Republic of the Philippines Further declares that it is the duty of the family to take

CONGRESS OF THE PHILIPPINES care of its elderly members while the State may design
Metro Manila programs of social security for them.

Fourteenth Congress "Consistent with these constitutional principles, this Act

Third Regular Session 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 "(5) in actual fare for land transportation travel in public
supportive care provided to the senior citizen patient at utility buses (PUBs), public utility jeepneys (PUJs),
home by licensed health care professionals to include, taxis, Asian utility vehicles (AUVs), shuttle services and
but not limited to, physicians, nurses, midwives, public railways, including Light Rail Transit (LRT), Mass
physical therapist and caregivers; and 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 "(6) in actual transportation fare for domestic air
permanent source of income, compensation or financial transport services and sea shipping vessels and the
assistance from his/her relatives to support his/her like, based on the actual fare and advanced booking;
basic needs, as determined by the Department of Social
Welfare and development (DSWD) in consultation with "(7) on the utilization of services in hotels and similar
the National Coordinating and Monitoring Board." 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. - "(9) on funeral and burial services for the death of senior
citizens;
The senior citizens shall be entitled to the following:
"(b) exemption from the payment of individual income "(j) to the extent possible, the government may grant
taxes of senior citizens who are considered to be special discounts in special programs for senior citizens
minimum wage earners in accordance with Republic on purchase of basic commodities, subject to the
Act No. 9504; 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
amended, and other laws, rules and regulations. geriatric ward may be used for emergency purposes,
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 appointed by the mayor for a term of three (3) years
Communications (DOTC) shall develop a program to without reappointment but without prejudice to an
assist senior citizens to fully gain access to public extension if exigency so requires. Said appointee shall
transport facilities. be chosen from a list of three (3) nominees as
recommended by a general assembly of senior citizens
"(g) Incentive for Foster Care organizations in the city or municipality.

"The government shall provide incentives to individuals "The head of the OSCA shall be appointed to serve the
or nongovernmental institution caring for or establishing interest of senior citizens and shall not be removed or
homes, residential communities or retirement villages replaced except for reasons of death permanent
solely for, senior citizens, as follows: 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
from the first year of operation; and "The head of the OSCA shall be entitled to receive an
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
home, residential community or retirement village. "The head of the OSCA shall be assisted by the City
Social Welfare and Development officer or by the
"(h) Additional Government Assistance Municipal Social Welfare and Development Officer, in
coordination with the Social Welfare and Development
"(1) Social Pension Office.

"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 "(a) To plan, implement and monitor yearly work
national health insurance program of PhilHealth. The programs in pursuance of the objectives of this Act;
LGUs where the indigent senior citizens resides shall
allocate the necessary funds to ensure the enrollment "(b) To draw up a list of available and required services
of their indigent senior citizens in accordance with the which can be provided by the senior citizens;
pertinent laws and regulations.
"(c) To maintain and regularly update on a quarterly
"(3) Social Safety Nets basis the list of senior citizens and to issue national
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
guidelimes to be issued by the DSWD." to senior citizens;

Section 6. Section 6 of the same Act, as amended, is "(f) To report to the mayor, any individual,
heeby further amended to read as follows: establishments, business entity, institutions or agency
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 "(a) Chairperson - the Secretary of the DSWD or an
with the privileges under this Act before the Department authorized representative;
of Justice (DOJ), the Provincial Prosecutor's Office, the
regional or the municipal trial court, the municipal trial "(b) Vice Chairperson - the Secretary of the Department
court in cities, or the municipal circuit trial court." 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
established which shall be composed of the following: Appropriations Act (GAA): Provided, further, That the
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 LIRIO-

BARUA-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 a) To recognize the rights of senior citizens to take their

TITLE, PURPOSE AND CONSTRUCTION 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;
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;

Article 3. Construction. - These Rules shall be e) To provide a comprehensive health care and
construed and applied in accordance with and in rehabilitation system for senior citizens with disability to
furtherance of the policies and objectives of the law. In foster their capacity to attain a more meaningful and
case of conflict or ambiguity, the same shall be productive ageing; and
construed liberally and in favor of the senior citizens.
f) To recognize the important role of the private and the
RULE II non-government sector in the improvement of the
DECLARATION OF POLICIES AND OBJECTIVES 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 non-
under 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
municipality where the elderly resides; intended for use in the diagnosis, cure, mitigation,
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,
senior citizen concerned; and parts, or accessories.

c) Other valid documents that establish the senior 5.10 MEDICAL SERVICES - refer to public and private
citizen or elderly person as a citizen of the Republic and hospital services, professional services of physicians
at least sixty (60) years of age, which shall include but and other health care professionals, and diagnostic and
not be limited to the following government-issued laboratory tests that are requested by a physician as
identification documents indicating an elderly's necessary for the diagnosis and/or treatment of an
birthdate or age: driver's license, voters ID, SSS/GSIS illness or injury.
ID, PRC card, postal ID.
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 and desires of retirees, which may include services
Echo, gastroenterology, blood chemistry exams, such as clubhouses, swimming pools, arts and crafts,
histopathology and immunopathology, hematology, boating, walking trails, golf courses, active adult retail
urine analysis, parasitology and bacteriology test, and and on-site medical services.
serology.
5.18 GROUP HOMES - refer to a community-based
5.13 OFFICE FOR SENIOR CITIZENS AFFAIRS alternative living arrangement to institutional care. It can
(OSCA) - refers to the office established in cities and be a transit home for a definite period for neglected
municipalities under the Office of the Mayor headed by older persons while the necessary services of locating
a senior citizen. relatives and care management is ongoing. It envisions
responding to the needs of the senior citizens who have
5.14 NON_GOVERNMENTAL ORGANIZATION or been abandoned, have no families to return to or to
NGO - refers to any private entity, which is non-profit whose family reunification is not suitable, and are
and voluntary in nature dedicated to the promotion, assessed to be needing group living experience. The
enhancement and support of the welfare of senior program enables a minimum of 6 and a maximum of 10
citizens, duly registered with any regulatory body. clients discharged from a residential care facility to live
together and manage their group living activities with
For purposes of the Act and its Rules, an ACCREDITED minimal supervision from the agency social worker.
NGO refers to any private non-stock non-profit
organization, regional or national in scope, mainly 5.19 FOSTER CARE - refer to a social work
providing services for senior citizens, duly registered intervention which provides for a planned substitute or
with the Securities and Exchange Commission (SEC), alternative family care by a licensed foster family to a
Cooperative Development Authority (CDA), or any neglected, abandoned, unattached and poor older
appropriate government regulatory body and registered person.
or licensed with, and with programs accredited by, the
Department of Social Welfare and Development 5.20 RESIDENTIAL CARE FACILITY - refers to facility
(DSWD). 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 reportorial requirements, and a system for claiming tax
Republic Act No. 7581 or The Price Act. deductions.

5.24 NEAREST SURVIVING RELATIVE - refers to the Section 1. MEDICAL_RELATED PRIVILEGES

closest person related to the deceased senior citizen by
blood or affinity, such as the legal spouse who survives (a) MEDICINE AND DRUG PURCHASES - The 20%
the deceased senior citizen: Provided, That where no discount and VAT exemption shall apply to the
spouse survives the decedent, this shall be limited to purchase of generic or branded medicines and drugs by
relatives in the following order of degree of kinship: or for senior citizens, including the purchase of
children, parents, siblings, grandchildren, uncles and influenza and pneumococcal vaccines. The 20%
aunts. 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
his/her duly authorized representative, shall present as Philippine Health Insurance Corporation
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
nationwide. as deemed necessary in keeping with the changes,
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
availment of senior citizens. come up with the appropriate Revenue Regulations for
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
PRIVILEGES authorization in favor of another person who is not a
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 "pre-
these 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
and VAT exemption, if applicable. for his/her exclusive consumption and to enable
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
applicable. IDs, each shall be entitled to a 20% discount and
exemption from Value Added Tax.
Section 3. HOTELS, RESTAURANTS,
RECREATIONAL CENTERS, AND PLACES OF (f) The 20% discount shall apply to Take-Out/Take-
LEISURES, AND FUNERAL SERVICES Home/Drive-Thru orders as long as it is the senior
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
its implementation to ensure compliance herewith. apply subject to certain conditions; i.e. senior citizen ID
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 Article 9. NO DOUBLE DISCOUNTS - In the purchase
senior citizen entitled to the 20% discount. 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
availed of by senior citizens, including professional feesSection 7. PRIVILEGES ON GRANTING SPECIAL
of attending doctors in all government hospitals, DISCOUNTS IN SPECIAL PROGRAMS - To the extent
medical facilities, outpatient clinics, and home health possible, the government may grant special discounts
care services, shall be provided free of charge to senior in special programs for senior citizens on purchase of
citizens. These shall be in accordance with the rules basic necessities and prime commodities, subject to the
and regulation to be issued by the DOH, in coordination guidelines to be issued for the purpose by the DTI and
with the PHILHEALTH. 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
Rules, administer free vaccinations against the Section 8. EXPRESS LANES PRIVILEGES -
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

The DOH shall enjoin all government and private Section 1. Five (5%) Discount - The grant of a
hospitals, as well as other health facilities to post, minimum of five percent (5%) discount relative to the
publish or print out a schedule of health benefits and monthly utilization of water and electricity by
privileges i.e., laboratory and diagnostic test fees, which households with senior citizens; Provided, That the
should be regularly updated. These postings and individual meters for the foregoing utilities are
publications shall be clearly identified in the guidelines. registered in the name of the senior citizen residing
therein: provided, further, that the monthly consumption
Section 5. EDUCATIONAL PRIVILEGES - Educational does not exceed one hundred kilowatt hours (100 kWh)
assistance shall be granted to senior citizens to pursue of electricity and thirty cubic meters (30m') of water:
post secondary, post tertiary, as well as vocational or Provided, furthermore, that the privilege is granted per
technical education in both public and private schools household regardless of the number of senior citizens
through provision of scholarships, grants, financial aid, residing therein.
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 DOST-
utilities/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 non-
within (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 non-
formal 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 d) Substitute family care in the form of residential care,
health personnel in relation to the care and health group homes, or foster homes for the abandoned,
problems of senior citizens; 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
gerontology, and health needs of senior citizens; caregiving and technical vocational schools.

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
throughout the country; and male and female senior citizens. The Home
Development Mutual Fund (HDMF) shall promote the
h) Provision of accessible express lanes, or establishment of elderly residence and shall review its
prioritization, in all health facilities. existing circulars particularly the limitation of the age
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
Article 16. SOCIAL SERVICES citizens which include the establishment/donation of
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,
The components of these programs are: Abused, Unattached and Poor Older Persons and
Persons with Disabilities" promulgated on May 16,
a) Self and social enhancement services which provide 2002.
senior citizens opportunities for socializing, organizing,
creative expression, and improvement of self; Article 18. ACCESS TO PUBLIC TRANSPORT

b) After care services for senior citizens who are The DOTC and its attached agencies and sectoral
discharged from the homes/institutions for the aged, officers shall improve the implementation or programs
especially those who have problems of reintegration to assist senior citizens to fully gain access in the use
with family and community, wherein both the senior of public transport facilities. The minimum requirements
citizens and their families are provided with counseling; 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
and transport system. As far as practicable, PUVs shall also
strive to install safe lower stepping boards.
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 Section 4. DEATH BENEFIT ASSISTANCE - Death
provide the necessary guidelines, shall provide benefit assistance of a minimum of Two thousand
incentives to persons or NGO institutions implementing pesos (Php 2, 000.00) shall be given to the nearest
foster care programs for senior citizens, as follows: 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
home, residential community or retirement village. granting burial assistance to continue giving such
benefit to non-indigent senior citizens.
Article 20. ADDITIONAL GOVERNMENT
ASSISTANCE RULE VI
THE OFFICE FOR SENIOR CITIZENS AFFAIRS
Section 1. SOCIAL PENSION - Pursuant to the (OSCA)
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.
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 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
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 Development Officer and the presidents of concerned
so requires. duly registered senior citizens organizations to
deliberate and act on the complaints;
The OSCA Head shall be appointed to serve the
interest of senior citizens and shall not be removed or h) To assist senior citizens in filling complaints or
replaced except for reasons of death, permanent charges against any person, natural or judicial;
disability, or ineffective performance of his duties to the establishment, institution, or agency refusing to comply
detriment of fellow senior citizens, as stated in a with the privileges under the Act before the Department
resolution issued by the general assembly. In case of of Justice (DOJ), the Provincial Prosecutor's Office, the
death or permanent disability, the remaining term shall regional or the municipal trial court, the municipal trial
be served by the new reappointed if he/she has not court in cities, or the municipal circuit trial court;
served one-half of the full term.
i) To assist and coordinate with the concerned person,
Section 3. Remuneration for Services Rendered. - The natural or judicial, establishment, institution or agency
head of the OSCA shall be entitled to received an in investigating fraudulent practices and abuses of the
honorarium of an amount equivalent to at least Salary discount and privileges exclusively granted to senior
Grade 10 to be approved by the local government unit citizens ; and
concerned.
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,
associations of senior citizens; activities and programs for senior citizens.

c) To maintain and regularly update on a quarterly basis RULE VII

the list of senior citizens and to issue national uniform PENALTIES AND OTHER SANCTIONS
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
purchases only, manager, managing partner, or such other officer
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
citizen discounts after a certain hour. also cause the cancellation or revocation of the
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/
or posting of notice to that effect; Article 25. Monitoring and Coordinating
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
enjoyment of senior citizens; Expanded Senior Citizens Act of 2010.

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
the exclusive use and enjoyment of senior citizens. of the following:

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 b) Vice-Chairperson - Secretary of the Department of
Fifty thousand pesos (Php 50,000.00) but not the Interior and Local Government (DILG), or
exceeding One hundred thousand pesos (Php authorized representatives;
100,000.00) and imprisonment for not less than two (2)
years but not more than six (6) years; and 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); g) Coordinate the conduct and evaluation of the plan of
action, research and documentation of good practices
3) Department of Trade and Industry (DTI); and and disparities for policy and program development;

4) Representatives from five (5) accredited NGOs for h) To actively establish national, regional and
senior citizens international networks for resource generation and
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
three (3) years. Section 6. Secretariat. - The Department of Social
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
agencies and other stakeholders; and services.

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
implementation of the law; citizens in the first year of implementation shall be
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
emerging concerns of the senior citizens; to availability of funds.

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
these Rules; be added to the regular appropriations of the DSWD
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
RA No. 9994; Section 3. The local government units concerned shall
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
contributions and participation of senior citizens; Article 27. Repealing Clause. - All laws, presidential
decrees, executive orders and rules and regulations or
part thereof, contrary to, or inconsistent with the
provisions of these Rules, are hereby repealed or Vice-President and Director-General
modified accordingly. Chairperson Technical Education
Housing and Urban and Skills
Article 28. Separability Clause. - Should any provision Development Development
of the Rules be found unconstitutional or invalid by a Coordinating Council Authority
court of law, such provision shall be served from the
remainder of these Rules and such action shall not HON. MONA D. HON. EMMANUEL
affect the enforceability of the remaining provisions of VALISNO Y. ANGELES
these Rules. Secretary Chairperson
Department of Commission on
Article 29. Effectivity. - These Rules and Regulations Education Higher Education
shall take effect fifteen (15) days after its complete
publication in at least two (2) national newspapers of HON. AUGUSTO B.
MR. FRANSISKUS
general circulation, and submission to the Office of the SANTOS
KUPANG
National Administrative Register, Law Center, Director-General
Executive Director
University of the Philippines. National Economic
Coalition of Services
and Development
for the Elderly
Signed June 18, 2010 at the Department of Social Authority
Welfare and Development, Batasan Pambansa
Complex, Constitution Hills, Quezon City. MR. JOSE P. MR. FELIPE A.
ORDOÑEZ, JR. HIDALGO, JR.
HON. CELIA CAPADOCIA-YANGCO National Secretary President
Acting Secretary, Federation of Senior Association of
Department of Social Welfare and Development Citizens Retired Postal
Chairperson Association of the Employees and
Philippines Senior Citizens, Inc.
HON. ESPERANZA HON. RONALDO V.
I. CABRAL, M.D. PUNO SR. NIEVA MANZANO, DC
Secretary Secretary Louise de Marillac Foundation
Department of Dept. of Interior and
Health Local Government

HON. ALBERTO C. HON. MARGARITO

AGRA B. TEVES
Secretary Secretary
Department of Department of
Justice Finance

HON. ANNELI R.
HON. JESLI A.
LONTOC
LAPUS
Secretary
Secretary
Dept. of
Dept. of Trade and
Transportation and
Industry
Communication

HON. MARIANITO HON. JOSEPH H.

D. ROQUE DURANO
Secretary Secretary
Dept. of Labor and Department of
Employment Tourism

HON. NOLI C. DE HON. PASTOR Z.

CASTRO GUIAO
Republic Act 7277 (c). The rehabilitation of the disabled persons shall be
Republic of the Philippines the concern of the Government in order to foster their
capability to attain a more meaningful, productive and
CONGRESS OF THE PHILIPPINES satisfying life. To reach out to a greater number of
Metro Manila disabled persons, the rehabilitation services and
Fifth Regular Session 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 (e). To facilitate integration of disabled persons into the
OTHER PURPOSES. 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 (l). Qualified Individual with a Disability shall mean an
institutions, whether legal, economic, cultural, individual with a disability who, with or without
recreational or other, any human group, community, or reasonable accommodations, can perform the essential
society which limit the fullest possible participation of functions of the employment position that such
disabled persons in the life of the group. Social barriers individual holds or desires. However, consideration
include negative attitudes which tends to single out and shall be given to the employer’s judgement as to what
exclude disabled persons and which distort roles and functions of a job are essential, and if an employer has
interpersonal relationship; prepared a written description before advertising or
interviewing applicants for the job, this description shall
(g). Auxiliary Aids and Services include: 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; 2) the overall financial resources of the facility or
and 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
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;

(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.
(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;
(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;
(o). Covered entity means employer, employment
agency, labor organization or joint labor-management
committee; and
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 The Department of Social Welfare and Development
of the Labor Code as amended, disabled persons shall shall design and implement training programs that will
be eligible as apprentices or learners; Provided, That provide disabled persons with vocational skills to
their handicap is not much as to effectively impede the enable them to engage in livelihood activities or obtain
performance of job operations in the particular gainful employment. The Department of Labor and
occupation for which they are hired; Provided, further, Employment shall likewise design and conduct training
That after the lapse of the period of apprenticeship if programs geared towards providing disabled persons
found satisfactory in the job performance, they shall be with skills for livelihood.
eligible for employment.
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 non-
learning 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 orthopedically-
may be in the form of scholarship grants, student loan impaired students, mentally retarded, and multi-
programs, 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 visually-
degree 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 CHAPTER 1 Discrimination on Employment

The Department of Transportation and
Communications shall formulate the rules and SECTION 32. Discrimination on Employment No
regulations necessary to implement the provision of this entity, whether public or private, shall discriminate
Chapter. 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 1). supervisors and managers may be informed
administration that: regarding necessary restrictions on the work or duties
of the employees and necessary accommodations;
1). have the effect of discrimination on the basis of
disability; or 2). first aid and safety personnel may be informed, when
appropriate, if the disability might require emergency
2). perpetuate the discrimination of others who are treatment;
subject to common administrative control;
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 (c). Local manufacturing of technical aids and
The Department of Public Works and Highway shall appliances used by disabled persons shall be
formulate the rules and regulations necessary to considered as a preferred area of investment subject to
implement the provisions of this Chapter. 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 8). tax and duty exemption on imported capital
Organizations Nongovernment organizations or equipment;
private volunteer organizations dedicated to the
purpose of promoting and enhancing the welfare of 9). tax credit on domestic capital equipment;
disabled persons shall, as they, are hereby
encouraged, become partners of the Government in the 10). exemption from contractor’s tax;
implementation of vocational rehabilitation measures
and other related programs and projects. Accordingly, 11). simplification of customs procedures;
their participation in the implementation of said
measures, program and projects is to be extended all 12). unrestricted use of consigned equipment;
possible support by the Government. The Government
shall sponsor a volunteer service program which shall 13). employment of foreign nationals;
 importance, the Secretary of Justice may commence a
14). tax credits for taxes and duties on raw materials; legal action in any appropriate court.

15). access to bonded manufacturing/trading SECTION 45. Authority of Court The court may grant
warehouse system; 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 1). for the first violation, a fine of not less than Fifty
established to replace the abolished department or thousand pesos (P 50,000.00) but not exceeding One
agency shall take-over the functions under this Act of hundred thousand pesos (P 100,000.00) or
the abolished department or agency. 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 Republic of the Philippines
provision of this Act be found unconstitutional by a court Congress of the Philippines
of law, such provisions shall be severed from the Metro Manila
remainder of the Act, and such action shall not affect
Thirteenth Congress
the enforceability of the remaining provisions of this Act. 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 AN ACT AMENDING REPUBLIC ACT NO. 7277,
fifteen (15) days after its publication in any two (2) OTHERWISE KNOWN AS THE "MAGNA CARTA FOR
newspaper of general circulation. DISABLED PERSONS, AND FOR OTHER PURPOSES"

Be it enacted by the Senate and House of Representatives of

Approved:
the Philippines in Congress assembled:

Signed) SECTION 1. A new chapter, to be denominated as "Chapter 8.

Other Privileges and Incentives" is hereby added to Title Two of
RAMON V. MITRA Republic Act No. 7277, otherwise known as the "Magna Carta
for Disabled Persons", with new Sections 32 and 33, to read as
Speaker of the House follows:

(Signed) "CHAPTER 8. Other Privileges and Incentives

NEPTALI A. GONZALES "SEC. 32. Persons with disability shall be entitled to the
following:
President of the Senate (a) At least twenty percent (20%) discount from all
establishments relative to the utilization of all services in hotels
This bill which is consolidation of Senate Bill No, 1286 and similar lodging establishments; restaurants and recreation
and House Bill 35091, was finally passed by the Senate centers for the exclusive use or enjoyment of persons with
and the House of Representatives on January 22, 1992 disability;
and January 16, 1992, respectively.
(b) A minimum of twenty percent (20%) discount on admission
(Signed) 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
CAMILO L. SABIO with disability;

House of Representatives (c) At least twenty percent (20%) discount for the purchase of
medicines in all drugstores for the exclusive use or enjoyment
(Signed) of persons with disability;

ANACLETO D. BADOY, JR. (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
Secretary of the Senate
and blood tests, in all government facilities, subject to
guidelines to be issued by the Department of Health (DOH), in
Approved: March 24, 1992 coordination with the Philippine Health Insurance Corporation
(PHILHEALTH);
(Signed)
(e) At least twenty percent (20%) discount on medical and
CORAZON C. AQUINO 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
President of the Philippines
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;
(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;
(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
(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 sub-
sections (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
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) Realty tax holiday for the first five years of operation; and
(ii) Priority in the building and/or maintenance of provincial or
municipal roads leading to the aforesaid home residential
community or retirement village."
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:
"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 self-
esteem 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 JOSE DE VENECIA JR. MANNY VILLAR
amended to read as follows: Speaker of the House of President of the Senate
Representatives
"SEC. 46. Penal Clause. -
This Act which is a consolidation of Senate Bill No. 2580 and
(a) Any person who violates any provision of this Act shall suffer House Bill No. 1214 was finally passed by the Senate and the
the following penalties: 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 OSCAR G. YABES
pesos (P100,000.00) or imprisonment of not less than six Secretary General Secretary of Senate
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 Approved: April 30, 2007
hundred thousand pesos (P100,000.00) but not exceeding Two
hundred thousand pesos (P200,000.00) or imprisonment for not GLORIA MACAPAGAL-ARROYO
less than two years but not more than six years, or both at the President of the Philippines
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,
 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.
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.
SEC. 5. Establishment of ECOZONES. – To ensure
the viability and geographical dispersal of ECOZONES immediate environs;
through a system of prioritization, the following areas
are initially identified as ECOZONES, subject to the
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;
(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;
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
Cebu, including its territorial waters and islets and its
(n) So much as may be necessary of that portion of
Tacloban City;
(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 non-
skilled 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 Agro-
Industrial, 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 non-
Filipinos 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 government-
owned-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.
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.
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.
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 ECOZONE-
registered enterprises. Among other pertinent
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:
a. Consolidation of lands for zone development
purposes;
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.
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. 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 twenty-
five (25) years, as provided for under Republic Act No.
7652, otherwise known as the Investors’ Lease Act.
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
conditions set forth under Republic Act No. 7652.
SEC. 31. Land Conversion. – Agricultural lands may
be converted for residential, commercial, industrial and issuing permits to investors shall assign their
other non-agricultural purposes, subjects to the
conditions set forth under Republic Act No. 6657 and
other existing laws.
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. 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. 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.
establish a one stop shop center for the purpose of
facilitating the registration of new enterprises in the
ECOZONE. Thus, all appropriate government
agencies that are Involved In registering, licensing or
representatives to the ECOZONE to attend to
Investor’s requirements.
CHAPTER IV
INDUSTRIAL HARMONY IN THE ECOZONES
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. 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. 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.

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
of incentives.
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 newly-
created 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 labor sector, and one (1) representative from the
Congress of the Philippines investors/business sector in the ECOZONE. In case of
Metro Manila the unavailability of the Secretary of the Department of
Trade and Industry to attend a particular board meeting,
Eleventh Congress the Director General of PEZA shall act as Chairman."

Republic Act No. 8748 June 1, 1999 xxx

AN ACT AMENDING REPUBLIC ACT NO. 7916, Section 2. Chapter II, Section 15 of Republic Act No.
OTHERWISE KNOWN AS THE "SPECIAL 7916 is likewise amended to read as follows:
ECONOMIC ZONE ACT OF 1995"
"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
7916 is hereby amended to read as follows: the Official Gazette or in two (2) newspapers of general
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
THE OMNIBUS INVESTMENTS CODE OF 1987 development. Fiscal incentive system shall be devised
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
incentives law; initiative is to be encouraged, with deregulation and
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
the guidance of domestic and foreign investors; 5. The State shall principally play a supportive role,
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
"Omnibus Investments Code" of 1987. of the Philippine economy and that it is the responsibility
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
are declared policies of the State: establishment and assist initial operations of the
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
other resources of the country, and improve utilization CHAPTER II
of the products thereof; improve technical skills of the BOARD OF INVESTMENTS
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 (4) After due hearing, decide controversies concerning
until his successor shall have been appointed and the implementation of the relevant books of this Code
qualified: Provided, further, That no vacancy shall be that may arise between registered enterprises or
filled except for the unexpired portion of any term, and investors therein and government agencies, within thirty
that no one may be designated to be governor of the (3)) days after the controversy has been submitted for
Board in an acting capacity but all appointments shall decision: Provided, That the investor or the registered
be ad interim or permanent. enterprise may appeal the decision of the Board within
thirty (30) days from receipt thereof to the President;
Article 5. Qualifications of Governors of the Board. The
governors of the Board shall be citizens of the (5) Recommend to the Commissioner of Immigration
Philippines, at least thirty (30) years old, of good moral and Deportation the entry into the Philippines for
character and of recognized competence in the fields of employment of foreign nationals under this Code;
economics, finance, banking, commerce, industry,
agriculture, engineering, law, management or labor. (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 (7) Periodically check and verify the compliance by
shall be responsible for the regulation and promotion of registered enterprises with the relevant provisions of
investments in the Philippines. It shall meet as often as this Code, with the rules and regulations promulgated
may be necessary generally once a week on such day under this Code and with the terms and conditions of
as it may fix. Notice of regular and special meetings registration;
shall be given all members of the Board. The presence
of four (4) governors shall constitute a quorum and the (8) After due notice, cancel the registration or suspend
affirmative vote of four (4) governors in a meeting validly the enjoyment of incentives benefits of any registered
held shall be necessary to exercise its powers and enterprise and/or require refund of incentives enjoyed
perform its duties, which shall be as follows: by such enterprise including interests and monetary
penalties, for (a) failure to maintain the qualifications
(1) Prepare annually the Investment Priorities Plan as required by this Code for registration with the Board of
defined in Article 26, which shall contain a listing of (b) for violation of any provisions of this Code, of the
specific activities that can qualify for incentives under rules and regulations issued under this Code, of the
Book I of this Code, duly supported by the studies of terms and conditions of registration, or of laws for the
existing and prospective demands for such products protection of labor or of the consuming public: Provided,
and services in the light of the level and structure of That the registration of an enterprise whose project
income, production, trade, prices and relevant timetable, as set by the Board is delayed by one year,
economic and technical factors of the regions as well as shall be considered automatically cancelled unless
existing facilities; 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;
(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

(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;
(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 management, design, planning, construction, operation
absence of the Chairman; and similar matters.

(3) Prepare the Agenda for the meetings of the Board Article 13. "Foreign loans" shall mean any credit facility
and submit for its consideration and approval the or financial assistance other than equity investment
policies and measures which the Chairman deems denominated and payable in foreign currency or where
necessary and proper to carry out the provisions of this the creditor has the option to demand payment in
Code; 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
assigned to him by the Board of Governors. exchange.

BOOK I Article 15. "Philippine national" shall mean a citizen of

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
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 diminishing the scope of negotiability under their laws
appropriate, pre-determined by the Board, in of issue are transferable under such conditions as may
consultation with the appropriate Department, to be be determined by the Board after consultation with the
feasible and highly essential to the attainment of the Department of Finance. The tax credit certificate shall
national goal, in relation to a declared specific national be used to pay taxes, duties, charges and fees due to
food and agricultural program for self-sufficiency and the National Government; Provided, That the tax credits
other social benefits of the project or (4) which produces issued under this Code shall not form part of the gross
non-conventional fuels or manufactures equipment income of the grantee/transferee for income tax
which utilize non-conventional sources of energy or purposes under Section 29 of the National Internal
uses or converts to coal or other non-conventional fuels Revenue Code and are therefore not taxable: Provided,
or sources of energy in its production, manufacturing or further, That such tax credits shall be valid only for a
processing operations. Provided, That the final product period of ten (10) years from date of issuance.
in any of the foregoing instances, involves or will involve
substantial use and processing of domestic raw Article 22. "Export products" shall mean manufactured
materials, whenever available; taking into account the or processed products the total F.O.B. Philippine port
risks and magnitude of investment: Provided, further, value of the exports of which did not exceed five million
That the foregoing definitions shall not in any way limit dollars in the United States Currency in the calendar
the rights and incentives granted to less-developed- year 1968 and which meet the local content
area enterprises provided under Title V, Book I, hereof. requirement, if any, set by the Board, and standards of
quality set by the Bureau of Product Standards, or, in
Article 18. "Non-pioneer enterprise" shall include all default of such standards, by the Board or by such
registered producer enterprises other than pioneer public or private organization, chamber, group or body
enterprises. as the Board may designate. The above definition
notwithstanding, the Investment Priorities Plan may
Article 19. "Expansion" shall include modernization include other products for export subjects to such
and rehabilitation and shall mean increase of existing conditions and limited incentives as may be determined
volume or value of production or upgrading the quality by the Board.
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
market therefor. operating bonded trading warehouses supplying raw
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 The specific and generic activities to be included in the
exportation of goods on consignment shall not be Investment Priorities Plan with their status as pioneer or
deemed export sales until the export products non-pioneer shall be determined by the Board in
consigned are in fact sold by the consignee. accordance with the criteria set forth in this Book.

Sales of locally manufactured or assembled goods for CHAPTER II

household and personal use to Filipinos abroad and INVESTMENT PRIORITIES PLAN
other non-residents of the Philippines as well as
returning Overseas Filipinos under the Internal Export Article 27. Investment Priorities Plan. Not later than the
Program of the government and paid for in convertible end of March of every year, the Board of Investments,
foreign currency inwardly remitted through the after consultation with the appropriate government
Philippine banking systems shall also be considered agencies and the private sector, shall submit to the
export sales. 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
(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.

(d) Such other information, analyzes, data, guidelines

or criteria as the Board may deem appropriate.
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:
(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
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.
development of the preferred area in particular and of entry of any enterprise in any field of endeavor or
the national economy in general; and activity;

(4) If the applicant is engaged or proposes to engage in (d) The amount of foreign exchange earned, used or
undertakings or activities other than preferred projects, saved in their operations;
it has installed or undertakes to install an accounting
system adequate to identify the investments, revenues, (e) The extent to which labor, materials and other
costs, and profits or losses of each preferred project resources obtained from indigenous sources are
undertaken by the enterprise separately from the utilized;
aggregate investment, revenues, costs and profits or
losses of the whole enterprise or to establish a separate (f) The extent to which technological advances are
corporation for each preferred project if the Board applied and adopted to local condition;
should so require to facilitate proper implementation of
this Code. (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 non-
citizens 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
prices; to maximize usage thereof; (2) that the equipment
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
permanently used for non-registered activities; and apply.

(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
machinery, equipment and spare parts. contractor's tax, whether national or local.

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.
The Board shall allow and approve the sale, transfer or
disposition of the said items within the said period of five
(5) years if made:
(aa) to another registered enterprise or registered provision of Article 39 (c) (3) shall apply. Outward
domestic producer enjoying similar incentives;
(bb) for reasons of proven technical obsolescence; or
(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.
If such equipment is sold, transferred or otherwise
disposed of by the registered enterprise the related
remittance of foreign exchange covering the proceeds
of such sale, transfer or disposition shall be allowed
only upon prior Central Bank approval.
(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.
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.
(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.
(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 semi-
manufactured 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
Customs.
(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 less-
developed-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.
(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.
TITLE V
GENERAL PROVISIONS
Article 41. Power of the President to Rationalize
Incentives. The President may, upon recommendation
of the Board and in the interest of national development,
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.
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.
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.
Article 45. Non-Applicability to Banking Institutions.
This Book shall not apply to banking institutions which
are governed and regulated by the General Banking Act
and other laws which are under the supervision of the
Central Bank.
CHAPTER II
INVESTMENTS
(1) Without need of prior authority, anyone not a
Philippine national as that term is defined in Article 15
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 Article 48. Authority to Do Business. No alien, and no
hereof, to the extent that the total investment of non- firm association, partnership, corporation or any other
Philippine nationals herein shall not exceed forty form of business organization formed, organized,
percent (40%) of the outstanding capital of that chartered or existing under any laws other than those of
enterprise, unless existing law forbids any non- the Philippines, or which is not a Philippine national, or
Philippine ownership in the enterprise or limits more than forty per cent (40%) of the outstanding
ownership by non-Philippine national to a percentage capital of which is owned or controlled by aliens shall do
smaller than forty percent (40%). business or engage in any economic activity in the
Philippines or be registered, licensed, or permitted by
(2) Within thirty (30) days after notice of the investment the Securities and Exchange Commission or by any
is received by it, the enterprise in which any investment other bureau, office, agency, political subdivision or
is made by a non-Philippine national shall register the instrumentality of the government, to do business, or
same with the Board of Investments for purposes of engage in any economic activity in the Philippines
record. Investments made in the form of foreign without first securing a written certificate from the Board
exchange or other assets actually transferred to the of Investments to the effect:
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 self-
sustaining 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
CHAPTER II the applicant's exact address and of every
LICENSE TO DO BUSINESS contemplated transfer thereof or of the opening of new
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 self-
sustaining 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 non-
resident 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 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.

Article 53. Automatic Registration. Application filed (2) No official or employee of the government, its
under this Book shall be considered automatically subdivisions or instrumentalities shall appear as
approved if not acted upon within ten (10) working days counsel for or act as agent or representative of, or in
from official acceptance thereof. any manner intervene or intercede, directly or indirectly,
in behalf of any party in any transaction with the Board
Article 54. Publication and Posting of Notices. regarding any application under Books I and II of this
Immediately after the application has been given due Code. The penalty for violation of this prohibition is the
course by the Board, the Secretary of the Board or any same as that provided for in the preceding paragraph.
official designated by the Board shall require the If the offender is an appointive official or employee, the
applicant to publish the notice of the action of the Board maximum of the penalty herein prescribed shall be
thereon at his expense once in a newspaper of general imposed, and the offender shall suffer the additional
circulation in the province or city where the applicant penalty of perpetual disqualification from public office,
has its principal office, and post copies of said notice in without prejudice to any administrative action against
conspicuous places, in the office of the Board or in the him.
building where said office is located; setting forth in
such copies the name of the applicant, the business in (3) If the offense is committed by a juridical entity, its
which it is engaged or proposes to engage or invest, president and/or other officials responsible therefor
and such other data and information as may be required shall be subject to the penalty prescribed above. If the
by the Board. No approval or certificate shall be valid offender or the president/official, in cases where the
without the publication and posting of notices as herein offense was committed by a juridical entity, is an alien,
provided. 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, converted the same to Philippine currency. Annually,
subsidiaries, or branches in the Asia-Pacific Region within thirty (30) days from the anniversary date of the
may establish a regional or area headquarters in the multinational company's registration as a regional or
Philippines, after securing a license therefor from the area headquarters with the Securities and Exchange
Securities and Exchange Commission, upon the Commission, it will submit proof to the Securities and
favorable recommendation of the Board of Investments. Exchange Commission of inward remittance amounting
to at least fifty thousand United States dollars or its
The Securities and Exchange Commission shall, within equivalent in other foreign currencies during the past
thirty (30) days from the effectivity of this Code, issue year.
the implementing rules and regulations. The following
minimum requirements shall, however, be complied (d) Any willful violation by the regional or area
with by the said foreign entity. 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,
branches in the region; That a responsible officer or the applicant company
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
branch office it might have in the Philippines; applicant's regional or area headquarters which is duly
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
same is effected. The admission and stay shall be co-terminus with the
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 Article 64. Exemption from Contractor's Tax. The
multiple entry special visa, as well as their respective regional or area headquarters established in the
spouses and dependents, shall be exempt from: the Philippines by multinational corporations, including their
payment of all fees due under the immigration and alien alien executives, are exempted from the contractor's
registration laws; securing alien certificates of tax.
registration; and obtaining immigration clearance
certificates, and all types of clearances required by any Article 65. Exemption from all Kinds of Local Licenses
government department or agency, except that upon Fees, Dues. The regional or area headquarters of
final departure from the Philippines the employer of the multinational companies shall be exempt from all kinds
said non-immigrants shall so advise in writing the of local licenses, fees, dues, imposts or any other local
Commission on Immigration and Deportation at least taxes or burdens.
five (5) working days prior to the non-immigrant's
departure, and the finally departing non-immigrant Article 66. Tax and Duty Free Importation of Training
employee shall be required to submit to the said office Materials; Importation of Motor Vehicles. Regional or
a tax clearance from the Bureau of Internal Revenue. area headquarters shall also enjoy tax and duty free
importation of equipment and materials for training,
Article 60. Withholding Tax of 15 %. Aliens employed conferences which are needed for the functions of the
by regional or area headquarters of multinational regional or area headquarters and which are not locally
corporations shall be subject for each taxable year upon available subject to the prior approval of the Board of
their gross income received from the regional or area Investments.
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 Customs the corresponding license fees and storage
therefor from the Board of Investments. fees to be determined by said offices.

The following minimum requirements shall be submitted (d) An application for the establishment of a regional
or complied with by the said foreign entity in accordance warehouse shall be made in writing to the Board of
with the rules and regulations to be issued by the Board Investments upon recommendation of the Bureau of
of Investments as provided for in Article 7 (2) of this Customs. The application shall describe the premises,
Code. 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 jurisdiction and responsibility of supervising the
the foreign firm's home country that said foreign firm is regional warehouses shall be vested on the Bureau of
engaged in international trade and supplies or will Customs.
supply spare parts or manufactured components and
raw materials to its distributors or markets in the Asia- The Board of Investments, in consultation with the
Pacific Region. 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 subject to the payment of customs duties, taxes and
district where the regional warehouse will be located. other charges and for which purpose, the proper
commercial invoice of the head offices or parent
5) Each shipment of goods which will be stored in the companies shall be submitted to the Regional Collector
regional warehouse shall be covered by an affidavit of of Customs; and shall be subject to laws and
the multinational company operator setting forth that regulations governing imported merchandise, Provided,
said articles shall be exclusively used as supply for its that in case any of the foregoing items are sold,
Asia-Pacific markets and stating the C & F price thereof; bartered, hired or used for purposes other than they
were intended for without prior compliance with the
6) That it shall file an ordinary warehousing bond in an guidelines implementing Book IV of this Code and
amount equal to ONE HUNDRED PER CENT (100%) without prior payment of the duty, tax or other charge
of the ascertained customs duties on the articles which would have been due and payable at the time of
imported without prejudice to its filing a general entry if the articles had been entered without the benefit
warehousing bond in lieu of the ordinary warehousing of this decree, shall be subject to forfeiture and the
bond. importation shall constitute a fraudulent practice against
customs revenue punishable under Section 3602, as
7) The percentage of annual allowable withdrawal for amended, of the Tariff and Customs Code of the
domestic use shall be subject to the approval of the Philippines; Provided, further, that a sale pursuant to a
Board of Investments; Provided, however, That in no judicial order shall not be subject to the preceding
case shall such withdrawals exceed thirty per cent proviso without prejudice to the payment of duties,
(30%) of the value of goods it has brought in for any taxes and other charges.
given year and the payment of the corresponding taxes
and duties. Article 70. Exemption from the Maximum Storage
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
Regional Warehouse. the law in Section 1908 of the Tariff and Customs Code
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,
notwithstanding. custody, entry, examinations, classifications, delivery,
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 Article 75. Reportorial Requirements. As a holder of the
balance between promoting the Philippines as a center Special Investors Resident Visa, an alien shall be
for multinational regional warehouses and safeguarding entitled to reside in the Philippines while his investment
the revenue laws of the country. lawphi1.net subsists. For this purpose, he should submit an annual
report, in the form fully prescribed for the purpose, to
The Commissioner of customs is directed is directed to prove that he has maintained his investment in the
expedite the immediate re-exportation or transhipment country. Should said alien withdraw his said investment
of the foregoing goods destined for regional from the Philippines, then the Special Investors
warehousing to their Asia-Pacific and other foreign Resident Visa issued to him will automatically expire.
markets, including the emergency withdrawal for re-
exportation by air and ship and the partial liquidation of BOOK VI
bonds adopting simplified export procedures therefor. INCENTIVES OF EXPORT PROCESSING ZONE
ENTERPRISES
Article 72. Penalties. Any willful violation by the
regional or area headquarters of a multinational Article 76. Employment of Foreign Nationals. The
company which has established regional warehouse or provisions of law to the contrary notwithstanding, Export
warehouses of the provisions of existing laws and the Processing Zone Authority, hereinafter referred to as
implementing guidelines of Book IV of this Code shall the "Authority" may authorize an alien or an association,
constitute a sufficient cause for the cancellation of its partnership, corporation or any other form of business
license or registration in addition to the penalties organization formed, organized, chartered or existing
hereinabove provided in Article 69, paragraph (b) under any law other than those of the Philippines, or
hereof. 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
BOOK V enterprise, a zone registered enterprise may employ
SPECIAL INVESTORS RESIDENT VISA foreign nationals in supervisory, technical or advisory
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
Investors Resident Visa. when the majority of the capital stock of a zone
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
turpitude; or their equivalents may be retained by foreign nationals
beyond the period set forth herein.
2. He is not afflicted with any loathsome, dangerous or
contagious disease; Foreign nationals employed within the purview of this
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.
disorder or disability; 29 of C.A. No. 613, as amended, shall be permitted to
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,
Philippines. shall be exempt from obtaining alien certificates and all
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
reports of such training to the Board. entering the country for the first time, under the
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
disposed of for local consumption. operated in the Zone for manufacturing, processing or
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
on the values added. of such taxes under the provisions of the Real Property
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
free of quotas, duty or tax. production, assembly or manufacture of the registered
product of the zone registered enterprise shall be 1) Batas Pambansa 44
exempt from real property taxes.
2) Batas Pambansa 391 (1983)
FINAL PROVISIONS
3) Presidential Decree 218
Article 79. Interpretation. All doubts concerning the
benefits and incentives granted enterprises and 4) Presidential Decree 1419
investors by this Code shall be resolved in favor of
investors and registered enterprises. 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 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 much-
needed 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 agro-
processing, 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.
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.
(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
hereof may apply for registration as BMBE. value of the loans.

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
from the operations of the enterprise. Committee of Both Houses of Congress on the status
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
BMBEs from local taxes, fees and charges. implementation of this provision and shall likewise
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
healthcare benefits. (P300,000,000.00) from the Philippine Amusement and
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 non-
institutions (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.

INFORMATION DISSEMINATION 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.
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
fine of not less than Five Hundred Thousand Pesos Approved: November 13, 2002
(P500,000.00)
GLORIA MACAPAGAL-ARROYO
MISCELLANEOUS PROVISIONS President of the Philippines

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.