino citizen who is a resident of the Philippines, and d) Further, it is declared that though the family has the who is sixty (60) years old or above. It may apply to duty to take care for its elderly members, the State may senior citizens with "dual citizenship" status provided also help through just programs of social security.

they prove their Filipino citizenship and have at least six completely independent part thereof such as cottages, (6) months residency in the Philippines. cabanas, or huts, are used for the regular reception, accommodation or lodging of travelers, tourists, or 5.2 BENEFACTOR - refers to any person whether vacationers, and provides other services incidental related or not to the senior citizen who provides care or thereto for a fee; who gives any form of assistance to him/her, and on whom the senior citizen is dependent on for primary 5.8 RESTAURANT - refers to any establishment duly care and material support, as certified by the City or licensed and with business permits issued by the local Municipal Social Welfare and Development Officer government units, offering to the public, regular and (C/MSWDO). special meals or menu, fast food, cooked food and short orders. Such eating-places may also serve coffee, 5.3 GERIATRICS - refers to the branch of medical beverages and drinks. This covers Quick-Service science devoted to the study, management and Restaurants or QSRs, Casual Dining and Fine Dining treatment of the biological and physical changes, and Restaurants as defined below: the diseases of old age. a) QUICK SERVICE RESTAURANTS, or fast-food 5.4 GERONTOLOGY - is the scientific study of the chains, refer to restaurants with multiple branches that biological, psychological, and sociological phenomena have menu boards where food item choices are listed. associated with old age and ageing and in determining Customers place their orders with the cashier and pay answers about the normal aging process rather than the right after their orders are taken. diseases of old age. It is also the scientific study of the processes of aging from many disciplines, including b) CASUAL and FINE DINING RESTAURANTS - are social work, anthropology, biology, history, sociology, restaurants where customers are seated first before psychology, and demography. their food orders are taken by waiters. They are served at their tables and pay only after they have consumed 5.5 IDENTIFICATION DOCUMENT - refers to any their meals. document or proof of being a senior citizen which may be used for the availment of benefits and privileges 5.9 MEDICINES - refer to prescription and nonunder the Act and its Rules. It shall be any of the prescription/over-the-counter drugs, both generic and following: branded, including vitamins and mineral supplements medically prescribed by the elderly's physician, and a) Senior Citizens' Identification Card issued by the approved by the Department of Health (DOH) and the Office of Senior Citizens Affairs (OSCA) in the city or Food and Drug Administration (FDA), which are intended for use in the diagnosis, cure, mitigation, municipality where the elderly resides; treatment or prevention of human disease or sickness. b) The Philippine passport of the elderly person or It does not include food, devices or their components, parts, or accessories. senior citizen concerned; and c) Other valid documents that establish the senior citizen or elderly person as a citizen of the Republic and at least sixty (60) years of age, which shall include but not be limited to the following government-issued identification documents indicating an elderly's birthdate or age: driver's license, voters ID, SSS/GSIS ID, PRC card, postal ID.

5.10 MEDICAL SERVICES - refer to public and private hospital services, professional services of physicians and other health care professionals, and diagnostic and laboratory tests that are requested by a physician as necessary for the diagnosis and/or treatment of an illness or injury.

5.11 DENTAL SERVICES - refer to oral examination, 5.6 LODGING ESTABLISHMENT - refers to a building, cleaning, permanent and temporary filling, extractions edifice, structure, apartment, or house including tourist and gum treatments, restoration, replacement or inn, apartelle, motorist hotel, and pension house repositioning of teeth, or alteration of the alveolar or engaged in catering, leasing, or providing facilities to periodontium process of the maxilla and the mandible transients, tourists, or travelers, duly licensed with that are necessary for the diagnosis and/or treatment of business permit and/or franchised by the national a dental illness or injury. government agencies or the local government units. 5.12 DIAGNOSTIC AND LABORATORY TESTS 5.7 HOTEL/HOSTEL - refers to an establishment refers to diagnostic examinations that are necessary for whose building, edifice or premises, including a the diagnosis and/or treatment of an illness and injury,

including but not limited to X-ray, CT scans, ECG, 2D Echo, gastroenterology, blood chemistry exams, histopathology and immunopathology, hematology, urine analysis, parasitology and bacteriology test, and serology. 5.13 OFFICE FOR SENIOR CITIZENS AFFAIRS (OSCA) - refers to the office established in cities and municipalities under the Office of the Mayor headed by a senior citizen. 5.14 NON_GOVERNMENTAL ORGANIZATION or NGO - refers to any private entity, which is non-profit and voluntary in nature dedicated to the promotion, enhancement and support of the welfare of senior citizens, duly registered with any regulatory body. For purposes of the Act and its Rules, an ACCREDITED NGO refers to any private non-stock non-profit organization, regional or national in scope, mainly providing services for senior citizens, duly registered with the Securities and Exchange Commission (SEC), Cooperative Development Authority (CDA), or any appropriate government regulatory body and registered or licensed with, and with programs accredited by, the Department of Social Welfare and Development (DSWD).

and desires of retirees, which may include services such as clubhouses, swimming pools, arts and crafts, boating, walking trails, golf courses, active adult retail and on-site medical services. 5.18 GROUP HOMES - refer to a community-based alternative living arrangement to institutional care. It can be a transit home for a definite period for neglected older persons while the necessary services of locating relatives and care management is ongoing. It envisions responding to the needs of the senior citizens who have been abandoned, have no families to return to or to whose family reunification is not suitable, and are assessed to be needing group living experience. The program enables a minimum of 6 and a maximum of 10 clients discharged from a residential care facility to live together and manage their group living activities with minimal supervision from the agency social worker. 5.19 FOSTER CARE - refer to a social work intervention which provides for a planned substitute or alternative family care by a licensed foster family to a neglected, abandoned, unattached and poor older person.

5.20 RESIDENTIAL CARE FACILITY - refers to facility which provides twenty-four (24) hour residential care services operated primarily for the purpose of promoting 5.15 PEOPLE'S ORGANIZATION or PO - refers to a the well-being of abandoned, neglected, unattached or type of social welfare and development association with homeless senior citizens. The facility may be run by a bonafide membership, an identifiable leadership and government or non-stock non-profit organization and is an organizational structure that has demonstrated its accredited by the DSWD to serve a minimum of 10 capacity to promote the public interest and engage in clients. social welfare and development activities. As part of the civil society movement, it is composed of a specific 5.21 AFTER CARE SERVICES - refer to the provision population or sector, like the senior citizens, and seeks of interventions, approaches, and strategies with the to represent the interest of its members. end goal of ensuring effective reintegration of older persons discharged from residential facilities. 5.16 SENIOR CITIZENS CENTER - refers to the place established by Republic Act No. 7876 or the Senior 5.22 BASIC NECESSITIES - refer to rice, corn, bread, Citizens Center Act, with recreational, educational, fresh, dried and canned fish and other marine products, health and social programs and facilities designed for fresh pork, beef and poultry, meat, fresh eggs, fresh and the full enjoyment and benefit of the senior citizens in processed milk, fresh vegetables, root crops, coffee, the city or municipality accredited by the DSWD. It can sugar, cooking oil, salt, laundry soap, detergents, and be any available structure, a spacious room in a private drugs classified as essential by the DOH and other or public building, a room attached to a community commodities as maybe classified by the Department of center, a barangay hall or chapel. Trade and Industry (DTI) and the Department of Agriculture (DA) according to Republic Act No. 7581 or 5.17 RETIREMENT VILLAGE refers to an the Price Act. independent-living facility, often with continuing-care amenities. It refers to a residential community offering 5.23 PRIME COMMODITIES - refer to fresh fruits, flour, separate or autonomous houses for residents. It is a dried, processed and canned pork, beef and poultry, retirement habitat with a multi-residence housing facility meat, dairy products not falling under basic necessities; that is planned, designed and geared towards people noodles, onions, garlic, and all drugs not classified as who no longer work and are restricted to a certain age. essential drugs by the DOH and other commodities that It has particular conveniences catering to the wishes

may be classified by the DTI and the DA according to Republic Act No. 7581 or The Price Act.

reportorial requirements, and a system for claiming tax deductions.

5.24 NEAREST SURVIVING RELATIVE - refers to the closest person related to the deceased senior citizen by blood or affinity, such as the legal spouse who survives the deceased senior citizen: Provided, That where no spouse survives the decedent, this shall be limited to relatives in the following order of degree of kinship: children, parents, siblings, grandchildren, uncles and aunts.

Section 1. MEDICAL_RELATED PRIVILEGES

(a) MEDICINE AND DRUG PURCHASES - The 20% discount and VAT exemption shall apply to the purchase of generic or branded medicines and drugs by or for senior citizens, including the purchase of influenza and pneumococcal vaccines. The 20% discount and VAT exemption shall also be granted to the purchase of vitamins and mineral supplements 5.25 HOME HEALTH CARE SERVICE - refers to which are medically prescribed by an attending health or supportive care provided to the senior citizen physician for prevention and treatment of diseases, patient at home by TESDA-certified caregivers or illness, or injury. licensed health care professionals to include, but not limited to, physicians, nurses, midwives, and physical (b) ESSENTIAL MEDICAL SUPPLIES, therapists. ACCESSORIES AND EQUIPMENT - The 20% discount and VAT exemption privilege shall also apply 5.26 INDIGENT SENIOR CITIZEN - refers to any to the purchase of eyeglasses, hearing aids, dentures, elderly who is frail, sickly, or with disability, and without prosthetics, artificial bone replacements like steel, pension or regular source of income, compensation or walkers, crutches, wheelchairs whether manual or financial assistance from his/her relatives to support electric-powered, canes/quad canes, geriatric diapers, his/her basic needs, as determined by the DSWD in and other essential medical supplies, accessories and consultation with the National Coordinating and equipment by or for senior citizens. Monitoring Board (NCMB). The purchase under Sections 1 (a) and (b) from drug RULE IV stores, hospital pharmacies, medical and optical clinics PRIVILEGES FOR THE SENIOR CITIZENS and similar establishments including non-traditional outlets dispensing medicines, shall be subject to Article 6. OSCA-issued Senior Citizens' Identification guidelines that shall be issued by the DOH within thirty Card. - For the availment of benefits and privileges (30) days from effectivity of these Rules, in coordination under the Act and these Rules, the senior citizen, or with the Food and Drug Administration (FDA) and the Health Insurance Corporation his/her duly authorized representative, shall present as Philippine proof of eligibility, a valid and original Senior Citizens' (PHILHEALTH). Said guidelines shall also indicate Identification Card issued by the Head of the Office of what constitutes discounted essential medical supplies, Senior Citizens Affairs (OSCA) of the place where the accessories and equipment as contemplated by senior citizen resides, and which shall be honored Section 1 (b), and will be subjected to a regular review as deemed necessary in keeping with the changes, nationwide. demands and needs of senior citizens. Article 7. Twenty Percent (20%) Discount and VAT Exemption - The senior citizens shall be entitled to the The guidelines issued by the DOH, in consultation with grant of twenty percent (20%) discount and to an the DOF and the BIR, shall also establish mechanisms exemption from the value-added tax (VAT), IF of compulsory rebates in the sharing of burden of APPLICABLE, on the sale of the goods and services discounts among retailers, manufacturers and covered by Section 1 to 6 of this Article, from all distributors, taking into consideration their respective establishments for the exclusive use and enjoyment or margins. When necessary, the DOF and the BIR shall come up with the appropriate Revenue Regulations for availment of senior citizens. this purpose. For this purpose, the Department of Finance (DOF) through the Bureau of Internal Revenue (BIR) shall (c) MEDICAL AND DENTAL SERVICES IN THE come up with the appropriate Revenue Regulations on PRIVATE FACILITIES - Medical and dental services, the 20% senior citizens discount and VAT exemption diagnostic and laboratory tests such as but not limited within thirty (30) days from effectivity of these Rules that to X-Rays, computerized tomography scans, and blood shall cover among others, new invoicing procedures, tests, that are requested by a physician as necessary

for the diagnosis and/or treatment of an illness or injury (a) HOTELS AND SIMILAR LODGING are subjected to the 20% discount and VAT exemption. ESTABLISHMENTS - The discount shall be for room accommodation and other amenities offered by the (d) PROFESSIONAL FEES OF ATTENDING establishment such as but not limited to hotel-based PHYSICIAN/S in all private hospitals, medical facilities, parlors and barbershops, restaurants, massage parlor, outpatient clinics and home health care facilities shall spa, sauna bath, aromatherapy rooms, workout gyms, be subjected to the 20% discount and VAT exemption. swimming pools, Jacuzzis, ktv bars, internet facilities, food, drinks and other services offered. The term "hotel" (e) PROFESSIONAL FEES OF LICENSED HEALTH shall include beach and mountain resorts, WORKERS PROVIDING HOME HEALTH CARE SERVICES as endorsed by private hospitals or (b) RESTAURANTS - The discount shall be for the employed through home health care employment purchase of food, drinks, dessert, and other agencies are entitled to the 20% discount and VAT consumable items served by the establishments offered exemption. The burden of the discount shall be borne for the consumption of the general public. solely by the employment agency given the health worker's very minimal share compared to the agency (c) For Dine-in services under paragraphs (a) and (b) of fee. Section 3, and Section 4, paragraph 2 of Article 7, the privilege must be personally availed of by the senior Section 2. DOMESTIC TRANSPORTATION citizen as defined under these Rules, and no proxies or authorization in favor of another person who is not a PRIVILEGES senior citizen will be honored. The Department of Transportation and Communication (DOTC), in coordination with the Maritime Industry (d) Consistent with the intent of the Act, the phrase Authority (MARINA), Philippine Ports Authority (PPA), "exclusive use and enjoyment" of the senior citizen shall the Civil Aeronautics Board (CAB), Light Rail Transit mean "for the senior citizen's personal consumption" Authority (LRTA), Philippine National Railways (PNR), only. As such, the 20% senior citizen discount shall not Mass Rail Transit Authority (MRTA) and Land apply to "children's meals" which are primarily prepared Transportation Franchising and Regulatory Board and intentionally marketed for children. Similarly, the (LTFRB), shall within thirty (30) days from effectivity of 20% senior citizen discount shall not apply to "prethese Rules issue the necessary circulars or directives contracted" party packages or bulk orders. on the following transportation privileges of senior citizens: (e) Food, drinks and other consumable items provided in Section 3 (a) and (b), and Section 4, paragraph 2 of (a) AIR AND SEA TRANSPORTATION PRIVILEGES - Article 7 purchased by the senior citizen shall be Fare for domestic air, and sea travel, including \f0 processed separately as an independent transaction advanced booking, shall be subject to the 20% discount from his/her non-eligible companions to ensure that it is for his/her exclusive consumption and to enable and VAT exemption, if applicable. computation of the 205 discount and the exemption (b) PUBLIC LAND TRANSPORTATION from the Value Added Tax (VAT), which only the senior PRIVILEGES - Fare in the public railways including citizen is entitled to. LRT, MRT, and PNR, fares in buses (PUB), jeepneys (PUJ), taxi and shuttle services (AUV), are likewise However, if the group of diners is composed entirely of subject to the 20% discount and VAT exemption, if senior citizens, all of whom present valid senior citizens IDs, each shall be entitled to a 20% discount and applicable. exemption from Value Added Tax. Section 3. HOTELS, RESTAURANTS, RECREATIONAL CENTERS, AND PLACES OF (f) The 20% discount shall apply to Take-Out/TakeHome/Drive-Thru orders as long as it is the senior LEISURES, AND FUNERAL SERVICES citizen himself/herself who is present and personally The Department of Interior and Local Government ordering, and he/she can show a valid senior citizen ID (DILG) and Department of Tourism (DOT) shall, within card. thirty (30) days from effectivity of these Rules, issue the necessary circulars or directives to establishments for (g) For Delivery Orders, the 20% discount shall likewise apply subject to certain conditions; i.e. senior citizen ID its implementation to ensure compliance herewith. card number must be given while making the order over the telephone; the senior citizen ID card must also be

presented upon delivery to verify the identity of the senior citizen entitled to the 20% discount.

Article 9. NO DOUBLE DISCOUNTS - In the purchase of goods and services which are on promotional discount, the senior citizen can avail of the (h) For the above-mentioned transactions under establishment's offered discount or the 20% discount paragraphs (f) and (g) of Section 3 of Article 7, the Most provided herein, whichever is higher and more Expensive Meal Combination (MEMC) shall apply to favorable. food purchases by senior citizens. The MEMC is an amount corresponding to the combination of the most In cases where the senior citizen is also a person with expensive and biggest single-serving meal with disability (PWD) entitled to a 20% discount under beverage served in a quick service restaurant, is his/her valid PWD identification card (ID), the senior deemed flexible and is adjusted accordingly by food citizen shall use either his/her OSCA-issued ID card or establishments to estimate a single food purchase for PWD ID card to avail of the 20% discount. an individual senior citizen. Article 10. TAX DEDUCTION - The establishment may Section 4. RECREATION CENTERS - The discount claim the discounts provided herein as tax deductions shall be for the utilization of services in the form of fees, based on the cost of the goods sold or services charges and rental for sport facilities or equipment, rendered: Provided. That the cost of the discount shall including golfcart rentals and green fees, or venues for be allowed as deduction from the gross income for the ballroom dancing, yoga, badminton courts, bowling same taxable year that the discount is granted: lanes, table or lawn tennis, workout gyms, martial arts Provides, further, That the total amount of the claimed facilities. tax deduction net of VAT, if applicable, shall be included in their gross sales receipts for tax purposes and shall Non-profit, stock golf and country clubs which are not be subject to proper documentation and to the open to the general public, and are private and for provisions of the National Internal Revenue Code exclusive membership only as duly proven by their (NIRC), as amended. official Securities and Exchange (SEC) registration papers, are not mandated to give the 20% senior For this purpose, the Department of Finance (DOF) citizens discount. However, should restaurants and through the Bureau of Internal Revenue (BIR) shall food establishments inside these country clubs be come up with the appropriate Revenue Regulations on independent concessionaires and food sold are not the 20% senior citizens discount and VAT exemption consumable items under club membership dues, they within thirty (30) days from effectivity of these Rules. must grant the 20% senior citizen discount. Article 11. OTHER PRIVILEGES Section 5. ADMISSION FEES PRIVILEGE - The discount shall be applied to admission fees charged by Section 1. INCOME TAX EXEMPTION - The senior theaters, cinema houses and concert halls, circuses, citizen shall be entitled to exemption from the payment carnivals, and other similar places of culture, leisure of the individual income tax, provided he/she is and amusement such as museums and parks. considered to be minimum wage earner in accordance with Republic Act No. 9504. Section 6. FUNERAL AND BURIAL SERVICES - The beneficiary or any person who shall shoulder the funeral Section 2. EXEMPTION FROM TRAINING FEES and burial expenses of the deceased senior citizen, The senior citizen shall be exempted from training fees shall claim the discount under this Rule for the for socio-economic programs conducted by private and deceased senior citizen upon presentation of the death government agencies subject to the guidelines to be certificate. Such expenses shall cover the purchase of issued within thirty (30) days from effectivity of these casket or urn, embalming, hospital morgue, transport of Rules by the DTI, the Department of Labor and the body to intended burial site in the place of origin, but Employment (DOLE), the DA, the Technical Education shall exclude obituary publication and the cost of the and Skills Development Authority (TESDA) and the memorial lot. Department of Science and Technology - Technology Resource Center (DOST-TRC). Article 8. CREDIT CARD PAYMENTS - The 20% discount and VAT exemption shall also apply to Section 3. FREE MEDICAL AND DENTAL SERVICES purchases of goods and services by senior citizens IN GOVERNMENT FACILITIES - Medical and dental paying through credit cards. services, diagnostic and laboratory tests requested by the physician such as but not limited to X-rays, computerized tomography scans, and blood tests

Section 7. PRIVILEGES ON GRANTING SPECIAL DISCOUNTS IN SPECIAL PROGRAMS - To the extent possible, the government may grant special discounts in special programs for senior citizens on purchase of basic necessities and prime commodities, subject to the guidelines to be issued for the purpose by the DTI and the DA within (30) days from effectivity of these Rules. Provided, That such special programs and their Section 4. FREE VACCINATION FOR INDIGENT guidelines shall be developed by the concerned SENIOR CITIZENS - The DOH shall, subject to department within the concerned department's technical and operational guidelines which it shall issue jurisdiction. not later than thirty (30) days from effectivity of these 8. EXPRESS LANES PRIVILEGES Rules, administer free vaccinations against the Section influenza virus and pneumococcal disease for indigent Accessible express lanes for senior citizens shall be senior citizen patients. Neglected, abandoned, provided in all private, banking, commercial, and unattached or homeless senior citizens in government- government establishments; in the absence thereof, run residential homes, centers and facilities shall priority shall be given to them. likewise be entitled to free vaccinations under these Rules. Article 12. UTILITY DISCOUNTS availed of by senior citizens, including professional fees of attending doctors in all government hospitals, medical facilities, outpatient clinics, and home health care services, shall be provided free of charge to senior citizens. These shall be in accordance with the rules and regulation to be issued by the DOH, in coordination with the PHILHEALTH.

The DOH shall enjoin all government and private hospitals, as well as other health facilities to post, publish or print out a schedule of health benefits and privileges i.e., laboratory and diagnostic test fees, which should be regularly updated. These postings and publications shall be clearly identified in the guidelines.

Section 1. Five (5%) Discount - The grant of a minimum of five percent (5%) discount relative to the monthly utilization of water and electricity by households with senior citizens; Provided, That the individual meters for the foregoing utilities are registered in the name of the senior citizen residing therein: provided, further, that the monthly consumption does not exceed one hundred kilowatt hours (100 kWh) of electricity and thirty cubic meters (30m') of water: Provided, furthermore, that the privilege is granted per household regardless of the number of senior citizens residing therein.

Section 5. EDUCATIONAL PRIVILEGES - Educational assistance shall be granted to senior citizens to pursue post secondary, post tertiary, as well as vocational or technical education in both public and private schools through provision of scholarships, grants, financial aid, subsidies and other incentives to qualified senior citizens, including support for books, learning materials, To avail of the discount under this Section, the senior and uniform allowance, to the extent feasible: Provided, citizen shall: that senior citizens shall meet minimum admission requirements. 1. Apply for the discount personally or thru a representative. There shall be annual renewal of Section 6. BENEFITS AND PRIVILEGES FOR application to the utility provider. RETIREES - To the extent practicable and feasible, the senior citizen shall be granted the continuance of the 2. Submit requirements. same benefits and privileges given by the Government Service Insurance System (GSIS), Social Security a. Proof of age and citizenship System (SSS) and PAG-IBIG, as the case may be, as are enjoyed by those in active service. b. Proof of billing. Meter registration should be in the name of the senior citizen for a period of one year Retirement benefits of retirees from both the government and the private sector shall be regularly c. Proof of residence reviewed every year to ensure their continuing responsiveness and sustainability, and to the extent Section 2. Fifty (50%) Discount - The grant of a 50% practicable and feasible, shall be upgraded to be at par discount an all electricity, water, telephone with the current scale enjoyed by those in actual service consumption for DSWD-accredited senior citizens based on National Economic and Development centers and residential care institutions or group homes Authority (NEDA) poverty threshold per region as that are government-run or organized and operated by determined by the National Statistical Coordination non-stock, non-profit domestic corporations, primarily Board (NSCB). for the purpose of promoting the well-being of

abandoned, neglected, unattached or homeless senior citizens the appropriate skills development, livelihood citizens. training programs, and welfare or livelihood support. Such senior citizens centers and residential care or Article 14. EDUCATION group homes must have been in operation for at least six (6) months and must have a separate meter for said The Department of Education (DepEd), the DOSTutilities/services. TRC, the Technical Education and Skills Development Authority (TESDA), and the Commission on Higher Section 3. DSWD shall issue the necessary guidelines Education (CHED), in consultation with nonwithin (30) days from effectivity of these Rules for the governmental (NGOs) and people's organizations accredited senior citizens centers and residential/group (POs) for senior citizens, shall institute a program that homes willing to avail of the utility discount. will ensure access of senior citizens to formal and nonformal education. They are to: The Energy Regulatory Commission (ERC), the Metropolitan Waterworks and Sewerage System a) Formulate and implement relevant and effective (MWSS), the Local Water Utility Administration (LWUA) course designs and educational programs; and other concerned utility-regulatory agencies shall, within six (6) months after the effectivity of these Rules, b) Conduct the necessary training for the formulate supplemental guidelines to cover recovery implementation of the appropriate curriculum for the rate mechanics and/or sharing of burden, among other purpose; concern of the distribution utilities. c) Ensure the availability of the needed-educational RULE V facilities in the form of modular programs and other GOVERNMENT ASSISTANCE distance and alternative learning materials; Article 13. EMPLOYMENT

d) In coordination with OSCA and the City or Municipal Social Welfare and Development Officer, shall conduct Section 1. Senior citizens, who have the capacity and assessment and profiling of senior citizens who wanted desire to work, or to be re-employed, shall be provided to study; and by the DOLE, in coordination with other government agencies including local government units, with e) Conduct continuing research and development information and matching services to enable them to be program for the necessary and relevant education of the productive members of society. Terms of employment senior citizens. shall conform to the provisions of the Labor Code, as amended, Civil Service Laws and other laws, rules and Article 15. HEALTH regulations. Section 1. The DOH, in coordination with local Section 2. Private entities that shall employ senior government units (LGUs), NGOs and POs for senior citizens as employees upon effectivity of the Act, shall citizens, shall institute a national health program that be entitled to an additional deduction from their gross shall incorporate the National Prevention of Blindness Income, equivalent to fifteen percent (15%) of the total Program, and shall also provide an integrated health amount paid as salaries and wages to senior citizens service for senior citizens. subject to the provision of Section 34 of the National Internal Revenue Code (NIRC), as amended and the It shall train community-based health workers including Revenue Regulations to be issued by the BIR and barangay health workers, among senior citizens and approved by the DOF; Provided, however, That such health personnel to specialize in geriatric care, employment shall continue for a period of at least six (6) gerontology, and health problems of senior citizens. months; Provided, further, That the net annual income of the senior citizen does not exceed the poverty level Section 2. The National Health Program aims to for that year as determined by NEDA thru the NSCB. promote healthy and productive older population through the following: Section 3. The DOLE, in coordination with other government agencies, such as, but not limited to, the a) Establishment and provision of a comprehensive and DOST-Technology Resource Center (DOST-TRC) and integrated health service package catering to the the DTI, shall assess, design and implement training specific needs of the citizens; programs that will provide free of charge to senior

b) Human resource development/capacity building of health personnel in relation to the care and health problems of senior citizens;

d) Substitute family care in the form of residential care, group homes, or foster homes for the abandoned, neglected, unattached or homeless senior citizens and those incapables of self-care.

c) Health promotion; e) Inclusion of community-based settings as practicum d) Conduct of researches and study in geriatric care, for academic institutions and in the curriculum of caregiving and technical vocational schools. gerontology, and health needs of senior citizens; e) In coordination with the municipal health worker, Article 17. HOUSING designate one (1) barangay health worker to attend to senior citizens' health needs; The national government shall include in its national shelter program the special housing needs of senior f) The barangay, in coordination with local office health citizens, such as establishment of housing units for the office shall designate one day of every month elderly. specifically for medical attention of senior citizens; Section 1. The Housing and Land Use Regulatory g) Establishment of senior citizens' ward in every Board (HLURB) shall formulate housing rules on how to government hospital and in all levels of hospitals develop subdivision suitable to the requirements of male and female senior citizens. The Home throughout the country; and Development Mutual Fund (HDMF) shall promote the h) Provision of accessible express lanes, or establishment of elderly residence and shall review its existing circulars particularly the limitation of the age prioritization, in all health facilities. requirements of sixty-five (65) years old at the date of Section 3. Provide technical assistance in coordination the loan application and seventy (70) years old at loan with DSWD, NGOs and other concerned agencies to maturity. It shall also consider the concept of pension in local government units in the establishment of lieu compensation. community-based health rehabilitation programs. Section 2. The housing program for the poor senior citizens which include the establishment/donation of Article 16. SOCIAL SERVICES group/foster homes for the neglected, abused and The DSWD, in cooperation with the OSCA and the local unattached or homeless senior citizens and those government units, non-governmental organizations and incapable of self-care including its management, people'' organizations for senior citizens, shall develop maintenance and operations shall be established in and implement programs and social services for senior accordance with EO 105, approving and directing the citizens. Local government units shall ensure that the implementation of the program, "Provision of developed programs and social services are provided. Group/Foster Home for Neglected, Abandoned, Abused, Unattached and Poor Older Persons and The components of these programs are: Persons with Disabilities" promulgated on May 16, a) Self and social enhancement services which provide 2002. senior citizens opportunities for socializing, organizing, Article 18. ACCESS TO PUBLIC TRANSPORT creative expression, and improvement of self; The DOTC and its attached agencies and sectoral officers shall improve the implementation or programs to assist senior citizens to fully gain access in the use of public transport facilities. The minimum requirements and standards to make transportation facilities and utilities for public use accessible to senior citizens shall c) Neighborhood support services/home care wherein be developed to enhance the mobility of senior citizens. the community or family members provide caregiving There shall be strict implementation of courtesy space services to their frail, sick, or bedridden senior citizens; and seats for the exclusive use of senior citizens in all transport system. As far as practicable, PUVs shall also and strive to install safe lower stepping boards. b) After care services for senior citizens who are discharged from the homes/institutions for the aged, especially those who have problems of reintegration with family and community, wherein both the senior citizens and their families are provided with counseling;

Article 19. INCENTIVE FOR FOSTER CARE

the senior citizens reside, subject to the guidelines to be issued by the DSWD in coordination with DILG.

The DILG through the local government units, in consultation with the DOF and the BIR which shall provide the necessary guidelines, shall provide incentives to persons or NGO institutions implementing foster care programs for senior citizens, as follows:

Section 4. DEATH BENEFIT ASSISTANCE - Death benefit assistance of a minimum of Two thousand pesos (Php 2, 000.00) shall be given to the nearest surviving relative who took care of the deceased senior citizens reside, subject to the guidelines to be issued by (a) reality tax holiday for the first five (5) years starting the DSWD and DILG. from the first year of operation and/or implementation of foster care program; and In keeping with the intention of the law and similar government assistance being granted, this benefit shall (b) priority in the construction, or maintenance of apply in relation to deceased indigent senior citizens provincial or municipal roads leading to the aforesaid only. However, it will not preclude LGUs already granting burial assistance to continue giving such home, residential community or retirement village. benefit to non-indigent senior citizens. Article 20. ADDITIONAL GOVERNMENT RULE VI ASSISTANCE THE OFFICE FOR SENIOR CITIZENS AFFAIRS (OSCA) Section 1. SOCIAL PENSION - Pursuant to the eligibility criteria as may be determined by the DSWD, indigent senior citizens shall be entitled to a monthly Article 21. Office of Senior Citizens Affairs - There stipend amounting to Five hundred pesos (Php 500.00) shall be established in all cities and municipalities an to augment the daily subsistence and other medical Office for Senior Citizens Affairs (OSCA). needs of senior citizens. The grant of social pension shall be subject to a review every two (2) years by Section 1. OSCA Head - The senior citizen to be Congress, in consultation with the DSWD within three appointed by the City or Municipal Mayor as OSCA months after convening the Congress. Head should have the following qualifications: The DSWD, in consultation with the Department of Budget and Management (DBM), the DILG, the NCMB, NGOs, and people's organizations shall formulate guidelines within thirty (30) days from effectivity of these Rules for the development of criteria, selection of, and establishment of database for indigent senior citizens focusing on targeting, delivery, monitoring and evaluation, to facilitate implementation of this additional government assistance. Section 2. MANDATORY PHILHEALTH COVERAGE All indigent senior citizens shall be covered by the national health insurance program of PHILHEALTH. The local government units where the indigent senior citizens reside shall allocate the necessary funds to ensure the enrollment and lifetime coverage of their indigent senior citizens, in accordance with the pertinent laws and regulations. Section 3. SOCIAL SAFETY NETS - Social safety assistance intended to cushion the effects of economic shocks; disasters and calamities shall be available for senior citizens. The social safety assistance which shall include, but not limited to, food, medicines, and financial assistance for domicile repair, shall be sourced from the disaster/calamity funds of local government units where

a) A Filipino citizen and resident of the municipality or city for at least one (1) year; b) A registered voter of the concerned city or municipality; c) Able to read and write; d) Must be physically and mentally capable of performing the tasks of OSCA Head; e) A bonafide member of a duly registered senior citizens organization which has a track record of at least three consecutive years; f) Good moral character; and g) At least a high school graduate Section 2. Selection and Term of OSCA Head. - The OSCA Head shall be chosen from a list of three (3) nominees as recommended by a general assembly of DSWD- accredited or LGU-registered senior citizens organizations in the city or municipality. He/she shall appointed by the mayor for a term of three (3) years without reappointment but without prejudice to an

extension not exceeding three (3) months, if exigency so requires. The OSCA Head shall be appointed to serve the interest of senior citizens and shall not be removed or replaced except for reasons of death, permanent disability, or ineffective performance of his duties to the detriment of fellow senior citizens, as stated in a resolution issued by the general assembly. In case of death or permanent disability, the remaining term shall be served by the new reappointed if he/she has not served one-half of the full term. Section 3. Remuneration for Services Rendered. - The head of the OSCA shall be entitled to received an honorarium of an amount equivalent to at least Salary Grade 10 to be approved by the local government unit concerned.

Development Officer and the presidents of concerned duly registered senior citizens organizations to deliberate and act on the complaints; h) To assist senior citizens in filling complaints or charges against any person, natural or judicial; establishment, institution, or agency refusing to comply with the privileges under the Act before the Department of Justice (DOJ), the Provincial Prosecutor's Office, the regional or the municipal trial court, the municipal trial court in cities, or the municipal circuit trial court; i) To assist and coordinate with the concerned person, natural or judicial, establishment, institution or agency in investigating fraudulent practices and abuses of the discount and privileges exclusively granted to senior citizens ; and

j) To establish linkages and work together wit the For 3rd to 6th class local government units, their accredited NGOs, people's organizations, and the respective sanggunians may provide for a reasonable barangays in their respective areas. and practicable remuneration for the OSCA Head. Section 5. Operations and Maintenance of OSCA. Section 4. Functions of OSCA. - The office for Senior The necessary appropriation for the operation and Citizens Affairs shall have the following Functions: maintenance of the OSCA shall be provided by the local government units concerned. An office space a) In consultation with the City or Municipal Social Work established at the Office of the Mayor shall likewise be and Development Officer and duly registered senior provided. citizen organizations, to plan, develop, implement, consolidate, and monitor yearly work programs in Section 6. Assistance and Supervision of OSCA. - The pursuance of the objectives of the Act and its Rules; OSCA Head shall be assisted by the City of the Municipal Social Welfare and Development Officer b) To draw up a list of available and required services (C/MSWDO). The Office of the Mayor shall exercise which can be provided by the registered federations and supervision over the OSCA relative to their plans, activities and programs for senior citizens. associations of senior citizens; RULE VII c) To maintain and regularly update on a quarterly basis PENALTIES AND OTHER SANCTIONS the list of senior citizens and to issue national uniform individual identification cards and purchase booklets, free of charge, which shall be valid anywhere in the Article 22. Violations in Discounted Medicine country; Purchases - The following acts concerning drug and medicine purchases are considered violative of the d) To serve as a general information and liaison center provisions of the Act and its Rules: the needs of the senior citizens; Section 1. A senior Citizen or his /her representative or e) To monitor compliance of the provisions of the Act a person misusing the privileges by: and its Rules particularly the grant of special discounts and privileges to senior citizens; a) using several purchase booklets, f) To report to the Mayor, any person, natural or judicial; b) availing of the discounts to buy medicines, drugs, establishments, business, entity, institution or agency medical accessories and supplies not for the use of the found violating any provision of the Act and its Rules; senior citizen, g) To facilitate the creation of a city or municipality c) unauthorized use of the identification card of the coordinating and monitoring board consisting of OSCA senior citizen. Head, the City or Municipal Social Work and

Section 2. A medical practitioner giving prescription to pesos (Php 200,000.00) and imprisonment for not less other persons in the name of the senior citizen or giving than two (2) years but not more than six (6) years. anomalous prescription. Section 3. Any person who abuses the privileges Section 3. Retailers and establishments dispensing granted herein shall be punished with a fine of not less medicines: than fifty thousand pesos (Php 50,000.00) but not more than One hundred thousand pesos (Php 100,000.00) a) refusing to grant the full 20% senior citizens discount and imprisonment of not less than six (6) months. and VAT exemption on drug and medicine purchases paid via credit card, Section 4. If the offender is an alien or a foreigner, he/she shall be deported immediately after service of b) making a distinction between branded and generic sentence without further deportation proceedings. drugs and medicines in giving the 20% discount, Section 5. If the offender is a corporation, partnership, c) posting notices and signages telling customers that organization or any similar entity the officials thereof availment of the 20% discount is limited to cash directly involved such as the president, general manager, managing partner, or such other officer purchases only, charged with the management of the business affairs d) "limiting" of discountable drug and medicine shall be liable therefor. purchases to certain weekdays only, such that senior citizens cannot avail of the 20% discount on other days, Section 6. Upon filing of an appropriate complaint, and and e) restricting the purchase time or period for senior after due notice and hearing, the proper authorities may also cause the cancellation or revocation of the citizen discounts after a certain hour. business permit, permit to operate, franchise and other Article 23. Violations in Discounted Food similar privileges granted to any person, establishment Purchases - The following acts concerning food or business entity that fails to abide by the provisions of purchases are considered violative of the provisions of the Act and these Rules. the Act and its Rules: RULE VIII a) Pegging a maximum amount of food purchase MONITORING AND COORDINATING MECHANISM subject to 20% discount and the VAT exemption, and/ Article 25. Monitoring and Coordinating or posting of notice to that effect; Mechanism. - An inter-agency coordinating and b) Refusal to grant the 20% discount and VAT monitoring mechanism at the national level shall be exemption on take -out/ take home/ drive-thru orders it established which shall be called the National appearing that the purchase is for the exclusive use and Coordinating and Monitoring Board (NCMB) on the Expanded Senior Citizens Act of 2010. enjoyment of senior citizens; c) Refusal to grant a 20% discount and VAT exemption Section 1. NCMB Composition. - The National on delivery orders it appearing that the purchases is for Coordinating and Monitoring Board shall be composed of the following: the exclusive use and enjoyment of senior citizens. Article 24. PENALTIES - Any person who refuses to a) Chairperson - Secretary of the Department of Social honor the senior citizen card or violates any provision of Welfare and Development (DSWD), or authorized the Act and its Rules shall suffer the following penalties: representatives; Section 1. For the first violation, a fine of not less than Fifty thousand pesos (Php 50,000.00) but not exceeding One hundred thousand pesos (Php 100,000.00) and imprisonment for not less than two (2) years but not more than six (6) years; and

b) Vice-Chairperson - Secretary of the Department of the Interior and Local Government (DILG), or authorized representatives; c) Members: Secretaries or authorized representatives of the following:

Section 2. For any subsequent violation, a fine of not less than One hundred thousand pesos (Php 1) Department of Justice (DOJ); 100,000.00) but not exceeding Two hundred thousand

2) Department of Health (DOH); 3) Department of Trade and Industry (DTI); and

g) Coordinate the conduct and evaluation of the plan of action, research and documentation of good practices and disparities for policy and program development;

4) Representatives from five (5) accredited NGOs for h) To actively establish national, regional and international networks for resource generation and senior citizens technical cooperation; and The National Inter-Agency Coordinating and Monitoring Board may call on other government agencies, NGOs i) Prepare yearly accomplishment report for the Office and people's organizations to serve as resource of the President, Congress, and the concerned national persons as the need arises. Resource persons have no government and local government units. voting rights at the Board. Section 5. Coordinating and Monitoring Body at the Section 2. NGO/PO Representation. The Regional Level. - There shall be established in all representatives from accredited NGOs and people's regions a Regional Coordinating and Monitoring Board organizations shall be senior citizens, or from other (RCMB) with similar membership and functions as the sectors that have services primarily for senior citizens. National Board. As far as practicable, similar bodies These NGO representatives which shall be selected shall be established in the local government units. and appointed by the Board shall serve for a period of Section 6. Secretariat. - The Department of Social three (3) years. Welfare and Development shall serve as the Secretariat Section 3. Level of Representation. - The authorized to the Board at the national and at the regional levels. representative to the National Coordinating and Monitoring Board from the government agencies shall RULE IX have a rank of not lower than Director level or its FINAL PROVISIONS equivalent, and for the NGOs, shall have a rank not lower than an Executive Director. Article 26. Appropriations. - The appropriation necessary to implement the provisions of the Act and its Section 4. Functions. - The National Coordinating and Rules shall be included in the respective budgets of the Monitoring Board (NCMB) shall have the following responsible national government agencies subject to functions: availability of funds. The heads of departments and agencies as well as local chief executives concerned a) Formulate a National Plan of Action for Senior shall immediately include in their annual appropriations Citizens in coordination with concerned government the funding necessary to implement these programs and services. agencies and other stakeholders; b) Develop an effective monitoring and reporting Section 1. The funds to be used for the national health system towards an efficient, consistent and uniform program and for the vaccination of indigent senior citizens in the first year of implementation shall be implementation of the law; added to the regular appropriations of the DOH and c) Develop and institute effective and innovative thereafter, as a line item under the DOH budget in the approaches and methods with which to address subsequent General Appropriations Act (GAA) subject to availability of funds. emerging concerns of the senior citizens; d) Coordinate the programs and projects of government Section 2. The monthly social pension for indigent agencies with responsibilities under RA No. 9994 and senior citizens in the first year of implementation shall be added to the regular appropriations of the DSWD these Rules; and thereafter as a line item under the DSWD budget in e) Coordinate the conduct of nationwide information, the subsequent GAA subject to availability of funds. education campaign and other advocacy activities on Section 3. The local government units concerned shall RA No. 9994; provide the necessary appropriations for the operation f) Monitor the conduct of orientation, training and other and maintenance of the OSCA. capability building programs to maximize the Article 27. Repealing Clause. - All laws, presidential contributions and participation of senior citizens; decrees, executive orders and rules and regulations or

part thereof, contrary to, or inconsistent with the provisions of these Rules, are hereby repealed or modified accordingly. Article 28. Separability Clause. - Should any provision of the Rules be found unconstitutional or invalid by a court of law, such provision shall be served from the remainder of these Rules and such action shall not affect the enforceability of the remaining provisions of these Rules. Article 29. Effectivity. - These Rules and Regulations shall take effect fifteen (15) days after its complete publication in at least two (2) national newspapers of general circulation, and submission to the Office of the National Administrative Register, Law Center, University of the Philippines. Signed June 18, 2010 at the Department of Social Welfare and Development, Batasan Pambansa Complex, Constitution Hills, Quezon City. HON. CELIA CAPADOCIA-YANGCO Acting Secretary, Department of Social Welfare and Development Chairperson HON. ESPERANZA I. CABRAL, M.D. Secretary Department of Health

HON. RONALDO V. PUNO Secretary Dept. of Interior and Local Government

HON. ALBERTO C. AGRA Secretary Department of Justice

HON. MARGARITO B. TEVES Secretary Department of Finance

HON. JESLI A. LAPUS Secretary Dept. of Trade and Industry

HON. ANNELI R. LONTOC Secretary Dept. of Transportation and Communication

HON. MARIANITO D. ROQUE Secretary Dept. of Labor and Employment

HON. JOSEPH H. DURANO Secretary Department of Tourism

HON. NOLI C. DE CASTRO

HON. PASTOR Z. GUIAO

Vice-President and Chairperson Housing and Urban Development Coordinating Council

Director-General Technical Education and Skills Development Authority

HON. MONA D. VALISNO Secretary Department of Education

HON. EMMANUEL Y. ANGELES Chairperson Commission on Higher Education

HON. AUGUSTO B. SANTOS Director-General National Economic and Development Authority

MR. FRANSISKUS KUPANG Executive Director Coalition of Services for the Elderly

MR. JOSE P. ORDOÑEZ, JR. National Secretary Federation of Senior Citizens Association of the Philippines

MR. FELIPE A. HIDALGO, JR. President Association of Retired Postal Employees and Senior Citizens, Inc.

SR. NIEVA MANZANO, DC Louise de Marillac Foundation

Republic Act 7277 Republic of the Philippines CONGRESS OF THE PHILIPPINES Metro Manila Fifth Regular Session

(c). The rehabilitation of the disabled persons shall be the concern of the Government in order to foster their capability to attain a more meaningful, productive and satisfying life. To reach out to a greater number of disabled persons, the rehabilitation services and benefits

BEGUN AND HELD IN METRO MANILA, ON shall be expanded beyond the traditional urban-based MONDAY, THE TWENTY SECOND DAY OF JULY, centers to community-based programs, that will ensure NINETEEN HUNDRED AND NINETY-ONE. full participation of different sectors as supported by national and local government agencies. Republic Act No. 7277 (d). The State also recognizes the role of the private AN ACT PROVIDING FOR THE REHABILITATION, sector in promoting the welfare of disabled persons and SELF-DEVELOPMENT AND SELF-RELIANCE OF shall encourage partnership in programs that address DISABLED PERSON AND THEIR INTEGRATION their needs and concerns. INTO THE MAINSTREAM OF SOCIETY AND FOR OTHER PURPOSES.

(e). To facilitate integration of disabled persons into the mainstream of society, the State shall advocate for and encourage respect for disabled persons. The State Be it enacted by the Senate and the House of shall exert all efforts to remove all social, cultural, Representatives of the Philippines in Congress economic, environmental and attitudinal barriers that assembled: are prejudicial to disabled persons. TITLE ONE GENERAL PROVISIONS SECTION 3. Coverage This Act shall covers all CHAPTER I Basic Principle disabled persons and, to the extend herein provided, departments, offices and agencies of the National SECTION 1. Title This Act shall be known and cited Government or non-government organization involved as the Magna Carta for Disabled Persons’•. in the attainment of the objectives of this Act. SECTION 2. Declaration of Polity The grant of the rights and privileges for disabled persons shall be guided by the following principles: (a). Disabled persons are part of the Philippine society, thus the Senate shall give full support to the improvement of the total well-being of disabled persons and their integration into the mainstream of society.

SECTION 4. Definition of Terms For purposes of this Act, these terms are defined as follows: (a). Disabled Persons are those suffering from restriction of different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being;

Toward this end, the State shall adopt policies ensuring (b). Impairment is any loss, diminution or aberration of the rehabilitation, self-development and self-reliance of psychological, physiological, or anatomical structure of disabled persons. function; It shall develop their skills and potentials to enable them (c). Disability shall mean (1) a physical or mental to compete favorably for available opportunities. impairment that substantially limits one or more psychological, physiological or anatomical function of (b). Disabled persons have the same rights as other an individual or activities of such individual; (2) a record people to take their proper place in society. They should of such an impairment; or (3) being regarded as having be able to live freely and as independently as possible. such an impairment; This must be the concern of everyone the family, community and all government and non-government (d). Handicap refers to a disadvantage for a given organizations. Disabled person’s rights must never be individual resulting from an impairment or a disability, perceived as welfare services by the Government. that limits or prevents the functions or activity, that is considered normal given the age and sex of the individual;

(k). Marginalized Disabled Persons refer to disabled (e). Rehabilitation is an integrated approach to persons who lack access to rehabilitative services and physical, social, cultural, spiritual, educational and opportunities to be able to participate fully in vocational measures that create conditions for the socioeconomic activities and who have no means of individual to attain the highest possible level of livelihood or whose incomes fall below poverty functional ability; threshold; (f). Social Barriers refer to the characteristics of institutions, whether legal, economic, cultural, recreational or other, any human group, community, or society which limit the fullest possible participation of disabled persons in the life of the group. Social barriers include negative attitudes which tends to single out and exclude disabled persons and which distort roles and interpersonal relationship; (g). Auxiliary Aids and Services include:

(l). Qualified Individual with a Disability shall mean an individual with a disability who, with or without reasonable accommodations, can perform the essential functions of the employment position that such individual holds or desires. However, consideration shall be given to the employer’s judgement as to what functions of a job are essential, and if an employer has prepared a written description before advertising or interviewing applicants for the job, this description shall be considered evidence of the essential functions of the job;

1) qualified interpreters or other effective methods of delivering materials to individuals with hearing (m). Readily Achievable means a goal can be easily impairments; attained and carried out without much difficulty or expense. In determining whether an action is readily 2) qualified readers, taped tests, or other effective achievable, factors to be considered include methods of delivering materials to individuals with visual impairments; 1) the nature and cost of the action; 3) acquisition or modification of equipment or devices; and

2) the overall financial resources of the facility or facilities involved in the action; the number of persons employed at such facility; the effect on expenses and

4) other similar services and actions or all types of aids and services that facilitate the learning process of resources, or the impact otherwise of such action upon people with mental disability; the operation of the facility; (h). Reasonable Accommodation include (1) improvement of existing facilities used by employees in order to render these readily accessible to and usable by disabled persons; and (2) modification of work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices, appropriate adjustments or modifications of examinations, training materials or company policies, rules and regulations, the provisions of auxiliary aids and services, and other similar accommodations for disabled persons;

3) the overall financial resources of the covered entity with respect to the number of its employees; the number, type and location of its facilities; and

(i). Sheltered Employment refers to the provision of productive work for disabled persons through workshop providing special facilities, income producing projects or homework schemes with a view to given them the opportunity to earn a living thus enabling them to acquire a working capacity required in open industry.

(n). Public Transportation means transportation by air, land and sea that provides the public with general or special service on a regular and continuing basis;

4) the type of operation or operations of the covered entity, including the composition, structure and functions of the work force of such entity; the geographic separateness, administrative or fiscal relationship of the facilities in question to the covered entity;

(o). Covered entity means employer, employment agency, labor organization or joint labor-management committee; and

(j). Auxiliary Social Services are the supportive activities in the delivery of social services to the marginalized (p). Commerce shall be taken to mean a s travel, trade, sectors of society; traffic, commerce, transportation, or communication

among the provinces or between any foreign country or income, equivalent to twenty-five percent (25%) of the any territory or possession and any province. total amount paid as salaries and wages to disabled persons: Provided, however, That such entities present TITLE TWO RIGHTS AND PRIVILEGES OF proof as certified by the Department of Labor and DISABLED PERSONS Employment that disabled person are under their employ. Provided, further, That the disabled employee CHAPTER I – Employment is accredited with the Department of Labor and Employment and the Department of Health as to his SECTION 5. Equal Opportunity for Employment No disability, skills and qualifications. disabled (c). Private entities that improved or modify their persons shall be denied access to opportunities for physical facilities in order to provide reasonable suitable employment. A qualified disabled employee accommodation for disabled persons shall also be shall be subject to the same terms and conditions of entitled to an additional deduction from their net taxable employment and the same compensation, privileges, income, equivalent to fifty percent (50%) of the direct benefits, fringe benefits, incentives or allowances as a costs of the improvements or modifications. This qualified able-bodied person. Five percent (5%) of all section, however, does not apply to improvements or casual, emergency and contractual positions in the modifications of facilities required under Batas Department of Social Welfare and Development; Pambansa Bilang 344. Health; Education, Culture and Sports; and other government agencies, offices or corporations engaged SECTION 9. Vocational Rehabilitation Consistent in social development shall be reserved for disabled with the principle of equal opportunity for disabled persons. workers and workers in general, the State shall take appropriate vocational rehabilitation measures that SECTION 6. Sheltered Employment If suitable shall serve to develop the skills and potential of disabled employment for disabled persons cannot be found persons and enable them to compete favorably for through open employment as provided in the available productive and remunerative employment immediately preceding Section, the State shall opportunities in the labor market. The State shall also endeavor to provide it by means of sheltered take measures to ensure the provisions of vocational employment. In the placement of disabled persons in rehabilitation and livelihood services for disabled sheltered employment, it shall accord due regard to the persons in the rural areas. In addition, it shall promote individual qualities, vocational goals and inclinations to cooperation and coordination between the government ensure a good working atmosphere and efficient and non-government organization and other private production. entities engaged in vocational rehabilitation activities. SECTION 7. Apprenticeship Subject to the provision of the Labor Code as amended, disabled persons shall be eligible as apprentices or learners; Provided, That their handicap is not much as to effectively impede the performance of job operations in the particular occupation for which they are hired; Provided, further, That after the lapse of the period of apprenticeship if found satisfactory in the job performance, they shall be eligible for employment.

The Department of Social Welfare and Development shall design and implement training programs that will provide disabled persons with vocational skills to enable them to engage in livelihood activities or obtain gainful employment. The Department of Labor and Employment shall likewise design and conduct training programs geared towards providing disabled persons with skills for livelihood.

SECTION 10. Vocational Guidance and Counselling SECTION 8. Incentives for Employer (a) To The Department of Social Welfare and Development encourage the active participation of the private sector shall implement measures providing and evaluating in promoting the welfare of disabled persons and to vocational guidance and counselling to enable disabled ensure gainful employment for qualified disabled persons to secure, retain and advance in employment. persons, adequate incentives shall be provided to It shall ensure the availability and training counsellors private entities which employ disabled persons. and other suitability qualified staff responsible for the vocational guidance and counselling of disabled (b). Private entities that employ disabled persons who persons. meet the required skills or qualifications, either as regular employee, apprentice or learner, shall be SECTION 11. Implementing Rules and Regulations entitled to an additional deduction, from their gross The Department of Labor and Employment shall in

coordination with the Department of Social Welfare and Development (DSWD) and National Council for the SECTION 15. Vocational or Technical and Other Welfare of Disabled Persons (NCWDP), shall Training Programs The State provide disabled promulgate the rules and regulations necessary to persons with training in civics, vocational efficiency, implement the provision under this Chapter. sports and physical fitness, and other skills. The CHAPTER 2 – Education Department of Education, Culture and Sports shall establish in at least one government-owned vocational SECTION 12. Access to Quality Education The State shall ensure that disabled persons are provided with and technical school in every province a special adequate access to quality education and ample vocational and technical training program for disabled opportunities to develop their skills. It shall take persons. It shall develop and implement sports and appropriate steps to make such education accessible to all disabled persons. It shall be unlawful for any learning physical fitness program specifically designed for institutions to deny a disabled person admission to any disabled persons taking into consideration the nature of course it offers by reason of handicap or disability. The their handicap. SECTION 16. Non-Formal Education State shall take into consideration the special The State shall develop nonformal education programs requirements of disabled persons in the formulation of intended for the total human development of disabled education policies and program. It shall encourage persons. It shall provide adequate resources for nonlearning institutions to take into account the special formal education programs and projects that cater to the needs of disabled persons with respect to the use of special needs of disabled persons. school facilities, class schedules, physical education requirements and other pertinent consideration. The SECTION 17. State Universities and Colleges If State shall also promote the provision by learning viable and needed, the State Universities or State institutions, of auxiliary services that will facilitate the Colleges in each region or province shall be responsible learning process for disabled persons. for (a) the development of material appliances and technical aids for disabled persons; (b) the SECTION 13. Assistance to Disabled Students The development of training materials for vocational State shall provide financial assistance to economically rehabilitation and special education instructions; and (c) marginalized but deserving disabled students pursuing the research on special problems, particularly of the post secondary or tertiary education. Such assistance visually-impaired, hearing-impaired, and orthopedicallymay be in the form of scholarship grants, student loan impaired students, mentally retarded, and multiprograms, subsidies, and other incentives to qualified handicapped and other, and the elimination of social disabled students in both public and private schools. At barriers and discrimination against disabled persons; least five percent (5%) of the allocation for the Private and (d) inclusion of the Special Education for Disabled Education Student Financial Assistance Program (SPED) course in the curriculum. The National created by virtue of R.A. 6728 shall be set aside for Government shall provide these state universities and disabled students pursuing vocational or technical and colleges with the necessary special facilities for visuallydegree courses. impaired, hearingimpaired, speech impaired, and orthopedically-impaired students. It shall likewise SECTION 14. Special Education The State shall allocate the necessary funds in support of the above. establish, maintain and support a complete, adequate and integrated system of special education for the CHAPTER 3 – Health visually impaired, hearing impaired, mentally retarded persons and other type of exceptional children in all SECTION 18. National Health Program The regions of the country. Towards this end, the Department of Health, in coordination with National Department of Education, Culture and Sports shall Council for the Welfare of Disabled Persons, shall establish special education classes in public schools in institute a national health program which shall aim to cities, or municipalities. It shall also establish, where attain the following: viable, Braille and Record Libraries in provinces, cities or municipalities. The National Government shall (a). prevention of disability, whether occurring allocate funds necessary for the effective prenatally or post-natally; implementation of the special education program nationwide. Local government units may likewise (b). recognition and early diagnosis of disability; and appropriate counterpart funds to supplement national funds. (c). early rehabilitation of the disabled.

(b). provision of specialized training activities designed SECTION 19. Rehabilitation Centers The to improved functional limitations of disabled persons Department of Health shall establish medical related to communications skills; rehabilitation centers in government provincial hospitals, and shall include it annual appropriation the (c). development among disabled persons of a positive necessary funds for the operation of such centers. The self-image through the provision of counselling, Department of Health shall formulate and implement a orientation and mobility and strengthening daily living program to enable marginalized disabled persons to capability; avail of free rehabilitation services in government hospitals. (d). provision of family care services geared towards developing the capability of families to respond to the SECTION 20. Health Services The State shall needs of the disabled members of the family; protect and promote the right to health of disabled persons and shall adopt an integrated and (e). provision of substitute family care services and the comprehensive approach to their health development facilities therefore for abandoned, neglected, abused which shall make essential health services available to and unattached disabled persons who need custodial them at affordable cost. The National Government shall care; provide an integrated health service for disabled persons which shall include, but not limited to, the (f). provision of after care and follow-up services for the following: continued rehabilitation in a community-based setting of disabled persons who were released from the (a). prevention of disability through immunization, residential care or rehabilitation center; and nutrition, environmental protection and preservation, and genetic counselling; and early detection of disability (g). provision of day care services for disabled children and timely intervention to arrest disabling condition; and of pre-school age. (b). medical treatment and rehabilitation.

CHAPTER 5 – Telecommunications

The Department of Health shall field medical personnel SECTION 22. Broadcast Media Television stations specializing in the treatment and rehabilitation of shall be encouraged to provide a sign language inset or disabled persons to provincial hospitals and, when subtitles in at least one (1) newscast program a day and special program covering events of national viable, to municipal health centers. It shall also train its significance. field health personnel in the provision of medical attention to disabled persons. It shall further ensure that SECTION 23. Telephone Services All telephone its field health units have the necessary capabilities to companies shall be encouraged to install special fit prosthetic and orthotic appliances on disabled telephone devices or units for the hearing-impaired and persons. ensure that they are commercially available to enable them to communicate through the telephone system. CHAPTER 4 Auxiliary Social Services SECTION 24. Free Postal Charges for the Disabled SECTION 21. Auxiliary Social Services. The State shall Postal charges shall be free on the following: ensure that marginalized persons are provided with the necessary auxiliary services that will restore their social (a). article and literature like books and periodicals, functioning and participation in community affairs. orthopedic and other devices, and teaching aids for the Toward this end, the Department of Social Welfare and use of the disabled sent by mail within the Philippines Development shall develop and implement programs and abroad; and on auxiliary social services that respond to the needs of marginalized disabled persons. The components of (b). aids and orthopedic devices for the disabled sent such a program shall be as follows: abroad by mail for repair; Provided, That the aforesaid items are for personal purposes only: Provided further, (a). assistance in the acquisition of prosthetic devices That the disabled person is a marginalized disabled as and medical intervention of specialty services; certified

by the Social Welfare and Development Office of the made accessible to disabled persons during the local government unit concerned or the Department of national or local elections. Social Welfare and Development. SECTION 30. Right to Assemble Consistent with CHAPTER 6 – Accessibility the provisions of the Constitution, the State shall recognize the right of disabled persons to participate in SECTION 25. Barrier-Free Environment The State processions, rallies, parades, demonstrations, public shall ensure the attainment of a barrier-free meetings, and assemblages or other forms of mass or environment that will enable disabled persons to have concerted action held in public. access in public and private buildings and establishments and such other places mentioned in SECTION 31. Right to Organize The State recognize Batas Pambansa Bilang 344, otherwise known as the the rights of disabled persons to form organizations or Accessibility Law’•. The national and local government associations that promote their welfare and advance or shall allocate funds for the provision of architectural or safeguard their interests. The National Government, structural features for disabled persons in government through its agencies, instrumentalities and buildings and facilities. subdivisions, shall assist disabled persons in establishing self-help organizations by providing them SECTION 26. Mobility The State promote the with necessary technical and financial assistance. mobility of disabled persons. Disabled persons shall be Concerned government agencies and offices shall allowed to drive motor vehicles, subject to the rules and establish close linkages with organizations of disabled regulations issued by the Land Transportation Office persons in order to respond expeditiously to the needs pertinent to the nature of their disability and the of disabled persons. National line agencies and local appropriate adaptations or modifications made on such government units shall assist disabled persons in vehicles. setting up specific projects that will be managed like business propositions. To ensure the active SECTION 27. Access to Public Transport Facilities participation of disabled persons in the social economic The Department of Social Welfare and Development development of the country, their organizations shall be shall develop a program to assist marginalized disabled encouraged to participate in the planning, organization persons gain access in the use of public transport and management of government programs and projects facilities. Such assistance may be in the form of for disabled persons. Organizations of disabled persons subsidized transportation fare. The said department shall participate in the identification and preparation of shall also allocate such funds as may be necessary for programs that shall serve to develop employment the effective implementation of the public transport opportunities for the disabled persons. program for the disabled persons. The Accessibility Law,’• as amended, shall be made supplementary to TITLE THREE PROHIBITION ON this Act. DISCRIMINATION AGAINST DISABLED PERSONS SECTION 28. Implementing Rules and Regulations The Department of Transportation and Communications shall formulate the rules and regulations necessary to implement the provision of this Chapter.

CHAPTER 1

Discrimination on Employment

SECTION 32. Discrimination on Employment No entity, whether public or private, shall discriminate against a qualified disabled person by reason of disability in regard to job application procedures, the CHAPTER 7 Political and Civil Rights hiring, promotion, or discharge of employees, employee compensation, job training, and other terms, conditions, SECTION 29. System of Voting Disabled persons and privileges of employment. The following constitute shall be allowed to be assisted by a person of his choice acts of discrimination: in voting in the national or local elections. The person thus chosen shall prepare ballot for the disabled voter (a). Limiting, segregating or classifying a disabled job inside the voting booth. The person assisting shall bind applicant in such a manner that adversely affects his himself in a formal document under oath to fill out the work opportunities; ballot strictly in accordance with the instructions of the voter and not to reveal the contents of the ballot (b). Using qualification standards, employment tests or prepared by him. Violation of this provision shall other selection criteria that screen out or tend to screen constitute an election offense. Polling places should be out a disabled person unless such standards, tests or other selection criteria are shown to be jobrelated for

the position on question and are consistent with treated as a confidential medical record, Provided, business necessity; however, That: (c). Utilizing standards, criteria, or methods of administration that: 1). have the effect of discrimination on the basis of disability; or 2). perpetuate the discrimination of others who are subject to common administrative control;

1). supervisors and managers may be informed regarding necessary restrictions on the work or duties of the employees and necessary accommodations; 2). first aid and safety personnel may be informed, when appropriate, if the disability might require emergency treatment;

3). government officials investigating compliance with (d). Providing less compensation, such as salary, wage this Act shall be provided relevant information on or other forms of remuneration and fringe benefits, to a request; and qualified disabled employee, by reason of his disability, than the amount to which a non-disabled person 4). the results of such examination are used only performing the same work is entitled; accordance with this Act. (e). Favoring a non-disabled employee over a qualified CHAPTER 2 Discrimination on Transportation disabled employee with respect to promotion, training opportunities, study and scholarship grants, solely on SECTION 34. Public Transportation It shall be account of the latter’s disability; considered discrimination for the franchises or operators and personnel of sea, land, and air (f). Re-assigning or transferring a disabled employee to transportation facilities to charge higher fare or to refuse a job or position he cannot perform by reason of his to convey a passenger, his orthopedic devices, disability; personal effects, and merchandise by reason of his disability. (g). Dismissing or terminating the services of a disabled employee by reason of his disability unless the CHAPTER 3 Discrimination on the Use of Public employer can prove that he impairs the satisfactory performance of the work involve to the prejudice of the Accommodations and Services business entities; Provided, however, That the employer first sought provide reasonable SECTION 35. Public Accommodations and Services accommodations for disabled persons; For purposes of this Chapter, public accommodations and services shall include the following: (h). Failing to select or administer in the effective manner employment tests which accurately reflect the (a). an inn, hotel, motel, or other place of lodging, skills, aptitude or other factor of the disabled applicant except for an establishment located within a building or employee that such test purports to measure, rather that contains not more than five (5) rooms for rent or than the impaired sensory, manual or speaking skills of hire and that is actually occupied by the proprietor of such applicant or employee, if any; and such establishment as the residence of such proprietor; (i). Excluding disabled persons from membership in (b). a restaurant, bar or other establishment serving labor unions or similar organization. food or drink; SECTION 33. Employment Entrance Examination (c). a motion picture, theater, concert hall, stadium, or Upon an offer of employment, a disabled applicant may other place of exhibition or entertainment; be subjected to medical examination, on the following occasions: (d). an auditorium, convention center, lecture hall, or other place of public gathering; (a). all entering employees are subjected to such an examination regardless of disability; (e). a bakery, grocery store, hardware store, shopping center, or other sales or rental establishment; (b). information obtained during the medical condition or history of the applicant is collected and maintained (f). a bank, barber-shop, beauty-shop, travel service, on separate forms and in separate medical files and is funeral parlor, gas station, office of a lawyer, pharmacy,

insurance office, professional office of a health care For purpose of this section, the term individuals or provider, hospital or other service establishment; class individuals’• refers to the clients or customers of the covered public accommodation that enters into the (g). a terminal, depot, or other station used for specified contractual, licensing or other arrangement. public transportation; (b). Integrated Settings Goods, services, facilities, (h). a museum, gallery, library or other place of public advantages, and accommodations shall be afforded to display or collection; an individual with a disability in the most integrated setting appropriate to the needs of the individual. (i). a park, zoo, amusement park, or other place of recreation; (c). Opportunity to Participate Not withstanding the existence of separate or different programs or activities (j). a nursery, elementary, secondary, undergraduate, provided in accordance with this section, an individual or post-graduate private school, or other place of with a disability shall not be denied the opportunity to education; participate in such programs or activities that are not (k). a gymnasium, health spa, bowling alley, golf course; separate or different. or (d). Association It shall be discriminatory to exclude (l). other place of exercise or recreation. or otherwise deny equal goods, services, facilities, advantages, privileges, accommodations or other SECTION 36. Discrimination on the Use of Public opportunities to an individual or entity because of the Accommodations known disability of an individual with whom the individual or entity is known to have a relationship or (a) No disabled persons shall be discriminated on the association. basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages (e). Prohibitions For purposes of this Section, the following shall be considered as discriminatory. or accommodations of any place of public accommodation by any person who owns, leases, or 1). the imposition or application of eligibility criteria that operates a place of public accommodation. The screen out or tend to screen out an individual with a following constitute acts of discrimination: disability or any class or individuals with disabilities from fully and equally enjoying and goods, services, facilities, 1). denying a disabled person, directly through privileges, advantages, accommodations, unless such contractual, licensing, or other arrangement, the criteria can be shown to be necessary for the provision opportunity to participate in or benefit from the goods, of the goods, services, facilities, privileges, or services, facilities, privileges, advantages, or accommodations being offered; accommodations of an entity by reason of his disability; 2). a failure to make reasonable modifications in 2). affording a disabled person, on the basis of his policies, practices, or procedures, when such disability, directly or through contractual, licensing, or modification are necessary to afford such goods, other arrangement, with the opportunity to participate in services, facilities, privileges, advantages or or benefit from a good, service, facility, privilege, accommodations to individuals with disabilities, unless advantage, or accommodation that is not equal to that the entity can demonstrate that making such afforded to other able-bodied persons; and modification would fundamentally alter the nature of the goods, facilities, services, privileges, advantages, or 3). providing disability, directly or through contractual, accommodations; licensing, or other arrangement, with a good, service, facility, advantages, privilege, or accommodation that is 3). Failure to take steps as may be necessary to ensure different or separate from that provided to other able- that no individual with disability is excluded, denied bodied persons unless such action is necessary to services, segregated or otherwise treated differently provide the disabled person with a good, service, than other individuals because of the absence of facility, advantage, privilege or accommodation, or auxiliary aids and services, unless the entity can other opportunity that is as effective as that provided to demonstrate that taking such steps would others; fundamentally alter the nature of the good, service, facility, privilege or would result in undue burden;

harness the involvement of private individual in the 4). a failure to remove architectural barriers, and provision of assistance to disabled persons. communication barriers that are structural in nature, in existing facilities, where such removal is readily SECTION 42. Tax Incentives (a) Any donation, achievable; and bequest, subsidy or financial aid which may be made to government agencies engaged in the rehabilitation of 5). where an entity can demonstrate that the removal of disabled persons and organizations of disabled persons a barrier under clause (4) is not readily achievable, a shall be exempt form the donor’s tax subject to the failure to make such goods, services, facilities, provisions of Section 94 of the National Internal privileges, advantages, or accommodations available Revenue Code (NIRC), as amended and shall be through alternative methods if such methods are readily allowed as deduction from the donor’s gross income for achievable. purposes of computing the taxable income subject to the provisions of Section 29 (h) of the Code. SECTION 37. Use of Government Recreational or Sports Centers (b). Donations from foreign countries shall be exempt from taxes and duties on importation subject to the Free of Charge Recreational or sports centers provisions of Section 105 of the Tariff and Customs owned or operated by the Governent shall be used, free Code of the Philippines, as amended, Section 103 of of charge, by marginalized disabled persons during the NIRC, as amended and other relevant laws and their social, sports or recreation activities. international agreements. SECTION 38. Implementing Rules and Regulations The Department of Public Works and Highway shall formulate the rules and regulations necessary to implement the provisions of this Chapter.

(c). Local manufacturing of technical aids and appliances used by disabled persons shall be considered as a preferred area of investment subject to the provisions of Executive Order No. 226 otherwise known as the Omnibus Investments Code of 1987’• TITLE FOUR FINAL PROVISIONS and, as such, shall enjoy the rights, privileges and incentives as provided in said Code such as, but not SECTION 39. Housing Program The National limited, to the following: Government shall take into consideration in its national shelter programs the special housing requirement of 1). repatriation of investments; disabled persons. 2). remittance of earnings; SECTION 40. Role of National Agencies and Local Government Units Local government units shall 3). remittance of payments on foreign contracts; promote the establishment of organizations of disabled persons in their respective territorial jurisdictions. 4). freedom from expropriations; National agencies and local government units may enter into joint ventures with organizations or 5). freedom from requisition of investment; associations of disabled persons to explore livelihood opportunities and other undertaking that shall enhance 6). income tax holiday; the health, physical fitness and the economic and social well-being of disabled persons. 7). additional deduction for labor expense; SECTION 41. Support From Non-government Organizations Nongovernment organizations or private volunteer organizations dedicated to the purpose of promoting and enhancing the welfare of disabled persons shall, as they, are hereby encouraged, become partners of the Government in the implementation of vocational rehabilitation measures and other related programs and projects. Accordingly, their participation in the implementation of said measures, program and projects is to be extended all possible support by the Government. The Government shall sponsor a volunteer service program which shall

8). tax and duty exemption on imported capital equipment; 9). tax credit on domestic capital equipment; 10). exemption from contractor’s tax; 11). simplification of customs procedures; 12). unrestricted use of consigned equipment; 13). employment of foreign nationals;

14). tax credits for taxes and duties on raw materials; 15). access to warehouse system;

importance, the Secretary of Justice may commence a legal action in any appropriate court.

bonded

manufacturing/trading SECTION 45. Authority of Court The court may grant any equitable relief that such court considers to be appropriate, including, to the extent required 16). exemption from taxes and duties on imported spare parts; and by this Act: 17). Exemption from wharfage dues and any export tax, duty, impostand free. SECTION 43. Continuity Clause Should any department or agency tasked with the enforcement or formulation of rules and regulations and guidelines for implementation of any provisions of this Act is abolished, merge with another department or agency or modified, such shall not affect the enforcement or formulation of rules, regulations and guidelines for implementation of this Act to the effect that

(a). granting temporary, preliminary or permanent relief; (b). providing an auxiliary aid or service, modification of policy, practice or procedure, or alternative method; and (c). making facilities readily accessible to and usable by individuals with disabilities. SECTION 46. Penal Clause (a) Any person who violates any provision of this Act shall suffer the following penalties:

(a). In case of abolition, the department or agency established to replace the abolished department or agency shall take-over the functions under this Act of the abolished department or agency.

1). for the first violation, a fine of not less than Fifty thousand pesos (P 50,000.00) but not exceeding One hundred thousand pesos (P 100,000.00) or imprisonment of not less than six (6) months but not more than two (2) years, or both at the discretion of the (b). In case of the department or agency tasked with the court; and enforcement of formulation of rules, regulations and guidelines for implementation of this Act is merged with 2). for any subsequent violation, a fine of not less than another department or agency, the former shall One hundred thousand pesos (P 100,000.00) but not continue the functions under this Act of the merged exceeding Two hundred thousand pesos (P department or agency. 200,000.00) or imprisonment for less than two (2) years but not more than six (6) years, or both at the discretion (c). In case of modification, the department or agency of the court. modified shall continue the functions under this Act of the department or agency that has undergone (b). Any person who abuses the privileges granted modification. herein shall be punished with imprisonment of not less than six (6) months or a fine of not less than Five SECTION 44. Enforcement by the Secretary of Justice thousand pesos (P 5,000.00) but not more than Fifty thousand pesos (P 50,000.00), or both, at the discretion (a). Denial of Right of the court. 1). Duty to Investigate the Secretary of Justice shall (c). If the violator is a corporation, organization or any investigate alleged violations of this Act, and shall similar entity, the officials thereof directly involved shall undertake periodic reviews of compliance of covered be liable therefor. entities under this Act. (d). If the violator is an alien or a foreigner, he shall be (b). Potential Violations If the Secretary of Justice deported immediately after service of sentence without has reasonable cause to believe that further deportation proceedings. 1). any person or group of persons is engaged in a SECTION 47. Appropriations The amount necessary pattern of practice of discrimination under this Act; or to carry out the provision of this Act shall be included in the General Appropriation Act of the year following its 2). any person or group of persons has been enactment into law and thereafter. discriminated against under this Act and such discrimination raises and issue of general public

SECTION 48. Separability Clause Should any provision of this Act be found unconstitutional by a court of law, such provisions shall be severed from the remainder of the Act, and such action shall not affect the enforceability of the remaining provisions of this Act.

Republic of the Philippines Congress of the Philippines Metro Manila Thirteenth Congress Third Regular Session

SECTION 49. Repealing Clause All laws, Begun and held in Metro Manila, on Monday, the twenty-fourth presidential decrees, executive orders and rules and day of July, two thousand six. regulations inconsistent with the provisions of this Act are hereby repealed or modified accordingly. REPUBLIC ACT NO. 9442 April 30, 2007 SECTION 50. Effectivity This Act shall take effect fifteen (15) days after its publication in any two (2) newspaper of general circulation. Approved: Signed)

AN ACT AMENDING REPUBLIC ACT NO. 7277, OTHERWISE KNOWN AS THE "MAGNA CARTA FOR DISABLED PERSONS, AND FOR OTHER PURPOSES" Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Speaker of the House

SECTION 1. A new chapter, to be denominated as "Chapter 8. Other Privileges and Incentives" is hereby added to Title Two of Republic Act No. 7277, otherwise known as the "Magna Carta for Disabled Persons", with new Sections 32 and 33, to read as follows:

(Signed)

"CHAPTER 8. Other Privileges and Incentives

NEPTALI A. GONZALES

"SEC. 32. Persons with disability shall be entitled to the following:

RAMON V. MITRA

President of the Senate This bill which is consolidation of Senate Bill No, 1286 and House Bill 35091, was finally passed by the Senate and the House of Representatives on January 22, 1992 and January 16, 1992, respectively. (Signed) CAMILO L. SABIO House of Representatives (Signed) ANACLETO D. BADOY, JR. Secretary of the Senate Approved: March 24, 1992

(a) At least twenty percent (20%) discount from all establishments relative to the utilization of all services in hotels and similar lodging establishments; restaurants and recreation centers for the exclusive use or enjoyment of persons with disability; (b) A minimum of twenty percent (20%) discount on admission fees charged by the theaters, cinema houses, concert halls, circuses, carnivals and other similar places of culture, leisure and amusement for the exclusive use or enjoyment of persons with disability; (c) At least twenty percent (20%) discount for the purchase of medicines in all drugstores for the exclusive use or enjoyment of persons with disability; (d) At least twenty percent (20%) discount on medical and dental services including diagnostic and laboratory fees such as, but not limited to x-rays, computerized tomography scans and blood tests, in all government facilities, subject to guidelines to be issued by the Department of Health (DOH), in coordination with the Philippine Health Insurance Corporation (PHILHEALTH);

(Signed) CORAZON C. AQUINO President of the Philippines

(e) At least twenty percent (20%) discount on medical and dental services including diagnostic and laboratory fees, and professional fees of attending doctors in all private hospitals and medical facilities, in accordance with the rules and regulations to be issued by the DOH, in coordination with the PHILHEALTH;

(f) At least twenty percent (20%) discount on fare for domestic air and sea travel for the exclusive use or enjoyment of persons with disability; (g) At least twenty percent (20%) discount in public railways, skyways and bus fare for the exclusive use and enjoyment of persons with disability; (h) Educational assistance to persons with disability, for them to pursue primary, secondary, tertiary, post tertiary, as well as vocational or technical education, In both public and private schools, through the provision of scholarships, grants, financial aids, subsidies and other incentives to qualified persons with disability, including support for books, learning materials, and uniform allowance to the extent feasible: provided, that persons with disability shall meet minimum admission requirements;

provisions of the National Internal Revenue Code (NIRC), as amended." "SEC. 33. Incentives. - Those caring for and living with a person with disability shall be granted the following incentives; (a) persons with disability shall be treated as dependents under Section 35(A) of the National Internal Revenue Code, as amended and as such, individual taxpayers caring for them shall be accorded the privileges granted by the code Insofar as having dependents under the same section are concerned; and (b) Individuals or nongovernmental institutions establishing homes, residential communities or retirement villages solely to suit the needs and requirements of persons with disability shall be accorded the following:

(i) To the extent practicable and feasible, the continuance of the same benefits and privileges given by the Government Service Insurance System (GSIS), Social Security System (SSS), and PAG-IBIG, as the case may be, as are enjoyed by those in actual service;

(i) Realty tax holiday for the first five years of operation; and

(j) To the extent possible, the government may grant special discounts in special programs for persons with disability on purchase of basic commodities, subject to guidelines to be issued for the purpose by the Department of Trade and Industry (DTI) and the Department of Agriculture (DA); and

SEC. 2. Republic Act No. 7277 is hereby amended by inserting a new title, chapter and section after Section 38 to be denominated as Title 4, chapters 1 and 2 and Sections 39, 40, 41 and 42 to read as follows:

(k) Provision of express lanes for persons with disability in all commercial and government establishments; in the absence thereof, priority shall be given to them. The abovementioned privileges are available only to persons with disability who are Filipino citizens upon submission of any of the following as proof of his/her entitlement thereto: (I) An identification card issued by the city or municipal mayor the barangay captain of the place where the person with disability resides; (II) The passport of the persons with disability concerned; or (III) Transportation discount fare Identification Card (ID) issued by the National Council for the Welfare of Disabled Persons (NCWDP). The privileges may not be claimed if the persons with disability claims a higher discount as may be granted by the commercial establishment and/or under other existing laws or in combination with other discount program/s. The establishments may claim the discounts granted in subsections (a), (b), (c), (e), (f) and (g) as tax deductions based on the net cost of the goods sold or services rendered: provided, however, That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted: provided, further, That the total amount of the claimed tax deduction net of value-added tax if applicable, shall be Included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the

(ii) Priority in the building and/or maintenance of provincial or municipal roads leading to the aforesaid home residential community or retirement village."

"Title Four Prohibitions on Verbal, Non-verbal Ridicule and Vilification Against Persons with Disability "CHAPTER 1. Deliverance from Public Ridicule. "SEC. 39. Public Ridicule . - For purposes of this Chapter, public ridicule shall be defined as an act of making fun or contemptuous initiating or making mockery of persons with disability whether in writing or in words, or in action due to their impairment/s. "SEC. 40. No individual, group or community shall execute any of these acts of ridicule against persons with disability in any time and place which could intimidate or result in loss of selfesteem of the latter. "CHAPTER 2. Deliverance from Vilification "SEC. 41. Vilification. - For purposes of this chapter, vilification shall be defined as: (a) the utterance of slanderous and abusive statements against a person with disability; and/or (b) An activity in public which incites hatred towards serious contempt for, or severe ridicule of persons with disability." "SEC. 42. Any individual, group or community is hereby prohibited from vilifying any person with disability which could result into loss of self-esteem of the latter."

SEC. 3. Section 46 of Republic Act No. 7277 is hereby amended to read as follows:

JOSE DE VENECIA JR. Speaker of the House of Representatives

MANNY VILLAR President of the Senate

"SEC. 46. Penal Clause. (a) Any person who violates any provision of this Act shall suffer the following penalties:

This Act which is a consolidation of Senate Bill No. 2580 and House Bill No. 1214 was finally passed by the Senate and the House of Representatives on February 8, 2007 and February 7, 2007, respectively.

(1) For the first violation, a fine of not less than Fifty thousand pesos (P50,000.00) but not exceeding One hundred thousand ROBERTO P. NAZARENO pesos (P100,000.00) or imprisonment of not less than six Secretary General months but not more than two years, or both at the discretion of House of Represenatives the court; and (2) For any subsequent violation, a fine of not less than One hundred thousand pesos (P100,000.00) but not exceeding Two hundred thousand pesos (P200,000.00) or imprisonment for not less than two years but not more than six years, or both at the discretion of the court. (b) Any person who abuses the privileges granted herein shall be punished with imprisonment of not less than six months or a fine of not less than Five thousand pesos (P5,000.00), but not more than Fifty thousand pesos (P50,000.00), or both, at the discretion of the court. (c) If the violator is a corporation organization or any similar entity, the officials thereof directly involved shall be liable therefore. (d) If the violator is an alien or a foreigner, he shall be deported immediately after service of sentence without further deportation proceedings. Upon filing of an appropriate complaint, and after notice and hearing the proper authorities may also cause the cancellation or revocation of the business permit, permit to operate, franchise and other similar privileges granted to any business entity that fails to abide by the provisions of this Act." Sec. 4. The title of Republic Act No. 7277 is hereby amended to read as the "Magna Carta for Persons with Disability", and all references on the said law to "disabled persons" shall likewise be amended to read as "persons with disability". SEC. 5. The Department of Social Welfare and Development, the National Council for the Welfare of Disabled Persons, and the Bureau of Internal Revenue, in consultation with the concerned Senate and House committees and other agencies, organizations, establishments shall formulate an agencies, organizations, establishments shall formulate an implementing rules and regulations pertinent to the provisions of this Act within six months after the effectivity of this Act. SEC. 6. This Act shall take effect fifteen (15) days after its publication in any two newspapers of general circulation. Approved,

OSCAR G. YABES Secretary of Senate

Approved: April 30, 2007 GLORIA MACAPAGAL-ARROYO President of the Philippines

Republic of the Philippines Congress of the Philippines Metro Manila Third Regular Session Began and held in Metro Manila, on Monday, the twenty-fifth day of July, nineteen hundred and ninety-four.

[REPUBLIC ACT NO. 7916] (as amended by Republic Act No. 8748)

AN ACT PROVIDING FOR THE LEGAL FRAMEWORK AND MECHANISMS FOR THE CREATION, OPERATON, ADMINISTRATION, AND COORDINATION OF SPECIAL ECONOMIC ZONES IN THE PHILIPPINES, CREATING FOR THIS PURPOSE, THE PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA), AND FOR OTHER PURPOSES. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: CHAPTER I PURPOSES AND OBJECTIVES: ESTABLISHMENT AND NATURE OF SPECIAL ECONOMIC ZONES; COORDINATION WITH OTHER SIMILAR SCHEMES SEC. 1. Title. – This act shall be known and cited as "The Special Economic Zone Act of 1995." SEC. 2. Declaration of Policy. – It is the declared policy of the government to translate into practical realities the following State policies and mandates in the 1987 Constitution, namely: (a) "The State recognizes the indispensible role of the private sector, encourages private enterprise, and provides incentives to needed investments." (Sec. 20, Art II) (b) "The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods and adopt measures that help make them competitive." (Sec. 12, Art XII) In pursuance of these policies, the government shall actively encourage, promote, induce and accelerate a sound and balanced industrial, economic and social

development of the country in order to provide jobs to the people specially those in the rural areas, increase their productivity and their individual and family income, and thereby improve the level and quality of their living condition through the establishment, among others, of special economic zones in suitable and strategic locations in the country and through measures that shall effectively attract legitimate and productive foreign investments. SEC. 3. Purposes, Intents and Objectives. – It is the purpose, intent and objective of this Act: (a) To establish the legal framework and mechanisms for the integration, coordination, planning and monitoring of special economic zones, industrial estates / parks, export processing zones and other economic zones; (b) To transform selected areas in the country into highly developed agro industrial, industrial, commercial, tourist, banking, investment, and financial centers, where highly trained workers and efficient services will be available to commercial enterprises; (c) To promote the flow of investors, both foreign and local, into special economic zones which would generate employment opportunities and establish backward and forward linkages among industries in and around the economic zones; (d) To stimulate the repatriation of Filipino capital by providing attractive climate and incentives for business activity; (e) To promote financial and industrial cooperation between the Philippines and industrialized countries through technology-intensive industries that will modernize the country’s industrial sector and improve productivity levels by utilizing new technological and managerial know-how; and (f) To vest the special economic zones on certain areas thereof with the status of a separate customs territory within the framework of the Constitution and the national sovereignty and territorial integrity of the Philippines. SEC. 4. Definition of Terms. – For purposes of this Act, the following definitions shall apply to the following terms: (a) "Special Economic Zones (SEZ)" – hereinafter referred to as the ECOZONES, are selected areas

with highly developed or which have the potential to be developed into agro-industrial, Industrial tourist/recreational, commercial, banking, investment and financial centers. An ECOZONE may contain any or all of the following: Industrial Estates (IEs), Export Processing Zones (EPZs), Free Trade Zones, and Tourist/Recreational Centers. (b) "Industrial Estate (IE)" – refers to a tract of land subdivided and developed according to a comprehensive plan under a unified continuous management and with provisions for basic infrastructure and utilities, with or without pre-built standard factory buildings and community facilities for the use of the community of industries. (c) "Export Processing Zone (EPZ)" – a specialized industrial estate located physically and/or administratively outside customs territory, predominantly oriented to export production. Enterprises located in export processing zones are allowed to import capital equipment and raw materials free from duties, taxes and other import restrictions. (d)"Free Trade Zone" - an isolated policed area adjacent to a port of entry (as a seaport) and/or airport where imported goods may be unloaded for immediate transshipment or stored, repacked, sorted, mixed, or otherwise manipulated without being subject to import duties. However, movement of these imported goods from the free-trade area to a non-free-trade area in the country shall be subject to import duties.

(d) So much as may be necessary of that portion of the City of Iligan in the Province of Lanao del Norte; (e) So much as may be necessary of that portion of the Province of Saranggani; (f) So much as may be necessary of that portion of the City of Laoag in the Province of Ilocos Norte; (g) So much as may be necessary of that portion of Davao City and Samal Island in the Province of Davao del Norte; (h) So much as may be necessary of that portion of Oroquieta City in the Province of Misamis Occidental; (i) So much as may be necessary of that portion of Tubalan Cove, Malita in the Province of Davao del Sur; (j) So much as may be necessary of that portion of Baler, Dinalungan and Casiguran including its territorial waters and islets and its immediate environs in the Province of Aurora; (k) So much as may be necessary of that portion of cities of Naga and Iriga in the Province of Camarines Sur, Legaspi and Tabaco in the Province of Albay, and Sorsogon in the Province of Sorsogon; (l) So much as may be necessary of that portion of Bataan Island in the Province of Batanes;

Enterprises within the zone are granted preferential tax (m) So much as may be necessary of that portion of treatment and immigration laws are more lenient. Lapu-lapu in the Island of Mactan, and the municipalities of Balamban and Pinamungahan and the cities of Cebu and Toledo and the Province of SEC. 5. Establishment of ECOZONES. – To ensure Cebu, including its territorial waters and islets and its the viability and geographical dispersal of ECOZONES immediate environs; through a system of prioritization, the following areas (n) So much as may be necessary of that portion of are initially identified as ECOZONES, subject to the Tacloban City; criteria specified in Section 6: (a) So much as may be necessary of that portion of Morong, Hermosa, Dinalupihan, Orani, Samal, and Abucay in the Province of Bataan; (b) So much as may be necessary of that portion of the municipalities of Ibaan, Rosario, Taysan, San Jose, San Juan, and cities of Lipa and Batangas; (c) So much as may be necessary of that portion of the City of Cagayan de Oro in the Province of Misamis Oriental;

(o) So much as may be necessary of that portion of the Municipality of Barugo in the Province of Leyte; (p) So much as may be necessary of that portion of the Municipality of Buenavista in the Province of Guimaras; (q) So much as may be necessary of that portion of the municipalities of San Jose de Buenavista, Hamtic, Sibalon, and Culasi in the Province of Antique; (r) So much as may be necessary of that portion of the municipalities of Catarman, Bobon and San Jose in the Province of Northern Samar, the Island of Samar;

(s) So much as may be necessary of that portion of the Municipality of Ternate and its immediate environs in the Province of Cavite; (t) So much as may be necessary of that portion of Polloc, Parang in the Province of Maguindanao; (u) So much as may be necessary of that portion of the Municipality of Boac in the Province of Marinduque; (v) So much of may be necessary of that portion of the Municipality of Pitogo in the Province of Zamboanga del Sur; (w) So much as may be necessary of that portion of Dipolog City-Manukan Corridor in the Province of Zamboanga del Norte; (x) So much as may be necessary of that portion of Mambajao, Camiguin Province; (y) So much as may be necessary of that portion of Infanta, Real, Polillo, Alabat, Atimonan, Mauban, Tiaong, Pagbilao, Mulanay, Tagkawayan, and Dingalan Bay in the Province of Quezon; (z) So much as may be necessary of that portion of Butuan City and the Province of Agusan del Norte, including its territorial waters and islets and its immediate environs; (aa) So much as may be necessary of that portion of Roxas City including its territorial waters and islets and its immediate environs in the Province of Capiz; (bb) So much as may be necessary of that portion of San Jacinto, San Fabian, Mangaldan, Lingayen, Sual, Dagupan, Alaminos, Manaoag, Binmaley in the Province of Pangasinan; (cc) So much as may be necessary of that portion of the autonomous region; (dd) So much as may be necessary of that portion of Masinloc, Candelaria and Sta. Cruz in the Province of Zambales; (ee)So much as may be necessary of that portion of the Palawan Island; (ff) So much as may be necessary of that portion of General Santos City in South Cotabato and its immediate environs; (gg) So much as may be necessary of that portion of

Dumaguete City and Negros Oriental, including its territorial waters and islets and its immediate environs; (hh)So much as may be necessary of that portion of the Province of Ilocos Sur; (ii) So much as may be necessary of that portion of the Province of La Union; (jj) So much as may be necessary of that portion of the Province of Laguna, including its territorial waters and its immediate environs; (kk) So much as may be necessary of that portion of the Province of Rizal; (ll) All existing export processing zones and government-owned industrial estates; and (mm) Any private industrial estate which shall voluntarily apply for conversion into an ECOZONE. These areas shall be developed through any of the following schemes: i. Private initiative; ii. Local government initiative with the assistance of the national government; and iii. National government initiative. The metes and bounds of each ECOZONE are to be delineated and more particularly described in a proclamation to be issued by the President of the Philippines, upon the recommendation of the Philippine Economic Zone Authority (PEZA), which shall be established under this Act, in coordination with the municipal and / or city council, National Land Use Coordinating Committee and / or the Regional Land Use Committee. SEC. 6. Criteria for the Establishment of Other ECOZONES. – In addition to the ECOZONES identified in Section 5 of this Act, other areas may be established as ECOZONES in a proclamation to be issued by the President of the Philippines subject to the evaluation and recommendation of the PEZA, based on a detailed feasibility and engineering study which must conform to the following criteria: (a) The proposed area must be identified as a regional growth center in the Medium-Term Philippine Development Plan or by the Regional Development

Council; (b) The existence of required infrastructure in the proposed ECOZONE, such as roads, railways, telephones, ports, airports, etc., and the suitability and capacity of the proposed site to absorb such improvements; (c) The availability of water source and electric power supply for use of the ECOZONE; (d) The extent of vacant lands available for industrial and commercial development and future expansion of the ECOZONE as well as of lands adjacent to the ECOZONE available for development of residential areas for the ECOZONE workers; (e) The availability of skilled, semi-skilled and nonskilled trainable labor force in and around the ECOZONE; (f) The area must have a significant incremental advantage over the existing economic zones and its potential profitability can be established; (g) The area must be strategically located; and (h) The area must be situated where controls can easily be established to curtail smuggling activities. Other areas which do not meet the foregoing criteria may be established as ECOZONES: Provided, That the said area shall be developed only through local government and/or private sector initiative under any of the schemes allowed in Republic Act No. 6957 (the build-operate-transfer law), and without any financial exposure on the part of the national government: Provided, further, That the area can be easily secured to curtail smuggling activities: Provided, finally, That after five (5) years the area must have attained a substantial degree of development, the indicators of which shall be formulated by the PEZA. SEC. 7. ECOZONE to be a Decentralized AgroIndustrial, Industrial, Commercial / Trading, Tourist, Investment and Financial Community. - Within the framework of the Constitution, the interest of national sovereignty and territorial integrity of the Republic, ECOZONE shall be developed, as much as possible, into a decentralized, self-reliant and self-sustaining industrial,commercial/trading, agro-industrial, tourist, banking, financial and investment center with minimum government intervention. Each ECOZONE shall be provided with transportation, telecommunications, and

other facilities needed to generate linkage with industries and employment opportunities for its own inhabitants and those of nearby towns and cities. The ECOZONE shall administer itself on economic, financial, industrial, tourism development and such other matters within the exclusive competence of the national government. The ECOZONE may establish mutually beneficial economic relations with other entities within the country, or, subject to the administrative guidance of the Department of Foreign Affairs and/or the Department of Trade and Industry, with foreign entities or enterprises. Foreign citizens and companies owned by nonFilipinos in whatever proportion may set up enterprises in the ECOZONE, either by themselves or in joint venture with Filipinos in any sector of industry, international trade and commerce within the ECOZONE. Their assets, profits and other legitimate interests shall be protected: Provided, That the ECOZONE through the PEZA may require a minimum investment for any ECOZONE enterprises in freely convertible currencies: Provided, further, That the new investment shall fall under the priorities, thrusts and limits provided for in the Act. SEC. 8. ECOZONE to be Operated and Managed as Separate Customs Territory. – The ECOZONE shall be managed and operated by the PEZA as separate customs territory. The PEZA is hereby vested with the authority to issue certificate of origin for products manufactured or processed in each ECOZONE in accordance with the prevailing rules or origin, and the pertinent regulations of the Department of Trade and Industry and/or the Department of Finance. SEC. 9. Defense and Security. – The defense of the ECOZONE and the security of its perimeter fence shall be the responsibility of the national government in coordination with the PEZA. Military forces sent by the national government for the purpose of defense shall not interfere in the internal affairs of any of the ECOZONE and expenditure for these military forces shall be borne by the national government. The PEZA may provide and establish the ECOZONES’ internal security and firefighting forces.

SEC. 10. Immigration. – Any investor within the ECOZONE whose initial investment shall not be less than One Hundred Fifty Thousand Dollars ($150,000.00), his/her spouse and dependent children under twenty-one (21) years of age shall be granted permanent resident status within the ECOZONE. They shall have freedom of ingress and egress to and from the ECOZONE without any need of special authorization from the Bureau of Immigration. The PEZA shall issue working visas renewable every two (2) years to foreign executives and other aliens, processing highly-technical skills which no Filipino within the ECOZONE possesses, as certified by the Department of Labor and Employment. The names of aliens granted permanent resident status and working visas by the PEZA shall be reported to the Bureau of Immigration within thirty (30) days after issuance thereof. CHAPTER II GOVERNING STRUCTURES SEC. 11. The Philippine Economic Zone Authority (PEZA) Board. – There is hereby created a body corporate to be known as the Philippine Economic Zone Authority (PEZA) attached to the Department of Trade and Industry. The Board shall have a director general with the rank of department undersecretary who shall be appointed by the President. The director general shall be at least forty (40) years of age, of proven probity and integrity, and a degree holder in any of the following fields: economics, business, public administration, law, management or their equivalent, and with at least ten (10) years relevant working experience preferably in the field of management or public administration. "The director general shall be assisted by three (3) deputy directors general each for policy and planning, administration and operation, who shall be appointed by the PEZA Board, upon the recommendation of the director general. The deputy directors general shall be at least thirty-five (35) years old, with proven probity and integrity, and a degree holder in any of the following fields: economics, business, public administration, law, management or their equivalent." "The Board shall be composed of thirteen (13) members as follows: the Secretary of the Department of Trade and Industry as Chairman, the Director General of the Philippine Economic Zone Authority as Vice-Chairman, the undersecretaries of the

Department of Finance, the Department of Labor and Employment, the Department of Interior and Local Government, the Department of Environment and Natural Resources, the Department of Agriculture, the Department of Public Works and Highways, the Department of Science and Technology, the Department of Energy, the Deputy Director General of the National Economic and Development Authority, one (1) representative from the investors / business sector in the ECOZONE. In case of the unavailability of the Secretary of the Department of Trade and Industry to attend a particular board meeting, the Director General of PEZA shall act as Chairman." The existing Export Processing Zone Authority (EPZA) created under Presidential Decree No. 66 shall evolve into the PEZA in accordance with the guidelines and regulations set forth in an executive order issued for this purpose. Members of the Board shall receive a per diem of not less than the amount equivalent to the representation and transportation allowances of the members of the Board and / or as may be determined by the Department of Budget and Management: Provided, however, That per diems collected per month does not exceed the equivalent of four (4) meetings. SEC. 12. Functions and Powers of PEZA Board. – The Philippine Economic Zone Authority (PEZA) Board shall have the following functions and powers: (a) Set the general policies on the establishment and operations of the ECOZONES, industrial estates, export processing zones, free trade zones, and the like; (b) Review proposals for the establishment of ECOZONES based on the set criteria under Section 6 and endorse to the President the establishment of the ECOZONES, industrial estates, export processing zones, free trade zones and the like. Thereafter, it shall facilitate and assist in the organization of said entities; (c) Regulate and undertake the establishment, operation and maintenance of utilities, other services and infrastructure in the ECOZONE, such as heat, light and power, water supply, telecommunication, transport, toll roads and bridges, port services, etc., and to fix just, reasonable and competitive rates, charges and fees therefore; (d) Approve the annual budget of the PEZA and the ECOZONE development plans;

(e) Issue rules and regulations to implement the provisions of this Act in so far as its power and functions are concerned; (f) Exercise its powers and functions as provided for in this Act; and (g) Render annual reports to the President and the Congress. SEC. 13. General Powers and Functions of the Authority. – The PEZA shall have the following powers and functions: (a) To operate, administer, manage and develop the ECOZONE according to the principles and provisions set forth in this Act; (b) To register, regulate and supervise the enterprises in the ECOZONE in an efficient and decentralized manner; (c) To coordinate with local government units and exercise general supervision over the development, plans, activities and operations of the ECOZONES, industrial estates, export processing zones, free trade zones, and the like; (d) In coordination with local government units concerned and appropriate agencies, to construct, acquire, own, lease, operate and maintain on its own or through contract, franchise, license, bulk purchase from the private sector and build-operate-transfer scheme or joint venture, adequate facilities and infrastructure, such as light and power systems, water supply and distribution systems, telecommunication and transportation, buildings, structures, warehouses, roads, bridges, ports and other facilities for the operation and development of the ECOZONE; (e) To create, operate and/or contract to operate such agencies and functional units or offices of the authority as it may deem necessary; (f) To adopt, alter and use a corporate seal; make contracts, lease, own or otherwise dispose of personal or real property; sue and be sued; and otherwise carry out its duties and functions as provided for in this Act; (g) To coordinate the formulation and preparation of the development plans of the different entities mentioned above; (h) To coordinate with the National Economic

Development Authority (NEDA), the Department of Trade and Industry (DTI), the Department of Science and Technology (DOST), and the local government units and appropriate government agencies for policy and program formulation and implementation; and (i) To monitor and evaluate the development and requirements of entities in subsection (a) and recommend to the local government units or other appropriate authorities the location, incentives, basic services, utilities and infrastructure required or to be made available for said entities. SEC. 14. Powers and Functions of the Director General. – The director general shall be the overall coordinator of the policies, plans and programs of the ECOZONES. As such, he shall provide overall supervision over and general direction to the development and operations of these ECOZONES. He shall determine the structure and the staffing pattern and personnel complement of the PEZA and establish regional offices, when necessary, subject to the approval of the PEZA Board. In addition, he shall have the following specific powers and responsibilities: (a) To safeguard all the lands, buildings, records, monies, credits and other properties and rights of the ECOZONES; (b) To ensure that all revenues of the ECOZONE are collected and applied in accordance with its budget; (c) To ensure that the investors/firms and employees of the ECOZONES are properly discharging their respective duties; (d) To give such information and recommend such measures to the Board, as he shall deem advantageous to the ECOZONE; (e) To submit to the Board, the ongoing and proposed projects, work and financial program, annual budget of receipts, and expenditures of the ECOZONE; (f) To represent the ECOZONE in all its business matters and sign on its behalf after approval of the Board, all its bonds, borrowings, contracts, agreements and obligations made in accordance with this Act; (g) To acquire jurisdiction, as he may deem proper, over the protests, complaints, and claims of the

residents and enterprises in the ECOZONE concerning administrative matters; (h) To recommend to the Board the grant, approval, refusal, amendment or termination of the ECOZONE franchises, licenses, permits, contracts, and agreements in accordance with the policies set by the Board; (i) To require owners of houses, buildings or other structures constructed without the necessary permit whether constructed on public or private lands, to remove or demolish such houses, buildings, structures within sixty (60) days after notice and upon failure of such owner to remove or demolish such house, building our structure within said period, the director general or his authorized representative may summarily cause its removal or demolition at the expense of the owner, any existing law, decree, executive order and other issuances or part thereof to the contrary notwithstanding; (j) To take such emergency measures as may be necessary to avoid fires, floods and mitigate the effects of storms and other natural or public calamities; (k) To prepare and make out plans for the physical and economic development of the ECOZONE, including zoning and land subdivision, and issue such rules and regulations which shall be submitted to the Board for its approval; and (l) To perform such other duties and exercises such powers as may be prescribed by the Board, and to implement the policies, rules and regulations set by the PEZA. SEC. 15. Administration of Each ECOZONE. – Except for privately-owned, managed or operated ECOZONES, each ECOZONE shall be organized, administered, managed and operated by the ECOZONE executive committee composed of the following: (a) The administrator who shall be appointed by the PEZA Board upon recommendation of the director general; and (b) One (1) deputy administrator to be appointed by the Board upon recommendation of the director general. An ECOZONE advisory body shall be created with the following members:

1. The president of the association of investors in the ECOZONE; 2. The governor of the province where the ECOZONE is located; 3. The mayor/s of the municipality/ies or city/ies where the ECOZONE is located; 4. The president of an accredited labor union in the ECOZONE; 5. The representative of the business sector in the periphery of the ECOZONE; and 6. The representative of the PEZA. The ECOZONE advisory body shall have the following functions: i. Advise the ECOZONE management on matters pertaining to policy initiatives; and ii.Assist the ECOZONE management in setting problems arising between labor and any enterprise in the ECOZONE. Privately-owned ECOZONES shall retain autonomy and independence but shall be monitored by the PEZA for the implementation of incentives and operations for adherence to the law. SEC. 16. Personnel. – The PEZA Board of Directors shall provide for an organization and staff of officers and employees of the PEZA, and upon recommendation of the director general with the approval of the Secretary of the Department of Trade and Industry, appoint and fix the remunerations and other emoluments: Provided, That the Board shall have exclusive and final authority to promote, transfer, assign and reassign officers of the PEZA, any provision of existing law to the contrary notwithstanding: Provided, further, That the director general may carry out removal of such officers and employees. All positions in the PEZA shall be governed by a compensation, position classification system and qualification standards approved by the director general with the concurrence of the Board of Directors based on a comprehensive job analysis and audit of actual duties and responsibilities. The compensation

plan shall be comparable with the prevailing compensation plans in the Subic Bay Metropolitan Authority (SBMA), Clark Development Corporation (BCDA) and the private sector and shall be subject to the periodic review by the Board no more than once every two (2) years without prejudice to yearly merit reviews or increases based on productivity and profitability. The PEZA shall therefore be exempt from existing laws, rules and regulations on compensation, position classification and qualification standards. It shall however endeavor to make its systems conform as closely as possible with the principles under Republic Act No. 6758. The PEZA officers and employees including all Members of the Board shall not engage directly or indirectly in partisan activities or take part in any election, except to vote. No officer or employee of the PEZA subject to Civil Service laws and regulations shall be removed or suspended except for cause, as provided by law. SEC. 17. Investigation and Inquiries. – Upon a written formal complaint made under oath, which on its face provides reasonable basis to believe that some anomaly or irregularity might have been committed, the PEZA or the administrator of the ECOZONE concerned, shall have the power to inquire into the conduct of firms or employees of the ECOZONE and to conduct investigations, and for that purpose may subpoena witnesses, administer oaths, and compel the production of books, papers, and other evidences: Provided, That to arrive at the truth, the investigator(s) may grant immunity from prosecution to any person whose testimony or whose possessions of documents or other evidence is necessary or convenient to determine the truth in any investigation conducted by him or under the authority of the PEZA or the administrator of the ECOZONE concerned. SEC. 18. Prohibition Against Holding Any Other Office. – The director general, deputy director general, administrators, officials and staff or assistants of the PEZA shall not hold any other office or employment within or outside the PEZA during their tenure. They shall not, during their tenure, directly or indirectly, practice any profession, participate in any business, or be financially interested in any contract with, or in any franchise, or special privilege granted by the PEZA or national government, or any subdivision, agency, or

instrumentality thereof, including any governmentowned-controlled corporation, or its subsidiary. SEC. 19. Disbursement of Funds. – No money shall be paid out of the funds of any ECOZONE except in pursuance of the budget as formulated and approved by the PEZA. SEC. 20. Full Disclosure of Financial and Business Interests. – Every member of the Board of the PEZA, the director general, the deputy directors general, and their staff shall, upon assumption of office, make full disclosure of their financial and business Interests. CHAPTER III OPERATIONS WITHIN THE ECOZONE SEC. 21. Development Strategy of the ECOZONE. The strategy and priority of development of each ECOZONE established pursuant to this Act shall be formulated by the PEZA, in coordination with the Department of Trade and Industry and the National Economic and Development Authority; Provided, That such development strategy is consistent with the priorities of the national government as outlined in the medium-term Philippine development plan. It shall be the policy of the government and the PEZA to encourage and provide Incentives and facilitate private sector participation in the construction and operation of public utilities and infrastructure in the ECOZONE, using any of the schemes allowed in Republic Act No. 6957 (the build-operate-transfer law). SEC. 22. Survey of Resources. The PEZA shall, in coordination with appropriate authorities and neighboring cities and municipalities, immediately conduct a survey of the physical, natural assets and potentialities of the ECOZONE areas under its jurisdiction. SEC. 23. Fiscal Incentives. – Business establishments operating within the ECOZONES shall be entitled to the fiscal incentives as provided for under Presidential Decree No. 66, the law creating the Export Processing Zone Authority, or those provided under Book VI of Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987.

Furthermore, tax credits for exporters using local materials as Inputs shall enjoy the same benefits provided for in the Export Development Act of 1994. SEC. 24. Exemption from National and Local Taxes.Except for real property taxes on land owned by developers, no taxes, local and national, shall be imposed on business establishments operating within the ECOZONE. In lieu thereof, five percent (5%) of the gross income earned by all business enterprises within the ECOZONE shall be paid and remitted as follows: a. Three percent (3%) to the National Government; b. Two percent (2%) which shall be directly remitted by the business establishments to the treasurer’s office of the municipality or city where the enterprise is located. SEC. 25. Applicable National and Local Taxes. – All persons and services establishments in the ECOZONE shall be subject to national and local taxes under the National Internal Revenue Code and the Local Government Code.

regulations, these include those governing foreign exchange and other current account transactions (trade and non-trade) local and foreign borrowings, foreign currency deposit units, offshore banking units and other financial institutions under the supervision of the BSP. SEC. 28. After Tax Profits. – Without prior Bangkok Sentral approval, after tax profits and other earnings of foreign investments in enterprises in the ECOZONE may be remitted outward in the equivalent foreign exchange through any of the banks licensed by the Bangko Sentral ng Pilipinas in the ECOZONE: Provided, however, That such foreign investments in said enterprises have been previously registered with the Bangko Sentral. SEC. 29. Eminent Domain. – The areas comprising an ECOZONE may be expanded or reduced when necessary. For this purpose, the government shall have the power to acquire, either by purchase, negotiation or condemnation proceedings, any private lands within or adjacent to the ECOZONE for:

SEC. 26. Domestic Sales. – Goods manufactured by an ECOZONE enterprise shall be made available for Immediate retail sales in the domestic market, subject to payment of corresponding taxes on the raw materials and other regulations that may be adopted by the Board of the PEZA.

a. Consolidation of lands for zone development purposes;

However, in order to protect the domestic industry, there shall be a negative list of Industries that will be drawn up by the PEZA. Enterprises engaged in the industries included in the negative list shall not be allowed to sell their products locally. Said negative list shall be regularly updated by the PEZA. The PEZA, in coordination with the Department of Trade and Industry and the Bureau of Customs, shall jointly issue the necessary implementing rules and guidelines for the effective Implementation of this section.

If in the establishment of a publicly-owned ECOZONE, any person or group of persons who has been occupying a parcel of land within the Zone has to be evicted, the PEZA shall provide the person or group of persons concerned with proper disturbance compensation: Provided, however, That in the case of displaced agrarian reform beneficiaries, they shall be entitled to the benefits under the Comprehensive Agrarian Reform Law, including but not limited to Section 36 of Republic Act No. 3844, in addition to a homelot in the relocation site and preferential employment in the project being undertaken.

SEC. 27. Applicability of Banking Laws and Regulations. – Existing banking laws and Bangko Sentral ng Pilipinas (BSP) rules and regulations shall apply to banks and financial institutions to be established in the ECOZONE and to other ECOZONEregistered enterprises. Among other pertinent

SEC. 30. Leases of Lands and Buildings. – Lands and buildings in each ECOZONE may be leased to foreign investors for a period not exceeding fifty (50) years renewable once for a period of not more than twentyfive (25) years, as provided for under Republic Act No. 7652, otherwise known as the Investors’ Lease Act.

b. Acquisition of right of way to the ECOZONE; and c. The protection of watershed areas and natural assets valuable to the prosperity of the ECOZONE.

The leasehold right acquired under long-term contracts SEC. 36. One Stop Shop Center. - The PEZA shall may be sold, transferred or assigned, subject to the establish a one stop shop center for the purpose of conditions set forth under Republic Act No. 7652. facilitating the registration of new enterprises in the ECOZONE. Thus, all appropriate government SEC. 31. Land Conversion. – Agricultural lands may agencies that are Involved In registering, licensing or be converted for residential, commercial, industrial and issuing permits to investors shall assign their other non-agricultural purposes, subjects to the representatives to the ECOZONE to attend to conditions set forth under Republic Act No. 6657 and Investor’s requirements. other existing laws. CHAPTER IV INDUSTRIAL HARMONY IN THE ECOZONES SEC. 32. Shipping and Shipping Register. – Private shipping and related business including private container terminals may operate freely in the ECOZONE, subject only to such minimum reasonable regulations of local application which the PEZA may prescribe. The PEZA shall, in coordination with the Department of Transportation and Communications, maintain a shipping register for each ECOZONE as a business register of convenience for ocean-going vessels and issue related certification. Ships of all sizes, descriptions and nationalities shall enjoy access to the ports of the ECOZONE, subject only to such reasonable requirement as may be prescribed by the PEZA In coordination with the appropriate agencies of the national government. SEC. 33. Protection of Environment. - The PEZA, in coordination with the appropriate agencies, shall take concrete and appropriate steps and enact the proper measure for the protection of the local environment.

SEC. 37. Labor and Management Relations. - Except as otherwise provided in this Act, labor and management relations in the ECOZONE shall be governed by the existing Labor Code of the Philippines. Employees and personnel in the ECOZONE enterprises shall receive salaries and benefits and shall enjoy working conditions not less than those provided under the Philippine Labor Code and other relevant laws, issuances, rules and regulations of the Philippine government and the Department of Labor and Employment. SEC. 38. Promotion of Industrial Peace. - In the pursuit of Industrial harmony in the ECOZONE, a tripartite body composed of one (1) representative each from the Department of Labor and Employment, labor sector and business and industry sectors shall be created In order to formulate a mechanism under a social pact for the enhancement and preservation of industrial peace in the ECOZONE within thirty (30) days after the effectivity of this Act.

SEC. 34. Termination of Business. - Investors In the ECOZONE who desire to terminate business or operations shall comply with such requirements and procedures which the PEZA shall set, particularly those relating to the clearing of debts. The assets of the closed enterprise can be transferred and the funds con be remitted out of the ECOZONE subject to the rules, guidelines and procedures prescribed jointly by the Bangko Sentral ng Pilipinas, the Department of Finance and the PEZA.

SEC. 39. Master Employment Contracts. - The PEZA, in coordination with the Department of Tabor and Employment, shall prescribe a master employment contract for all ECOZONE enterprise staff members and workers, the terms of which provide salaries and benefits not less than those provided under this Act, the Philippine Labor Code, as amended, and other relevant issuances of the national government.

SEC. 35. Registration of Business Enterprises. Business enterprises within a designated ECOZONE shall register with the PEZA to avail of all incentives and benefits provided for in this Act.

SEC. 40. Percentage of Foreign Nationals. Employment of foreign nationals hired by ECOZONE enterprises in a supervisory, technical or advisory capacity shall not exceed five percent (5%) of Its workforce without the express authorization of the Secretary of Labor and Employment.

of incentives. SEC. 41. Migrant Worker. - The PEZA, in coordination with the Department of Labor and Employment, shall promulgate appropriate measures and programs leading to the expansion of the services of the ECOZONE to help the local governments of nearby areas meet the needs of the migrant workers. SEC. 42. Incentive Scheme. - An additional deduction equivalent to one- half (1/2) of the value of training expenses incurred In developing skilled or unskilled labor or for managerial or other management development programs incurred by enterprises In the ECOZONE can be deducted from the national government's share of three percent (3%) as provided In Section 24. The PEZA, the Department of Labor and Employment, and the Department of Finance shall jointly make a review of the incentive scheme provided In this section every two (2) years or when circumstances so warrant. CHAPTER V NATIONAL GOVERNMENT AND OTHER ENTITIES SEC. 43. Relationship with the Regional Development Council. - The PEZA shall determine the development goals for the ECOZONE within the framework of national development plans, policies and goals, and the administrator shall, upon approval by the PEZA Board, submit the ECOZONE plans, programs and projects to the regional development council for inclusion in and as inputs to the overall regional development plan. SEC. 44. Relationship with the Local Government Units. - Except as herein provided, the local government units comprising the ECOZONE shall retain their basic autonomy and identity. The cities shall be governed by their respective charters and the municipalities shall operate and function In accordance with Republic Act No. 7160, otherwise known as the Local Government Code of 1991. SEC. 45. Relationship of PEZA to Privately-Owned Industrial Estates. – Privately-owned industrial estates shall retain their autonomy and independence and shall be monitored by the PEZA for the implementation

SEC. 46. Transfer of Resources. - The relevant functions of the Board of Investments over industrial estates and agri-export processing estates shall be transferred to the PEZA. The resources of government-owned Industrial estates and similar bodies except the Bases Conversion Development Authority and those areas identified under Republic Act No. 7227, are hereby transferred to the PEZA as the holding agency. They are hereby detached from their mother agencies and attached to the PEZA for policy, program and operational supervision. The Boards of the affected government-owned industrial estates shall be phased out and only the management level and an appropriate number of personnel shall be retained. Government personnel whose services are not retained by the PEZA or any government office within the ECOZONE shall be entitled to separation pay and such retirement and other benefits they are entitled to under the laws then in force at the time of their separation: Provided, That in no case shall the separation pay be less than one and one-fourth (1 1/4) month of every year of service. CHAPTER VI MISCELLANEOUS PROVISIONS SEC. 47. Appropriation. - Upon the effectivity of this Act, all funds of the former Export Processing Zone Authority (EPZA) shall be transferred to the newlycreated Philippine Economic Zone Authority, Thereafter, any sum as may be necessary to augment its capital outlay shall be Included In the General Appropriations Act to be treated as an equity of the national government. Additional funding shall come from the following: (a) The annual subsidies, appropriations and/or other assets of the exports processing zone, and the industrial estates and other economic areas that have been absorbed/transferred to the PEZA as mandate in this Act; (b) The proceeds from the rent of lands, buildings, and other properties of the ECOZONES concerned; (c) The proceeds from fees, charges and other

revenue-generatlng Instruments which the PEZA is authorized to impose and collect under this Act, (d) The proceeds from bonds which the PEZA authorized to float both domestic and abroad; and (e) The advance rentals, license fees, and other charges which the PEZA is authorized to impose under this Act and which an investor is willing to advance payment for. SEC. 48. Applicability of National Laws. - National laws shall prevail vis-a- vis ECOZONE rules, regulations and standards, unless there is a clear intent in this Act or other Acts of Congress to vest the ECOZONE specific power and privileges not otherwise allowed under existing laws. SEC. 49. Authority of the President to Advance Initial Funding.-- Subject to existing laws, the President of the Philippines is hereby authorized to advance out of the savings of the Office of the President such funds as may be necessary to effect the organization of an ECOZONE which shall be reimbursed by the PEZA at reasonable term and condition. SEC. 50. Non-Applicability on Areas Covered by Republic Act. No. 7227. - This Act shall not be applicable to economic zones and areas already created or to be created under Republic Act No. 7227 or other special laws, and governed by authorities constituted pursuant thereto. SEC. 51. Ipso-Facto Clause. - All privileges, benefits, advantages or exemptions granted to special economic zones under Republic Act. No. 7227, shall ipso-facto be accorded to special economic zones already created or to be created under this Act. The free port status shall not be vested upon new special economic zones. SEC. 52. Separability Clause. - The provisions of this Act are hereby declared separable, and in the event one or more of such provisions or part thereof are declared unconstitutional, such declaration of unconstitutionality shall not affect the validity of the other provisions thereof. SEC. 53. Interpretation / Construction. - The powers, authorities and functions that are vested In the Philippine Economic Zone Authority (PEZA) and the ECOZONES concerned are intended to establish decentralization of governmental functions and authority as well as an efficient and effective working relationship between the ECOZONE, the central

government and the local government units. SEC. 54. Repealing Clause. - All laws, acts, presidential decrees, executive orders, proclamations and / or administrative regulations which are inconsistent with the provisions of this Act, are hereby amended, modified, superseded or repealed accordingly. SEC. 55. Implementing Rules and Regulations. - The Department of Trade and Industry, the National Economic and Development Authority, the Department of Finance, the Bureau of Customs, the Department of Agrarian Reform, the Department of Interior and local Government, the Philippine Economic Zone Authority, and the representatives from the technical staff of the Committee on Economic Affairs of both Houses of Congress shall formulate the implementing rules and regulations of this Act within ninety (90) days after its approval. Such rules and regulations shall take effect fifteen (15) days after their publication in a newspaper of general circulation in the Philippines. SEC. 56. Transitory Provisions. - Prior to the effectivity of the implementing rules and regulations of this Act, the provisions of Presidential Decree No. 66, as amended, and its implementing rules and regulations shall remain in force. SEC. 57. Effectivity- This Act shall take effect upon its approval. Approved:

This Act, which is a consolidation of House Bill No. 14295 and Senate Bill No. 1061 was finally passed by the House of Representatives and the Senate on February 21, 1995.

Approved:

Republic of the Philippines Congress of the Philippines Metro Manila Eleventh Congress Republic Act No. 8748

June 1, 1999

AN ACT AMENDING REPUBLIC ACT NO. 7916, OTHERWISE KNOWN AS THE "SPECIAL ECONOMIC ZONE ACT OF 1995"

labor sector, and one (1) representative from the investors/business sector in the ECOZONE. In case of the unavailability of the Secretary of the Department of Trade and Industry to attend a particular board meeting, the Director General of PEZA shall act as Chairman." xxx Section 2. Chapter II, Section 15 of Republic Act No. 7916 is likewise amended to read as follows:

"Section 15. Administration of Each ECOZONE. — Be it enacted by the Senate and House of Except for privately-owned, managed or operated Representatives of the Philippines in Congress ECOZONES, each ECOZONE shall be organized, assembled:: administered, managed and operated by the ECOZONE executive committee composed of the Section 1. Chapter II, Section 11 of Republic Act No. following: 7916 is hereby amended to read as follows: xxx xxx xxx "Section 11. The Philippine Economic Zone Authority (PEZA) Board. — There is hereby created a body "Privately-owned ECOZONES shall retain autonomy corporate to be known as the Philippine Economic Zone and independence but shall be monitored by the PEZA Authority (PEZA) attached to the Department of Trade for the implementation of incentives and operations for and Industry. The Board shall have a director general adherence to the law." with the rank of department undersecretary who shall be appointed by the President. The director general Section 3. Chapter II, Section 16 of Republic Act No. shall be at least forty (40) years of age, of proven probity 7916 is likewise amended to read as follows: and integrity, and a degree holder in any of the following fields: economics, business, public administration, law, "Section 16. Personnel. — The PEZA Board of management or their equivalent, and with at least ten Directors shall provide for an organization and staff of (10) years relevant working experience preferably in the officers and employees of the PEZA, and upon field of management or public administration. recommendation of the director general with the approval of the Secretary of the Department of Trade "The director general, shall be assisted by three (3) and Industry, appoint and fix the remunerations and deputy directors general each for policy and planning, other emoluments: provided, that the Board shall have administration and operations, who shall be appointed exclusive and final authority to promote, transfer, assign by the PEZA Board, upon the recommendation of the or reassign officers of the PEZA, any provision of director general. The deputy directors general shall be existing law to the contrary notwithstanding: provided, at least thirty-five (35) years old, with proven probity and further, that the director general may carry out removal integrity and a degree holder in any of the following of such officers and employees. fields: economics, business, public administration, law, management or their equivalent. "All positions in the PEZA shall be governed by a compensation, position classification system and "The Board shall be composed of thirteen (13) qualification standards approved by the director general members as follows: the Secretary of the Department with the concurrence of the Board of Directors based on of Trade and Industry as Chairman, the Director a comprehensive job analysis and audit of actual duties General of the Philippine Economic Zone Authority as and responsibilities. The compensation plan shall be Vice-chairman, the undersecretaries of the Department comparable with the prevailing compensation plans in of Finance, the Department of Labor and Employment, the Subic Bay Metropolitan Authority (SBMA), Clark the Department of Interior and Local Government, the Development Corporation (CDC), Bases Conversion Department of Environment and Natural Resources, the and Development Authority (BCDA) and the private Department of Agriculture, the Department of Public sector and shall be subject to periodic review by the Works and Highways, the Department of Science and Board no more than once every two (2) years without Technology, the Department of Energy, the Deputy prejudice to yearly merit reviews or increases based on Director General of the National Economic and productivity and profitability. The PEZA shall thereforee Development Authority, one (1) representative from the be exempt from existing laws, rules and regulations on

compensation, position classification and qualification homelot in the relocation site, and preferential standards. It shall however endeavor to make its employment in the project being undertaken." system conform as closely as possible with the principles under Republic Act No. 6758. Section 7. Chapter VI, Section 50 of Republic Act No. 7916 is hereby amended to read as follows: "The PEZA officers and employees including all Members of the Board shall not engage directly or "Section 50. Non-Applicability on Areas Covered by indirectly in partisan activities or take part in any Republic Act No. 7227. — This Act shall not be election, except to vote. applicable to economic zones and areas already created or to be created under Republic Act No. 7227 "No officer or employee of the PEZA subject to Civil or other special laws and governed by authorities Service laws and regulations shall be removed or constituted pursuant thereto." suspended except for cause, as provided by law." Section 8. Effectivity Clause. — This Act shall take Section 4. Chapter III, Section 24 of Republic Act No. effect after fifteen (15) days following its publication in the Official Gazette or in two (2) newspapers of general 7916 is hereby amended to read as follows: circulation whichever comes earlier. "Section 24. Exemption from National and Local Taxes. — Except for real property taxes on land owned by Approved, June 1, 1999. developers, no taxes, local and national, shall be imposed on business establishments operating within the ECOZONE. In lieu thereof, five percent (5%) of the gross income earned by all business enterprises within the ECOZONE shall be paid and remitted as follows: "(a) Three percent (3%) to the National Government; "(b) Two percent (2%) which shall be directly remitted by the business establishments to the treasurer's office of the municipality or city where the enterprise is located." Section 5. Chapter III, Section 25 of Republic Act No. 7916 is hereby amended to read as follows: "Section 25. Applicable National and Local Taxes. — All persons and service establishments in the ECOZONE shall be subject to national and local taxes under the National Internal Revenue Code and the Local Government Code." Section 6. Chapter III, Section 29 of Republic Act No. 7916, is hereby amended to read as follows: "Section 29. Eminent Domain. — x x x "If in the establishment of a publicly-owned ECOZONE, any person or group of persons who has been occupying a parcel of land within the Zone has to be evicted, the PEZA shall provide the person or group of persons concerned with proper disturbance compensation: provided, however, that in the case of displaced agrarian reform beneficiaries, they shall be entitled to the benefits under the Comprehensive Agrarian Reform Law, including but not limited to Section 36 of Republic Act No. 3844, in addition to a

EXECUTIVE ORDER NO. 226 July 16, 1987

may not be established in the locales, number and/or pace required for optimum national economic development. Fiscal incentive system shall be devised THE OMNIBUS INVESTMENTS CODE OF 1987 to compensate for market imperfections, to reward WHEREAS, the Government is committed to performance contributing to economic development, be encourage investments in desirable areas of activities; cost-efficient and be simple to administer. WHEREAS, to facilitate investment, there is a need to 4. The Sate considers the private sector as the prime adopt a cohesive and consolidated investments mover for economic growth. In this regard, private initiative is to be encouraged, with deregulation and incentives law; self-regulation of business activities to be generally WHEREAS, it is imperative to integrate basic laws on adopted where dictated by urgent social concerns. investment, to clarify and harmonize their provisions for 5. The State shall principally play a supportive role, the guidance of domestic and foreign investors; rather than a competitive one, providing the framework, NOW, THEREFORE, I, CORAZON C. AQUINO, the climate and the incentives within which business President of the Philippines, do hereby order and ordain activity is to take place. the following: 6. The State recognize that there are appropriate roles Article 1. Short Title. This Order shall be known as the for local and foreign capital to play in the development of the Philippine economy and that it is the responsibility "Omnibus Investments Code" of 1987. of Government to define these roles and provide the Article 2. Declaration of Investment Policies. To climate for their entry and growth. accelerate the sound development of the national economy in consonance with the principles and 7. The State recognizes that industrial peace is an objectives of economic nationalism and in pursuance of essential element of economic growth and that it is a a planned economically feasible and practical dispersal principal responsibility of the State to ensure that such of industries and the promotion of small and medium condition prevails. scale industries, under conditions which will encourage competition and discourage monopolies, the following 8. Fiscal incentives shall be extended to stimulate the establishment and assist initial operations of the are declared policies of the State: enterprise, and shall terminate after a period of not 1. The State shall encourage private Filipino and foreign more than 10 years from registration or start-up of investments in industry, agriculture, forestry, mining, operation unless a specific period is otherwise stated. tourism and other sectors of the economy which shall: provide significant employment opportunities relative to The foregoing declaration of investment policies shall the amount of the capital being invested; increase apply to all investment incentive schemes. productivity of the land, minerals, forestry, aquatic and CHAPTER II other resources of the country, and improve utilization BOARD OF INVESTMENTS of the products thereof; improve technical skills of the people employed in the enterprise; provide a fountain for the future development of the economy; meet the Article 3. The Board of Investments. The Board of tests of international competitiveness; accelerate Investments shall implement the provisions of Books development of less developed regions of the country; One to Five of this Code. and result in increased volume and value of exports for the economy. lawphi1.net Article 4. Composition of the Board. The Board of Investments shall be composed of seven (7) governors: 2. The State shall ensure the holistic development by The Secretary of Trade and Industry, three (3) safeguarding the well-being of the social, cultural and Undersecretaries of Trade and Industry to be chosen by ecological life of the people. For this purpose, the President, and three (3) representatives from other consultation with affected communities will be government agencies and the private sector. The conducted whenever necessary. lawphi1.net Secretary of Trade and Industry shall be concurrently Chairman of the Board and the Undersecretary of the 3. The Sate shall extend to projects which will Department of Trade and Industry for Industry and significantly contribute to the attainment of these Investments shall be appointed by the President for a objectives, fiscal incentives without which said projects term of four (4) years: Provided, That upon the

expiration of his term, a governor shall serve as such until his successor shall have been appointed and qualified: Provided, further, That no vacancy shall be filled except for the unexpired portion of any term, and that no one may be designated to be governor of the Board in an acting capacity but all appointments shall be ad interim or permanent. Article 5. Qualifications of Governors of the Board. The governors of the Board shall be citizens of the Philippines, at least thirty (30) years old, of good moral character and of recognized competence in the fields of economics, finance, banking, commerce, industry, agriculture, engineering, law, management or labor.

(4) After due hearing, decide controversies concerning the implementation of the relevant books of this Code that may arise between registered enterprises or investors therein and government agencies, within thirty (3)) days after the controversy has been submitted for decision: Provided, That the investor or the registered enterprise may appeal the decision of the Board within thirty (30) days from receipt thereof to the President; (5) Recommend to the Commissioner of Immigration and Deportation the entry into the Philippines for employment of foreign nationals under this Code;

(6) Periodically check and verify, either by inspection of the books or by requiring regular reports, the proportion Article 6. Appointment of Board Personnel. The Board of the participation of Philippine nationals in a registered shall appoint its technical staff and other personnel enterprise to ascertain compliance with its qualification subject to Civil Service Law, rules and regulations. to retain registration under this Code; Article 7. Powers and Duties of the Board. The Board shall be responsible for the regulation and promotion of investments in the Philippines. It shall meet as often as may be necessary generally once a week on such day as it may fix. Notice of regular and special meetings shall be given all members of the Board. The presence of four (4) governors shall constitute a quorum and the affirmative vote of four (4) governors in a meeting validly held shall be necessary to exercise its powers and perform its duties, which shall be as follows: (1) Prepare annually the Investment Priorities Plan as defined in Article 26, which shall contain a listing of specific activities that can qualify for incentives under Book I of this Code, duly supported by the studies of existing and prospective demands for such products and services in the light of the level and structure of income, production, trade, prices and relevant economic and technical factors of the regions as well as existing facilities;

(7) Periodically check and verify the compliance by registered enterprises with the relevant provisions of this Code, with the rules and regulations promulgated under this Code and with the terms and conditions of registration; (8) After due notice, cancel the registration or suspend the enjoyment of incentives benefits of any registered enterprise and/or require refund of incentives enjoyed by such enterprise including interests and monetary penalties, for (a) failure to maintain the qualifications required by this Code for registration with the Board of (b) for violation of any provisions of this Code, of the rules and regulations issued under this Code, of the terms and conditions of registration, or of laws for the protection of labor or of the consuming public: Provided, That the registration of an enterprise whose project timetable, as set by the Board is delayed by one year, shall be considered automatically cancelled unless otherwise reinstated as a registered enterprise by the Board;

(2) Promulgate such rules and regulations as may be necessary to implement the intent and provisions of this (9) Determine the organizational structure taking into Code relevant to the Board: account Article 6 of this Code; appoint, discipline and remove its personnel consistent with the provisions of (3) Process and approve applications for registration the Civil Service Law and Rules; with the Board, imposing such terms and conditions as it may deem necessary to promote the objectives of this (10) Prepare or contract for the preparation of feasibility Code, including refund of incentives when appropriate, and other pre-investment studies for pioneer areas restricting availment of certain incentives not needed by either upon its own initiative; or upon the request of the project in the determination of the Board, requiring Philippine nationals who commit themselves to invest performance bonds and other guarantees, and therein and show the capability of doing so; Provided, payment of application, registration, publication and That if the venture is implemented, then the amount other necessary fees and when warranted may limit the advanced by the Board shall be repaid within five (5) availment of the tax holiday incentive to the extent that years from the date the commercial operation of said the investor's country law or treaties with the Philippines enterprise starts; allows a credit for taxes paid in the Philippines;

(11) When feasible and considered desirable by the Board, require registered enterprises to list their shares of stock in any accredited stock exchange or directly offer a portion of their capital stock to the public and/or their employees;

(16) Prepare or contract for the preparation of industry and sectoral development programs and gather and compile statistical, technical, marketing, financial and other data required for the effective implementation of this Code;

(12) Formulate and implement rationalization programs for certain industries whose operation may result in dislocation, overcrowding or inefficient use of resources, thus impeding economic growth. For this purpose, the Board may formulate guidelines for progressive manufacturing programs, local content programs, mandatory sourcing requirements and dispersal of industries. In appropriate cases and upon approval of the President, the Board may restrict, either totally or partially, the importation of any equipment or raw materials or finished products involved in the rationalization program;

(17) Within four (4) months after the close of the fiscal year, submit annual reports to the President which shall cover its activities in the administration of this Code, including recommendations on investment policies;

(13) In appropriate cases, the subject to the conditions which the Board deems necessary, suspend the nationality requirement provided for in this Code or any other nationalization statute in cases of ASEAN projects or investments by ASEAN nationals in preferred projects, and with the approval of the President, extend said suspension to other international complementation arrangements for the manufacture of a particular product on a regional basis to take advantage of economies of scale;

(20) Enter into agreements with other agencies of government for the simplification and facilitation of systems and procedures involved in the promotion of investments, operation of registered enterprises and other activities necessary for the effective implementation of this Code;

(18) Provide, directly or through Philippine Diplomatic Missions, such information as may be of interest to prospective foreign investors; (19) Collate, analyze and compile pertinent information and studies concerning areas that have been or may be declared preferred areas of investments; and

(21) Generally, exercise all the powers necessary or incidental to attain the purposes of this Code and other laws vesting additional functions on the Board.

(14) Extend the period of availment of incentives by any Article 8. Powers and Duties of the Chairman. The registered enterprise; Provided, That the total period of Chairman shall have the following powers and duties: availment shall not exceed ten (10) years, subject to any of the following criteria: (1) To preside over the meetings of the Board; (a) The registered enterprise has suffered operational (2) To render annual reports to the President and such force majeure that has impaired its viability; special reports as may be requested; (b) The registered enterprise has not fully enjoyed the (3) To act as liaison between investors seeking joint incentives granted to it for reasons beyond its control; venture arrangements in particular areas of investments; (c) The project of the registered enterprise has a gestation period which goes beyond the period of (4) Recommend to the Board such policies and availment of needed incentives; and measures he may deem necessary to carry out the objectives of this Code; and (d) The operation of the registered enterprise has been subjected to unforeseen changes in government (5) Generally, to exercise such other powers and policies, particularly, protectionalism policies of perform such other duties as may be directed by the importing countries, and such other supervening factors Board of Governors from time to time. which would affect the competitiveness of the registered firm; Article 9. Powers and Duties of the Vice-Chairman. The Vice-Chairman shall have the following powers and (15) Regulate the making of investments and the doing duties: of business within the Philippines by foreigners or business organizations owned in whole or in part by (1) To act as Managing Head of the Board; foreigners;

(2) To preside over the meetings of the Board in the absence of the Chairman;

management, design, planning, construction, operation and similar matters.

(3) Prepare the Agenda for the meetings of the Board and submit for its consideration and approval the policies and measures which the Chairman deems necessary and proper to carry out the provisions of this Code;

Article 13. "Foreign loans" shall mean any credit facility or financial assistance other than equity investment denominated and payable in foreign currency or where the creditor has the option to demand payment in foreign exchange and registered with the Central Bank and the Board.

(4) Assist registered enterprises and prospective investors to have their papers processed with dispatch Article 14. "Foreign Investments" shall mean equity by all government offices, agencies, instrumentalities investments owned by a non-Philippine national made and financial institutions; and in the form of foreign exchange or other assets actually transferred to the Philippines and registered with the (5) Perform the other duties of the Chairman in the Central Bank and the Board, which shall assess and absence of the latter, and such other duties as may be appraise the value of such assets other than foreign exchange. assigned to him by the Board of Governors. BOOK I INVESTMENTS WITH INCENTIVES TITLE I PREFERRED AREAS OF INVESTMENTS CHAPTER I DEFINITIONS OF TERMS Article 10. "Board" shall mean the Board of Investments created under this Code. Article 11. "Registered Enterprises" shall mean any individual, partnership, cooperative, corporation or other entity incorporated and/or organized and existing under Philippine laws; and registered with the Board in accordance with this Book: Provided, however, That the term "registered enterprise" shall not include commercial banks, savings and mortgage banks, rural banks, savings and loan associations, building and loan associations, developmental banks, trust companies, investment banks, finance companies, brokers and dealers in securities, consumers cooperatives and credit unions, and other business organizations whose principal purpose or principal source of income is to receive deposits, lend or borrow money, buy and sell or otherwise deal, trade or invest in common or preferred stocks, debentures, bonds or other marketable instruments generally recognized as securities, or discharge other similar intermediary, trust of fiduciary functions. Article 12. "Technological assistance contracts" shall mean contracts for: (1) the transfer, by license otherwise, of patents, processes, formulas or other technological rights of foreign origin; and/or (2) foreign assistance concerning technical and factory

Article 15. "Philippine national" shall mean a citizen of the Philippines or a domestic partnership or association wholly-owned by citizens of the Philippines; or a corporation organized under the laws of the Philippines of which at least sixty per cent (60%) of the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines, or a trustee of funds for pension or other employee retirement or separation benefits, where the trustee is a Philippine national and at least sixty per cent (60%) of the fund will accrue to the benefit of Philippine nationals; Provided, That where a registered and its non-Filipino stockholders own stock in a registered enterprise, at least sixty per cent (60%) of the capital stock outstanding and entitled to vote of both corporations must be owned and held by the citizens of the Philippines and at least sixty per cent (60%) of the members of the Board of Directors of both corporations must be citizens of the Philippines in order that the corporation shall be considered a Philippine national. Article 16. "Preferred areas of investments" shall mean the economic activities that the Board shall have declared as such in accordance with Article 28 which shall be either non-pioneer or pioneer. Article 17. "Pioneer enterprise" shall mean a registered enterprise (1) engaged in the manufacture, processing or production, and not merely in the assembly or packaging of goods, products, commodities or raw materials that have not been or are not being produced in the Philippines on a commercial scale or (2) which uses a design, formula, scheme, method, process or system of production or transformation of any element, substance or raw materials into another raw material or finished goods which is new and untried in the Philippines or (3) engaged in the pursuit of agricultural, forestry and mining activities and/or services including

the industrial aspects of food processing whenever appropriate, pre-determined by the Board, in consultation with the appropriate Department, to be feasible and highly essential to the attainment of the national goal, in relation to a declared specific national food and agricultural program for self-sufficiency and other social benefits of the project or (4) which produces non-conventional fuels or manufactures equipment which utilize non-conventional sources of energy or uses or converts to coal or other non-conventional fuels or sources of energy in its production, manufacturing or processing operations. Provided, That the final product in any of the foregoing instances, involves or will involve substantial use and processing of domestic raw materials, whenever available; taking into account the risks and magnitude of investment: Provided, further, That the foregoing definitions shall not in any way limit the rights and incentives granted to less-developedarea enterprises provided under Title V, Book I, hereof. Article 18. "Non-pioneer enterprise" shall include all registered producer enterprises other than pioneer enterprises.

diminishing the scope of negotiability under their laws of issue are transferable under such conditions as may be determined by the Board after consultation with the Department of Finance. The tax credit certificate shall be used to pay taxes, duties, charges and fees due to the National Government; Provided, That the tax credits issued under this Code shall not form part of the gross income of the grantee/transferee for income tax purposes under Section 29 of the National Internal Revenue Code and are therefore not taxable: Provided, further, That such tax credits shall be valid only for a period of ten (10) years from date of issuance. Article 22. "Export products" shall mean manufactured or processed products the total F.O.B. Philippine port value of the exports of which did not exceed five million dollars in the United States Currency in the calendar year 1968 and which meet the local content requirement, if any, set by the Board, and standards of quality set by the Bureau of Product Standards, or, in default of such standards, by the Board or by such public or private organization, chamber, group or body as the Board may designate. The above definition notwithstanding, the Investment Priorities Plan may include other products for export subjects to such conditions and limited incentives as may be determined by the Board.

Article 19. "Expansion" shall include modernization and rehabilitation and shall mean increase of existing volume or value of production or upgrading the quality of the registered product or utilization of inefficient or idle equipment under such guidelines as the Board may Article 23. "Export sales" shall mean the Philippine port adopt. F.O.B. value, determined from invoices, bills of lading, inward letters of credit, landing certificates, and other Article 20. "Measured capacity" shall mean the commercial documents, of exports products exported estimated additional volume of production or service directly by a registered export producer or the net which the Board determines to be desirable in each selling price of export product sold by a registered preferred area of investment in order to supply the export producer to another export producer, or to an needs of the economy at reasonable prices, taking into export trader that subsequently exports the same: account the export potential of the product, including Provided, That sales of export products to another economies of scale which would render such product producer or to an export trader shall only be deemed competitive in the world market. Measured capacity export sales when actually exported by the latter, as shall not be less than the amount by which the evidenced by landing certificates or similar commercial measurable domestic and country's potential export documents: Provided, further, That without actual market demand exceeds the existing productive exportation the following shall be considered capacity in said preferred areas. For export market constructively exported for purposes of this provision: industries, when warranted the Board shall base (1) sales to bonded manufacturing warehouses of measured capacity on the availability of domestic raw export-oriented manufacturers; (2) sales to export materials after deducting the needs of the domestic processing zones; (3) sales to registered export traders operating bonded trading warehouses supplying raw market therefor. materials used in the manufacture of export products Article 21. "Tax credit" shall mean any of the credits under guidelines to be set by the Board in consultation against taxes and/or duties equal to those actually paid with the Bureau of Internal Revenue and the Bureau of or would have been paid to evidence which tax credit Customs; (4) sales to foreign military bases, diplomatic certificate shall be issued by the Secretary of Finance missions and other agencies and/or instrumentalities or his representative, or the Board, if so delegated by granted tax immunities, of locally manufactured, the Secretary of Finance. The tax credit certificates assembled or repacked products whether paid for in including those issued by the Board pursuant to laws foreign currency or not: Provided, further, That export repealed by this Code but without in any way sales of registered export trader may include

commission income: and Provided, finally, That exportation of goods on consignment shall not be deemed export sales until the export products consigned are in fact sold by the consignee.

The specific and generic activities to be included in the Investment Priorities Plan with their status as pioneer or non-pioneer shall be determined by the Board in accordance with the criteria set forth in this Book.

Sales of locally manufactured or assembled goods for household and personal use to Filipinos abroad and other non-residents of the Philippines as well as returning Overseas Filipinos under the Internal Export Program of the government and paid for in convertible foreign currency inwardly remitted through the Philippine banking systems shall also be considered export sales.

CHAPTER INVESTMENT PRIORITIES PLAN

II

Article 27. Investment Priorities Plan. Not later than the end of March of every year, the Board of Investments, after consultation with the appropriate government agencies and the private sector, shall submit to the President an Investment Priorities Plan: Provided, however, That the deadline for submission, may be Article 24. "Production cost" shall mean the total of the extended by the President. cost of direct labor, raw materials, and manufacturing overhead, determined in accordance with generally Article 28. Criteria in Investment Priority Determination. accepted accounting principles, which are incurred in No economic activity shall be included in the Investment manufacturing or processing the products of a Priority Plan unless it is shown to be economically, registered enterprise. technically and financially sound after thorough investigation and analysis by the Board. Article 25. "Processing" shall mean converting of raw materials into marketable from through physical, The determination of preferred areas of investment to mechanical, chemical, electrical, biochemical, be listed in the Investment Priorities Plan shall be based biological or other means or by a special treatment or a on long-run comparative advantage, taking into account series of actions, such as slaughtering, milling, the value of social objectives and employing economic pasteurizing, drying or dessicating, quick freezing, that criteria along with market, technical, and financial results in a change in the nature or state of the products. analyses. Merely packing or packaging shall not constitute processing. The Board shall take into account the following: Article 26. "Investment Priorities Plan" shall mean the (a) Primarily, the economic soundness of the specific over-all plan prepared by the Board which includes and activity as shown by its economic internal rate of return; contains: (b) The extent of contribution of an activity to a specific (a) The specific activities and generic categories of developmental goal; economic activity wherein investments are to be encouraged and the corresponding products and (c) Other indicators or comparative advantage; commodities to be grown, processed or manufactured pursuant thereto for the domestic or export market; (d) Measured capacity as defined in Article 20; and (b) Specific public utilities which can qualify for incentives under this Code and which shall be supported by studies of existing and prospective regional demands for the services of such public utilities in the light of the level and structure of income, production, trade, prices and relevant economic and technical factors of the regions as well as the existing facilities to produce such services; (c) Specific activities where the potential for utilization of indigenous no-petroleum based fuels or sources of energy can be best promoted; and (d) Such other information, analyzes, data, guidelines or criteria as the Board may deem appropriate.

(e) The market and technical aspects and considerations of the activity proposed to be included. In any of the declared preferred areas of investment, the Board may designate as pioneer areas the specific products and commodities that meet the requirements of Article 17 of this Code and review yearly whether such activity, as determined by the Board, shall continue as pioneer, otherwise, it shall be considered as non-pioneer and accordingly listed as such in the Investment Priorities Plan or removed from the Investment Priorities Plan.

Article 29. Approval of the Investment Priorities Plan. The President shall proclaim the whole or part of such plan as in effect; or alternatively, return the whole or part of the plan to the Board of Investment for revision. Upon the effectivity of the plan or portions thereof, the President shall issue all necessary directives to all departments, bureaus, agencies or instrumentalities of the government to ensure the implementation of the plan by the agencies concerned in a synchronized and integrated manner. No government body shall adopt any policy or take any course of action contrary to or inconsistent with the plan. Article 30. Amendments. Subject to publication requirements and the criteria for investment priority determination, the Board of Investments may, at any time, add additional areas in the plan, alter any of the terms of the declaration of an investment area or the designation of measured capacities, or terminate the status of preference. In no case, however, shall any amendment of the plan impair whatever rights may have already been legally vested in qualified enterprises which shall continue to enjoy such rights to the full extent allowed under this Code. The Board shall not accept applications in an area of investment prior to the approval of the same as a preferred area nor after approval of its deletion as a preferred area of investment. Article 31. Publication. Upon approval of the plan, in whole or in part, or upon approval of an amendment thereof, the plan or the amendment, specifying and declaring the preferred areas of investment and their corresponding measured capacity shall be published in at least one (1) newspaper of general circulation and all such areas shall be open for application until publication of an amendment or deletion thereof, or until the Board approves registration of enterprises which fill the measured capacity. CHAPTER III REGISTRATION OF ENTERPRISES Article 32. Qualifications of a Registered Enterprises. To be entitled to registration under the Investment Priorities Plan, an applicant must satisfy the Board that:

entitled to vote is owned and held by Philippine nationals as defined under Article 15 of this Code, and at least sixty per cent (60%) of the members of the Board of Directors are citizens of the Philippines. If it does not possess the required degree of ownership as mentioned above by Philippine nationals, the following circumstances must be satisfactorily established: (a) That it proposes to engage in a pioneer projects as defined in Article 17 of this Code, which, considering the nature and extent of capital requirements, processes, technical skills and relative business risks involved, is in the opinion of the Board of such a nature that the available measured capacity thereof cannot be readily and adequately filled by Philippine nationals; or, if the applicant is exporting at least seventy per cent (70%) of is total production, the export requirement herein provided may be reduced in meritorious cases under such conditions and/or limited incentives as the Board may determine; (b) That it obligates itself to attain the status of a Philippine national, as defined in Article 15, within thirty (30) years from the date of registration or with such longer period as the Board may require taking into account the export potential of the project: Provided, That a registered enterprise which exports one hundred percent (100%) of its total production need not comply with this requirement; (c) That the pioneer are it will engage in is one that is not within the activities reserved by the Constitution or other laws of the Philippines to the Philippine citizens or corporations owned and controlled by Philippine citizens; (2) The applicant is proposing to engage in a preferred project listed or authorized in the current Investment Priorities Plan within a reasonable time to be fixed by the Board or, if not so listed, at least fifty percent (50%) of its total production is for export or it is an existing producer which will export part of production under such conditions and/or limited incentives as the Board may determine; or that the enterprise is engaged or proposing to engage in the sale abroad of export products bought by it from one or more export producers; or the enterprise in engaged or proposing to engage in rendering technical, professional or other services or in exporting television and motion pictures and musical recordings made or produced in the Philippines, either directly or through a registered trader.

(1) He is a citizen of the Philippines, in case the applicant is a natural person, or in case of a partnership or any other association, it is organized under Philippine laws and that at least sixty percent (60%) of its capital is owned and controlled by citizens of the Philippines; or in case of a corporation or a cooperative, it is (3) The applicant is capable of operating on a sound organized under Philippine laws and that at least sixty and efficient basis of contributing to the national per cent (60%) of the capital stock outstanding and

development of the preferred area in particular and of the national economy in general; and

entry of any enterprise in any field of endeavor or activity;

(4) If the applicant is engaged or proposes to engage in undertakings or activities other than preferred projects, it has installed or undertakes to install an accounting system adequate to identify the investments, revenues, costs, and profits or losses of each preferred project undertaken by the enterprise separately from the aggregate investment, revenues, costs and profits or losses of the whole enterprise or to establish a separate corporation for each preferred project if the Board should so require to facilitate proper implementation of this Code.

(d) The amount of foreign exchange earned, used or saved in their operations; (e) The extent to which labor, materials and other resources obtained from indigenous sources are utilized; (f) The extent to which technological advances are applied and adopted to local condition;

(g) The amount of equity and degree to which the ownership of such equity is spread out and diversified; Article 33. Application. Applications shall be filed with and the Board, recorded in a registration book and the date appearing therein and stamped on the application shall (h) Such other criteria as the Board may determine. be considered the date of official acceptance. Article 36. Appeal from Board's Decision. Any order or Whenever necessary, the Board, through the People's decision of the Board shall be final and executory after Economic Councils, shall consult the communities thirty (30) days from its promulgation. Within the said affected on the acceptability of locating the registered period of thirty (30) days, said order or decision may be enterprise within their community. appealed to the Office of the President. Where an appeal has been filed, said order or decision shall be Article 34. Approval and Registration Procedures. The final and executory ninety (90) days after the perfection Board is authorized to adopt rules and regulations to of the appeal, unless reversed. facilitate action on applications filed with it; prescribe criteria for the evaluation of several applications filed in Article 37. Certificate of Registration. A registered one preferred area; devise standard forms for the use enterprise under this Code shall be issued a certificate of applicants and delegate to the regional offices of the of registration under the seal of the Board of Department of Trade and Industry the authority to Investments and the signature of its Chairman and/or receive and process applications for enterprises to be such other officer or employee of the Board as it may located in their respective regions. empower and designate for the purpose. The certificate shall be in such form and style as the Board may Applications filed shall be considered automatically determine and shall state, among other matters: approved if not acted upon by the Board within twenty (20) working days from official acceptance thereof. (a) The name of the registered enterprise; Article 35. Criteria for Evaluation of Applications. The (b) The preferred area of investment in which the following criteria will be considered in the evaluation of registered enterprise is proposing to engage; applications for registration under a preferred area: (c) The nature of the activity it is undertaking or (a) The extent of ownership and control by Philippine proposing to undertake, whether pioneer or noncitizens of the enterprises; pioneer, and the registered capacity of the enterprise; and (b) The economic rates of return; (d) The other terms and conditions to be observed by (c) The measured capacity Provided, That estimates of the registered enterprise by virtue of the registration. measured capacities shall be regularly reviewed and updated to reflect changes in market supply and TITLE II demand conditions; Provided, Further, That measured BASIC RIGHTS AND GUARANTEES capacity shall not result in a monopoly in any preferred area of investment which would unduly restrict trade Article 38. Protection of Investments. All investors and and fair competition nor shall it be used to deny the registered enterprises are entitled to the basic rights

and guarantees provided in the Constitution. Among the time of remittance, subject to the provisions of other rights recognized by the Government of the Section 74 of Republic Act No. 265 as amended. Philippines are the following: TITLE III (a) Repatriation of Investments. In the case of foreign INCENTIVES TO REGISTERED ENTERPRISES investments, the right to repatriate the entire proceeds of the liquidation of the investment in the currency in Article 39. Incentives to Registered Enterprises. All which the investment was originally made and at the registered enterprises shall be granted the following exchange rate prevailing at the time of repatriation, incentives to the extent engaged in a preferred area of subject to the provisions of Section 74 of Republic Act investment; No. 265 as amended; (a) Income Tax Holiday. For investments made pursuant to Executive Order No. 32 and its implementing rules and regulations, (1) For six (6) years from commercial operation for remittability shall be as provided therein. pioneer firms and four (4) years for non-pioneer firms, new registered firms shall be fully exempt from income (b) Remittance of Earnings. In the case of foreign taxes levied by the National Government. Subject to investments, the right to remit earnings from the such guidelines as may be prescribed by the Board, the investment in the currency in which the investment was income tax exemption will be extended for another year originally made and at the exchange rate prevailing at in each of the following cases: the time of remittance, subject to the provisions of Section 74 of Republic Act No. 265 as amended; i. the project meets the prescribed ratio of capital equipment to number of workers set by the Board; (c) Foreign Loans and Contracts. The right to remit at the exchange rate prevailing at the time of remittance ii. utilization of indigenous raw materials at rates set by such sums as may be necessary to meet the payments the Board; of interest and principal on foreign loans and foreign obligations arising from technological assistance iii. the net foreign exchange savings or earnings amount contracts, subject to the provisions of Section 74 of to at least US$500,000.00 annually during the first three Republic Act No. 265 as amended; (3) years of operation. (d) Freedom from Exploriation. There shall be no expropriation by the government of the property represented by investments or of the property of the enterprise except for public use or in the interest of national welfare or defense and upon payment of just compensation. In such cases, foreign investors or enterprises shall have the right to remit sums received as compensation for the expropriated property in the currency in which the investment was originally made and at the exchange rate at the time of remittance, subject to the provisions of Section 74 of Republic Act No. 265 as amended; (e) Requisition of Investment. There shall be no requisition of the property represented by the investment or of the property of enterprises, except in the event of war or national emergency and only for the duration thereof. Just compensation shall be determined and paid either at the time of requisition or immediately after cessation of the state of war or national emergency. Payments received as compensation for the requisitioned property may be remitted in the currency in which the investment was originally made and at the exchange rate prevailing at

The preceding paragraph notwithstanding, no registered pioneer firm may avail of this incentive for a period exceeding eight (8) years. (2) For a period of three (3) years from commercial operation, registered expanding firms shall be entitled to an exemption from income taxes levied by the National Government proportionate to their expansion under such terms and conditions as the Board may determine; Provided, however, That during the period within which this incentive is availed of by the expanding firm it shall not be entitled to additional deduction for incremental labor expense. (3) The provision of Article 7 (14) notwithstanding, registered firms shall not be entitled to any extension of this incentive. (b) Additional Deduction for Labor Expense. For the first five (5) years from registration a registered enterprise shall be allowed an additional deduction from the taxable income of fifty percent (50%) of the wages corresponding to the increment in the number of direct labor for skilled and unskilled workers if the project meets the prescribed ratio of capital equipment to

number of workers set by the Board: Provided, That this (cc) for purposes of replacement to improve and/or additional deduction shall be doubled if the activity is expand the operations of the registered enterprise. located in less developed areas as defined in Art. 40. (d) Tax Credit on Domestic Capital Equipment. A tax (c) Tax and Duty Exemption on Imported Capital credit equivalent to one hundred percent (100%) of the Equipment. Within five (5) years from the effectivity of value of the national internal revenue taxes and this Code, importations of machinery and equipment customs duties that would have been waived on the and accompanying spare parts of new and expanding machinery, equipment and spare parts, had these items registered enterprise shall be exempt to the extent of been imported shall be given to the new and expanding one hundred percent (100%) of the customs duties and registered enterprise which purchases machinery, national internal revenue tax payable thereon: equipment and spare parts from a domestic Provided, That the importation of machinery and manufacturer: Provided, That (1) That the said equipment and accompanying spare parts shall comply equipment, machinery and spare parts are reasonably with the following conditions: needed and will be used exclusively by the registered enterprise in the manufacture of its products, unless (1) They are not manufactured domestically in sufficient prior approval of the Board is secured for the part-time quantity, of comparable quality and at reasonable utilization of said equipment in a non-registered activity to maximize usage thereof; (2) that the equipment prices; would have qualified for tax and duty-free importation (2) They are reasonably needed and will be used under paragraph (c) hereof; (3) that the approval of the exclusively by the registered enterprise in the Board was obtained by the registered enterprise; and manufacture of its products, unless prior approval of the (4) that the purchase is made within five (5) years from Board is secured for the part-time utilization of said the date of effectivity of the Code. If the registered equipment in a non-registered activity to maximize enterprise sells, transfers or disposes of these usage thereof or the proportionate taxes and duties are machinery, equipment and spare parts, the provisions paid on the specific equipment and machinery being in the preceding paragraph for such disposition shall apply. permanently used for non-registered activities; and (3) The approval of the Board was obtained by the (e) Exemption from Contractor's Tax. The registered registered enterprise for the importation of such enterprise shall be exempt from the payment of contractor's tax, whether national or local. machinery, equipment and spare parts. In granting the approval of the importations under this paragraph, the Board may require international canvassing but if the total cost of the capital equipment or industrial plant exceeds US$5,000,000, the Board shall apply or adopt the provisions of Presidential Decree Numbered 1764 on International Competitive Bidding. If the registered enterprise sells, transfers or disposes of these machinery, equipment and spare parts without prior approval of the Board within five (5) years from date of acquisition, the registered enterprise and the vendee, transferee, or assignee shall be solidarily liable to pay twice the amount of the tax exemption given it.

(f) Simplification of Customs Procedure. Customs procedures for the importation of equipment, spare parts, raw materials and supplies, and exports of processed products by registered enterprises shall be simplied by the Bureau of Customs. (g) Unrestricted Use of Consigned Equipment. Provisions of existing laws notwithstanding, machinery, equipment and spare part consigned to any registered enterprises shall not be subject to restrictions as to period of use of such machinery, equipment and spare parts Provided, that the appropriate re-export bond is posted unless the importation is otherwise covered under subsections (c) and (m) of this Article. Provided, further, that such consigned equipment shall be for the exclusive use of the registered enterprise.

The Board shall allow and approve the sale, transfer or disposition of the said items within the said period of five If such equipment is sold, transferred or otherwise (5) years if made: disposed of by the registered enterprise the related (aa) to another registered enterprise or registered provision of Article 39 (c) (3) shall apply. Outward remittance of foreign exchange covering the proceeds domestic producer enjoying similar incentives; of such sale, transfer or disposition shall be allowed only upon prior Central Bank approval. (bb) for reasons of proven technical obsolescence; or

(h) Employment of Foreign Nationals. Subject to the provisions of Section 29 of Commonwealth Act Number 613, as amended, a registered enterprise may employ foreign nationals in supervisory, technical or advisory positions for a period not exceeding five (5) years from its registration, extendible for limited periods at the discretion of the Board: Provided, however, That when the majority of the capital stock of a registered enterprise is owned by foreign investors, the position of president, treasurer and general manager or their equivalents may be retained by foreign nationals beyond the period set forth herein. Foreign nationals under employment contract within the purview of this incentive, their spouses and unmarried children under twenty-one (21) years of age, who are not excluded by Section 29 of Commonwealth Act Numbered 613, as amended, shall be permitted to enter and reside in the Philippines during the period of employment of such foreign nationals.

(k) Tax Credit for Taxes and Duties on Raw Materials. Every registered enterprise shall enjoy a tax credit equivalent to the National Internal Revenue taxes and Customs duties paid on the supplies, raw materials and semi-manufactured products used in the manufacture, processing or production of its export products and forming part thereof, exported directly or indirectly by the registered enterprise: Provided, however, that the taxes on the supplies, raw materials and semimanufactured products domestically purchased are indicated as a separate item in the sales invoice. Nothing herein shall be construed as to preclude the Board from setting a fixed percentage of export sales as the approximate tax credit for taxes and duties of raw materials based on an average or standard usage for such materials in the industry.

(l) Access to Bonded Manufacturing/Trading Warehouse System. Registered export oriented enterprises shall have access to the utilization of the A registered enterprise shall train Filipinos as bonded warehousing system in all areas required by the understudies of foreign nationals in administrative, project subject to such guidelines as may be issued by supervisory and technical skills and shall submit annual the Board upon prior consultation with the Bureau of reports on such training to the Board. Customs. (i) Exemption on Breeding Stocks and Genetic Materials. The importation of breeding stocks and genetic materials within ten (10) years from the date of registration or commercial operation of the enterprise shall be exempt from all taxes and duties: Provided, That such breeding stocks and genetic materials are (1) not locally available and/or obtainable locally in comparable quality and at reasonable prices; (2) reasonably needed in the registered activity; and (3) approved by the Board. (j) Tax Credit on Domestic Breeding Stocks and Genetic Materials. A tax credit equivalent to one hundred percent (100%) of the value of national internal revenue taxes and customs duties that would have been waived on the breeding stocks and genetic materials had these items been imported shall be given to the registered enterprise which purchases breeding stocks and generic materials from a domestic producer: Provided, 1) That said breeding stocks and generic materials would have qualified for tax and duty free importation under the preceding paragraph; 2) that the breeding stocks and genetic materials are reasonably needed in the registered activity; 3) that the approval of the board has been obtained by the registered enterprise; and 4) that the purchase is made within ten (10) years from date of registration or commercial operation of the registered enterprise.

(m) Exemption from Taxes and Duties on Imported Spare Parts. Importation of required supplies and spare parts for consigned equipment or those imported tax and duty free by a registered enterprise with a bonded manufacturing warehouse shall be exempt from customs duties and national internal revenue taxes payable thereon, Provided, However, That at least seventy percent (70%) of production is exported; Provided, further, that such spare parts and supplies are not locally available at reasonable prices, sufficient quantity and comparable quality; Provided, finally, That all such spare parts and supplies shall be used only in the bonded manufacturing warehouse of the registered enterprise under such requirements as the Bureau of Customs may impose. (n) Exemption from Wharfage Dues and any Export Tax, Duty, Impost and Fee. The provisions of law to the contrary notwithstanding, exports by a registered enterprise of its non- traditional export products shall be exempted of its non-traditional export products shall be exempted from any wharfage dues, and any export tax, duty, impost and fee. TITLE IV INCENTIVES TO LESS-DEVELOPED-AREA REGISTERED ENTERPRISE Article 40. A registered enterprise regardless of nationality located in a less-developed-area included in

the list prepared by the Board of Investments after consultation with the National Economic & Development Authority and other appropriate government agencies, taking into consideration the following criteria: low per capita gross domestic product; low level of investments; high rate of unemployment and/or underemployment; and low level of infrastructure development including its accessibility to develop urban centers, shall be entitled to the following incentives in addition to those provided in the preceding article: (a) Pioneer incentives. An enterprise in a lessdeveloped-area registered with the Board under Book I of this Code, whether proposed, or an expansion of an existing venture, shall be entitled to the incentives provided for a pioneer registered enterprise under its law of registration.

Article 43. Benefits of Multiple Area Enterprises. When a registered enterprise engages in activities or endeavors that have not been declared preferred areas of investments, the benefits and incentives accruing under this Code to registered enterprises and investors therein shall be limited to the portion of the activities of such registered enterprise as is a preferred area of investment. BOOK II FOREIGN INVESTMENTS WITHOUT INCENTIVES TITLE I CHAPTER I DEFINITIONS AND SCOPE OF THIS BOOK Article 44. Definition of terms. As used in this Book, the term "investment" shall mean equity participation in any enterprise formed, organized or existing under the laws of the Philippines; and the phrase "doing business" shall include soliciting orders, purchases, service contracts, opening offices, whether called "liaison" offices or branches; appointing representatives or distributors who are domiciled in the Philippines for a period or periods totalling one hundred eighty (180) days or more; participating in the management, supervision or control of any domestic business firm, entity or corporation in the Philippines, and any other act or acts that imply a continuity of commercial dealings or arrangements and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization.

(b) Incentives for necessary and Major Infrastructure and Public Utilities. Registered enterprise establishing their production, processing or manufacturing plants in an area that the Board designates as necessary for the proper dispersal of industry or in area which the Board finds deficient in infrastructure, public utilities, and other facilities, such as irrigation, drainage or other similar waterworks infrastructure may deduct from taxable income an amount equivalent to one hundred percent (100%) of necessary and major infrastructure works it may have undertaken with the prior approval of the Board in consultation with other government agencies concerned; Provided, That the title to all such infrastructure works shall upon completion, be transferred to the Philippine Government: Provided, further, That any amount not deducted for a particular year may be carried over for deduction for subsequent years not exceeding ten (10) years from commercial operation. Article 45. Non-Applicability to Banking Institutions. This Book shall not apply to banking institutions which TITLE V are governed and regulated by the General Banking Act GENERAL PROVISIONS and other laws which are under the supervision of the Central Bank. Article 41. Power of the President to Rationalize Incentives. The President may, upon recommendation CHAPTER II of the Board and in the interest of national development, INVESTMENTS rationalize the incentives scheme herein provided; extend the period of availment of incentives or increase Article 46. Permitted Investments. rates of tax exemption of any project whose viability or profitability require such modification. (1) Without need of prior authority, anyone not a Philippine national as that term is defined in Article 15 Article 42. Refund and Penalties. In case of of this Code, and not otherwise disqualified by law, may cancellation of the certificate granted under this Code, invest: the Board may, in appropriate cases, require the refund of incentives availed of and impose corresponding fines (a) In any enterprise registered under Book One hereof, and penalties. to the extent that the total investment of non-Philippine nationals therein would not affect its status as a registered enterprise under the law;

(b) In an enterprise not registered under Book One hereof, to the extent that the total investment of nonPhilippine nationals herein shall not exceed forty percent (40%) of the outstanding capital of that enterprise, unless existing law forbids any nonPhilippine ownership in the enterprise or limits ownership by non-Philippine national to a percentage smaller than forty percent (40%).

Article 48. Authority to Do Business. No alien, and no firm association, partnership, corporation or any other form of business organization formed, organized, chartered or existing under any laws other than those of the Philippines, or which is not a Philippine national, or more than forty per cent (40%) of the outstanding capital of which is owned or controlled by aliens shall do business or engage in any economic activity in the Philippines or be registered, licensed, or permitted by the Securities and Exchange Commission or by any other bureau, office, agency, political subdivision or instrumentality of the government, to do business, or engage in any economic activity in the Philippines without first securing a written certificate from the Board of Investments to the effect:

(2) Within thirty (30) days after notice of the investment is received by it, the enterprise in which any investment is made by a non-Philippine national shall register the same with the Board of Investments for purposes of record. Investments made in the form of foreign exchange or other assets actually transferred to the Philippines shall also be registered with the Central Bank. The Board shall assess and appraise the value (1) That the operation or activity of such alien, firm, of such assets other than foreign exchange. association, partnership, corporation or other form of business organization, is not inconsistent with the Article 47. Permissible Investments. If an investment Investment Priorities Plan; by a non-Philippine national in an enterprise not registered under Book One hereof is such that the total (2) That such business or economic activity will participation by non-Philippine nationals in the contribute to the sound and balanced development of outstanding capital thereof shall exceed forty percent the national economy on a self-sustaining basis; (40%), the enterprise must obtain prior authority from the Board of Investments, which authority shall be (3) That such business or economic activity by the granted unless the proposed investment applicant would not conflict with the Constitution or laws of the Philippines; (a) Would conflict with existing constitutional provisions and laws regulating the degree of required ownership (4) That the field of business or economic activity is not by Philippine nationals in the enterprise; or one that is being adequately exploited by Philippine nationals; and (b) Would pose a clear and present danger of promoting monopolies or combinations in restraint of trade; or (5) That the entry of applicant therein will not pose a clear and present danger of promoting monopolies or (c) Would be made in enterprise engaged in an area combinations in restraint of trade. adequately being exploited by Philippine nationals; or Article 49. Requirements to be Imposed by the Board. (d) Would conflict or be inconsistent with the Investment Upon granting said certificate, the Board shall impose Priorities Plan in force at the time the investment is the following requirements on the alien or the firm, sought to be made; or association, partnership, corporation or other form of business organization that is not organized or existing (e) Would not contribute to the sound and balanced under the laws of the Philippines development of the national economy on a selfsustaining basis. (1) To appoint a citizen of the Philippines, of legal age, good moral character and reputation, and sound Investments made in the form of foreign exchange or financing standing, as resident agent, who shall be other assets actually transferred to the Philippines shall authorized to accept summons and other legal process also be registered with the Central Bank. The Board in behalf of the applicant; shall assess and appraise the value of such assets other than foreign exchange. (2) To establish an office in the Philippines and to notify the Securities and Exchange Commission in writing of the applicant's exact address and of every CHAPTER II contemplated transfer thereof or of the opening of new LICENSE TO DO BUSINESS offices, at least fifteen (15) days before the same are to

be effected; and once effected, not later than ten (10) days afterwards; (3) To bring assets into the Philippines to constitute the capital of the office or offices, of such kind and value as the Board may deem necessary to protect those who may deal with the applicant, and to maintain that capital unimpaired during the period it does business in the Philippines; (4) To present prior proof that citizens of the Philippines and corporations or other business organizations organized or existing under the laws of the Philippines are allowed to do business in the country or individual state within the federal country of which applicant is a citizen or in which it is domiciled: Provided, however, That if the state or country of domicile of the applicant imposes on, or requires of, Philippine nationals other conditions, requirements or restrictions besides those set forth in this Code, the Board of Investments shall impose the said other conditions, requirements or restrictions on the applicant, if in its judgment, the imposition thereof shall foster the sound and balanced development of the national economy on a selfsustaining basis; (5) To submit to the Securities and Exchange Commission certified copies of applicant's charter and by-laws and all amendments thereto, if any, with their translation into an official language within twenty (20) days after their adoption or after the grant of the prescribed certificate by the Board of Investments and annually of applicant's financial statements showing all assets, liabilities and net worth and results of operations, setting out separately those pertaining to the branch office; (6) To keep a complete set of accounting records with the resident agent, which shall fully and faithfully reflect all transactions within the Philippines, and to permit inspections thereof by the Securities and Exchange Commission, the Bureau of Internal Revenue and the Board of Investments; (7) To give priority to resident creditors as against nonresident creditors and owners or stockholders in the distribution of assets within the Philippines upon insolvency, dissolution or revocation of the license; (8) To give the Securities and Exchange Commission at least six (6) months advance notice in writing of applicant's intention to stop doing business within the Philippines; and to give such public notice thereof as the Securities and Exchange Commission may require for the protection of resident creditors and others dealing with the applicant; and

(9) Not to terminate any franchise, licensing or other agreement that applicant may have with a resident of the Philippines authorizing the latter to assemble, manufacture or sell within the Philippines the products of the applicant, except for violation thereof or other just cause and upon payment of compensation and reimbursement of investment and other expenses incurred by the licensee in developing a market for the said products: Provided, however, That in case of disagreement, the amount of compensation or reimbursement shall be determined by the country where the licensee is domiciled or has its principal office who shall require the applicant to file a bond in such amount as, in its opinion, is sufficient for this purpose. The above requirements shall be in addition to those set forth in the Corporation Code of the Philippines for authorizing foreign corporations to transact business in the Philippines. Article 50. Cause for Cancellation of Certificate of Authority or Payment of Fine. A violation of any of the requirements set forth in Article 49 or of the terms and conditions which the Board may impose shall be sufficient cause to cancel the certificate of authority issued pursuant to this Book and/or subject firms to the payment of fines in accordance with the rules and regulations issued by the Board: Provided, however, That aliens or foreign firms, associations, partnerships, corporations or other forms of business organization not organized or existing under the laws of the Philippines which may have been lawfully licensed to do business in the Philippines prior to the effectivity of R.A. 5455, shall, with respect to the activities for which they were licensed and actually engaged in prior to the effectivity of said Act, not be subject to the provisions of Article 48 and 49 but shall be subject to the reporting requirements prescribed by the Board: Provided, further, That where the issuance of said license has been irregular or contrary to law, any person adversely affected thereby may file an action with the Regional Trial Court where said alien or foreign business organization resides or has its principal office to cancel the said license. In such cases, no injunction shall issue without notice and hearing; and appeals and other proceedings for review shall be filed directly with the Supreme Court. TITLE II GENERAL PROVISIONS Article 51. Mergers and Consolidations. The provisions of this Book Two shall apply to any merger, consolidation, syndicate or any other combination of firms, associations, partnership or other forms of business organization that will result in ownership or

control by persons or entities that are not Philippine nationals or have foreign equity participation, of more than forty per cent (40%) of the outstanding capital of whatever organizations results from the merger, consolidation, syndicate or other combination. Article 52. Local Government Action. No agency, instrumentality or political subdivision of the Government shall take any action in conflict with or which will nullify the provisions of Book Two of this Code, or any certificate of authority granted hereunder. Article 53. Automatic Registration. Application filed under this Book shall be considered automatically approved if not acted upon within ten (10) working days from official acceptance thereof. Article 54. Publication and Posting of Notices. Immediately after the application has been given due course by the Board, the Secretary of the Board or any official designated by the Board shall require the applicant to publish the notice of the action of the Board thereon at his expense once in a newspaper of general circulation in the province or city where the applicant has its principal office, and post copies of said notice in conspicuous places, in the office of the Board or in the building where said office is located; setting forth in such copies the name of the applicant, the business in which it is engaged or proposes to engage or invest, and such other data and information as may be required by the Board. No approval or certificate shall be valid without the publication and posting of notices as herein provided.

Article 57. Penal Clause. (1) Without prejudice to the provisions of Articles 42 and 50 hereof a violation of any provision of Books I and II of this Code, or of the terms and conditions of registration, or of the rules and regulations promulgated pursuant thereto, or the act of abetting or aiding in any manner any such violation, shall be punished by a fine not to exceed one hundred thousand pesos (P100,000.00) or imprisonment for not more than ten (10) years, at the discretion of the Court. (2) No official or employee of the government, its subdivisions or instrumentalities shall appear as counsel for or act as agent or representative of, or in any manner intervene or intercede, directly or indirectly, in behalf of any party in any transaction with the Board regarding any application under Books I and II of this Code. The penalty for violation of this prohibition is the same as that provided for in the preceding paragraph. If the offender is an appointive official or employee, the maximum of the penalty herein prescribed shall be imposed, and the offender shall suffer the additional penalty of perpetual disqualification from public office, without prejudice to any administrative action against him.

(3) If the offense is committed by a juridical entity, its president and/or other officials responsible therefor shall be subject to the penalty prescribed above. If the offender or the president/official, in cases where the offense was committed by a juridical entity, is an alien, he shall be deported without further proceedings on the part of the Deportation Board in addition to the penalty Article 55. Limited Authority to do Business. When herein prescribed and shall, if naturalized, be appropriate, the Board may grant permissible automatically denaturalized from the date his sentence investments or authority to do business under Book becomes final. Two of this Code for a limited period where the need to prove economic viability of such activity warrants the (4) Payment of the tax due after apprehension shall not issuance of a temporary authorization. constitute a valid defense in any prosecution for violation of any provision of this Code. Article 56. Periodic Reports. The Board shall periodically check and verify compliance with these BOOK III provisions, either by inspection of the books or by INCENTIVES TO MULTINATIONAL COMPANIES requiring regular reports from aliens or foreign firms, ESTABLISHES REGIONAL OR AREA domestic enterprises with foreign investments and new HEADQUARTERS IN THE PHILIPPINES entities licensed to do business under Article 48 of this Code. CHAPTER I LICENSING OF THE MULTINATIONAL COMPANY A summary of said reports shall be periodically submitted by the Board to the President. For this Article 58. Qualifications of Multinational Company. purpose, the Board may require other government Any foreign business entity formed, organized and agencies licensing and/or regulating foreign enterprises existing under any laws other than those of the or domestic firms with foreign equity, to furnish the Philippines whose purpose, as expressed in its Board with reports on such foreign investments. organizational documents or by resolution of its Board of Directors or its equivalent, is to supervise,

superintend, inspect or coordinate, its own affiliates, subsidiaries, or branches in the Asia-Pacific Region may establish a regional or area headquarters in the Philippines, after securing a license therefor from the Securities and Exchange Commission, upon the favorable recommendation of the Board of Investments. The Securities and Exchange Commission shall, within thirty (30) days from the effectivity of this Code, issue the implementing rules and regulations. The following minimum requirements shall, however, be complied with by the said foreign entity.

converted the same to Philippine currency. Annually, within thirty (30) days from the anniversary date of the multinational company's registration as a regional or area headquarters with the Securities and Exchange Commission, it will submit proof to the Securities and Exchange Commission of inward remittance amounting to at least fifty thousand United States dollars or its equivalent in other foreign currencies during the past year.

(d) Any willful violation by the regional or area headquarters of a multinational company of any of the provisions of this Code, or its implementing rules and (a) A certification from the Philippine Foreign Trade regulations, or other terms and conditions of its Senior Officer or in the absence of such an official, a registration, or any provision of existing laws, shall Philippine Consul in the foreign firm's home country that constitute a sufficient cause for the cancellation of its said foreign firm is an entity engaged in international license or registration. trade with affiliates, subsidiaries or branch offices in the Asia-Pacific Region. CHAPTER II INCENTIVES TO EXPATRIATES (b) A certification from a principal officer of the foreign entity to the effect that the said foreign entity has been Article 59. Multiple entry visa. Foreign personnel of authorized by its Board of Directors or governing copy regional or area headquarters of multinational to establish its regional headquarters in the Philippines, companies, their respective spouses, and unmarried specifying that: children under twenty-one years of age, if accompanying them or if following to join them after 1. The activities of the regional headquarters shall be their admission into the Philippines as non- immigrant limited to acting as a supervisory, communications and shall be issued a multiple entry special visa, valid for a coordinating center for its subsidiaries, affiliates and period of one year, to enter the Philippines: Provided, That a responsible officer or the applicant company branches in the region; submits a certificate to the effect that the person who 2. The headquarters will not derive any income from seeks entry into the Philippines is an executive of the sources within the Philippines and will not participate in applicant company and will work exclusively for any manner in the management of any subsidiary or applicant's company and will work exclusively for applicant's regional or area headquarters which is duly branch office it might have in the Philippines; licensed to operate in the Philippines, and that he will 3. The headquarters shall notify the Board of receive a salary and will be paid by the headquarters in Investments and the Securities and Exchange the Philippines an amount equivalent to at least twelve Commission of any decision to close down or suspend thousand United States dollars, or the equivalent in operations of its headquarters or terminate the services other foreign currencies per annum. of any expatriate at least fifteen (15) days before the The admission and stay shall be co-terminus with the same is effected. validity of the multiple entry special visa. The stay, (c) Any undertaking that the multinational company will however, is extendible yearly upon submission to the remit into the country such amount as may be Commission on Immigration and Deportation of a sworn necessary to cover its operations in the Philippines but certification by a responsible officer of the regional or which amount will not be less than fifty thousand United area headquarters; that its license to operate remains States dollars or its equivalent in other foreign valid and subsisting; that he has been paid in the currencies annually. Within thirty (30) days from receipt Philippines from the date of original admission, the of Certificate of Registration from the Securities and equivalent of at least one thousand United States Exchange Commission, the multinational company will dollars per month, or its equivalent in other foreign submit to the Securities and Exchange Commission a currencies; and that the regional or area headquarters Certificate of inward remittance from a local bank has withheld the tax due on said compensation and the showing that it has remitted to the Philippines the same has been paid to the Bureau of Internal Revenue. amount of at least thirty thousand United States dollars or its equivalent in other foreign currencies and

Non-immigrant who have been admitted under the multiple entry special visa, as well as their respective spouses and dependents, shall be exempt from: the payment of all fees due under the immigration and alien registration laws; securing alien certificates of registration; and obtaining immigration clearance certificates, and all types of clearances required by any government department or agency, except that upon final departure from the Philippines the employer of the said non-immigrants shall so advise in writing the Commission on Immigration and Deportation at least five (5) working days prior to the non-immigrant's departure, and the finally departing non-immigrant employee shall be required to submit to the said office a tax clearance from the Bureau of Internal Revenue.

Article 64. Exemption from Contractor's Tax. The regional or area headquarters established in the Philippines by multinational corporations, including their alien executives, are exempted from the contractor's tax. Article 65. Exemption from all Kinds of Local Licenses Fees, Dues. The regional or area headquarters of multinational companies shall be exempt from all kinds of local licenses, fees, dues, imposts or any other local taxes or burdens. Article 66. Tax and Duty Free Importation of Training Materials; Importation of Motor Vehicles. Regional or area headquarters shall also enjoy tax and duty free importation of equipment and materials for training, conferences which are needed for the functions of the regional or area headquarters and which are not locally available subject to the prior approval of the Board of Investments.

Article 60. Withholding Tax of 15 %. Aliens employed by regional or area headquarters of multinational corporations shall be subject for each taxable year upon their gross income received from the regional or area headquarters established in the Philippines by multinational companies as salaries, wages, annuities, Regional or area headquarters shall be entitled to the compensations, remunerations, and emoluments to a importation of motor vehicles subject to the prior tax equal to fifteen percentum of such gross income. approval of the Board and the payment of the corresponding taxes and duties: Provided, That such Article 61. Tax and Duty Free Importation. An alien motor vehicles shall be for the exclusive use of its executive of the regional or area headquarters of a expatriate executives and that the number thereof shall multinational company shall enjoy tax and duty free not exceed the number of its expatriate executives and importation of personal and household effects as that such motor vehicles may be replaced every three provided for under Section 105 (h) of the Tariff and (3) years from their importation. Customs Code, as amended, and Section 169 (b) (4) of the Internal Revenue Code, as amended. Article 67. Exemption from Registration Requirements. The regional or area headquarters of multinational Article 62. Travel Tax Exemption. Personnel of companies shall be exempt from the provisions of Book multinational companies performing technical and II of this Code. supervisory functions with regional headquarters at, but not engaged in business in the Philippines and the BOOK IV dependents of such foreign personnel if joining them INCENTIVES TO MULTINATIONAL COMPANIES during the period of their assignment in the Philippines, ESTABLISHING REGIONAL WAREHOUSES TO as certified to by the Board of Investments, shall be SUPPLY SPARE PARTS OR MANUFACTURED exempted from the payment of travel tax imposed under COMPONENTS AND RAW MATERIALS TO THE Section 1 of Presidential Decree No. 1183, by securing ASIA-PACIFIC REGION AND OTHER FOREIGN a Travel Tax Certificate from the Philippine Tourism MARKETS Authority. Article 68. Qualifications. A multinational company CHAPTER III organized and existing under any laws other than those INCENTIVES TO THE REGIONAL HEADQUARTERS of the Philippines which is engaged in international trade and supplies spare parts or manufactured Article 63. Exemption from Income Tax. Regional or components and raw materials to its distributors or area headquarters established in the Philippines by markets in the Asia-Pacific Area and other foreign areas multinational corporations and which headquarters do and which has established or will simultaneously not earn or derive income from the Philippines and establish a regional or area headquarters in the which act as supervisory, communications and Philippines in accordance with the provisions of Book III coordinating center for their affiliates, subsidiaries, or of this Code and the rules and regulations implementing branches in the Asia-Pacific Regional shall not be the same may also establish regional warehouse or subject to income tax.

warehouses in the Philippines, after securing a license therefor from the Board of Investments.

Customs the corresponding license fees and storage fees to be determined by said offices.

The following minimum requirements shall be submitted or complied with by the said foreign entity in accordance with the rules and regulations to be issued by the Board of Investments as provided for in Article 7 (2) of this Code.

(d) An application for the establishment of a regional warehouse shall be made in writing to the Board of Investments upon recommendation of the Bureau of Customs. The application shall describe the premises, the location and capacity of the regional warehouse and the purpose for which the building is to be used.

(a) A certification from the Foreign Trade Officer or in the absence of such an official, a Philippine Consul in the foreign firm's home country that said foreign firm is engaged in international trade and supplies or will supply spare parts or manufactured components and raw materials to its distributors or markets in the AsiaPacific Region.

The jurisdiction and responsibility of supervising the regional warehouses shall be vested on the Bureau of Customs.

The Board of Investments, in consultation with the Regional Director of Customs of the district where the warehouse will be situated shall cause an examination (b) A certification from a principal officer of the foreign of the premises to be made with reference particularly entity to the effect that said foreign entity has been to the location, construction and means provided for the authorized by its Board of Directors or governing body safekeeping of its articles and if found satisfactory, it to establish its regional warehouse in the Philippines, may authorize its establishment without complying with specifying that: the requirements of any other government body and aimed at providing speedy procedure for its 1. The activities of the regional warehouse shall be establishment, subject to the following conditions: limited to serving as a supply depot for the storage, deposit, safekeeping of its spare parts or manufactured 1) That the articles to be stored in the warehouse are components and raw materials including the packing, spare parts or manufactured components and/or raw covering, putting up, marking, labelling and cutting or materials of the multinational company operator for altering to customer's specification, mounting and/or distribution and supply to its Asia-Pacific markets packaging into kits or marketable lots thereof, to fill up including packaging, coverings, brands, labels and transactions and sales made by its head offices or warehouse equipment as provided in Art. 69 (a) hereof; parent companies and to serving as a storage or warehouse of goods purchased locally by the home 2) That the entry or importation, storage or re-export of office of the multinational for export abroad; Provided, the goods destined for or to be stored in the regional That said locally purchased goods for export may be warehouse will not involve any dollar outlay from stored in the regional warehouse only after they have Philippine sources; been cleared for export in accordance with the laws and regulations, including those of the Central Bank and 3) That they are of such character as to be readily simplified procedures governing exports. The regional identifiable for re-export; and in case of local distribution warehouse shall not directly engage in trade nor directly they shall be subject to Article 69 paragraph (b) and the solicit business, promote any sale, nor enter into any guidelines implementing Book IV of this Code; contract for the sale or disposition of goods in the Philippines. 4) That they shall be allowed provisional entry expeditiously by means of a pro forma invoice of the 2. The regional warehouse will not derive any income parent company, identified, examined and appraised by from the sources within the Philippines and its the Regional Collector of Customs and they shall be personnel will not participate in any manner in the directly delivered to and kept in the regional management of any subsidiary, affiliate or branch office warehouses and released therefrom only in accordance it might have in the Philippines. with Article 69 paragraphs (a) and (b) and the guidelines implementing Book IV of this Code; 3. The personnel of the regional headquarters shall be responsible for the operation of the regional warehouse In the absence of a Regional Collector of Customs subject to the provisions of this Code. where the volume of the establishment of regional warehouses does not yet warrant the creation of said (c) The multinational company shall pay the Board of offices, the duties of the Regional Collector of Customs Investments and the appropriate Regional Collector of

shall be performed by the Collector of Customs of the district where the regional warehouse will be located. 5) Each shipment of goods which will be stored in the regional warehouse shall be covered by an affidavit of the multinational company operator setting forth that said articles shall be exclusively used as supply for its Asia-Pacific markets and stating the C & F price thereof; 6) That it shall file an ordinary warehousing bond in an amount equal to ONE HUNDRED PER CENT (100%) of the ascertained customs duties on the articles imported without prejudice to its filing a general warehousing bond in lieu of the ordinary warehousing bond.

subject to the payment of customs duties, taxes and other charges and for which purpose, the proper commercial invoice of the head offices or parent companies shall be submitted to the Regional Collector of Customs; and shall be subject to laws and regulations governing imported merchandise, Provided, that in case any of the foregoing items are sold, bartered, hired or used for purposes other than they were intended for without prior compliance with the guidelines implementing Book IV of this Code and without prior payment of the duty, tax or other charge which would have been due and payable at the time of entry if the articles had been entered without the benefit of this decree, shall be subject to forfeiture and the importation shall constitute a fraudulent practice against customs revenue punishable under Section 3602, as amended, of the Tariff and Customs Code of the Philippines; Provided, further, that a sale pursuant to a judicial order shall not be subject to the preceding proviso without prejudice to the payment of duties, taxes and other charges.

7) The percentage of annual allowable withdrawal for domestic use shall be subject to the approval of the Board of Investments; Provided, however, That in no case shall such withdrawals exceed thirty per cent (30%) of the value of goods it has brought in for any given year and the payment of the corresponding taxes Article 70. Exemption from the Maximum Storage and duties. Period under the Tariff and Customs Code; Period of Article 69. Tax Treatment of Imported Articles in the Storage in the Regional Warehouse. The provision of the law in Section 1908 of the Tariff and Customs Code Regional Warehouse. of the Philippines, as amended, to the contrary (a) Tax Incentives for Qualified Goods Destined for Re- notwithstanding, articles duly entered for warehousing exportation to the Asia-Pacific and other Foreign may remain in the regional warehouses for a period of Markets. Except as otherwise provided in this Code, two (2) years from the time of their transfer to the imported spare parts or manufactured components, raw regional warehouse, which period may be extended materials and other items including any packages, with the approval of the Board of Investments for an coverings, brands and labels and warehouse additional period of one (1) year upon payment of the equipment as may be allowed by the Board of corresponding storage fee on the unexported articles, Investments for the use exclusively on the goods as provided for under Article 68 paragraph (c) for each stored, except those prohibited by law, brought into the extension until they are re-exported in accordance with regional warehouse from abroad to be kept, stored the guideline implementing Book IV of this Code. Any and/or deposited or used therein and re-exported article, withdrawn, release or removed contrary to the directly therefrom under the supervision of the Regional provisions of said guidelines shall be forfeited pursuant Collector of Customs for distribution to its Asia-Pacific to the provisions of Article 69, paragraph (b) hereof. and other foreign markets in accordance with the guidelines implementing Book IV of this Code including Article 71. Rules and Regulations on the Jurisdiction, to a bonded manufacturing warehouse in the Operation and Control over Qualified Goods Stored in Philippines and eventually re-exported shall not be the Regional Warehouse. The Board of Investments subject to customs duty, internal revenue tax, export tax and the Bureau of Customs shall jointly issue special nor to local taxes, the provisions of law to the contrary rules and regulations on the receiving, handling, custody, entry, examinations, classifications, delivery, notwithstanding. storage, warehousing, manipulation and packaging, (b) Payment of Applicable Duties and Taxes on release for re-exportation and for the safekeeping, Qualified Goods subject to Laws and Regulations recording, inventory and liquidation of said qualified Covering Imported Merchandise if destined for the goods, any existing law notwithstanding. Such rules Local Market. Any spare parts, manufactured and regulations shall be formulated in consultation with components, raw materials and other items sent, the applicants/operators of regional warehouses in delivered, released or taken from the regional order to be responsive to the objective of providing a warehouse to the local market in accordance with the procedure for the speedy inflow and outflow of the guidelines implementing Book IV of this Code shall be qualified goods which are destined for the Asia-Pacific

and other foreign markets and keeping a proper balance between promoting the Philippines as a center for multinational regional warehouses and safeguarding the revenue laws of the country. lawphi1.net The Commissioner of customs is directed is directed to expedite the immediate re-exportation or transhipment of the foregoing goods destined for regional warehousing to their Asia-Pacific and other foreign markets, including the emergency withdrawal for reexportation by air and ship and the partial liquidation of bonds adopting simplified export procedures therefor. Article 72. Penalties. Any willful violation by the regional or area headquarters of a multinational company which has established regional warehouse or warehouses of the provisions of existing laws and the implementing guidelines of Book IV of this Code shall constitute a sufficient cause for the cancellation of its license or registration in addition to the penalties hereinabove provided in Article 69, paragraph (b) hereof.

Article 75. Reportorial Requirements. As a holder of the Special Investors Resident Visa, an alien shall be entitled to reside in the Philippines while his investment subsists. For this purpose, he should submit an annual report, in the form fully prescribed for the purpose, to prove that he has maintained his investment in the country. Should said alien withdraw his said investment from the Philippines, then the Special Investors Resident Visa issued to him will automatically expire. BOOK VI INCENTIVES OF EXPORT PROCESSING ZONE ENTERPRISES

Article 76. Employment of Foreign Nationals. The provisions of law to the contrary notwithstanding, Export Processing Zone Authority, hereinafter referred to as the "Authority" may authorize an alien or an association, partnership, corporation or any other form of business organization formed, organized, chartered or existing under any law other than those of the Philippines, or which is not a Philippine national, or the working capital of which id fully owned or controlled by aliens to do Article 73. The regional or area headquarters of business or engage in an industry inside the export multinational companies establishing regional processing zone. warehouses shall be exempt from the provisions of Book II of this Code. Subject to the provisions of Section 29 of Commonwealth Act No. 613, as amended, an enterprise, a zone registered enterprise may employ BOOK V foreign nationals in supervisory, technical or advisory SPECIAL INVESTORS RESIDENT VISA positions for a period not exceeding five (5) years from Article 74. Qualifications. Any alien who possesses the its registration, extendible for limited periods at the following qualifications may be issued a Special discretion of the Authority: Provided, however, That when the majority of the capital stock of a zone Investors Resident Visa. registered enterprise is owned by foreign national, the 1. He had not been convicted of a crime involving moral positions of president, treasurer, and general manager or their equivalents may be retained by foreign nationals turpitude; beyond the period set forth herein. 2. He is not afflicted with any loathsome, dangerous or Foreign nationals employed within the purview of this contagious disease; Book, their spouses, and unmarried children under 3. He has not been institutionalized for any mental twenty-one years of age who are not excluded by Sec. 29 of C.A. No. 613, as amended, shall be permitted to disorder or disability; enter and reside in the Philippines during the period of 4. He is willing and able to invest the amount of at least employment of such foreign nationals. They shall be US$75,000.00 in the Philippines; Provided, That the issued a multiple entry visa, valid for a period of three foregoing invested amount shall be lowered to years, to enter and leave the Philippines without further US$50,000 for aliens availing of Executive Order No. 63 documentary requirements other than valid passports and Executive Order No. 1037 subject to the conditions or other travel documents in the nature of passports. imposed by said legislations: Provided, further, That for The validity of the multiple entry special visa shall be purposes of compliance with this particular condition, extendible yearly. Foreign Nationals who have been the alien-applicant should prove that he has remitted issued multiple entry special visas under this provision, such amount in acceptable foreign currency to the as well as their respective spouses and dependents, shall be exempt from obtaining alien certificates and all Philippines. types of clearances required by any government department or agency. For this purpose, the

Commission on Immigration and Deportation and the (6) Subject to such regulations respecting identity and authority shall jointly issue the necessary implementing safeguarding of the revenue as the Authority may deem rules and regulations. necessary when the identity of an article entered into the export processing zone under the immediately A registered enterprise shall train Filipinos as preceding paragraph has been lost, such article when understudies of foreign nationals in administrative, removed from the zone and taken to the customs supervisory and technical skills and shall submit annual territory shall be treated as foreign merchandise entering the country for the first time, under the reports of such training to the Board. provisions of the Tariff and Customs Code. Article 77. Tax Treatment of Merchandise in the Zone. (7) Articles produced or manufactured in the zone and (1) Except as otherwise provided in this Code, foreign exported therefrom shall, on subsequent importation and domestic merchandise, raw materials, supplies, into the customs territory, be subject to the import laws articles, equipment, machineries, spare parts and applicable to like articles manufactured in a foreign wares of every description, except those prohibited by country; law, brought into the zone to be sold, stored, broken up, repacked, assembled, installed, sorted, cleaned, (8) Unless the contrary is shown, merchandise taken graded, or otherwise processed, manipulated, out of the zone shall be considered for tax purposes to manufactured, mixed with foreign or domestic have been sent to customs territory. lawphi1.net merchandise whether directly or indirectly related in such activity, shall not be subject to customs and Article 78. Additional Incentives. A zone registered internal revenue laws and regulations nor to local tax enterprise shall also enjoy all the incentive benefits ordinances, the provisions of law to the contrary provided in Article 39 hereof under the same terms and notwithstanding. conditions stated therein. In addition zone registered enterprises shall also be entitled to the following: (2) Merchandise purchased by a registered zone enterprise from the customs territory and subsequently (a) Exemption from Local Taxes and Licenses. brought into the zone, shall be considered as export Notwithstanding the provisions of law to the contrary, sales and the exported thereof shall be entitled to the zone registered enterprise shall, to the extent of their benefits allowed by law for such transaction. construction, operation or production inside the zone be exempt from the payment of any and all local (3) Domestic merchandise sent from the zone to the government imposts, fees, licenses or taxes except real customs territory shall, whether or not combined with or estate taxes which shall be collected by the made part of other articles likewise of local origin or Province/City/Municipality responsible for the collection manufactured in the Philippines while in the export thereof under the provisions of the Real Property Tax processing zone, be subject to internal revenue laws of Code: Provided, That machineries owned by zone the Philippines as domestic goods sold, transferred or registered enterprises which are actually installed and operated in the Zone for manufacturing, processing or disposed of for local consumption. for industrial purposes shall not be subject to the (4) Merchandise sent from the export processing zone payment of real estate taxes for the first three (3) years to the customs territory shall, whether or not combined of operation of such machineries: Provided, further, with or made part of other articles while in the zone, be That fifty percent (50%) of the proceeds of the real subject to rules and regulations governing imported estate taxes collected from all real properties located in merchandise. The duties and taxes shall be assessed the Zone and such other areas owned or administered on the value of imported materials (except when the by the Authority shall be remitted to the Authority by the final product is exempt) and the internal revenue taxes province/city/municipality responsible for the collection of such taxes under the provisions of the Real Property on the values added. Tax Code. All real estate taxes accruing to the Authority (5) Domestic merchandise on which all internal revenue as herein provided shall be expanded for such taxes have been paid, if subject thereto, and foreign community facilities, utilities and/or services as the merchandise previously imported on which duty or tax Authority may determine. has been paid, or which have been admitted free of duty and tax, may be taken into the zone from the customs (b) Production equipment or machineries, not attached territory of the Philippines and be brought back thereto to real estate, used directly or indirectly, in the production, assembly or manufacture of the registered free of quotas, duty or tax.

product of the zone registered enterprise shall be exempt from real property taxes.

1) Batas Pambansa 44 2) Batas Pambansa 391 (1983)

FINAL PROVISIONS 3) Presidential Decree 218 Article 79. Interpretation. All doubts concerning the benefits and incentives granted enterprises and investors by this Code shall be resolved in favor of investors and registered enterprises.

4) Presidential Decree 1419 5) Presidential Decree 1623, as amended

Article 80. Vested Rights. Existing registered 6) Presidential Decree No. 1789 (1981) enterprises which are enjoying the incentives under the laws repealed by Books One and Six of this Code shall 7) Presidential Decree 2032 continue to enjoy such incentives for the period therein stated: Provided, however, That firms which made 8) Executive Order 815 investments in new or expansion projects approved or registered by the Board of the Authority on or after 9) Executive Order 1945 (1985) December 1, 1986 but before the effectivity of this Code may opt to be governed by the provisions of this Code. All other laws, decrees, executive orders, administrative orders, rules and regulations or parts thereof which are Article 81. Confidentiality of Applications. All inconsistent with the provisions of this Code are hereby applications and their supporting documents filed under repealed, amended or modified this Code shall be confidential and shall not be accordingly. lawphi1.net disclosed to any person, except with the consent of the applicant or on orders of a court of competent Article 86. Effectivity. This Code shall take effect jurisdiction. immediately upon approval. Article 82. Judicial Relief. All orders or decisions of the DONE in the City of Manila, this 16th day of July, in the Board in cases involving the provisions of this Code year of Our Lord, nineteen hundred and eighty-seven. shall immediately be executory. No appeal from the order or decision of the Board by the party adversely affected shall stay such order or decision: Provided, That all appeals shall be filed directly with the Supreme Court within thirty (30) days from receipt of the order or decision. Article 83. Effectivity of Implementing Rules and Regulations. The Board shall promulgate rules and regulations to implement the intent and provisions of this Code and shall have the authority to impose such fines in amounts that are just and reasonable in cases of late submission or non-compliance on the part of registered enterprises, with reporting and other requirements under this Code and its implementing rules and regulations. Such rules and regulations shall take effect fifteen (15) days following its publication in newspaper of general circulation in the Philippines. Article 84. Separability Clause. The provisions of this Code are hereby declared to be separable and, in the event any such provisions is declared unconstitutional, the other provisions which are not affected thereby shall remain in force and effect. Article 85. Repealing Clause. The following provisions or laws are hereby repealed:

Republic of the Philippines Congress of the Philippines Metro Manila Twelfth Congress Second Regular Session Begun and held in Metro Manila, on Monday, the twenty-second day of July, two thousand two. Republic Act No. 9178

For the purpose of this Act, "service" shall exclude those rendered by any one, who is duly licensed government after having passed a government licensure examination, in connection with the exercise of one's profession. (b) "Certificate of Authority" is the certificate issued granting the authority to the registered BMBE to operate and be entitled to the benefits and privileges accorded thereto.

November 13, 2002

AN ACT TO PROMOTE THE ESTABLISHMENT OF BARANGAY MICRO BUSINESS ENTERPRISES (BMBEs), PROVIDING INCENTIVES AND BENEFITS THEREFOR, AND FOR OTHER PURPOSES. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled. PRELIMINARY PROVISIONS Section 1. Short Title – This Act shall be known as the "Barangay Micro Business Enterprises (BMBE's) Act of 2002." Section 2. Declaration of Policy – It is hereby declared to be the policy of the State to hasten the country's economic development by encouraging the formation and growth of barangay micro business enterprises which effectively serve as seedbeds of Filipino entrepreneurial talents, and intergranting those in the informal sector with the mainstream economy, through the rationalization of bureaucratic restrictions, the active granting of incentives and benefits to generate muchneeded employment and alleviate poverty. Section 3. Definition of Terms – As used in this Act, the following terms shall mean: (a) "Barangay Micro Business Enterprise," hereinafter referred to as BMBE, refers to any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agroprocessing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are situated, shall not be more than Three Million Pesos (P3,000,000.00) The Above definition shall be subjected to review and upward adjustment by the SMED Council, as mandated under Republic Act No. 6977, as amended by Republic Act No. 8289.

(c) "Assets" refers to all kinds of properties, real or personal, owned by the BMBE and used for the conduct of its business as defined by the SMED Council: Provided, That for the purpose of exemption from taxes and fees under this Act, this term shall mean all kinds of properties, real or personal, owned and/or used by the BMBE for the conduct of its business as defined by the SMED Council. (d) "Registration" refers to the inclusion of BMBE in the BMBE Registry of a city or municipality. (e) "Financing" refers to all borrowings of the BMBE from all sources after registration. REGISTRATION AND OPERATION OF BMBE Section 4. Registration and Fees - The Office of the Treasurer of each city or municipality shall register the BMBE's and issue a Certificate of Authority to enable the BMBE to avail of the benefits under this Act. Any such applications shall be processed within fifteen (15) working days upon submission of complete documents. Otherwise, the BMBEs shall be deemed registered. The Municipal or City Mayor may appoint a BMBE Registration Officer who shall be under the Office of the Treasurer. Local government units (LGU's) are encouraged to establish a One-Stop-business Registration Center to handle the efficient registration and processing of permits/licenses of BMBEs. Likewise, LGUs shall make a periodic evaluation of the BMBE's financial status for monitoring and reporting purposes. The LGUs shall issue the Certificate of Authority promptly and free of charge. However, to defray the administrative costs of registering and monitoring the BMBEs, the LGUs may charge a fee renewal. The Certificate of Authority shall be effective for a period of two (2) years, renewable for a period of two (2) years for every renewal.

As much as possible, BMBEs shall be subject to compliance to Presidential Decree no, 717,, otherwise minimal bureaucratic requirements and reasonable known as the Agri-Agra Law, or to Republic Act. No. fees and charges. 6977, known as the Magna Carta for Small and Medium Enterprises, as amended. For purposes of compliance Section 5. Who are Eligible to Register – Any person, with presidential Decree no. 717 and Republic Act No. natural or juridical, or cooperative, or association, 6977, as amended, loans granted to BMBEs under this having the qualifications as defined in Section 3(a) Act shall be computed at twice the amount of the face value of the loans. hereof may apply for registration as BMBE. Section 6. Transfer of Ownership - The BMBE shall report to the city or municipality of any changer in the status of its ownership structure, and shall surrender the original copy of the BMBE Certificate of Authority for notation of the transfer. INCENTIVES AND BENEFITS

To minimize the risks in lending to the BMBEs, the SBGFC and the Quedan and Rural Credit Guarantee Corporation (QUEDANCOR) under the Department of Agriculture, in case of agribusiness activities, shall set up a special guarantee window to provide the necessary credit guarantee to BMBEs unde rtheir respective guarantee programs.

Section 7. Exemption from Taxes and Fees – All The LBP, DBP. PCFC, SBGFC, SSS, GSIS, and BMBEs shall be exempt from tax for income arising QUEDANCOR shall annually report to the appropriate Committee of Both Houses of Congress on the status from the operations of the enterprise. of the implementation of this provision. The LGUs are encouraged either to reduce the amount of local taxes, fees and charges imposed or to exempt The BSP shall formulate the rules for the implementation of this provision and shall likewise BMBEs from local taxes, fees and charges. establish incentive programs to encourage and improve Section 8. Exemption from the Coverage of the credit delivery to the BMBEs. Minimum Wage Law – The BMBEs shall be exempt from the coverage of the Minimum Wage Section 10. Technology Transfer, Production and Law: Provided, That all employees covered under this Management Training, and marketing Assistance – A Act shall be entitled to the same benefits given to any BMBE Development Fund shall be set up with an regular employee such as social security and endowment of Three Hundred Million pesos (P300,000,000.00) from the Philippine Amusement and healthcare benefits. Gaming Corporation (PAGCOR) and shall be Section 9. Credit Delivery – upon the approval of this administered by the SMED Council. Act, the land Bank of the Philippines (LBP), the Development Bank of the Philippines (DBP), the Small The Department of Trade and Industry (DTI), the Business Guarantee and Finance Corporation Department of Science and Technology (DOST), the (SBGFC), and the People's Credit and Finance university of the Philippines Institute for Small Scale Corporation (PCFC) shall set up a special credit window Industries (UP ISSI), Cooperative Development that will service the financing needs of BMBEs Authority (CDA), Technical Education and Skills registered under this Act consistent with the Banko Development Authority (TESDA), and Technology and Sentral ng Pilipinas (BSP) policies; rules and Livelihood Resource Center (TLRC) may avail of the regulations. The Government Service Insurance said Fund for technology transfer, production and System (GSIS) and Social Security System (SSS) shall management training and marketing assistance to likewise set up a special credit window that will serve BMBEs. the financing needs of their respective members who wish to establish a BMBE. The concerned financial The DTI, in coordination with the private sector and noninstitutions (FIs) encouraged to wholesale the funds to government organization (NGOs), shall explore the accredited private financial institutions including possibilities of linking or matching-up BMBEs with community-based organizations such as credit, small, medium and large enterprises and likewise cooperatives, non-government organizations (NGOs) establish incentives therefor. and people's organizations, which will in turn, directly provide credit support to BMBEs. The DTI, in behalf of the DOST, UP ISSI, CDA. TESDA and TLRC shall be required to furnish the appropriate All loans from whatever sources granted to BMBEs Committees of both Houses of Congress a yearly report under this Act shall be considered as part of alternative on the development and accomplishments of their

projects and programs in relation to technology transfer, Section 16. Separably Clause - If any provision or part production and management training and marketing hereof, is held invalid or unconstitutional, the remainder assistance extended to BMBEs. of the law or the provision not otherwise affected shall remain valid and subsisting. Section 11. Trade and Investment Promotions – The data gathered from business registration shall be made Section 17. Repealing Clause – Existing laws, accessible to and shall be utilized by private sector presidential decrees, executive orders, proclamations organizations and non-government organizations for or administrative regulations that are inconsistent with purposes of business matching, trade and investment the provisions of this Act are hereby amended, promotion. modified, superseded or repealed accordingly. Section 18. Effectivity – This Act shall take effect fifteen (15) days after its publication in the Office Gazette or in Section 12. Information Dissemination - The Philippine at least two (2) newspaper of general circulation. Information Agency (PIA), in accordance with the Department of Labor and Employment (DOLE), the DILG and the DTI, shall ensure the proper and adequate information dissemination of the contents and benefits of this Act to the general public especially to its Approved, intended beneficiaries specifically in the barangay level. FRANKLIN DRILON JOSE DE VENECIA JR. PENALTY President of the Senate Speaker of the House of Representatives Section 13. Penalty - Any person who shall willfully violates any provision of this Act or who shall in any manner commit any act to defeat any provisions of this Act shall, upon conviction, be punished by a fine of not This Act, which is a consolidation of Senate Bill No. less than twenty-five Thousand Pesos (P25,000.00) but 1855 and House Bill No. 4871 was finally passed by the not more than Fifty Thousand Pesos (P50,000.00) and Senate and the House of Representatives on October suffer imprisonment of not less than six (6) months but 24, 2002 and October 23, 2002, respectively. not more than two (2) years. INFORMATION DISSEMINATION

OSCAR G. YABES ROBERTO P. NAZARENO In case of non-compliance with the provisions of Secretary of Senate Secretary General Section 9 of this Act, the BSP shall impose House of Represenatives administrative sanctions and other penalties on the concerned government financial institutions, including a Approved: November 13, 2002 fine of not less than Five Hundred Thousand Pesos (P500,000.00) GLORIA MACAPAGAL-ARROYO President of the Philippines MISCELLANEOUS PROVISIONS Section 14. Annual Report – The DILG, DTI, and BSP shall submit an annual report to the Congress on the status of the implementation of this Act. Section 15. Implementing Rules and Regulations – The Secretary of the Department of Trade and Industry, in consultation with the Secretaries of the DILG, DOF, and the BSP Governor shall formulate the necessary ruled and regulations to implement the provisions of this Act within ninety (90) days after its approval. The rules and regulations issued pursuant to this section shall take effect fifteen (15) days after its publication in a newspaper of general circulation.