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

Third Regular Session Act shall serve the following objectives:

Begun and held in Metro Manila, on Monday, the "(a) To recognize the rights of senior citizens to take
twenty-seventh day of July two thousand nine. their proper place in society and make it a concern of
the family, community, and government;
Republic Act No. 9994
"(b) To give full support to the improvement of the total
AN ACT GRANTING ADDITIONAL BENEFITS AND well-being of the elderly and their full participation in
PRIVILEGES TO SENIOR CITIZENS, FURTHER society, considering that senior citizens are integral
AMENDING REPUBLIC ACT NO. 7432, AS part 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
amended by Republic Act No. 9257, otherwise known sector in the improvement of the welfare of senior
as the "Expanded Senior Citizens Act of 2003", is citizens and 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
Philippines, it is the declared policy of the State to of the senior citizens are maximized;
promote a just and dynamic social order that will
ensure the prosperity and independence of the nation "(2) adopt measures whereby our senior citizens are
and free the people from poverty through policies that assisted and appreciated by the community as a
provide adequate social services, promote full whole;
employment, a rising standard of living and an
improved quality of life. In the Declaration of Principles "(3) establish a program beneficial to the senior
and State Policies in Article II, Sections 10 and 11, it is citizens, their families and the rest of the community
further declared that the State shall provide social they serve: and
justice in all phases of national development and that
the State values the dignity of every human person "(4) establish community-based health and
and guarantees full respect for human rights. rehabilitation programs for senior citizens in every
political unit of society."
"Article XIII, Section 11 of the Constitution provides
that the Sate shall adopt an integrated and Section 3. Section 2 of Republic Act No. 7432, as
comprehensive approach to health development which amended by Republic Act No. 9257, otherwise known
shall endeavor to make essential goods, health and as the Expanded Senior Citizens Act of 2003", is
other social services available to all the people at hereby further amended to read as follows:
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
SEC. 2. Definition of terms. - For purposes of this Act, as the "Expanded Senior Citizens Act of 2003", is
these terms are defined as follows: hereby further amended to read as follows:

"(a) Senior citizen or elderly refers to any resident "SEC. 4. Privileges for the Senior Citizens. -
citizen of the Philippines at least sixty (60) years old;
The senior citizens shall be entitled to the following:
"(b) Geriatrics refer to the branch of medical science
devoted to the study of the biological and physical "(a) the grant of twenty percent (20%) discount and
changes and the diseases of old age; exemption from the value -added tax (VAT), if
applicable, on the sale of the following goods and
"(c) Lodging establishment refers to a building, edifice, services from all establishments, for the exclusive use
structure, apartment or house including tourist inn, and enjoyment or availment of the senior citizen
apartelle, motorist hotel, and pension house engaged
in catering, leasing or providing facilities to transients, "(1) on the purchase of medicines, including the
tourists or travelers; purchase of influenza and pnuemococcal vaccines,
and such other essential medical supplies,
"(d) Medical Services refer to hospital services, accessories and equipment to be determined by the
professional services of physicians and other health Department of Health (DOH).
care professionals and diagnostics and laboratory
tests that the necessary for the diagnosis or treatment "The DOH shall establish guidelines and mechanism
of an illness or injury; of compulsory rebates in the sharing of burden of
discounts among retailers, manufacturers and
"(e) Dental services to oral examination, cleaning, distributors, taking into consideration their respective
permanent and temporary filling, extractions and gum margins;
treatments, restoration, replacement or repositioning of
teeth, or alteration of the alveolar or periodontium "(2) on the professional fees of attending physician/s in
process of the maxilla and the mandible that are all private hospitals, medical facilities, outpatient clinics
necessary for the diagnosis or treatment of an illness and home health care services;
or injury;
"(3) on the professional fees of licensed professional
"(f) Nearest surviving relative refers to the legal health providing home health care services as
spouse who survives the deceased senior citizen: endorsed by private hospitals or employed through
Provided, That where no spouse survives the home health care employment agencies;
decedent, this shall be limited to relatives in the
following order of degree of kinship: children, parents, "(4) on medical and dental services, diagnostic and
siblings, grandparents, grandchildren, uncles and laboratory fees in all private hospitals, medical
aunts; facilities, outpatient clinics, and home health care
services, in accordance with the rules and regulations
"(g) Home health care service refers to health or to be issued by the DOH, in coordination with the
supportive care provided to the senior citizen patient at Philippine Health Insurance Corporation (PhilHealth);
home by licensed health care professionals to include,
but not limited to, physicians, nurses, midwives, "(5) in actual fare for land transportation travel in public
physical therapist and caregivers; and utility buses (PUBs), public utility jeepneys (PUJs),
taxis, Asian utility vehicles (AUVs), shuttle services
"(h) Indigent senior citizen, refers to any elderly who is and public railways, including Light Rail Transit (LRT),
frail, sickly or with disability, and without pension or Mass Rail Transit (MRT), and Philippine National
permanent source of income, compensation or Railways (PNR);
financial assistance from his/her relatives to support
his/her basic needs, as determined by the Department "(6) in actual transportation fare for domestic air
of Social Welfare and development (DSWD) in transport services and sea shipping vessels and the
consultation with the National Coordinating and like, based on the actual fare and advanced booking;
Monitoring Board."
"(7) on the utilization of services in hotels and similar
Section 4 Section 4 of Republic Act No. 7432, as lodging establishments, restaurants and recreation
amended by Republic Act No. 9257, otherwise known centers;
"(8) on admission fees charged by theaters, cinema "(i) retirement benefits of retirees from both the
houses and concert halls, circuses, leisure and government and the private sector shall be regularly
amusement; and reviewed to ensure their continuing responsiveness
and sustainability, and to the extent practicable and
"(9) on funeral and burial services for the death of feasible, shall be upgraded to be at par with the
senior citizens; current scale enjoyed by those in actual service;

"(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
minimum wage earners in accordance with Republic citizens on purchase of basic commodities, subject to
Act No. 9504; the guidelines to be issued for the purpose by the
Department of Trade and Industry (DTI) and the
"(c) the grant of a minimum of five percent (5%) Department of Agriculture (DA);
discount relative to the monthly utilization of water and
electricity supplied by the public "(k) provision of express lanes for senior citizens in all
utilities: Provided, That the individual meters for the commercial and government establishments; in the
foregoing utilities are registered in the name of the absence thereof, priority shall be given to them; and
senior citizen residing therein: Provided, further, That
the monthly consumption does not exceed one "(l) death benefit assistance of a minimum of Two
hundred kilowatt hours (100 kWh) of electricity and thousand pesos (Php2, 000.00) shall be given to the
thirty cubic meters (30 m3) of water: Provided, nearest surviving relative of a deceased senior citizen
furthermore, That the privilege is granted per which amount shall be subject to adjustments due to
household regardless of the number of senior citizens inflation in accordance with the guidelines to be issued
residing therein; by the DSWD.1avvphi1

"(d) exemption from training fees for socioeconomic "In the availment of the privileges mentioned above,
programs; the senior citizen, or his/her duly authorized
representative, may submit as proof of his/her entitled
"(e) free medical and dental services, diagnostic and thereto any of the following:
laboratory fees such as, but not limited to, x-rays,
computerized tomography scans and blood tests, in all "(1) an identification card issued by the Office of the
government facilities, subject to the guidelines to be Senior Citizen Affairs (OSCA) of the place where the
issued by the DOH in coordination with the PhilHealth; senior citizen resides: Provided, That the identification
card issued by the particular OSCA shall be honored
"(f) the DOH shall administer free vaccination against nationwide;
the influenza virus and pneumococcal disease for
indigent senior citizen patients; "(2) the passport of the senior citizen concerned; and

"(g) educational assistance to senior citizens to pursue "(3) other documents that establish that the senior
pot secondary, tertiary, post tertiary, vocational and citizen is a citizen of the Republic and is at least sixty
technical education, as well as short-term courses for (60) years of age as further provided in the
retooling in both public and private schools through implementing rules and regulations.
provision of scholarships, grants, financial aids,
subsides and other incentives to qualified senior "In the purchase of goods and services which are on
citizens, including support for books, learning promotional discount, the senior citizen can avail of the
materials, and uniform allowances, to the extent promotional discount or the discount provided herein,
feasible: Provided, That senior citizens shall meet whichever is higher.
minimum admission requirements;
"The establishment may claim the discounts granted
"(h) to the extent practicable and feasible, the under subsections (a) and (c) of this section as tax
continuance of the same benefits and privileges given deduction based on the cost of the goods sold or
by the Government Service Insurance System (GSIS), services rendered: Provided, That the cost of the
the Social Security System (SSS) and the PAG-IBIG, discount shall be allowed as deduction from gross
as the case may be, as are enjoyed by those in actual income for the same taxable year that the discount is
service; 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 institute a national health program and shall provide an
purposes and shall be subject to proper integrated health service for senior citizens. It shall
documentation and to the provisions of the National train community-based health workers among senior
Internal Revenue Code (NICR), as amended." citizens and health personnel to specialize in the
geriatric care and health problems of senior citizens.
Section 5. Section 5 of the same Act, as amended, is
hereby further amended to read as follows: "The national health program for senior citizens shall,
among others, be harmonized with the National
"SEC. 5. Government Assistance. - The government Prevention of Blindness Program of the DOH.
shall provide the following:
"Throughout the country, there shall be established a
"(a) Employment "senior citizens' ward" in every government hospital.
This geriatric ward shall be for the exclusive use of
"Senior citizens who have the capacity and desire to senior citizens who are in need of hospital confinement
work, or be re-employed, shall be provided information by reason of their health conditions. However, when
and matching services to enable them to be productive urgency of public necessity purposes so require, such
members of society. Terms of employment shall geriatric ward may be used for emergency purposes,
conform with the provisions of the Labor Code, as after which, such "senior citizens' ward" shall be
amended, and other laws, rules and regulations. reverted to its nature as geriatric ward.

"Private entities that will employ senior citizens as "(d) Social Services
employees, upon the effectivity of this Act, shall be
entitled to an additional deduction from their gross "At least fifty percent (50%) discount shall be granted
income, equivalent to fifteen percent (15%) of the total on the consumption of electricity, water, and telephone
amount paid as salaries and wages to senior citizens, by the senior citizens center and residential care/group
subject to the provision of Section 34 of the NIRC, as homes that are government-run or non-stock, non-
amended: Provided, however, That such employment profit domestic corporation organized and operated
shall continue for a period of at least six (6) months: primarily for the purpose of promoting the well-being of
Provided, further, That the annual income of the senior abandoned, neglected, unattached, or homeless
citizen does not exceed the latest poverty threshold as senior citizens, subject to the guidelines formulated by
determined by the National Statistical Coordination the DSWD.
Board (NSCB) of the National Economic and
Development Authority (NEDA) for that year. "(1) "self and social enhancement services" which
provide senior citizens opportunities for socializing,
"The Department of Labor and Employment (DOLE), organizing, creative expression, and self-improvement;
in coordination with other government agencies such
as, but not limited to, the Technology and Livelihood "(2) "after care and follow-up services" for citizens who
Resource Center (TLRC) and the Department of Trade are discharged from the homes or institutions for the
and Industry (DTI), shall assess, design and aged, especially those who have problems of
implement training programs that will provide skills and reintegration with family and community, wherein both
welfare or livelihood support for senior citizens. the senior citizens and their families are provided with
counseling;
"(b) Education
"(3) "neighborhood support services" wherein the
"The Department of Education (DepED), the Technical community or family members provide caregiving
Education and Skills Development Authority (TESDA) services to their frail, sick, or bedridden senior citizens;
and the Commission on Higher Education (CHED), in and
consultation with nongovernmental organizations
(NGOs) and people's organizations (POs) for senior "(4) "substitute family care " in the form of residential
citizens, shall institute programs that will ensure care or group homes for the abandoned, neglected,
access to formal and nonformal education. unattached or homeless senior citizens and those
incapable of self-care.
"(c) Health
"(e) Housing
"The DOH, in coordination with local government units
(LGUs), NGOs and POs for senior citizens, shall
"The national government shall include in its national LGUs where the senior citizens reside, subject to the
shelter program the special housing needs of senior guidelimes to be issued by the DSWD."
citizens, such as establishment of housing units for the
elderly. Section 6. Section 6 of the same Act, as amended, is
heeby further amended to read as follows:
"(f) Access to Public Transport
SEC. 6. The Office for Senior Citizens Affairs
"The Department of Transportation and (OSCA). - There shall be established in all cities and
Communications (DOTC) shall develop a program to municipalities an OSCA to be headed by a senior
assist senior citizens to fully gain access to public citizen who shall be appointed by the mayor for a term
transport facilities. of three (3) years without reappointment but without
prejudice to an extension if exigency so requires. Said
"(g) Incentive for Foster Care appointee shall be chosen from a list of three (3)
nominees as recommended by a general assembly of
"The government shall provide incentives to senior citizens organizations in the city or municipality.
individuals or nongovernmental institution caring for or
establishing homes, residential communities or "The head of the OSCA shall be appointed to serve
retirement villages solely for, senior citizens, as the interest of senior citizens and shall not be removed
follows: or replaced except for reasons of death permanent
disability or ineffective performance of his duties to the
"(1) realty tax holiday for the first five (5) years starting detriment of fellow senior citizens.
from the first year of operation; and
"The head of the OSCA shall be entitled to receive an
"(2) priority in the construction or maintenance of honorarium of an amount at least equivalent to Salary
provincial or municipal roads leading to the aforesaid Grade 10 to be approved by the LGU concerned.
home, residential community or retirement village.
"The head of the OSCA shall be assisted by the City
"(h) Additional Government Assistance Social Welfare and Development officer or by the
Municipal Social Welfare and Development Officer, in
"(1) Social Pension coordination with the Social Welfare and Development
Office.
"Indigent senior citizens shall be entitled to a monthly
stipend amounting to Five hundred pesos (Php500.00) "The Office of the Mayor shall exercise supervision
to augment the daily subsistence and other medical over the OSCA relative to their plans, activities and
needs of senior citizens, subject to a review every two programs for senior citizens. The OSCA shall work
(2) years by Congress, in consultation with the DSWD. together and establish linkages with accredited NGOs
Pos and the barangays in their respective areas.
"(2) Mandatory PhilHealth Coverage
"The OSCA shall have the following functions:
"All indigent senior citizens shall be covered by the
national health insurance program of PhilHealth. The "(a) To plan, implement and monitor yearly work
LGUs where the indigent senior citizens resides shall programs in pursuance of the objectives of this Act;
allocate the necessary funds to ensure the enrollment
of their indigent senior citizens in accordance with the "(b) To draw up a list of available and required
pertinent laws and regulations. services which can be provided by the senior citizens;

"(3) Social Safety Nets "(c) To maintain and regularly update on a quarterly
basis the list of senior citizens and to issue national
"Social safety assistance intended to cushion the individual identification cards, free of charge, which
effects of economics shocks, disasters and calamities shall be valid anywhere in the country;
shall be available for senior citizens. The social safety
assistance which shall include, but not limited to, food, "(d) To serve as a general information and liason
medicines, and financial assistance for domicile repair, center for senior citizens;
shall be sourced from the disaster/calamity funds of
"(e) To monitor compliance of the provisions of this Act permit, permit to operate, franchise and other similar
particularly the grant of special discounts and privileges granted to any person, establishment or
privileges to senior citizens; business entity that fails to abide by the provisions of
this Act."
"(f) To report to the mayor, any individual,
establishments, business entity, institutions or agency Section 8. Section 11 of the same Act, as amended, is
found violating any provision of this Act; and hereby further amended to read as follows:

"(g) To assist the senior citizens in filing complaints or "SEC. 11. Monitoring and Coordinating Mechanism. -
charges against any individual, establishments, A National Coordinating and Monitoring Board shall be
business entity, institution, or agency refusing to established which shall be composed of the following:
comply with the privileges under this Act before the
Department of Justice (DOJ), the Provincial "(a) Chairperson - the Secretary of the DSWD or an
Prosecutor's Office, the regional or the municipal trial authorized representative;
court, the municipal trial court in cities, or the municipal
circuit trial court." "(b) Vice Chairperson - the Secretary of the
Department of the Interior and Local Government
Section 7. Section 10 of the same Act, as amended, is (DILG) or an authorized representative; and
hereby further amended to read as follows:
"(c) Members:
"SEC. 10. Penalties. - Any person who refuses to
honor the senior citizen card issued by this the "(1) the Secretary of the DOJ or an authorized
government or violates any provision of this Act shall representative;
suffer the following penalties:
"(2) the Secretary of the DOH or an authorized
"(a) For the first violation, imprisonment of not less representative;
than two (2) years but not more than six (6) years and
a fine of not less than Fifty thousand pesos "(3) the Secretary of the DTI or an authorized
(Php50,000.00) but not exceeding One hundred representative; and
thousand pesos (Php100,000.00);
(4) representatives from five (5) NGOs for senior
"(b) For any subsequent violation, imprisonment of not citizens which are duly accredited by the DSWD and
less than two (2) years but not more than six (6) years have service primarily for senior citizens.
and a fine of not less than One Hundred thousand Representatives of NGOs shall serve a period of tree
pesos (Php100,000.00) but not exceeding Two (3) years.
hundred thousand pesos (Php200,000.00); and
"The Board may call on other government agencies,
"(c) Any person who abuses the privileges granted NGOs and Pos to serve as resource persons as the
herein shall be punished with imprisonment of not less need arises. Resource person have no right to vote in
than six (6) months and a fine of not less than Fifty the National Coordinating and Monitoring Board."
thousand pesos (Php50,000.00) but not more than
One hundred thousand pesos (Php100,000.00). Section 9. Implementing Rules and Regulations. -
Within sixty (60) days from theeffectivity of this Act, the
"If the offender is a corporation, partnership, Secretary of the DSWD shall formulate and adopt
organization or any similar entity, the officials thereof amendments to the existing rules and regulations
directly involved such as the president, general implementing Republic Act No. 7432, as amended by
manager, managing partner, or such other officer Republic Act No. 9257, to carry out the objectives of
charged with the management of the business affairs this Act, in consultation with the Department of
shall be liable therefor. Finance, the Department of Tourism, the Housing and
Urban Development Coordinating Council (HUDCC),
"If the offender is an alien or a foreigner, he/she shall the DOLE, the DOJ, the DILG, the DTI, the DOH, the
be deported immediately after service of sentence. DOTC, the NEDA, the DepED, the TESDA, the CHED,
and five (5) NGOs or POs for the senior citizens duly
"Upon filing of an appropriate complaint, and after due accredited by the DSWD. The guidelines pursuant to
notice and hearing, the proper authorities may also Section 4(a)(i) shall be established by the DOH within
cause the cancellation or revocation of the business sixty (60) days upon the effectivity of this Act.
Section 10. Appropriations. - The Necessary Approved: FEB 15, 2010
appropriations for the operation and maintenance of
the OSCA shall be appropriated and approved by the (Sgd.) GLORIA MACAPAGAL-ARROYO
LGUs concerned. For national government agencies, President of the Philippines
the requirements to implement the provisions of this
Act shall be included in their respective budgets:
Provided, That the funds to be used for the national
health program and for the vaccination of senior
citizens in the first year of the DOH and thereafter, as IMPLEMENTING RULES AND REGULATIONS OF
a line item under the under the DOH budget in the REPUBLIC ACT NO. 9994, ALSO KNOWN AS THE
subsequent General Appropriations Act (GAA): "EXPANDED SENIOR CITIZENS ACT OF 2010," AN
Provided, further, That the monthly social pension for ACT GRANTING ADDITIONAL BENEFITS AND
indigent senior citizens in the first year of PRIVILEGES TO SENIOR CITIZENS, FURTHER
implementation shall be added to the regular AMENDING REPUBLIC ACT NO. 7432 OF 1992 AS
appropriations of the DSWD budget in the subsequent AMENDED BY REPUBLIC ACT NO. 9257 OF 2003
GAA.
RULE I
Section 11. Repealing Clause. - All law, executive TITLE, PURPOSE AND CONSTRUCTION
orders, rules and regulations or any part hereof
inconsistent herewith are deemed repealed or Article 1. Title. - These Rules shall be known and
modified accordingly. cited as the Implementing Rules and Regulations of
Republic Act No. 9994, otherwise known as the
Section 12. Separability Clause. - If any part or "Expanded Senior Citizens Act of 2010."
provision of this Act shall be declared unconstitutional
and invalid, such 18 declaration shall not invalidate Article 2. Purpose. - Pursuant to Section 9 of RA No.
other parts thereof which shall remain in full force and 9994 (hereinafter referred to as the Act), these Rules
effect. and Regulations are promulgated to prescribe the
procedures and guidelines for its implementation, in
Section 13. Effectivity. - This Act shall take effect order to facilitate compliance with the Act and to
fifteen (15) days its complete publication n the Official achieve its objectives.
Gazette or in at least two (2) newspapers of general
circulation, whichever comes earlier. Article 3. Construction. - These Rules shall be
construed and applied in accordance with and in
Approved furtherance of the policies and objectives of the law. In
case of conflict or ambiguity, the same shall be
construed liberally and in favor of the senior citizens.
(Sgd.) PROSPERO C. (Sgd.) JUAN PONCE
NOGRALES ENRILE RULE II
Speaker of the House President of the Senate DECLARATION OF POLICIES AND OBJECTIVES
of Representatives
Article 4. Declaration of Policies and Objectives. -
This Act which is a consolidation of Senate Bill No.
3561 and House Bill No. 6390 was finally passed by Section 1. As provided in the Constitution of the
the Senate and the House of Representatives on Philippines:
January 27, 2010.
a) It is the declared policy of the State to promote a
just and dynamic social order that will ensure the
(Sgd.) MARILYN B. (Sgd.) EMMA LIRIO- prosperity and independence of the nation and free the
BARUA-YAP REYES people from poverty through policies that provide
Secretary General Secretary of Senate adequate social services, promote full employment, a
House of rising standard of living, and an improved quality of life
Represenatives for all.

b) It is further declared that the State shall promote

social justice in all phases of national development
and values the dignity of every human person and c) Establish programs beneficial to the senior citizens,
guarantees full respect for human rights. their families and the rest of the community that they
serve; and
c) In all matters relating to the care, health, and
benefits of the elderly, the State shall adopt an d) Establish community-based health and rehabilitation
integrated and comprehensive approach to health programs in every political unit of society.
development which shall endeavor to make essential
goods, health and other social services available to all RULE III
people at affordable costs giving priority for the needs DEFINITION OF TERMS
of the underprivileged sick, elderly, disabled, women
and children. Article 5. Definition of Terms. - For purposes of these
Rules, the terms are defined as follows:
d) Further, it is declared that though the family has the
duty to take care for its elderly members, the State 5.1 SENIOR CITEZEN OR ELDERLY - refers to any
may also help through just programs of social security. Filipino citizen who is a resident of the Philippines, and
who is sixty (60) years old or above. It may apply to
Section 2. Consonant with these constitutional senior citizens with "dual citizenship" status provided
policies and RA 9994, these Rules shall serve the they prove their Filipino citizenship and have at least
following objectives: six (6) months residency in the Philippines.

a) To recognize the rights of senior citizens to take 5.2 BENEFACTOR - refers to any person whether
their proper place in society and make them a concern related or not to the senior citizen who provides care
of the family, community, and government; or who gives any form of assistance to him/her, and on
whom the senior citizen is dependent on for primary
b) To give full support to the improvement of the total care and material support, as certified by the City or
well-being of the elderly and their full participation as Municipal Social Welfare and Development Officer
an integral part of Philippine society; (C/MSWDO).

c) To motivate and encourage the senior citizens to 5.3 GERIATRICS - refers to the branch of medical
contribute to nation building; science devoted to the study, management and
treatment of the biological and physical changes, and
d) To encourage their families and the communities the diseases of old age.
they live in to reaffirm and apply the valued Filipino
traditions of caring for the senior citizens; 5.4 GERONTOLOGY - is the scientific study of the
biological, psychological, and sociological phenomena
e) To provide a comprehensive health care and associated with old age and ageing and in determining
rehabilitation system for senior citizens with disability answers about the normal aging process rather than
to foster their capacity to attain a more meaningful and the diseases of old age. It is also the scientific study of
productive ageing; and the processes of aging from many disciplines,
including social work, anthropology, biology, history,
f) To recognize the important role of the private and sociology, psychology, and demography.
the non-government sector in the improvement of the
welfare of senior citizens and to actively seek their 5.5 IDENTIFICATION DOCUMENT - refers to any
partnership. document or proof of being a senior citizen which may
be used for the availment of benefits and privileges
Section 3. In conformity with these objectives, these under the Act and its Rules. It shall be any of the
Rules shall: following:

a) Establish mechanisms whereby the contributions of a) Senior Citizens' Identification Card issued by the
the senior citizens are maximized; Office of Senior Citizens Affairs (OSCA) in the city or
municipality where the elderly resides;
b) Adopt measures whereby our senior citizens are
assisted and appreciated by the community as a b) The Philippine passport of the elderly person or
whole; senior citizen concerned; and
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 hospital services, professional services of physicians
and at least sixty (60) years of age, which shall include and other health care professionals, and diagnostic
but not be limited to the following government-issued and laboratory tests that are requested by a physician
identification documents indicating an elderly's as 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 cleaning, permanent and temporary filling, extractions
building, edifice, structure, apartment, or house and gum treatments, restoration, replacement or
including tourist inn, apartelle, motorist hotel, and repositioning of teeth, or alteration of the alveolar or
pension house engaged in catering, leasing, or periodontium process of the maxilla and the mandible
providing facilities to transients, tourists, or travelers, that are necessary for the diagnosis and/or treatment
duly licensed with business permit and/or franchised of a dental illness or injury.
by the national government agencies or the local
government units. 5.12 DIAGNOSTIC AND LABORATORY TESTS -
refers to diagnostic examinations that are necessary
5.7 HOTEL/HOSTEL - refers to an establishment for the diagnosis and/or treatment of an illness and
whose building, edifice or premises, including a injury, including but not limited to X-ray, CT scans,
completely independent part thereof such as cottages, ECG, 2D Echo, gastroenterology, blood chemistry
cabanas, or huts, are used for the regular reception, exams, histopathology and immunopathology,
accommodation or lodging of travelers, tourists, or hematology, urine analysis, parasitology and
vacationers, and provides other services incidental bacteriology test, and serology.
thereto for a fee;
5.13 OFFICE FOR SENIOR CITIZENS AFFAIRS
5.8 RESTAURANT - refers to any establishment duly (OSCA) - refers to the office established in cities and
licensed and with business permits issued by the local municipalities under the Office of the Mayor headed by
government units, offering to the public, regular and a senior citizen.
special meals or menu, fast food, cooked food and
short orders. Such eating-places may also serve 5.14 NON_GOVERNMENTAL ORGANIZATION or
coffee, beverages and drinks. This covers Quick- NGO - refers to any private entity, which is non-profit
Service Restaurants or QSRs, Casual Dining and Fine and voluntary in nature dedicated to the promotion,
Dining Restaurants as defined below: enhancement and support of the welfare of senior
citizens, duly registered with any regulatory body.
a) QUICK SERVICE RESTAURANTS, or fast-food
chains, refer to restaurants with multiple branches that For purposes of the Act and its Rules, an
have menu boards where food item choices are listed. ACCREDITED NGO refers to any private non-stock
Customers place their orders with the cashier and pay non-profit organization, regional or national in scope,
right after their orders are taken. mainly providing services for senior citizens, duly
registered with the Securities and Exchange
b) CASUAL and FINE DINING RESTAURANTS - are Commission (SEC), Cooperative Development
restaurants where customers are seated first before Authority (CDA), or any appropriate government
their food orders are taken by waiters. They are served regulatory body and registered or licensed with, and
at their tables and pay only after they have consumed with programs accredited by, the Department of Social
their meals. Welfare and Development (DSWD).

5.9 MEDICINES - refer to prescription and non-
prescription/over-the-counter drugs, both generic and
branded, including vitamins and mineral supplements
medically prescribed by the elderly's physician, and
approved by the Department of Health (DOH) and the
Food and Drug Administration (FDA), which are
intended for use in the diagnosis, cure, mitigation,
treatment or prevention of human disease or sickness.
It does not include food, devices or their components,
parts, or accessories.
5.15 PEOPLE'S ORGANIZATION or PO - refers to a
type of social welfare and development association
with a bonafide membership, an identifiable leadership
and an organizational structure that has demonstrated
its capacity to promote the public interest and engage
in social welfare and development activities. As part of
the civil society movement, it is composed of a specific
population or sector, like the senior citizens, and seeks
to represent the interest of its members.
5.16 SENIOR CITIZENS CENTER - refers to the place end goal of ensuring effective reintegration of older
established by Republic Act No. 7876 or the Senior persons discharged from residential facilities.
Citizens Center Act, with recreational, educational,
health and social programs and facilities designed for 5.22 BASIC NECESSITIES - refer to rice, corn, bread,
the full enjoyment and benefit of the senior citizens in fresh, dried and canned fish and other marine
the city or municipality accredited by the DSWD. It can products, fresh pork, beef and poultry, meat, fresh
be any available structure, a spacious room in a eggs, fresh and processed milk, fresh vegetables, root
private or public building, a room attached to a crops, coffee, sugar, cooking oil, salt, laundry soap,
community center, a barangay hall or chapel. detergents, and drugs classified as essential by the
DOH and other commodities as maybe classified by
5.17 RETIREMENT VILLAGE - refers to an the Department of Trade and Industry (DTI) and the
independent-living facility, often with continuing-care Department of Agriculture (DA) according to Republic
amenities. It refers to a residential community offering Act No. 7581 or the Price Act.
separate or autonomous houses for residents. It is a
retirement habitat with a multi-residence housing 5.23 PRIME COMMODITIES - refer to fresh fruits,
facility that is planned, designed and geared towards flour, dried, processed and canned pork, beef and
people who no longer work and are restricted to a poultry, meat, dairy products not falling under basic
certain age. It has particular conveniences catering to necessities; noodles, onions, garlic, and all drugs not
the wishes and desires of retirees, which may include classified as essential drugs by the DOH and other
services such as clubhouses, swimming pools, arts commodities that may be classified by the DTI and the
and crafts, boating, walking trails, golf courses, active DA according to Republic Act No. 7581 or The Price
adult retail and on-site medical services. Act.

5.18 GROUP HOMES - refer to a community-based 5.24 NEAREST SURVIVING RELATIVE - refers to the
alternative living arrangement to institutional care. It closest person related to the deceased senior citizen
can be a transit home for a definite period for by blood or affinity, such as the legal spouse who
neglected older persons while the necessary services survives the deceased senior citizen: Provided, That
of locating relatives and care management is ongoing. where no spouse survives the decedent, this shall be
It envisions responding to the needs of the senior limited to relatives in the following order of degree of
citizens who have been abandoned, have no families kinship: children, parents, siblings, grandchildren,
to return to or to whose family reunification is not uncles and aunts.
suitable, and are assessed to be needing group living
experience. The program enables a minimum of 6 and 5.25 HOME HEALTH CARE SERVICE - refers to
a maximum of 10 clients discharged from a residential health or supportive care provided to the senior citizen
care facility to live together and manage their group patient at home by TESDA-certified caregivers or
living activities with minimal supervision from the licensed health care professionals to include, but not
agency social worker. limited to, physicians, nurses, midwives, and physical
therapists.
5.19 FOSTER CARE - refer to a social work
intervention which provides for a planned substitute or 5.26 INDIGENT SENIOR CITIZEN - refers to any
alternative family care by a licensed foster family to a elderly who is frail, sickly, or with disability, and without
neglected, abandoned, unattached and poor older pension or regular source of income, compensation or
person. financial assistance from his/her relatives to support
his/her basic needs, as determined by the DSWD in
5.20 RESIDENTIAL CARE FACILITY - refers to consultation with the National Coordinating and
facility which provides twenty-four (24) hour residential Monitoring Board (NCMB).
care services operated primarily for the purpose of
promoting the well-being of abandoned, neglected, RULE IV
unattached or homeless senior citizens. The facility PRIVILEGES FOR THE SENIOR CITIZENS
may be run by government or non-stock non-profit
organization and is accredited by the DSWD to serve a Article 6. OSCA-issued Senior Citizens' Identification
minimum of 10 clients. Card. - For the availment of benefits and privileges
under the Act and these Rules, the senior citizen, or
5.21 AFTER CARE SERVICES - refer to the provision his/her duly authorized representative, shall present as
of interventions, approaches, and strategies with the proof of eligibility, a valid and original Senior Citizens'
Identification Card issued by the Head of the Office of
Senior Citizens Affairs (OSCA) of the place where the by Section 1 (b), and will be subjected to a regular
senior citizen resides, and which shall be honored review as deemed necessary in keeping with the
nationwide. changes, demands and needs of senior citizens.

Article 7. Twenty Percent (20%) Discount and VAT
Exemption - The senior citizens shall be entitled to the
grant of twenty percent (20%) discount and to an
exemption from the value-added tax (VAT), IF
APPLICABLE, on the sale of the goods and services
covered by Section 1 to 6 of this Article, from all
establishments for the exclusive use and enjoyment or
availment of senior citizens.
The guidelines issued by the DOH, in consultation with
the DOF and the BIR, shall also establish mechanisms
of compulsory rebates in the sharing of burden of
discounts among retailers, manufacturers and
distributors, taking into consideration their respective
margins. When necessary, the DOF and the BIR shall
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
come up with the appropriate Revenue Regulations on
the 20% senior citizens discount and VAT exemption
within thirty (30) days from effectivity of these Rules
that shall cover among others, new invoicing
procedures, reportorial requirements, and a system for
claiming tax deductions.
(c) MEDICAL AND DENTAL SERVICES IN THE
PRIVATE FACILITIES - Medical and dental services,
diagnostic and laboratory tests such as but not limited
to X-Rays, computerized tomography scans, and
blood tests, that are requested by a physician as
necessary for the diagnosis and/or treatment of an
illness or injury are subjected to the 20% discount and
VAT exemption.

Section 1. MEDICAL_RELATED PRIVILEGES (d) PROFESSIONAL FEES OF ATTENDING

PHYSICIAN/S in all private hospitals, medical
(a) MEDICINE AND DRUG PURCHASES - The 20% facilities, outpatient clinics and home health care
discount and VAT exemption shall apply to the facilities shall be subjected to the 20% discount and
purchase of generic or branded medicines and drugs VAT exemption.
by or for senior citizens, including the purchase of
influenza and pneumococcal vaccines. The 20% (e) PROFESSIONAL FEES OF LICENSED HEALTH
discount and VAT exemption shall also be granted to WORKERS PROVIDING HOME HEALTH CARE
the purchase of vitamins and mineral supplements SERVICES as endorsed by private hospitals or
which are medically prescribed by an attending employed through home health care employment
physician for prevention and treatment of diseases, agencies are entitled to the 20% discount and VAT
illness, or injury. exemption. The burden of the discount shall be borne
solely by the employment agency given the health
(b) ESSENTIAL MEDICAL SUPPLIES, worker's very minimal share compared to the agency
ACCESSORIES AND EQUIPMENT - The 20% fee.
discount and VAT exemption privilege shall also apply
to the purchase of eyeglasses, hearing aids, dentures, Section 2. DOMESTIC TRANSPORTATION
prosthetics, artificial bone replacements like steel, PRIVILEGES
walkers, crutches, wheelchairs whether manual or
electric-powered, canes/quad canes, geriatric diapers, The Department of Transportation and Communication
and other essential medical supplies, accessories and (DOTC), in coordination with the Maritime Industry
equipment by or for senior citizens. Authority (MARINA), Philippine Ports Authority (PPA),
the Civil Aeronautics Board (CAB), Light Rail Transit
The purchase under Sections 1 (a) and (b) from drug Authority (LRTA), Philippine National Railways (PNR),
stores, hospital pharmacies, medical and optical clinics Mass Rail Transit Authority (MRTA) and Land
and similar establishments including non-traditional Transportation Franchising and Regulatory Board
outlets dispensing medicines, shall be subject to (LTFRB), shall within thirty (30) days from effectivity of
guidelines that shall be issued by the DOH within thirty these Rules issue the necessary circulars or directives
(30) days from effectivity of these Rules, in on the following transportation privileges of senior
coordination with the Food and Drug Administration citizens:
(FDA) and the Philippine Health Insurance Corporation
(PHILHEALTH). Said guidelines shall also indicate (a) AIR AND SEA TRANSPORTATION
what constitutes discounted essential medical PRIVILEGES - Fare for domestic air, and sea travel,
supplies, accessories and equipment as contemplated
including \f0 advanced booking, shall be subject to the from his/her non-eligible companions to ensure that it
20% discount and VAT exemption, if applicable. is 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
PRIVILEGES - Fare in the public railways including senior 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
applicable. citizens 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 (g) For Delivery Orders, the 20% discount shall
for its implementation to ensure compliance herewith. likewise apply subject to certain conditions; i.e. senior
citizen ID card number must be given while making the
(a) HOTELS AND SIMILAR LODGING order over the telephone; the senior citizen ID card
ESTABLISHMENTS - The discount shall be for room must also be presented upon delivery to verify the
accommodation and other amenities offered by the identity of the senior citizen entitled to the 20%
establishment such as but not limited to hotel-based discount.
parlors and barbershops, restaurants, massage parlor,
spa, sauna bath, aromatherapy rooms, workout gyms, (h) For the above-mentioned transactions under
swimming pools, Jacuzzis, ktv bars, internet facilities, paragraphs (f) and (g) of Section 3 of Article 7, the
food, drinks and other services offered. The term Most Expensive Meal Combination (MEMC) shall
"hotel" shall include beach and mountain resorts, apply to food purchases by senior citizens. The MEMC
is an amount corresponding to the combination of the
(b) RESTAURANTS - The discount shall be for the most expensive and biggest single-serving meal with
purchase of food, drinks, dessert, and other beverage served in a quick service restaurant, is
consumable items served by the establishments deemed flexible and is adjusted accordingly by food
offered for the consumption of the general public. establishments to estimate a single food purchase for
an individual senior citizen.
(c) For Dine-in services under paragraphs (a) and (b)
of Section 3, and Section 4, paragraph 2 of Article 7, Section 4. RECREATION CENTERS - The discount
the privilege must be personally availed of by the shall be for the utilization of services in the form of
senior citizen as defined under these Rules, and no fees, charges and rental for sport facilities or
proxies or authorization in favor of another person who equipment, including golfcart rentals and green fees,
is not a senior citizen will be honored. or venues for ballroom dancing, yoga, badminton
courts, bowling lanes, table or lawn tennis, workout
(d) Consistent with the intent of the Act, the phrase gyms, martial arts facilities.
"exclusive use and enjoyment" of the senior citizen
shall mean "for the senior citizen's personal Non-profit, stock golf and country clubs which are not
consumption" only. As such, the 20% senior citizen open to the general public, and are private and for
discount shall not apply to "children's meals" which are exclusive membership only as duly proven by their
primarily prepared and intentionally marketed for official Securities and Exchange (SEC) registration
children. Similarly, the 20% senior citizen discount papers, are not mandated to give the 20% senior
shall not apply to "pre-contracted" party packages or citizens discount. However, should restaurants and
bulk orders. food establishments inside these country clubs be
independent concessionaires and food sold are not
(e) Food, drinks and other consumable items provided consumable items under club membership dues, they
in Section 3 (a) and (b), and Section 4, paragraph 2 of must grant the 20% senior citizen discount.
Article 7 purchased by the senior citizen shall be
processed separately as an independent transaction
Section 5. ADMISSION FEES PRIVILEGE - The
discount shall be applied to admission fees charged by
theaters, cinema houses and concert halls, circuses,
carnivals, and other similar places of culture, leisure
and amusement such as museums and parks.
Section 1. INCOME TAX EXEMPTION - The senior
citizen shall be entitled to exemption from the payment
of the individual income tax, provided he/she is
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 and burial expenses of the deceased senior
citizen, shall claim the discount under this Rule for the
deceased senior citizen upon presentation of the death
certificate. Such expenses shall cover the purchase of
casket or urn, embalming, hospital morgue, transport
of the body to intended burial site in the place of origin,
but shall exclude obituary publication and the cost of
the memorial lot.
Section 2. EXEMPTION FROM TRAINING FEES -
The senior citizen shall be exempted from training fees
for socio-economic programs conducted by private
and government agencies subject to the guidelines to
be issued within thirty (30) days from effectivity of
these Rules by the DTI, the Department of Labor and
Employment (DOLE), the DA, the Technical Education
and Skills Development Authority (TESDA) and the
Department of Science and Technology - Technology
Resource Center (DOST-TRC).

Article 8. CREDIT CARD PAYMENTS - The 20% Section 3. FREE MEDICAL AND DENTAL
discount and VAT exemption shall also apply to SERVICES IN GOVERNMENT FACILITIES - Medical
purchases of goods and services by senior citizens and dental services, diagnostic and laboratory tests
paying through credit cards. requested by the physician such as but not limited to
X-rays, computerized tomography scans, and blood
Article 9. NO DOUBLE DISCOUNTS - In the tests availed of by senior citizens, including
purchase of goods and services which are on professional fees of attending doctors in all
promotional discount, the senior citizen can avail of the government hospitals, medical facilities, outpatient
establishment's offered discount or the 20% discount clinics, and home health care services, shall be
provided herein, whichever is higher and more provided free of charge to senior citizens. These shall
favorable. be in accordance with the rules and regulation to be
issued by the DOH, in coordination with the
In cases where the senior citizen is also a person with PHILHEALTH.
disability (PWD) entitled to a 20% discount under
his/her valid PWD identification card (ID), the senior Section 4. FREE VACCINATION FOR INDIGENT
citizen shall use either his/her OSCA-issued ID card or SENIOR CITIZENS - The DOH shall, subject to
PWD ID card to avail of the 20% discount. technical and operational guidelines which it shall
issue not later than thirty (30) days from effectivity of
Article 10. TAX DEDUCTION - The establishment these Rules, administer free vaccinations against the
may claim the discounts provided herein as tax influenza virus and pneumococcal disease for indigent
deductions based on the cost of the goods sold or senior citizen patients. Neglected, abandoned,
services rendered: Provided. That the cost of the unattached or homeless senior citizens in government-
discount shall be allowed as deduction from the gross run residential homes, centers and facilities shall
income for the same taxable year that the discount is likewise be entitled to free vaccinations under these
granted: Provides, further, That the total amount of the Rules.
claimed tax deduction net of VAT, if applicable, shall
be included in their gross sales receipts for tax The DOH shall enjoin all government and private
purposes and shall be subject to proper hospitals, as well as other health facilities to post,
documentation and to the provisions of the National publish or print out a schedule of health benefits and
Internal Revenue Code (NIRC), as amended. privileges i.e., laboratory and diagnostic test fees,
which should be regularly updated. These postings
For this purpose, the Department of Finance (DOF) and publications shall be clearly identified in the
through the Bureau of Internal Revenue (BIR) shall guidelines.
come up with the appropriate Revenue Regulations on
the 20% senior citizens discount and VAT exemption Section 5. EDUCATIONAL PRIVILEGES -
within thirty (30) days from effectivity of these Rules. Educational assistance shall be granted to senior
citizens to pursue post secondary, post tertiary, as well
Article 11. OTHER PRIVILEGES as vocational or technical education in both public and
private schools through provision of scholarships,
grants, financial aid, subsidies and other incentives to
qualified senior citizens, including support for books,
learning materials, and uniform allowance, to the
extent feasible: Provided, that senior citizens shall
meet minimum admission requirements.
privilege is granted per household regardless of the
number of senior citizens residing therein.
To avail of the discount under this Section, the senior
citizen shall:

Section 6. BENEFITS AND PRIVILEGES FOR
RETIREES - To the extent practicable and feasible,
the senior citizen shall be granted 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 active service.
1. Apply for the discount personally or thru a
representative. There shall be annual renewal of
application to the utility provider.
2. Submit requirements.
a. Proof of age and citizenship

Retirement benefits of retirees from both the b. Proof of billing. Meter registration should be in the
government and the private sector shall be regularly name of the senior citizen for a period of one year
reviewed every year to ensure their continuing
responsiveness and sustainability, and to the extent c. Proof of residence
practicable and feasible, shall be upgraded to be at
par with the current scale enjoyed by those in actual Section 2. Fifty (50%) Discount - The grant of a 50%
service based on National Economic and Development discount an all electricity, water, telephone
Authority (NEDA) poverty threshold per region as consumption for DSWD-accredited senior citizens
determined by the National Statistical Coordination centers and residential care institutions or group
Board (NSCB). homes that are government-run or organized and
operated by non-stock, non-profit domestic
Section 7. PRIVILEGES ON GRANTING SPECIAL corporations, primarily for the purpose of promoting
DISCOUNTS IN SPECIAL PROGRAMS - To the the well-being of abandoned, neglected, unattached or
extent possible, the government may grant special homeless senior citizens.
discounts in special programs for senior citizens on
purchase of basic necessities and prime commodities, Such senior citizens centers and residential care or
subject to the guidelines to be issued for the purpose group homes must have been in operation for at least
by the DTI and the DA within (30) days from effectivity six (6) months and must have a separate meter for
of these Rules. Provided, That such special programs said utilities/services.
and their guidelines shall be developed by the
concerned department within the concerned Section 3. DSWD shall issue the necessary guidelines
department's jurisdiction. within (30) days from effectivity of these Rules for the
accredited senior citizens centers and
Section 8. EXPRESS LANES PRIVILEGES - residential/group homes willing to avail of the utility
Accessible express lanes for senior citizens shall be discount.
provided in all private, banking, commercial, and
government establishments; in the absence thereof, The Energy Regulatory Commission (ERC), the
priority shall be given to them. Metropolitan Waterworks and Sewerage System
(MWSS), the Local Water Utility Administration
Article 12. UTILITY DISCOUNTS (LWUA) and other concerned utility-regulatory
agencies shall, within six (6) months after the
Section 1. Five (5%) Discount - The grant of a effectivity of these Rules, formulate supplemental
minimum of five percent (5%) discount relative to the guidelines to cover recovery rate mechanics and/or
monthly utilization of water and electricity by sharing of burden, among other concern of the
households with senior citizens; Provided, That the distribution utilities.
individual meters for the foregoing utilities are
registered in the name of the senior citizen residing RULE V
therein: provided, further, that the monthly GOVERNMENT ASSISTANCE
consumption does not exceed one hundred kilowatt
hours (100 kWh) of electricity and thirty cubic meters Article 13. EMPLOYMENT
(30m') of water: Provided, furthermore, that the
Section 1. Senior citizens, who have the capacity and d) In coordination with OSCA and the City or Municipal
desire to work, or to be re-employed, shall be provided Social Welfare and Development Officer, shall conduct
by the DOLE, in coordination with other government assessment and profiling of senior citizens who
agencies including local government units, with wanted to study; and
information and matching services to enable them to
be productive members of society. Terms of e) Conduct continuing research and development
employment shall conform to the provisions of the program for the necessary and relevant education of
Labor Code, as amended, Civil Service Laws and the senior citizens.
other laws, rules and regulations.
Article 15. HEALTH
Section 2. Private entities that shall employ senior
citizens as employees upon effectivity of the Act, shall Section 1. The DOH, in coordination with local
be entitled to an additional deduction from their gross government units (LGUs), NGOs and POs for senior
Income, equivalent to fifteen percent (15%) of the total citizens, shall institute a national health program that
amount paid as salaries and wages to senior citizens shall incorporate the National Prevention of Blindness
subject to the provision of Section 34 of the National Program, and shall also provide an integrated health
Internal Revenue Code (NIRC), as amended and the service for senior citizens.
Revenue Regulations to be issued by the BIR and
approved by the DOF; Provided, however, That such It shall train community-based health workers including
employment shall continue for a period of at least six barangay health workers, among senior citizens and
(6) months; Provided, further, That the net annual health personnel to specialize in geriatric care,
income of the senior citizen does not exceed the gerontology, and health problems of senior citizens.
poverty level for that year as determined by NEDA thru
the NSCB. Section 2. The National Health Program aims to
promote healthy and productive older population
Section 3. The DOLE, in coordination with other through the following:
government agencies, such as, but not limited to, the
DOST-Technology Resource Center (DOST-TRC) and a) Establishment and provision of a comprehensive
the DTI, shall assess, design and implement training and integrated health service package catering to the
programs that will provide free of charge to senior specific needs of the citizens;
citizens the appropriate skills development, livelihood
training programs, and welfare or livelihood support. b) Human resource development/capacity building of
health personnel in relation to the care and health
Article 14. EDUCATION problems of senior citizens;

The Department of Education (DepEd), the DOST- c) Health promotion;

TRC, the Technical Education and Skills Development
Authority (TESDA), and the Commission on Higher
Education (CHED), in consultation with non-
governmental (NGOs) and people's organizations
(POs) for senior citizens, shall institute a program that
will ensure access of senior citizens to formal and non-
formal education. They are to:
d) Conduct of researches and study in geriatric care,
gerontology, and health needs of senior citizens;
e) In coordination with the municipal health worker,
designate one (1) barangay health worker to attend to
senior citizens' health needs;

a) Formulate and implement relevant and effective f) The barangay, in coordination with local office health
course designs and educational programs; office shall designate one day of every month
specifically for medical attention of senior citizens;
b) Conduct the necessary training for the
implementation of the appropriate curriculum for the g) Establishment of senior citizens' ward in every
purpose; government hospital and in all levels of hospitals
throughout the country; and
c) Ensure the availability of the needed-educational
facilities in the form of modular programs and other h) Provision of accessible express lanes, or
distance and alternative learning materials; prioritization, in all health facilities.
Section 3. Provide technical assistance in existing circulars particularly the limitation of the age
coordination with DSWD, NGOs and other concerned requirements of sixty-five (65) years old at the date of
agencies to local government units in the the loan application and seventy (70) years old at loan
establishment of community-based health maturity. It shall also consider the concept of pension
rehabilitation programs. in lieu compensation.

Article 16. SOCIAL SERVICES Section 2. The housing program for the poor senior
citizens which include the establishment/donation of
The DSWD, in cooperation with the OSCA and the group/foster homes for the neglected, abused and
local government units, non-governmental unattached or homeless senior citizens and those
organizations and people'' organizations for senior incapable of self-care including its management,
citizens, shall develop and implement programs and maintenance and operations shall be established in
social services for senior citizens. Local government accordance with EO 105, approving and directing the
units shall ensure that the developed programs and implementation of the program, "Provision of
social services are provided. The components of these Group/Foster Home for Neglected, Abandoned,
programs are: Abused, Unattached and Poor Older Persons and
Persons with Disabilities" promulgated on May 16,
a) Self and social enhancement services which 2002.
provide senior citizens opportunities for socializing,
organizing, creative expression, and improvement of Article 18. ACCESS TO PUBLIC TRANSPORT
self;
The DOTC and its attached agencies and sectoral
b) After care services for senior citizens who are officers shall improve the implementation or programs
discharged from the homes/institutions for the aged, to assist senior citizens to fully gain access in the use
especially those who have problems of reintegration of public transport facilities. The minimum
with family and community, wherein both the senior requirements and standards to make transportation
citizens and their families are provided with facilities and utilities for public use accessible to senior
counseling; citizens shall be developed to enhance the mobility of
senior citizens. There shall be strict implementation of
c) Neighborhood support services/home care wherein courtesy space and seats for the exclusive use of
the community or family members provide caregiving senior citizens in all transport system. As far as
services to their frail, sick, or bedridden senior citizens; practicable, PUVs shall also strive to install safe lower
and stepping boards.

d) Substitute family care in the form of residential care,

group homes, or foster homes for the abandoned,
neglected, unattached or homeless senior citizens and Article 19. INCENTIVE FOR FOSTER CARE
those incapables of self-care.
The DILG through the local government units, in
e) Inclusion of community-based settings as practicum consultation with the DOF and the BIR which shall
for academic institutions and in the curriculum of provide the necessary guidelines, shall provide
caregiving and technical vocational schools. incentives to persons or NGO institutions
implementing foster care programs for senior citizens,
Article 17. HOUSING as follows:

The national government shall include in its national (a) reality tax holiday for the first five (5) years starting
shelter program the special housing needs of senior from the first year of operation and/or implementation
citizens, such as establishment of housing units for the of foster care program; and
elderly.
(b) priority in the construction, or maintenance of
Section 1. The Housing and Land Use Regulatory provincial or municipal roads leading to the aforesaid
Board (HLURB) shall formulate housing rules on how home, residential community or retirement village.
to develop subdivision suitable to the requirements of
male and female senior citizens. The Home Article 20. ADDITIONAL GOVERNMENT
Development Mutual Fund (HDMF) shall promote the ASSISTANCE
establishment of elderly residence and shall review its
Section 1. SOCIAL PENSION - Pursuant to the RULE VI
eligibility criteria as may be determined by the DSWD, THE OFFICE FOR SENIOR CITIZENS AFFAIRS
indigent senior citizens shall be entitled to a monthly (OSCA)
stipend amounting to Five hundred pesos (Php
500.00) to augment the daily subsistence and other Article 21. Office of Senior Citizens Affairs - There
medical needs of senior citizens. The grant of social shall be established in all cities and municipalities an
pension shall be subject to a review every two (2) Office for Senior Citizens Affairs (OSCA).
years by Congress, in consultation with the DSWD
within three months after convening the Congress. Section 1. OSCA Head - The senior citizen to be
appointed by the City or Municipal Mayor as OSCA
The DSWD, in consultation with the Department of Head should have the following qualifications:
Budget and Management (DBM), the DILG, the
NCMB, NGOs, and people's organizations shall a) A Filipino citizen and resident of the municipality or
formulate guidelines within thirty (30) days from city for at least one (1) year;
effectivity of these Rules for the development of
criteria, selection of, and establishment of database for b) A registered voter of the concerned city or
indigent senior citizens focusing on targeting, delivery, municipality;
monitoring and evaluation, to facilitate implementation
of this additional government assistance. c) Able to read and write;

Section 2. MANDATORY PHILHEALTH d) Must be physically and mentally capable of

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.
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

Section 3. SOCIAL SAFETY NETS - Social safety g) At least a high school graduate
assistance intended to cushion the effects of economic
shocks; disasters and calamities shall be available for Section 2. Selection and Term of OSCA Head. - The
senior citizens. The social safety assistance which OSCA Head shall be chosen from a list of three (3)
shall include, but not limited to, food, medicines, and nominees as recommended by a general assembly of
financial assistance for domicile repair, shall be DSWD- accredited or LGU-registered senior citizens
sourced from the disaster/calamity funds of local organizations in the city or municipality. He/she shall
government units where the senior citizens reside, appointed by the mayor for a term of three (3) years
subject to the guidelines to be issued by the DSWD in without reappointment but without prejudice to an
coordination with DILG. extension not exceeding three (3) months, if exigency
so requires.
Section 4. DEATH BENEFIT ASSISTANCE - Death
benefit assistance of a minimum of Two thousand The OSCA Head shall be appointed to serve the
pesos (Php 2, 000.00) shall be given to the nearest interest of senior citizens and shall not be removed or
surviving relative who took care of the deceased replaced except for reasons of death, permanent
senior citizens reside, subject to the guidelines to be
disability, or ineffective performance of his duties to
issued by the DSWD and DILG. the detriment of fellow senior citizens, as stated in a
resolution issued by the general assembly. In case of
In keeping with the intention of the law and similar death or permanent disability, the remaining term shall
government assistance being granted, this benefit be served by the new reappointed if he/she has not
shall apply in relation to deceased indigent senior served one-half of the full term.
citizens only. However, it will not preclude LGUs
already granting burial assistance to continue giving Section 3. Remuneration for Services Rendered. -
such benefit to non-indigent senior citizens. The head of the OSCA shall be entitled to received an
honorarium of an amount equivalent to at least Salary
Grade 10 to be approved by the local government unit i) To assist and coordinate with the concerned person,
concerned. natural or judicial, establishment, institution or agency
in investigating fraudulent practices and abuses of the
For 3rd to 6th class local government units, their discount and privileges exclusively granted to senior
respective sanggunians may provide for a reasonable citizens ; and
and practicable remuneration for the OSCA Head.
j) To establish linkages and work together wit the
Section 4. Functions of OSCA. - The office for Senior accredited NGOs, people's organizations, and the
Citizens Affairs shall have the following Functions: barangays in their respective areas.

a) In consultation with the City or Municipal Social
Work and Development Officer and duly registered
senior citizen organizations, to plan, develop,
implement, consolidate, and monitor yearly work
programs in pursuance of the objectives of the Act and
its Rules;
Section 5. Operations and Maintenance of OSCA. -
The necessary appropriation for the operation and
maintenance of the OSCA shall be provided by the
local government units concerned. An office space
established at the Office of the Mayor shall likewise be
provided.

b) To draw up a list of available and required services Section 6. Assistance and Supervision of OSCA. -
which can be provided by the registered federations The OSCA Head shall be assisted by the City of the
and associations of senior citizens; Municipal Social Welfare and Development Officer
(C/MSWDO). The Office of the Mayor shall exercise
c) To maintain and regularly update on a quarterly supervision over the OSCA relative to their plans,
basis the list of senior citizens and to issue national activities and programs for senior citizens.
uniform individual identification cards and purchase
booklets, free of charge, which shall be valid anywhere RULE VII
in the country; PENALTIES AND OTHER SANCTIONS

d) To serve as a general information and liaison center Article 22. Violations in Discounted Medicine
the needs of the senior citizens; Purchases - The following acts concerning drug and
medicine purchases are considered violative of the
e) To monitor compliance of the provisions of the Act provisions of the Act and its Rules:
and its Rules particularly the grant of special discounts
and privileges to senior citizens; Section 1. A senior Citizen or his /her representative
or a person misusing the privileges by:
f) To report to the Mayor, any person, natural or
judicial; establishments, business, entity, institution or a) using several purchase booklets,
agency found violating any provision of the Act and its
Rules; b) availing of the discounts to buy medicines, drugs,
medical accessories and supplies not for the use of
g) To facilitate the creation of a city or municipality the senior citizen,
coordinating and monitoring board consisting of OSCA
Head, the City or Municipal Social Work and c) unauthorized use of the identification card of the
Development Officer and the presidents of concerned senior citizen.
duly registered senior citizens organizations to
deliberate and act on the complaints; Section 2. A medical practitioner giving prescription to
other persons in the name of the senior citizen or
h) To assist senior citizens in filling complaints or giving anomalous prescription.
charges against any person, natural or judicial;
establishment, institution, or agency refusing to comply Section 3. Retailers and establishments dispensing
with the privileges under the Act before the medicines:
Department of Justice (DOJ), the Provincial
Prosecutor's Office, the regional or the municipal trial a) refusing to grant the full 20% senior citizens
court, the municipal trial court in cities, or the municipal discount and VAT exemption on drug and medicine
circuit trial court; purchases paid via credit card,
b) making a distinction between branded and generic Section 4. If the offender is an alien or a foreigner,
drugs and medicines in giving the 20% discount, he/she shall be deported immediately after service of
sentence without further deportation proceedings.
c) posting notices and signages telling customers that
availment of the 20% discount is limited to cash Section 5. If the offender is a corporation, partnership,
purchases only, organization or any similar entity the officials thereof
directly involved such as the president, general
d) "limiting" of discountable drug and medicine manager, managing partner, or such other officer
purchases to certain weekdays only, such that senior charged with the management of the business affairs
citizens cannot avail of the 20% discount on other shall be liable therefor.
days, and e) restricting the purchase time or period for
senior citizen discounts after a certain hour. Section 6. Upon filing of an appropriate complaint,
and after due notice and hearing, the proper
Article 23. Violations in Discounted Food authorities may also cause the cancellation or
Purchases - The following acts concerning food revocation of the business permit, permit to operate,
purchases are considered violative of the provisions of franchise and other similar privileges granted to any
the Act and its Rules: person, establishment or business entity that fails to
abide by the provisions of the Act and these Rules.
a) Pegging a maximum amount of food purchase
subject to 20% discount and the VAT exemption, and/ RULE VIII
or posting of notice to that effect; MONITORING AND COORDINATING MECHANISM

b) Refusal to grant the 20% discount and VAT Article 25. Monitoring and Coordinating
exemption on take -out/ take home/ drive-thru orders it Mechanism. - An inter-agency coordinating and
appearing that the purchase is for the exclusive use monitoring mechanism at the national level shall be
and enjoyment of senior citizens; established which shall be called the National
Coordinating and Monitoring Board (NCMB) on the
c) Refusal to grant a 20% discount and VAT Expanded Senior Citizens Act of 2010.
exemption on delivery orders it appearing that the
purchases is for the exclusive use and enjoyment of Section 1. NCMB Composition. - The National
senior citizens. Coordinating and Monitoring Board shall be composed
of the following:
Article 24. PENALTIES - Any person who refuses to
honor the senior citizen card or violates any provision a) Chairperson - Secretary of the Department of Social
of the Act and its Rules shall suffer the following Welfare and Development (DSWD), or authorized
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
pesos (Php 200,000.00) and imprisonment for not less 2) Department of Health (DOH);
than two (2) years but not more than six (6) years.
3) Department of Trade and Industry (DTI); and
Section 3. Any person who abuses the privileges
granted herein shall be punished with a fine of not less 4) Representatives from five (5) accredited NGOs for
than fifty thousand pesos (Php 50,000.00) but not senior citizens
more than One hundred thousand pesos (Php
100,000.00) and imprisonment of not less than six (6) The National Inter-Agency Coordinating and
months. Monitoring Board may call on other government
agencies, NGOs and people's organizations to serve i) Prepare yearly accomplishment report for the Office
as resource persons as the need arises. Resource of the President, Congress, and the concerned
persons have no voting rights at the Board. national government and local government units.

Section 2. NGO/PO Representation. - The Section 5. Coordinating and Monitoring Body at the
representatives from accredited NGOs and people's Regional Level. - There shall be established in all
organizations shall be senior citizens, or from other regions a Regional Coordinating and Monitoring Board
sectors that have services primarily for senior citizens. (RCMB) with similar membership and functions as the
These NGO representatives which shall be selected National Board. As far as practicable, similar bodies
and appointed by the Board shall serve for a period of shall be established in the local government units.
three (3) years.
Section 6. Secretariat. - The Department of Social
Section 3. Level of Representation. - The authorized Welfare and Development shall serve as the
representative to the National Coordinating and Secretariat to the Board at the national and at the
Monitoring Board from the government agencies shall regional levels.
have a rank of not lower than Director level or its
equivalent, and for the NGOs, shall have a rank not RULE IX
lower than an Executive Director. FINAL PROVISIONS

Section 4. Functions. - The National Coordinating and Article 26. Appropriations. - The appropriation
Monitoring Board (NCMB) shall have the following necessary to implement the provisions of the Act and
functions: its Rules shall be included in the respective budgets of
the responsible national government agencies subject
a) Formulate a National Plan of Action for Senior to availability of funds. The heads of departments and
Citizens in coordination with concerned government agencies as well as local chief executives concerned
agencies and other stakeholders; shall immediately include in their annual appropriations
the funding necessary to implement these programs
b) Develop an effective monitoring and reporting and services.
system towards an efficient, consistent and uniform
implementation of the law; Section 1. The funds to be used for the national health
program and for the vaccination of indigent senior
c) Develop and institute effective and innovative citizens in the first year of implementation shall be
approaches and methods with which to address added to the regular appropriations of the DOH and
emerging concerns of the senior citizens; thereafter, as a line item under the DOH budget in the
subsequent General Appropriations Act (GAA) subject
d) Coordinate the programs and projects of to availability of funds.
government agencies with responsibilities under RA
No. 9994 and these Rules; Section 2. The monthly social pension for indigent
senior citizens in the first year of implementation shall
e) Coordinate the conduct of nationwide information, be added to the regular appropriations of the DSWD
education campaign and other advocacy activities on and thereafter as a line item under the DSWD budget
RA No. 9994; in the subsequent GAA subject to availability of funds.

f) Monitor the conduct of orientation, training and other Section 3. The local government units concerned shall
capability building programs to maximize the provide the necessary appropriations for the operation
contributions and participation of senior citizens; and maintenance of the OSCA.

g) Coordinate the conduct and evaluation of the plan Article 27. Repealing Clause. - All laws, presidential
of action, research and documentation of good decrees, executive orders and rules and regulations or
practices and disparities for policy and program part thereof, contrary to, or inconsistent with the
development; provisions of these Rules, are hereby repealed or
modified accordingly.
h) To actively establish national, regional and
international networks for resource generation and Article 28. Separability Clause. - Should any provision
technical cooperation; and of the Rules be found unconstitutional or invalid by a
court of law, such provision shall be served from the
remainder of these Rules and such action shall not
affect the enforceability of the remaining provisions of VALISNO ANGELES
these Rules. Secretary Chairperson
Department of Commission on Higher
Article 29. Effectivity. - These Rules and Regulations Education 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 Retired
Department of Social Welfare and Development Citizens Postal
Chairperson Association of the Employees and Senior
Philippines Citizens, Inc.
HON. RONALDO V.
HON. ESPERANZA I.
PUNO SR. NIEVA MANZANO, DC
CABRAL, M.D.
Secretary Louise de Marillac Foundation
Secretary
Dept. of Interior and
Department of Health
Local Government

HON. ALBERTO C. HON. MARGARITO Republic Act 7277

AGRA B. TEVES Republic of the Philippines
Secretary Secretary
Department of Justice Department of Finance CONGRESS OF THE PHILIPPINES
Metro Manila
HON. ANNELI R. Fifth Regular Session
HON. JESLI A.
LONTOC
LAPUS BEGUN AND HELD IN METRO MANILA, ON
Secretary
Secretary MONDAY, THE TWENTY SECOND DAY OF JULY,
Dept. of
Dept. of Trade and NINETEEN HUNDRED AND NINETY-ONE.
Transportation and
Industry
Communication
Republic Act No. 7277
HON. MARIANITO D. HON. JOSEPH H. AN ACT PROVIDING FOR THE REHABILITATION,
ROQUE DURANO SELF-DEVELOPMENT AND SELF-RELIANCE OF
Secretary Secretary DISABLED PERSON AND THEIR INTEGRATION
Dept. of Labor and Department of
Employment Tourism INTO THE MAINSTREAM OF SOCIETY AND FOR
OTHER PURPOSES.
HON. NOLI C. DE
HON. PASTOR Z.
CASTRO Be it enacted by the Senate and the House of
GUIAO
Vice-President and Representatives of the Philippines in Congress
Director-General
Chairperson assembled:
Technical Education
Housing and Urban
and Skills
Development TITLE ONE GENERAL PROVISIONS
Development Authority
Coordinating Council
CHAPTER I Basic Principle
HON. MONA D. HON. EMMANUEL Y.
SECTION 1. Title This Act shall be known and SECTION 3. Coverage This Act shall covers all
cited as the Magna Carta for Disabled Persons’•. disabled persons and, to the extend herein provided,
departments, offices and agencies of the National
SECTION 2. Declaration of Polity The grant of the Government or non-government organization involved
rights and privileges for disabled persons shall be in the attainment of the objectives of this Act.
guided by the following principles:
SECTION 4. Definition of Terms For purposes of
(a). Disabled persons are part of the Philippine society, this Act, these terms are defined as follows:
thus the Senate shall give full support to the
improvement of the total well-being of disabled (a). Disabled Persons are those suffering from
persons and their integration into the mainstream of restriction of different abilities, as a result of a mental,
society. physical or sensory impairment, to perform an activity
in the manner or within the range considered normal
Toward this end, the State shall adopt policies for a human being;
ensuring the rehabilitation, self-development and self-
reliance of disabled persons. (b). Impairment is any loss, diminution or aberration of
psychological, physiological, or anatomical structure of
It shall develop their skills and potentials to enable function;
them to compete favorably for available opportunities.
(c). Disability shall mean (1) a physical or mental
(b). Disabled persons have the same rights as other impairment that substantially limits one or more
people to take their proper place in society. They psychological, physiological or anatomical function of
should be able to live freely and as independently as an individual or activities of such individual; (2) a
possible. This must be the concern of everyone the record of such an impairment; or (3) being regarded as
family, community and all government and non- having such an impairment;
government organizations. Disabled person’s rights
must never be perceived as welfare services by the (d). Handicap refers to a disadvantage for a given
Government. individual resulting from an impairment or a disability,
that limits or prevents the functions or activity, that is
(c). The rehabilitation of the disabled persons shall be considered normal given the age and sex of the
the concern of the Government in order to foster their individual;
capability to attain a more meaningful, productive and
satisfying life. To reach out to a greater number of (e). Rehabilitation is an integrated approach to
disabled persons, the rehabilitation services and physical, social, cultural, spiritual, educational and
benefits vocational measures that create conditions for the
individual to attain the highest possible level of
shall be expanded beyond the traditional urban-based functional ability;
centers to community-based programs, that will ensure
full participation of different sectors as supported by (f). Social Barriers refer to the characteristics of
national and local government agencies. institutions, whether legal, economic, cultural,
recreational or other, any human group, community, or
(d). The State also recognizes the role of the private society which limit the fullest possible participation of
sector in promoting the welfare of disabled persons disabled persons in the life of the group. Social
and shall encourage partnership in programs that barriers include negative attitudes which tends to
address their needs and concerns. single out and exclude disabled persons and which
distort roles and interpersonal relationship;
(e). To facilitate integration of disabled persons into
the mainstream of society, the State shall advocate for (g). Auxiliary Aids and Services include:
and encourage respect for disabled persons. The
State shall exert all efforts to remove all social, 1) qualified interpreters or other effective methods of
cultural, economic, environmental and attitudinal delivering materials to individuals with hearing
barriers that impairments;

are prejudicial to disabled persons. 2) qualified readers, taped tests, or other effective
methods of delivering materials to individuals with
visual impairments;
 1) the nature and cost of the action;
3) acquisition or modification of equipment or devices;
and 2) the overall financial resources of the facility or
facilities involved in the action; the number of persons
4) other similar services and actions or all types of aids employed at such facility; the effect on expenses and
and services that facilitate the learning process of
people with mental disability; resources, or the impact otherwise of such action upon
the operation of the facility;
(h). Reasonable Accommodation include (1)
improvement of existing facilities used by employees 3) the overall financial resources of the covered entity
in order to render these readily accessible to and with respect to the number of its employees; the
usable by disabled persons; and (2) modification of number, type and location of its facilities; and
work schedules, reassignment to a vacant position,
acquisition or modification of equipment or devices, 4) the type of operation or operations of the covered
appropriate adjustments or modifications of entity, including the composition, structure and
examinations, training materials or company policies, functions of the work force of such entity; the
rules and regulations, the provisions of auxiliary aids geographic
and services, and other similar accommodations for
disabled persons; 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 (n). Public Transportation means transportation by air,
workshop providing special facilities, income producing land and sea that provides the public with general or
projects or homework schemes with a view to given special service on a regular and continuing basis;
them the opportunity to earn a living thus enabling
them to acquire a working capacity required in open (o). Covered entity means employer, employment
industry. agency, labor organization or joint labor-management
committee; and
(j). Auxiliary Social Services are the supportive
activities in the delivery of social services to the (p). Commerce shall be taken to mean a s travel,
marginalized sectors of society; trade, traffic, commerce, transportation, or
communication among the provinces or between any
(k). Marginalized Disabled Persons refer to disabled foreign country or any territory or possession and any
persons who lack access to rehabilitative services and province.
opportunities to be able to participate fully in
socioeconomic activities and who have no means of TITLE TWO RIGHTS AND PRIVILEGES OF
livelihood or whose incomes fall below poverty DISABLED PERSONS
threshold;
CHAPTER I – Employment
(l). Qualified Individual with a Disability shall mean an
individual with a disability who, with or without SECTION 5. Equal Opportunity for Employment
reasonable accommodations, can perform the No disabled
essential functions of the employment position that
such individual holds or desires. However, persons shall be denied access to opportunities for
consideration shall be given to the employer’s suitable employment. A qualified disabled employee
judgement as to what functions of a job are essential, shall be subject to the same terms and conditions of
and if an employer has prepared a written description employment and the same compensation, privileges,
before advertising or interviewing applicants for the benefits, fringe benefits, incentives or allowances as a
job, this description shall be considered evidence of qualified able-bodied person. Five percent (5%) of all
the essential functions of the job; casual, emergency and contractual positions in the
Department of Social Welfare and Development;
(m). Readily Achievable means a goal can be easily Health; Education, Culture and Sports; and other
attained and carried out without much difficulty or government agencies, offices or corporations engaged
expense. In determining whether an action is readily in social development shall be reserved for disabled
achievable, factors to be considered include persons.
SECTION 6. Sheltered Employment If suitable
employment for disabled persons cannot be found
through open employment as provided in the
immediately preceding Section, the State shall
endeavor to provide it by means of sheltered
employment. In the placement of disabled persons in
sheltered employment, it shall accord due regard to
the individual qualities, vocational goals and
inclinations to ensure a good working atmosphere and
efficient production.
SECTION 7. Apprenticeship Subject to the
provision of the Labor Code as amended, disabled
persons shall be eligible as apprentices or learners;
Provided, That their handicap is not much as to
effectively impede the performance of job operations in
the particular occupation for which they are hired;
Provided, further, That after the lapse of the period of
apprenticeship if found satisfactory in the job
performance, they shall be eligible for employment.
shall serve to develop the skills and potential of
disabled persons and enable them to compete
favorably for available productive and remunerative
employment opportunities in the labor market. The
State shall also take measures to ensure the
provisions of vocational rehabilitation and livelihood
services for disabled persons in the rural areas. In
addition, it shall promote cooperation and coordination
between the government and non-government
organization and other private entities engaged in
vocational rehabilitation activities.
The Department of Social Welfare and Development
shall design and implement training programs that will
provide disabled persons with vocational skills to
enable them to engage in livelihood activities or obtain
gainful employment. The Department of Labor and
Employment shall likewise design and conduct training
programs geared towards providing disabled persons
with skills for livelihood.

SECTION 8. Incentives for Employer (a) To SECTION 10. Vocational Guidance and Counselling
encourage the active participation of the private sector The Department of Social Welfare and Development
in promoting the welfare of disabled persons and to shall implement measures providing and evaluating
ensure gainful employment for qualified disabled vocational guidance and counselling to enable
persons, adequate incentives shall be provided to disabled persons to secure, retain and advance in
private entities which employ disabled persons. employment. It shall ensure the availability and training
counsellors and other suitability qualified staff
(b). Private entities that employ disabled persons who responsible for the vocational guidance and
meet the required skills or qualifications, either as counselling of disabled persons.
regular employee, apprentice or learner, shall be
entitled to an additional deduction, from their gross SECTION 11. Implementing Rules and Regulations
income, equivalent to twenty-five percent (25%) of the The Department of Labor and Employment shall in
total amount paid as salaries and wages to disabled coordination with the Department of Social Welfare
persons: Provided, however, That such entities and Development (DSWD) and National Council for
present proof as certified by the Department of Labor the Welfare of Disabled Persons (NCWDP), shall
and Employment that disabled person are under their promulgate the rules and regulations necessary to
employ. Provided, further, That the disabled employee implement the provision under this Chapter.
is accredited with the Department of Labor and
Employment and the Department of Health as to his CHAPTER 2 – Education
disability, skills and qualifications.
SECTION 12. Access to Quality Education The
(c). Private entities that improved or modify their State shall ensure that disabled persons are provided
physical facilities in order to provide reasonable with adequate access to quality education and ample
accommodation for disabled persons shall also be opportunities to develop their skills. It shall take
entitled to an additional deduction from their net appropriate steps to make such education accessible
taxable income, equivalent to fifty percent (50%) of the to all disabled persons. It shall be unlawful for any
direct costs of the improvements or modifications. This learning institutions to deny a disabled person
section, however, does not apply to improvements or admission to any course it offers by reason of
modifications of facilities required under Batas handicap or disability. The State shall take into
Pambansa Bilang 344. consideration the special requirements of disabled
persons in the formulation of education policies and
SECTION 9. Vocational Rehabilitation Consistent program. It shall encourage learning institutions to take
with the principle of equal opportunity for disabled into account the special needs of disabled persons
workers and workers in general, the State shall take with respect to the use of school facilities, class
appropriate vocational rehabilitation measures that schedules, physical education requirements and other
pertinent consideration. The State shall also promote programs and projects that cater to the special needs
the provision by learning institutions, of auxiliary of disabled persons.
services that will facilitate the learning process for
disabled persons. SECTION 17. State Universities and Colleges If
viable and needed, the State Universities or State
SECTION 13. Assistance to Disabled Students Colleges in each region or province shall be
The State shall provide financial assistance to responsible for (a) the development of material
economically marginalized but deserving disabled appliances and technical aids for disabled persons; (b)
students pursuing post secondary or tertiary the development of training materials for vocational
education. Such assistance may be in the form of rehabilitation and special education instructions; and
scholarship grants, student loan programs, subsidies, (c) the research on special problems, particularly of
and other incentives to qualified disabled students in the visually-impaired, hearing-impaired, and
both public and private schools. At least five percent orthopedically-impaired students, mentally retarded,
(5%) of the allocation for the Private Education and multi-handicapped and other, and the elimination
Student Financial Assistance Program created by of social barriers and discrimination against disabled
virtue of R.A. 6728 shall be set aside for disabled persons; and (d) inclusion of the Special Education for
students pursuing vocational or technical and degree Disabled (SPED) course in the curriculum. The
courses. National Government shall provide these state
universities and colleges with the necessary special
SECTION 14. Special Education The State shall facilities for visually-impaired, hearingimpaired, speech
establish, maintain and support a complete, adequate impaired, and orthopedically-impaired students. It shall
and integrated system of special education for the likewise allocate the necessary funds in support of the
visually impaired, hearing impaired, mentally retarded above.
persons and other type of exceptional children in all
regions of the country. Towards this end, the CHAPTER 3 – Health
Department of Education, Culture and Sports shall
establish special education classes in public schools in SECTION 18. National Health Program The
cities, or municipalities. It shall also establish, where Department of Health, in coordination with National
viable, Braille and Record Libraries in provinces, cities Council for the Welfare of Disabled Persons, shall
or municipalities. The National Government shall institute a national health program which shall aim to
allocate funds necessary for the effective attain the following:
implementation of the special education program
nationwide. Local government units may likewise (a). prevention of disability, whether occurring
appropriate counterpart funds to supplement national prenatally or post-natally;
funds.
(b). recognition and early diagnosis of disability; and
SECTION 15. Vocational or Technical and Other
Training Programs The State provide disabled (c). early rehabilitation of the disabled.
persons with training in civics, vocational efficiency,
SECTION 19. Rehabilitation Centers The
sports and physical fitness, and other skills. The Department of Health shall establish medical
Department of Education, Culture and Sports shall rehabilitation centers in government provincial
establish in at least one government-owned vocational hospitals, and shall include it annual appropriation the
necessary funds for the operation of such centers. The
and technical school in every province a special Department of Health shall formulate and implement a
vocational and technical training program for disabled program to enable marginalized disabled persons to
persons. It shall develop and implement sports and avail of free rehabilitation services in government
hospitals.
physical fitness program specifically designed for
disabled persons taking into consideration the nature SECTION 20. Health Services The State shall
of their handicap. SECTION 16. Non-Formal protect and promote the right to health of disabled
Education The State shall develop nonformal persons and shall adopt an integrated and
education programs intended for the total human comprehensive approach to their health development
development of disabled persons. It shall provide which shall make essential health services available to
adequate resources for non-formal education them at affordable cost. The National Government
shall provide an integrated health service for disabled
persons which shall include, but not limited to, the
following: (f). provision of after care and follow-up services for
the continued rehabilitation in a community-based
(a). prevention of disability through immunization, setting of disabled persons who were released from
nutrition, environmental protection and preservation, the residential care or rehabilitation center; and
and genetic counselling; and early detection of
disability and timely intervention to arrest disabling (g). provision of day care services for disabled children
condition; and of pre-school age.

(b). medical treatment and rehabilitation. CHAPTER 5 – Telecommunications

The Department of Health shall field medical SECTION 22. Broadcast Media Television stations
personnel specializing in the treatment and shall be encouraged to provide a sign language inset
rehabilitation of disabled persons to provincial or subtitles in at least one (1) newscast program a day
hospitals and, when and special program covering events of national
significance.
viable, to municipal health centers. It shall also train its
field health personnel in the provision of medical SECTION 23. Telephone Services All telephone
attention to disabled persons. It shall further ensure companies shall be encouraged to install special
that its field health units have the necessary telephone devices or units for the hearing-impaired
capabilities to fit prosthetic and orthotic appliances on and ensure that they are commercially available to
disabled persons. 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 Postal charges shall be free on the following:
shall ensure that marginalized persons are provided
with the necessary auxiliary services that will restore (a). article and literature like books and periodicals,
their social functioning and participation in community orthopedic and other devices, and teaching aids for
affairs. Toward this end, the Department of Social the use of the disabled sent by mail within the
Welfare and Development shall develop and Philippines and abroad; and
implement programs on auxiliary social services that
respond to the needs of marginalized disabled (b). aids and orthopedic devices for the disabled sent
persons. The components of such a program shall be abroad by mail for repair; Provided, That the aforesaid
as follows: items are for personal purposes only: Provided further,
That the disabled person is a marginalized disabled as
(a). assistance in the acquisition of prosthetic devices certified
and medical intervention of specialty services;
by the Social Welfare and Development Office of the
(b). provision of specialized training activities designed local government unit concerned or the Department of
to improved functional limitations of disabled persons Social Welfare and Development.
related to communications skills;
CHAPTER 6 – Accessibility
(c). development among disabled persons of a positive
self-image through the provision of counselling, SECTION 25. Barrier-Free Environment The State
orientation and mobility and strengthening daily living shall ensure the attainment of a barrier-free
capability; environment that will enable disabled persons to have
access in public and private buildings and
(d). provision of family care services geared towards establishments and such other places mentioned in
developing the capability of families to respond to the Batas Pambansa Bilang 344, otherwise known as the
needs of the disabled members of the family; Accessibility Law’•. The national and local
government shall allocate funds for the provision of
(e). provision of substitute family care services and the architectural or structural features for disabled persons
facilities therefore for abandoned, neglected, abused in government buildings and facilities.
and unattached disabled persons who need custodial
care;
SECTION 26. Mobility The State promote the technical and financial assistance. Concerned
mobility of disabled persons. Disabled persons shall government agencies and offices shall establish close
be allowed to drive motor vehicles, subject to the rules linkages with organizations of disabled persons in
and regulations issued by the Land Transportation order to respond expeditiously to the needs of disabled
Office pertinent to the nature of their disability and the persons. National line agencies and local government
appropriate adaptations or modifications made on units shall assist disabled persons in setting up
such vehicles. specific projects that will be managed like business
propositions. To ensure the active participation of
SECTION 27. Access to Public Transport Facilities disabled persons in the social economic development
The Department of Social Welfare and Development of the country, their organizations shall be encouraged
shall develop a program to assist marginalized to participate in the planning, organization and
disabled persons gain access in the use of public management of government programs and projects for
transport facilities. Such assistance may be in the form disabled persons. Organizations of disabled persons
of 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 entity, whether public or private, shall discriminate
this 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,
SECTION 29. System of Voting Disabled persons conditions, and privileges of employment. The
shall be allowed to be assisted by a person of his following constitute acts of discrimination:
choice in voting in the national or local elections. The
person thus chosen shall prepare ballot for the (a). Limiting, segregating or classifying a disabled job
disabled voter inside the voting booth. The person applicant in such a manner that adversely affects his
assisting shall bind himself in a formal document under work opportunities;
oath to fill out the ballot strictly in accordance with the
instructions of the voter and not to reveal the contents (b). Using qualification standards, employment tests or
of the ballot prepared by him. Violation of this provision other selection criteria that screen out or tend to
shall constitute an election offense. Polling places screen out a disabled person unless such standards,
should be made accessible to disabled persons during tests or other selection criteria are shown to be
the national or local elections. jobrelated for the position on question and are
consistent with business necessity;
SECTION 30. Right to Assemble Consistent with
the provisions of the Constitution, the State shall (c). Utilizing standards, criteria, or methods of
recognize the right of disabled persons to participate in administration that:
processions, rallies, parades, demonstrations, public
meetings, and assemblages or other forms of mass or 1). have the effect of discrimination on the basis of
concerted action held in public. disability; or

SECTION 31. Right to Organize The State 2). perpetuate the discrimination of others who are
recognize the rights of disabled persons to form subject to common administrative control;
organizations or associations that promote their
welfare and advance or safeguard their interests. The (d). Providing less compensation, such as salary,
National Government, through its agencies, wage or other forms of remuneration and fringe
instrumentalities and subdivisions, shall assist benefits, to a qualified disabled employee, by reason
disabled persons in establishing self-help of his disability, than the amount to which a non-
organizations by providing them with necessary disabled person performing the same work is entitled;
(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 transportation facilities to charge higher fare or to
to a job or position he cannot perform by reason of his refuse 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 CHAPTER 3 Discrimination on the Use of
the employer can prove that he impairs the satisfactory Public
performance of the work involve to the prejudice of the
business entities; Provided, however, That the Accommodations and Services
employer first sought provide reasonable
accommodations for disabled persons; SECTION 35. Public Accommodations and Services
For purposes of this Chapter, public accommodations
(h). Failing to select or administer in the effective and services shall include the following:
manner employment tests which accurately reflect the
skills, aptitude or other factor of the disabled applicant (a). an inn, hotel, motel, or other place of lodging,
or employee that such test purports to measure, rather except for an establishment located within a building
than the impaired sensory, manual or speaking skills that contains not more than five (5) rooms for rent or
of such applicant or employee, if any; and hire and that is actually occupied by the proprietor of
such establishment as the residence of such
(i). Excluding disabled persons from membership in proprietor;
labor unions or similar organization.
(b). a restaurant, bar or other establishment serving
SECTION 33. Employment Entrance Examination food or drink;
Upon an offer of employment, a disabled applicant
may be subjected to medical examination, on the (c). a motion picture, theater, concert hall, stadium, or
following occasions: other place of exhibition or entertainment;

(a). all entering employees are subjected to such an (d). an auditorium, convention center, lecture hall, or
examination regardless of disability; other place of public gathering;

(b). information obtained during the medical condition (e). a bakery, grocery store, hardware store, shopping
or history of the applicant is collected and maintained center, or other sales or rental establishment;
on separate forms and in separate medical files and is
treated as a confidential medical record, Provided, (f). a bank, barber-shop, beauty-shop, travel service,
however, That: funeral parlor, gas station, office of a lawyer,
pharmacy, insurance office, professional office of a
1). supervisors and managers may be informed health care provider, hospital or other service
regarding necessary restrictions on the work or duties establishment;
of the employees and necessary accommodations;
(g). a terminal, depot, or other station used for
2). first aid and safety personnel may be informed, specified public transportation;
when appropriate, if the disability might require
emergency treatment; (h). a museum, gallery, library or other place of public
display or collection;
3). government officials investigating compliance with
this Act shall be provided relevant information on (i). a park, zoo, amusement park, or other place of
request; and recreation;

4). the results of such examination are used only

accordance with this Act.
(j). a nursery, elementary, secondary, undergraduate, (c). Opportunity to Participate Not withstanding the
or post-graduate private school, or other place of existence of separate or different programs or
education; activities provided in accordance with this section, an
individual with a disability shall not be denied the
(k). a gymnasium, health spa, bowling alley, golf opportunity to participate in such programs or activities
course; or that are not

(l). other place of exercise or recreation. separate or different.

SECTION 36. Discrimination on the Use of Public (d). Association It shall be discriminatory to
Accommodations exclude or otherwise deny equal goods, services,
facilities, advantages, privileges, accommodations or
(a) No disabled persons shall be discriminated on the other opportunities to an individual or entity because of
basis of disability in the full and equal enjoyment of the the known disability of an individual with whom the
goods, services, facilities, privileges, advantages individual or entity is known to have a relationship or
association.
or accommodations of any place of public
accommodation by any person who owns, leases, or (e). Prohibitions For purposes of this Section, the
operates a place of public accommodation. The following shall be considered as discriminatory.
following constitute acts of discrimination:
1). the imposition or application of eligibility criteria that
1). denying a disabled person, directly through screen out or tend to screen out an individual with a
contractual, licensing, or other arrangement, the disability or any class or individuals with disabilities
opportunity to participate in or benefit from the goods, from fully and equally enjoying and goods, services,
services, facilities, privileges, advantages, or facilities, privileges, advantages, accommodations,
accommodations of an entity by reason of his unless such criteria can be shown to be necessary for
disability; the provision of the goods, services, facilities,
privileges, or accommodations being offered;
2). affording a disabled person, on the basis of his
disability, directly or through contractual, licensing, or 2). a failure to make reasonable modifications in
other arrangement, with the opportunity to participate policies, practices, or procedures, when such
in or benefit from a good, service, facility, privilege, modification are necessary to afford such goods,
advantage, or accommodation that is not equal to that services, facilities, privileges, advantages or
afforded to other able-bodied persons; and accommodations to individuals with disabilities, unless
the entity can demonstrate that making such
3). providing disability, directly or through contractual, modification would fundamentally alter the nature of
licensing, or other arrangement, with a good, service, the goods, facilities, services, privileges, advantages,
facility, advantages, privilege, or accommodation that or accommodations;
is different or separate from that provided to other
able-bodied persons unless such action is necessary 3). Failure to take steps as may be necessary to
to provide the disabled person with a good, service, ensure that no individual with disability is excluded,
facility, advantage, privilege or accommodation, or denied services, segregated or otherwise treated
other opportunity that is as effective as that provided to differently than other individuals because of the
others; absence of auxiliary aids and services, unless the
entity can demonstrate that taking such steps would
For purpose of this section, the term individuals or fundamentally alter the nature of the good, service,
class individuals’• refers to the clients or customers of facility, privilege or would result in undue burden;
the covered public accommodation that enters into the
contractual, licensing or other arrangement. 4). a failure to remove architectural barriers, and
communication barriers that are structural in nature, in
(b). Integrated Settings Goods, services, facilities, existing facilities, where such removal is readily
advantages, and accommodations shall be afforded to achievable; and
an individual with a disability in the most integrated
setting appropriate to the needs of the individual. 5). where an entity can demonstrate that the removal
of a barrier under clause (4) is not readily achievable,
a failure to make such goods, services, facilities,
privileges, advantages, or accommodations available to the provisions of Section 94 of the National Internal
through alternative methods if such methods are Revenue Code (NIRC), as amended and shall be
readily achievable. allowed as deduction from the donor’s gross income
for purposes of computing the taxable income subject
SECTION 37. Use of Government Recreational or to the provisions of Section 29 (h) of the Code.
Sports Centers
(b). Donations from foreign countries shall be exempt
Free of Charge Recreational or sports centers from taxes and duties on importation subject to the
owned or operated by the Governent shall be used, provisions of Section 105 of the Tariff and Customs
free of charge, by marginalized disabled persons Code of the Philippines, as amended, Section 103 of
during their social, sports or recreation activities. the NIRC, as amended and other relevant laws and
international agreements.
SECTION 38. Implementing Rules and Regulations
The Department of Public Works and Highway shall (c). Local manufacturing of technical aids and
formulate the rules and regulations necessary to appliances used by disabled persons shall be
implement the provisions of this Chapter. considered as a preferred area of investment subject
to the provisions of Executive Order No. 226 otherwise
TITLE FOUR FINAL PROVISIONS known as the Omnibus Investments Code of
1987’• and, as such, shall enjoy the rights, privileges
SECTION 39. Housing Program The National and incentives as provided in said Code such as, but
Government shall take into consideration in its national not limited, to the following:
shelter programs the special housing requirement of
disabled persons. 1). repatriation of investments;

SECTION 40. Role of National Agencies and Local 2). remittance of earnings;
Government Units Local government units shall
promote the establishment of organizations of disabled 3). remittance of payments on foreign contracts;
persons in their respective territorial jurisdictions.
National agencies and local government units may 4). freedom from expropriations;
enter into joint ventures with organizations or
associations of disabled persons to explore livelihood 5). freedom from requisition of investment;
opportunities and other undertaking that shall enhance
the health, physical fitness and the economic and 6). income tax holiday;
social well-being of disabled persons.
7). additional deduction for labor expense;
SECTION 41. Support From Non-government
Organizations Nongovernment organizations or 8). tax and duty exemption on imported capital
private volunteer organizations dedicated to the equipment;
purpose of promoting and enhancing the welfare of
disabled persons shall, as they, are hereby 9). tax credit on domestic capital equipment;
encouraged, become partners of the Government in
the implementation of vocational rehabilitation 10). exemption from contractor’s tax;
measures and other related programs and projects.
Accordingly, their participation in the implementation of 11). simplification of customs procedures;
said measures, program and projects is to be
extended all possible support by the Government. The 12). unrestricted use of consigned equipment;
Government shall sponsor a volunteer service
program which shall harness the involvement of 13). employment of foreign nationals;
private individual in the provision of assistance to
disabled persons. 14). tax credits for taxes and duties on raw materials;

SECTION 42. Tax Incentives (a) Any donation, 15). access to bonded manufacturing/trading
bequest, subsidy or financial aid which may be made warehouse system;
to government agencies engaged in the rehabilitation
of disabled persons and organizations of disabled 16). exemption from taxes and duties on imported
persons shall be exempt form the donor’s tax subject spare parts; and
17). Exemption from wharfage dues and any export (a). granting temporary, preliminary or permanent
tax, duty, impostand free. relief;

SECTION 43. Continuity Clause Should any (b). providing an auxiliary aid or service, modification
department or agency tasked with the enforcement or of policy, practice or procedure, or alternative method;
formulation of rules and regulations and guidelines for and
implementation of any provisions of this Act is
abolished, merge with another department or agency (c). making facilities readily accessible to and usable
or modified, such shall not affect the enforcement or by individuals with disabilities.
formulation of rules, regulations and guidelines for
implementation of this Act to the effect that SECTION 46. Penal Clause
(a) Any person who violates any provision of this Act
(a). In case of abolition, the department or agency shall suffer the following penalties:
established to replace the abolished department or
agency shall take-over the functions under this Act of 1). for the first violation, a fine of not less than Fifty
the abolished department or agency. thousand pesos (P 50,000.00) but not exceeding One
hundred thousand pesos (P 100,000.00) or
(b). In case of the department or agency tasked with imprisonment of not less than six (6) months but not
the enforcement of formulation of rules, regulations more than two (2) years, or both at the discretion of
and guidelines for implementation of this Act is merged the court; and
with another department or agency, the former shall
continue the functions under this Act of the merged 2). for any subsequent violation, a fine of not less than
department or agency. One hundred thousand pesos (P 100,000.00) but not
exceeding Two hundred thousand pesos (P
(c). In case of modification, the department or agency 200,000.00) or imprisonment for less than two (2)
modified shall continue the functions under this Act of years but not more than six (6) years, or both at the
the department or agency that has undergone discretion of the court.
modification.
(b). Any person who abuses the privileges granted
SECTION 44. Enforcement by the Secretary of Justice herein shall be punished with imprisonment of not less
than six (6) months or a fine of not less than Five
(a). Denial of Right thousand pesos (P 5,000.00) but not more than Fifty
thousand pesos (P 50,000.00), or both, at the
1). Duty to Investigate the Secretary of Justice discretion of the court.
shall investigate alleged violations of this Act, and shall
undertake periodic reviews of compliance of covered (c). If the violator is a corporation, organization or any
entities under this Act. similar entity, the officials thereof directly involved shall
be liable therefor.
(b). Potential Violations If the Secretary of Justice
has reasonable cause to believe that (d). If the violator is an alien or a foreigner, he shall be
deported immediately after service of sentence without
1). any person or group of persons is engaged in a further deportation proceedings.
pattern of practice of discrimination under this Act; or
SECTION 47. Appropriations The amount
2). any person or group of persons has been necessary to carry out the provision of this Act shall be
discriminated against under this Act and such included in the General Appropriation Act of the year
discrimination raises and issue of general public following its enactment into law and thereafter.
importance, the Secretary of Justice may commence a
legal action in any appropriate court. SECTION 48. Separability Clause Should any
provision of this Act be found unconstitutional by a
SECTION 45. Authority of Court The court may court of law, such provisions shall be severed from the
grant any equitable relief that such court considers to remainder of the Act, and such action shall not affect
be appropriate, including, to the extent required the enforceability of the remaining provisions of this
Act.
by this Act:
SECTION 49. Repealing Clause All laws,
presidential decrees, executive orders and rules and
regulations inconsistent with the provisions of this Act
are hereby repealed or modified accordingly.
SECTION 50. Effectivity This Act shall take effect REPUBLIC ACT NO. 9442
fifteen (15) days after its publication in any two (2)
newspaper of general circulation.
Approved:
Thirteenth Congress
Third Regular Session
Begun and held in Metro Manila, on Monday, the twenty-fourth
day of July, two thousand six.
April 30, 2007
AN ACT AMENDING REPUBLIC ACT NO. 7277,
OTHERWISE KNOWN AS THE "MAGNA CARTA FOR
DISABLED PERSONS, AND FOR OTHER PURPOSES"

Signed) Be it enacted by the Senate and House of Representatives of

the Philippines in Congress assembled:
RAMON V. MITRA
SECTION 1. A new chapter, to be denominated as "Chapter 8.
Other Privileges and Incentives" is hereby added to Title Two
Speaker of the House
of Republic Act No. 7277, otherwise known as the "Magna
Carta for Disabled Persons", with new Sections 32 and 33, to
(Signed) read as follows:

NEPTALI A. GONZALES "CHAPTER 8. Other Privileges and Incentives

President of the Senate "SEC. 32. Persons with disability shall be entitled to the
following:
This bill which is consolidation of Senate Bill No, 1286
and House Bill 35091, was finally passed by the (a) At least twenty percent (20%) discount from all
Senate and the House of Representatives on January establishments relative to the utilization of all services in hotels
and similar lodging establishments; restaurants and recreation
22, 1992 and January 16, 1992, respectively. centers for the exclusive use or enjoyment of persons with
disability;
(Signed)
(b) A minimum of twenty percent (20%) discount on admission
CAMILO L. SABIO fees charged by the theaters, cinema houses, concert halls,
circuses, carnivals and other similar places of culture, leisure
House of Representatives and amusement for the exclusive use or enjoyment of persons
with disability;
(Signed)
(c) At least twenty percent (20%) discount for the purchase of
medicines in all drugstores for the exclusive use or enjoyment
ANACLETO D. BADOY, JR. of persons with disability;

Secretary of the Senate (d) At least twenty percent (20%) discount on medical and
dental services including diagnostic and laboratory fees such
Approved: March 24, 1992 as, but not limited to x-rays, computerized tomography scans
and blood tests, in all government facilities, subject to
(Signed) guidelines to be issued by the Department of Health (DOH), in
coordination with the Philippine Health Insurance Corporation
(PHILHEALTH);
CORAZON C. AQUINO
(e) At least twenty percent (20%) discount on medical and
President of the Philippines dental services including diagnostic and laboratory fees, and
professional fees of attending doctors in all private hospitals
and medical facilities, in accordance with the rules and
regulations to be issued by the DOH, in coordination with the
PHILHEALTH;
Republic of the Philippines
Congress of the Philippines (f) At least twenty percent (20%) discount on fare for domestic
Metro Manila 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
amended to read as follows:
"SEC. 46. Penal Clause. -
(a) Any person who violates any provision of this Act shall
suffer the following penalties:
(1) For the first violation, a fine of not less than Fifty thousand ROBERTO P. NAZARENO
pesos (P50,000.00) but not exceeding One hundred thousand
pesos (P100,000.00) or imprisonment of not less than six House of Represenatives
months but not more than two years, or both at the discretion
of the court; and
(2) For any subsequent violation, a fine of not less than One
hundred thousand pesos (P100,000.00) but not exceeding
Two hundred thousand pesos (P200,000.00) or imprisonment
for not less than two years but not more than six years, or both
at the discretion of the court.
(b) Any person who abuses the privileges granted herein shall
be punished with imprisonment of not less than six months or
a fine of not less than Five thousand pesos (P5,000.00), but
not more than Fifty thousand pesos (P50,000.00), or both, at
the discretion of the court.
(c) If the violator is a corporation organization or any similar
entity, the officials thereof directly involved shall be liable
therefore.
(d) If the violator is an alien or a foreigner, he shall be
deported immediately after service of sentence without further
deportation proceedings.
Upon filing of an appropriate complaint, and after notice and
hearing the proper authorities may also cause the cancellation
or revocation of the business permit, permit to operate,
franchise and other similar privileges granted to any business
entity that fails to abide by the provisions of this Act."
Sec. 4. The title of Republic Act No. 7277 is hereby amended
to read as the "Magna Carta for Persons with Disability", and
all references on the said law to "disabled persons" shall
likewise be amended to read as "persons with disability".
SEC. 5. The Department of Social Welfare and Development,
the National Council for the Welfare of Disabled Persons, and
the Bureau of Internal Revenue, in consultation with the
concerned Senate and House committees and other agencies,
organizations, establishments shall formulate an agencies,
organizations, establishments shall formulate an implementing
rules and regulations pertinent to the provisions of this Act
within six months after the effectivity of this Act.
SEC. 6. This Act shall take effect fifteen (15) days after its
publication in any two newspapers of general circulation.
Approved,
JOSE DE VENECIA JR. MANNY VILLAR
Speaker of the House of President of the Senate
Representatives
This Act which is a consolidation of Senate Bill No. 2580 and
House Bill No. 1214 was finally passed by the Senate and the
House of Representatives on February 8, 2007 and February
7, 2007, respectively.
OSCAR G. YABES
Secretary General Secretary of Senate
Approved: April 30, 2007
GLORIA MACAPAGAL-ARROYO
President of the Philippines
Republic of the Philippines
Congress of the Philippines
Metro Manila
Third Regular Session
Began and held in Metro Manila, on Monday, the
twenty-fifth
day of July, nineteen hundred and ninety-four.
[REPUBLIC ACT NO. 7916]
(as amended by Republic Act No. 8748)
AN ACT PROVIDING FOR THE LEGAL
FRAMEWORK AND MECHANISMS FOR THE
CREATION, OPERATON, ADMINISTRATION, AND
COORDINATION OF SPECIAL ECONOMIC ZONES
IN THE PHILIPPINES, CREATING FOR THIS
PURPOSE, THE PHILIPPINE ECONOMIC ZONE
AUTHORITY (PEZA), AND FOR OTHER
PURPOSES.
Be it enacted by the Senate and House of
Representatives of the Philippines in Congress
assembled:
CHAPTER I
PURPOSES AND OBJECTIVES: ESTABLISHMENT
AND NATURE OF SPECIAL ECONOMIC ZONES;
COORDINATION WITH OTHER SIMILAR SCHEMES
SEC. 1. Title. – This act shall be known and cited as
"The Special Economic Zone Act of 1995."
SEC. 2. Declaration of Policy. – It is the declared
policy of the government to translate into practical
realities the following State policies and mandates in
the 1987 Constitution, namely:
(a) "The State recognizes the indispensible role of the
private sector, encourages private enterprise, and
provides incentives to needed investments." (Sec. 20,
Art II)
(b) "The State shall promote the preferential use of
Filipino labor, domestic materials and locally produced
goods and adopt measures that help make them
competitive." (Sec. 12, Art XII)
In pursuance of these policies, the government shall
actively encourage, promote, induce and accelerate a
sound and balanced industrial, economic and social
development of the country in order to provide jobs to
the people specially those in the rural areas, increase
their productivity and their individual and family
income, and thereby improve the level and quality of
their living condition through the establishment, among
others, of special economic zones in suitable and
strategic locations in the country and through
measures that shall effectively attract legitimate and
productive foreign investments.
SEC. 3. Purposes, Intents and Objectives. – It is the
purpose, intent and objective of this Act:
(a) To establish the legal framework and mechanisms
for the integration, coordination, planning and
monitoring of special economic zones, industrial
estates / parks, export processing zones and other
economic zones;
(b) To transform selected areas in the country into
highly developed agro industrial, industrial,
commercial, tourist, banking, investment, and financial
centers, where highly trained workers and efficient
services will be available to commercial enterprises;
(c) To promote the flow of investors, both foreign and
local, into special economic zones which would
generate employment opportunities and establish
backward and forward linkages among industries in
and around the economic zones;
(d) To stimulate the repatriation of Filipino capital by
providing attractive climate and incentives for business
activity;
(e) To promote financial and industrial cooperation
between the Philippines and industrialized countries
through technology-intensive industries that will
modernize the country’s industrial sector and improve
productivity levels by utilizing new technological and
managerial know-how; and
(f) To vest the special economic zones on certain
areas thereof with the status of a separate customs
territory within the framework of the Constitution and
the national sovereignty and territorial integrity of the
Philippines.
SEC. 4. Definition of Terms. – For purposes of this
Act, the following definitions shall apply to the following
terms:
(a) "Special Economic Zones (SEZ)" – hereinafter
referred to as the ECOZONES, are selected areas
with highly developed or which have the potential to be
developed into agro-industrial, Industrial
tourist/recreational, commercial, banking, investment
and financial centers. An ECOZONE may contain any
or all of the following: Industrial Estates (IEs), Export
Processing Zones (EPZs), Free Trade Zones, and
Tourist/Recreational Centers.
(b) "Industrial Estate (IE)" – refers to a tract of land
subdivided and developed according to a
comprehensive plan under a unified continuous
management and with provisions for basic
infrastructure and utilities, with or without pre-built
standard factory buildings and community facilities for
the use of the community of industries.
(c) "Export Processing Zone (EPZ)" – a specialized
industrial estate located physically and/or
administratively outside customs territory,
predominantly oriented to export production.
Enterprises located in export processing zones are
allowed to import capital equipment and raw materials
free from duties, taxes and other import restrictions.
(d)"Free Trade Zone" - an isolated policed area
adjacent to a port of entry (as a seaport) and/or airport
where imported goods may be unloaded for immediate
transshipment or stored, repacked, sorted, mixed, or
otherwise manipulated without being subject to import
duties. However, movement of these imported goods
from the free-trade area to a non-free-trade area in the
country shall be subject to import duties.
Enterprises within the zone are granted preferential tax
treatment and immigration laws are more lenient.
SEC. 5. Establishment of ECOZONES. – To ensure
the viability and geographical dispersal of ECOZONES
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;
(m) So much as may be necessary of that portion of
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
immediate environs;
(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 the ECOZONE shall be paid and remitted as follows:
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
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
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
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.
SEC. 36. One Stop Shop Center. - The PEZA shall
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
issuing permits to investors shall assign their
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
Congress of the Philippines
Metro Manila
Eleventh Congress
Republic Act No. 8748 June 1, 1999
AN ACT AMENDING REPUBLIC ACT NO. 7916,
OTHERWISE KNOWN AS THE "SPECIAL
ECONOMIC ZONE ACT OF 1995"
Be it enacted by the Senate and House of
Representatives of the Philippines in Congress
assembled::
Section 1. Chapter II, Section 11 of Republic Act No.
7916 is hereby amended to read as follows:
"Section 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 operations, 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 of existing law to the contrary notwithstanding:
and integrity and a degree holder in any of the provided, further, that the director general may carry
following fields: economics, business, public out removal of such officers and employees.
administration, law, management or their equivalent.
"All positions in the PEZA shall be governed by a
"The Board shall be composed of thirteen (13) compensation, position classification system and
members as follows: the Secretary of the Department qualification standards approved by the director
of Trade and Industry as Chairman, the Director general with the concurrence of the Board of Directors
General of the Philippine Economic Zone Authority as based on a comprehensive job analysis and audit of
Vice-chairman, the undersecretaries of the actual duties and responsibilities. The compensation
Department of Finance, the Department of Labor and plan shall be comparable with the prevailing
Employment, the Department of Interior and Local compensation plans in the Subic Bay Metropolitan
Government, the Department of Environment and Authority (SBMA), Clark Development Corporation
Natural Resources, the Department of Agriculture, the (CDC), Bases Conversion and Development Authority
Department of Public Works and Highways, the (BCDA) and the private sector and shall be subject to
Department of Science and Technology, the periodic review by the Board no more than once every
Department of Energy, the Deputy Director General of two (2) years without prejudice to yearly merit reviews
the National Economic and Development Authority, or increases based on productivity and profitability.
one (1) representative from the labor sector, and one The PEZA shall thereforee be exempt from existing
(1) representative from the investors/business sector laws, rules and regulations on compensation, position
in the ECOZONE. In case of the unavailability of the classification and qualification standards. It shall
Secretary of the Department of Trade and Industry to however endeavor to make its system conform as
attend a particular board meeting, the Director General closely as possible with the principles under Republic
of PEZA shall act as Chairman." Act No. 6758.

xxx "The PEZA officers and employees including all

Members of the Board shall not engage directly or
Section 2. Chapter II, Section 15 of Republic Act No. indirectly in partisan activities or take part in any
7916 is likewise amended to read as follows: election, except to vote.

"Section 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:
"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."
Section 4. Chapter III, Section 24 of Republic Act No.
7916 is hereby amended to read as follows:

xxx xxx xxx "Section 24. Exemption from National and Local
Taxes. — Except for real property taxes on land
"Privately-owned ECOZONES shall retain autonomy owned by developers, no taxes, local and national,
and independence but shall be monitored by the PEZA shall be imposed on business establishments
for the implementation of incentives and operations for operating within the ECOZONE. In lieu thereof, five
adherence to the law." percent (5%) of the gross income earned by all
business enterprises within the ECOZONE shall be
Section 3. Chapter II, Section 16 of Republic Act No. paid and remitted as follows:
7916 is likewise amended to read as follows:
"(a) Three percent (3%) to the National Government;
"Section 16. Personnel. — The PEZA Board of
Directors shall provide for an organization and staff of "(b) Two percent (2%) which shall be directly remitted
officers and employees of the PEZA, and upon by the business establishments to the treasurer's
recommendation of the director general with the office of the municipality or city where the enterprise is
approval of the Secretary of the Department of Trade located."
and Industry, appoint and fix the remunerations and
other emoluments: provided, that the Board shall have Section 5. Chapter III, Section 25 of Republic Act No.
exclusive and final authority to promote, transfer, 7916 is hereby amended to read as follows:
assign or reassign officers of the PEZA, any provision
"Section 25. Applicable National and Local Taxes. — EXECUTIVE ORDER NO. 226 July 16, 1987
All persons and service establishments in the
ECOZONE shall be subject to national and local taxes THE OMNIBUS INVESTMENTS CODE OF 1987
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
homelot in the relocation site, and preferential
employment in the project being undertaken."
Section 7. Chapter VI, Section 50 of Republic Act No.
7916 is hereby amended to read as follows:
"Section 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."
Section 8. Effectivity Clause. — This Act shall take mining, tourism and other sectors of the economy
effect after fifteen (15) days following its publication in which
the Official Gazette or in two (2) newspapers of opportunities relative to the amount of the capital being
general circulation whichever comes earlier.
Approved, June 1, 1999.
WHEREAS, the Government is committed to
encourage investments in desirable areas of activities;
WHEREAS, to facilitate investment, there is a need to
adopt a cohesive and consolidated investments
incentives law;
WHEREAS, it is imperative to integrate basic laws on
investment, to clarify and harmonize their provisions
for the guidance of domestic and foreign investors;
NOW, THEREFORE, I, CORAZON C. AQUINO,
President of the Philippines, do hereby order and
ordain the following:
Article 1. Short Title. This Order shall be known as the
"Omnibus Investments Code" of 1987.
Article 2. Declaration of Investment Policies. To
accelerate the sound development of the national
economy in consonance with the principles and
objectives of economic nationalism and in pursuance
of a planned economically feasible and practical
dispersal of industries and the promotion of small and
medium scale industries, under conditions which will
encourage competition and discourage monopolies,
the following are declared policies of the State:
1. The State shall encourage private Filipino and
foreign investments in industry, agriculture, forestry,
shall: provide significant employment
invested; increase productivity of the land, minerals,
forestry, aquatic and other resources of the country,
and improve utilization of the products thereof;
improve technical skills of the people employed in the
enterprise; provide a fountain for the future
development of the economy; meet the tests of
international competitiveness; accelerate development
of less developed regions of the country; and result in
increased volume and value of exports for the
economy. lawphi1.net
2. The State shall ensure the holistic development by
safeguarding the well-being of the social, cultural and
ecological life of the people. For this purpose,
consultation with affected communities will be
conducted whenever necessary. lawphi1.net
3. The Sate shall extend to projects which will
significantly contribute to the attainment of these
objectives, fiscal incentives without which said projects appointed by the President for a term of four (4) years:
may not be established in the locales, number and/or Provided, That upon the expiration of his term, a
pace required for optimum national economic governor shall serve as such until his successor shall
development. Fiscal incentive system shall be devised have been appointed and qualified: Provided, further,
to compensate for market imperfections, to reward That no vacancy shall be filled except for the
performance contributing to economic development, unexpired portion of any term, and that no one may be
be cost-efficient and be simple to administer. designated to be governor of the Board in an acting
capacity but all appointments shall be ad interim or
4. The Sate considers the private sector as the prime permanent.
mover for economic growth. In this regard, private
initiative is to be encouraged, with deregulation and Article 5. Qualifications of Governors of the Board.
self-regulation of business activities to be generally The governors of the Board shall be citizens of the
adopted where dictated by urgent social concerns. Philippines, at least thirty (30) years old, of good moral
character and of recognized competence in the fields
5. The State shall principally play a supportive role, of economics, finance, banking, commerce, industry,
rather than a competitive one, providing the agriculture, engineering, law, management or labor.
framework, the climate and the incentives within which
business activity is to take place. Article 6. Appointment of Board Personnel. The Board
shall appoint its technical staff and other personnel
6. The State recognize that there are appropriate roles subject to Civil Service Law, rules and regulations.
for local and foreign capital to play in the development
of the Philippine economy and that it is the Article 7. Powers and Duties of the Board. The Board
responsibility of Government to define these roles and shall be responsible for the regulation and promotion
provide the climate for their entry and growth. of investments in the Philippines. It shall meet as often
as may be necessary generally once a week on such
7. The State recognizes that industrial peace is an day as it may fix. Notice of regular and special
essential element of economic growth and that it is a meetings shall be given all members of the Board. The
principal responsibility of the State to ensure that such presence of four (4) governors shall constitute a
condition prevails. quorum and the affirmative vote of four (4) governors
in a meeting validly held shall be necessary to
8. Fiscal incentives shall be extended to stimulate the exercise its powers and perform its duties, which shall
establishment and assist initial operations of the be as follows:
enterprise, and shall terminate after a period of not
more than 10 years from registration or start-up of (1) Prepare annually the Investment Priorities Plan as
operation unless a specific period is otherwise stated. defined in Article 26, which shall contain a listing of
specific activities that can qualify for incentives under
The foregoing declaration of investment policies shall Book I of this Code, duly supported by the studies of
apply to all investment incentive schemes. existing and prospective demands for such products
and services in the light of the level and structure of
CHAPTER II income, production, trade, prices and relevant
BOARD OF INVESTMENTS economic and technical factors of the regions as well
as existing facilities;
Article 3. The Board of Investments. The Board of
Investments shall implement the provisions of Books (2) Promulgate such rules and regulations as may be
One to Five of this Code. necessary to implement the intent and provisions of
this Code relevant to the Board:
Article 4. Composition of the Board. The Board of
Investments shall be composed of seven (7) (3) Process and approve applications for registration
governors: The Secretary of Trade and Industry, three with the Board, imposing such terms and conditions as
(3) Undersecretaries of Trade and Industry to be it may deem necessary to promote the objectives of
chosen by the President, and three (3) representatives this Code, including refund of incentives when
from other government agencies and the private appropriate, restricting availment of certain incentives
sector. The Secretary of Trade and Industry shall be not needed by the project in the determination of the
concurrently Chairman of the Board and the Board, requiring performance bonds and other
Undersecretary of the Department of Trade and guarantees, and payment of application, registration,
Industry for Industry and Investments shall be publication and other necessary fees and when
warranted may limit the availment of the tax holiday
incentive to the extent that the investor's country law
or treaties with the Philippines allows a credit for taxes
paid in the Philippines;
(4) After due hearing, decide controversies concerning
the implementation of the relevant books of this Code
that may arise between registered enterprises or
investors therein and government agencies, within
thirty (3)) days after the controversy has been
submitted for decision: Provided, That the investor or
the registered enterprise may appeal the decision of
the Board within thirty (30) days from receipt thereof to
the President;
(5) Recommend to the Commissioner of Immigration
and Deportation the entry into the Philippines for
employment of foreign nationals under this Code;
(6) Periodically check and verify, either by inspection
of the books or by requiring regular reports, the
proportion of the participation of Philippine nationals in
a registered enterprise to ascertain compliance with its
qualification to retain registration under this Code;
invest therein and show the capability of doing so;
Provided, That if the venture is implemented, then the
amount advanced by the Board shall be repaid within
five (5) years from the date the commercial operation
of said enterprise starts;
(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;
(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;

(7) Periodically check and verify the compliance by (13) In appropriate cases, the subject to the conditions
registered enterprises with the relevant provisions of which the Board deems necessary, suspend the
this Code, with the rules and regulations promulgated nationality requirement provided for in this Code or any
under this Code and with the terms and conditions of other nationalization statute in cases of ASEAN
registration; projects or investments by ASEAN nationals in
preferred projects, and with the approval of the
(8) After due notice, cancel the registration or suspend President, extend said suspension to other
the enjoyment of incentives benefits of any registered international complementation arrangements for the
enterprise and/or require refund of incentives enjoyed manufacture of a particular product on a regional basis
by such enterprise including interests and monetary to take advantage of economies of scale;
penalties, for (a) failure to maintain the qualifications
required by this Code for registration with the Board of (14) Extend the period of availment of incentives by
(b) for violation of any provisions of this Code, of the any registered enterprise; Provided, That the total
rules and regulations issued under this Code, of the period of availment shall not exceed ten (10) years,
terms and conditions of registration, or of laws for the subject to any of the following criteria:
protection of labor or of the consuming public:
Provided, That the registration of an enterprise whose (a) The registered enterprise has suffered operational
project timetable, as set by the Board is delayed by force majeure that has impaired its viability;
one year, shall be considered automatically cancelled
unless otherwise reinstated as a registered enterprise (b) The registered enterprise has not fully enjoyed the
by the Board; incentives granted to it for reasons beyond its control;

(9) Determine the organizational structure taking into (c) The project of the registered enterprise has a
account Article 6 of this Code; appoint, discipline and gestation period which goes beyond the period of
remove its personnel consistent with the provisions of availment of needed incentives; and
the Civil Service Law and Rules;
(d) The operation of the registered enterprise has been
(10) Prepare or contract for the preparation of subjected to unforeseen changes in government
feasibility and other pre-investment studies for pioneer policies, particularly, protectionalism policies of
areas either upon its own initiative; or upon the request importing countries, and such other supervening
of Philippine nationals who commit themselves to
factors which would affect the competitiveness of the (5) Generally, to exercise such other powers and
registered firm; perform such other duties as may be directed by the
Board of Governors from time to time.
(15) Regulate the making of investments and the doing
of business within the Philippines by foreigners or Article 9. Powers and Duties of the Vice-Chairman.
business organizations owned in whole or in part by The Vice-Chairman shall have the following powers
foreigners; and duties:

(16) Prepare or contract for the preparation of industry (1) To act as Managing Head of the Board;
and sectoral development programs and gather and
compile statistical, technical, marketing, financial and (2) To preside over the meetings of the Board in the
other data required for the effective implementation of absence of the Chairman;
this Code;
(3) Prepare the Agenda for the meetings of the Board
(17) Within four (4) months after the close of the fiscal and submit for its consideration and approval the
year, submit annual reports to the President which policies and measures which the Chairman deems
shall cover its activities in the administration of this necessary and proper to carry out the provisions of
Code, including recommendations on investment this Code;
policies;
(4) Assist registered enterprises and prospective
(18) Provide, directly or through Philippine Diplomatic investors to have their papers processed with dispatch
Missions, such information as may be of interest to by all government offices, agencies, instrumentalities
prospective foreign investors; and financial institutions; and

(19) Collate, analyze and compile pertinent information (5) Perform the other duties of the Chairman in the
and studies concerning areas that have been or may absence of the latter, and such other duties as may be
be declared preferred areas of investments; and assigned to him by the Board of Governors.

(20) Enter into agreements with other agencies of BOOK I

government for the simplification and facilitation of INVESTMENTS WITH INCENTIVES
systems and procedures involved in the promotion of
investments, operation of registered enterprises and TITLE I
other activities necessary for the effective PREFERRED AREAS OF INVESTMENTS
implementation of this Code;
CHAPTER I
(21) Generally, exercise all the powers necessary or DEFINITIONS OF TERMS
incidental to attain the purposes of this Code and other
laws vesting additional functions on the Board. Article 10. "Board" shall mean the Board of
Investments created under this Code.
Article 8. Powers and Duties of the Chairman. The
Chairman shall have the following powers and duties: Article 11. "Registered Enterprises" shall mean any
individual, partnership, cooperative, corporation or
(1) To preside over the meetings of the Board; other entity incorporated and/or organized and existing
under Philippine laws; and registered with the Board in
(2) To render annual reports to the President and such accordance with this Book: Provided, however, That
special reports as may be requested; the term "registered enterprise" shall not include
commercial banks, savings and mortgage banks, rural
(3) To act as liaison between investors seeking joint banks, savings and loan associations, building and
venture arrangements in particular areas of loan associations, developmental banks, trust
investments; companies, investment banks, finance companies,
brokers and dealers in securities, consumers
(4) Recommend to the Board such policies and cooperatives and credit unions, and other business
measures he may deem necessary to carry out the organizations whose principal purpose or principal
objectives of this Code; and 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 processing or production, and not merely in the
securities, or discharge other similar intermediary, trust assembly or packaging of goods, products,
of fiduciary functions. commodities or raw materials that have not been or
are not being produced in the Philippines on a
Article 12. "Technological assistance contracts" shall commercial scale or (2) which uses a design, formula,
mean contracts for: (1) the transfer, by license scheme, method, process or system of production or
otherwise, of patents, processes, formulas or other transformation of any element, substance or raw
technological rights of foreign origin; and/or (2) foreign materials into another raw material or finished goods
assistance concerning technical and factory which is new and untried in the Philippines or (3)
management, design, planning, construction, engaged in the pursuit of agricultural, forestry and
operation and similar matters. mining activities and/or services including the industrial
aspects of food processing whenever appropriate, pre-
Article 13. "Foreign loans" shall mean any credit determined by the Board, in consultation with the
facility or financial assistance other than equity appropriate Department, to be feasible and highly
investment denominated and payable in foreign essential to the attainment of the national goal, in
currency or where the creditor has the option to relation to a declared specific national food and
demand payment in foreign exchange and registered agricultural program for self-sufficiency and other
with the Central Bank and the Board. social benefits of the project or (4) which produces
non-conventional fuels or manufactures equipment
Article 14. "Foreign Investments" shall mean equity which utilize non-conventional sources of energy or
investments owned by a non-Philippine national made uses or converts to coal or other non-conventional
in the form of foreign exchange or other assets fuels or sources of energy in its production,
actually transferred to the Philippines and registered manufacturing or processing operations. Provided,
with the Central Bank and the Board, which shall That the final product in any of the foregoing
assess and appraise the value of such assets other instances, involves or will involve substantial use and
than foreign exchange. processing of domestic raw materials, whenever
available; taking into account the risks and magnitude
Article 15. "Philippine national" shall mean a citizen of of investment: Provided, further, That the foregoing
the Philippines or a domestic partnership or definitions shall not in any way limit the rights and
association wholly-owned by citizens of the incentives granted to less-developed-area enterprises
Philippines; or a corporation organized under the laws provided under Title V, Book I, hereof.
of the Philippines of which at least sixty per cent (60%)
of the capital stock outstanding and entitled to vote is Article 18. "Non-pioneer enterprise" shall include all
owned and held by citizens of the Philippines, or a registered producer enterprises other than pioneer
trustee of funds for pension or other employee enterprises.
retirement or separation benefits, where the trustee is
a Philippine national and at least sixty per cent (60%) Article 19. "Expansion" shall include modernization
of the fund will accrue to the benefit of Philippine and rehabilitation and shall mean increase of existing
nationals; Provided, That where a registered and its volume or value of production or upgrading the quality
non-Filipino stockholders own stock in a registered of the registered product or utilization of inefficient or
enterprise, at least sixty per cent (60%) of the capital idle equipment under such guidelines as the Board
stock outstanding and entitled to vote of both may adopt.
corporations must be owned and held by the citizens
of the Philippines and at least sixty per cent (60%) ofArticle 20. "Measured capacity" shall mean the
the members of the Board of Directors of both estimated additional volume of production or service
corporations must be citizens of the Philippines in which the Board determines to be desirable in each
order that the corporation shall be considered a preferred area of investment in order to supply the
Philippine national. needs of the economy at reasonable prices, taking into
account the export potential of the product, including
Article 16. "Preferred areas of investments" shall economies of scale which would render such product
mean the economic activities that the Board shall have competitive in the world market. Measured capacity
declared as such in accordance with Article 28 which shall not be less than the amount by which the
shall be either non-pioneer or pioneer. measurable domestic and country's potential export
market demand exceeds the existing productive
Article 17. "Pioneer enterprise" shall mean a capacity in said preferred areas. For export market
registered enterprise (1) engaged in the manufacture, industries, when warranted the Board shall base
measured capacity on the availability of domestic raw (1) sales to bonded manufacturing warehouses of
materials after deducting the needs of the domestic export-oriented manufacturers; (2) sales to export
market therefor. processing zones; (3) sales to registered export
traders operating bonded trading warehouses
Article 21. "Tax credit" shall mean any of the credits supplying raw materials used in the manufacture of
against taxes and/or duties equal to those actually export products under guidelines to be set by the
paid or would have been paid to evidence which tax Board in consultation with the Bureau of Internal
credit certificate shall be issued by the Secretary of Revenue and the Bureau of Customs; (4) sales to
Finance or his representative, or the Board, if so foreign military bases, diplomatic missions and other
delegated by the Secretary of Finance. The tax credit agencies and/or instrumentalities granted tax
certificates including those issued by the Board immunities, of locally manufactured, assembled or
pursuant to laws repealed by this Code but without in repacked products whether paid for in foreign currency
any way diminishing the scope of negotiability under or not: Provided, further, That export sales of
their laws of issue are transferable under such registered export trader may include commission
conditions as may be determined by the Board after income: and Provided, finally, That exportation of
consultation with the Department of Finance. The tax goods on consignment shall not be deemed export
credit certificate shall be used to pay taxes, duties, sales until the export products consigned are in fact
charges and fees due to the National Government; sold by the consignee.
Provided, That the tax credits issued under this Code
shall not form part of the gross income of the Sales of locally manufactured or assembled goods for
grantee/transferee for income tax purposes under household and personal use to Filipinos abroad and
Section 29 of the National Internal Revenue Code and other non-residents of the Philippines as well as
are therefore not taxable: Provided, further, That such returning Overseas Filipinos under the Internal Export
tax credits shall be valid only for a period of ten (10) Program of the government and paid for in convertible
years from date of issuance. foreign currency inwardly remitted through the
Philippine banking systems shall also be considered
Article 22. "Export products" shall mean manufactured export sales.
or processed products the total F.O.B. Philippine port
value of the exports of which did not exceed five Article 24. "Production cost" shall mean the total of
million dollars in the United States Currency in the the cost of direct labor, raw materials, and
calendar year 1968 and which meet the local content manufacturing overhead, determined in accordance
requirement, if any, set by the Board, and standards of with generally accepted accounting principles, which
quality set by the Bureau of Product Standards, or, in are incurred in manufacturing or processing the
default of such standards, by the Board or by such products of a registered enterprise.
public or private organization, chamber, group or body
as the Board may designate. The above definition Article 25. "Processing" shall mean converting of raw
notwithstanding, the Investment Priorities Plan may materials into marketable from through physical,
include other products for export subjects to such mechanical, chemical, electrical, biochemical,
conditions and limited incentives as may be biological or other means or by a special treatment or
determined by the Board. a series of actions, such as slaughtering, milling,
pasteurizing, drying or dessicating, quick freezing, that
Article 23. "Export sales" shall mean the Philippine results in a change in the nature or state of the
port F.O.B. value, determined from invoices, bills of products. Merely packing or packaging shall not
lading, inward letters of credit, landing certificates, and constitute processing.
other commercial documents, of exports products
exported directly by a registered export producer or Article 26. "Investment Priorities Plan" shall mean the
the net selling price of export product sold by a over-all plan prepared by the Board which includes
registered export producer to another export producer, and contains:
or to an export trader that subsequently exports the
same: Provided, That sales of export products to (a) The specific activities and generic categories of
another producer or to an export trader shall only be economic activity wherein investments are to be
deemed export sales when actually exported by the encouraged and the corresponding products and
latter, as evidenced by landing certificates or similar commodities to be grown, processed or manufactured
commercial documents: Provided, further, That without pursuant thereto for the domestic or export market;
actual exportation the following shall be considered
constructively exported for purposes of this provision:
(b) Specific public utilities which can qualify for (d) Measured capacity as defined in Article 20; and
incentives under this Code and which shall be
supported by studies of existing and prospective (e) The market and technical aspects and
regional demands for the services of such public considerations of the activity proposed to be included.
utilities in the light of the level and structure of income,
production, trade, prices and relevant economic and In any of the declared preferred areas of investment,
technical factors of the regions as well as the existing the Board may designate as pioneer areas the specific
facilities to produce such services; products and commodities that meet the requirements
of Article 17 of this Code and review yearly whether
(c) Specific activities where the potential for utilization such activity, as determined by the Board, shall
of indigenous no-petroleum based fuels or sources of continue as pioneer, otherwise, it shall be considered
energy can be best promoted; and as non-pioneer and accordingly listed as such in the
Investment Priorities Plan or removed from the
(d) Such other information, analyzes, data, guidelines Investment Priorities Plan.
or criteria as the Board may deem appropriate.
Article 29. Approval of the Investment Priorities Plan.
The specific and generic activities to be included in the The President shall proclaim the whole or part of such
Investment Priorities Plan with their status as pioneer plan as in effect; or alternatively, return the whole or
or non-pioneer shall be determined by the Board in part of the plan to the Board of Investment for revision.
accordance with the criteria set forth in this Book.
Upon the effectivity of the plan or portions thereof, the
CHAPTER II President shall issue all necessary directives to all
INVESTMENT PRIORITIES PLAN departments, bureaus, agencies or instrumentalities of
the government to ensure the implementation of the
Article 27. Investment Priorities Plan. Not later than plan by the agencies concerned in a synchronized and
the end of March of every year, the Board of integrated manner. No government body shall adopt
Investments, after consultation with the appropriate any policy or take any course of action contrary to or
government agencies and the private sector, shall inconsistent with the plan.
submit to the President an Investment Priorities Plan:
Provided, however, That the deadline for submission, Article 30. Amendments. Subject to publication
may be extended by the President. requirements and the criteria for investment priority
determination, the Board of Investments may, at any
Article 28. Criteria in Investment Priority time, add additional areas in the plan, alter any of the
Determination. No economic activity shall be included terms of the declaration of an investment area or the
in the Investment Priority Plan unless it is shown to be designation of measured capacities, or terminate the
economically, technically and financially sound after status of preference. In no case, however, shall any
thorough investigation and analysis by the Board. amendment of the plan impair whatever rights may
have already been legally vested in qualified
The determination of preferred areas of investment to enterprises which shall continue to enjoy such rights to
be listed in the Investment Priorities Plan shall be the full extent allowed under this Code. The Board
based on long-run comparative advantage, taking into shall not accept applications in an area of investment
account the value of social objectives and employing prior to the approval of the same as a preferred area
economic criteria along with market, technical, and nor after approval of its deletion as a preferred area of
financial analyses. investment.

The Board shall take into account the following: Article 31. Publication. Upon approval of the plan, in
whole or in part, or upon approval of an amendment
(a) Primarily, the economic soundness of the specific thereof, the plan or the amendment, specifying and
activity as shown by its economic internal rate of declaring the preferred areas of investment and their
return; corresponding measured capacity shall be published
in at least one (1) newspaper of general circulation
(b) The extent of contribution of an activity to a specific and all such areas shall be open for application until
developmental goal; publication of an amendment or deletion thereof, or
until the Board approves registration of enterprises
(c) Other indicators or comparative advantage; which fill the measured capacity.
 CHAPTER III the Board or, if not so listed, at least fifty percent
REGISTRATION OF ENTERPRISES (50%) of its total production is for export or it is an
existing producer which will export part of production
Article 32. Qualifications of a Registered Enterprises. under such conditions and/or limited incentives as the
To be entitled to registration under the Investment Board may determine; or that the enterprise is
Priorities Plan, an applicant must satisfy the Board engaged or proposing to engage in the sale abroad of
that: export products bought by it from one or more export
producers; or the enterprise in engaged or proposing
(1) He is a citizen of the Philippines, in case the to engage in rendering technical, professional or other
applicant is a natural person, or in case of a services or in exporting television and motion pictures
partnership or any other association, it is organized and musical recordings made or produced in the
under Philippine laws and that at least sixty percent Philippines, either directly or through a registered
(60%) of its capital is owned and controlled by citizens trader.
of the Philippines; or in case of a corporation or a
cooperative, it is organized under Philippine laws and (3) The applicant is capable of operating on a sound
that at least sixty per cent (60%) of the capital stock and efficient basis of contributing to the national
outstanding and entitled to vote is owned and held by development of the preferred area in particular and of
Philippine nationals as defined under Article 15 of this the national economy in general; and
Code, and at least sixty per cent (60%) of the
members of the Board of Directors are citizens of the (4) If the applicant is engaged or proposes to engage
Philippines. If it does not possess the required degree in undertakings or activities other than preferred
of ownership as mentioned above by Philippine projects, it has installed or undertakes to install an
nationals, the following circumstances must be accounting system adequate to identify the
satisfactorily established: investments, revenues, costs, and profits or losses of
each preferred project undertaken by the enterprise
(a) That it proposes to engage in a pioneer projects as separately from the aggregate investment, revenues,
defined in Article 17 of this Code, which, considering costs and profits or losses of the whole enterprise or to
the nature and extent of capital requirements, establish a separate corporation for each preferred
processes, technical skills and relative business risks project if the Board should so require to facilitate
involved, is in the opinion of the Board of such a proper implementation of this Code.
nature that the available measured capacity thereof
cannot be readily and adequately filled by Philippine Article 33. Application. Applications shall be filed with
nationals; or, if the applicant is exporting at least the Board, recorded in a registration book and the date
seventy per cent (70%) of is total production, the appearing therein and stamped on the application shall
export requirement herein provided may be reduced in be considered the date of official acceptance.
meritorious cases under such conditions and/or limited
incentives as the Board may determine; Whenever necessary, the Board, through the People's
Economic Councils, shall consult the communities
(b) That it obligates itself to attain the status of a affected on the acceptability of locating the registered
Philippine national, as defined in Article 15, within enterprise within their community.
thirty (30) years from the date of registration or with
such longer period as the Board may require taking Article 34. Approval and Registration Procedures. The
into account the export potential of the project: Board is authorized to adopt rules and regulations to
Provided, That a registered enterprise which exports facilitate action on applications filed with it; prescribe
one hundred percent (100%) of its total production criteria for the evaluation of several applications filed in
need not comply with this requirement; one preferred area; devise standard forms for the use
of applicants and delegate to the regional offices of the
(c) That the pioneer are it will engage in is one that is Department of Trade and Industry the authority to
not within the activities reserved by the Constitution or receive and process applications for enterprises to be
other laws of the Philippines to the Philippine citizens located in their respective regions.
or corporations owned and controlled by Philippine
citizens; Applications filed shall be considered automatically
approved if not acted upon by the Board within twenty
(2) The applicant is proposing to engage in a preferred (20) working days from official acceptance thereof.
project listed or authorized in the current Investment
Priorities Plan within a reasonable time to be fixed by
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
entry of any enterprise in any field of endeavor or and guarantees provided in the Constitution. Among
activity; other rights recognized by the Government of the
Philippines are the following:
(d) The amount of foreign exchange earned, used or
saved in their operations; (a) Repatriation of Investments. In the case of foreign
investments, the right to repatriate the entire proceeds
(e) The extent to which labor, materials and other of the liquidation of the investment in the currency in
resources obtained from indigenous sources are which the investment was originally made and at the
utilized; exchange rate prevailing at the time of repatriation,
subject to the provisions of Section 74 of Republic Act
(f) The extent to which technological advances are No. 265 as amended;
applied and adopted to local condition;
For investments made pursuant to Executive Order
(g) The amount of equity and degree to which the No. 32 and its implementing rules and regulations,
ownership of such equity is spread out and diversified; remittability shall be as provided therein.
and
(b) Remittance of Earnings. In the case of foreign
(h) Such other criteria as the Board may determine. investments, the right to remit earnings from the
investment in the currency in which the investment
Article 36. Appeal from Board's Decision. Any order or was originally made and at the exchange rate
decision of the Board shall be final and executory after prevailing at the time of remittance, subject to the
thirty (30) days from its promulgation. Within the said provisions of Section 74 of Republic Act No. 265 as
period of thirty (30) days, said order or decision may amended;
be appealed to the Office of the President. Where an
appeal has been filed, said order or decision shall be (c) Foreign Loans and Contracts. The right to remit at
final and executory ninety (90) days after the the exchange rate prevailing at the time of remittance
perfection of the appeal, unless reversed. such sums as may be necessary to meet the
payments of interest and principal on foreign loans and
Article 37. Certificate of Registration. A registered foreign obligations arising from technological
enterprise under this Code shall be issued a certificate assistance contracts, subject to the provisions of
of registration under the seal of the Board of Section 74 of Republic Act No. 265 as amended;
Investments and the signature of its Chairman and/or
such other officer or employee of the Board as it may (d) Freedom from Exploriation. There shall be no
empower and designate for the purpose. The expropriation by the government of the property
certificate shall be in such form and style as the Board represented by investments or of the property of the
may determine and shall state, among other matters: enterprise except for public use or in the interest of
national welfare or defense and upon payment of just
(a) The name of the registered enterprise; 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 determine; Provided, however, That during the period
and at the exchange rate at the time of remittance, within which this incentive is availed of by the
subject to the provisions of Section 74 of Republic Act expanding firm it shall not be entitled to additional
No. 265 as amended; deduction for incremental labor expense.

(e) Requisition of Investment. There shall be no (3) The provision of Article 7 (14) notwithstanding,
requisition of the property represented by the registered firms shall not be entitled to any extension
investment or of the property of enterprises, except in of this incentive.
the event of war or national emergency and only for
the duration thereof. Just compensation shall be (b) Additional Deduction for Labor Expense. For the
determined and paid either at the time of requisition or first five (5) years from registration a registered
immediately after cessation of the state of war or enterprise shall be allowed an additional deduction
national emergency. Payments received as from the taxable income of fifty percent (50%) of the
compensation for the requisitioned property may be wages corresponding to the increment in the number
remitted in the currency in which the investment was of direct labor for skilled and unskilled workers if the
originally made and at the exchange rate prevailing at project meets the prescribed ratio of capital equipment
the time of remittance, subject to the provisions of to number of workers set by the Board: Provided, That
Section 74 of Republic Act No. 265 as amended. this additional deduction shall be doubled if the activity
is located in less developed areas as defined in Art.
TITLE III 40.
INCENTIVES TO REGISTERED ENTERPRISES
(c) Tax and Duty Exemption on Imported Capital
Article 39. Incentives to Registered Enterprises. All Equipment. Within five (5) years from the effectivity of
registered enterprises shall be granted the following this Code, importations of machinery and equipment
incentives to the extent engaged in a preferred area of and accompanying spare parts of new and expanding
investment; registered enterprise shall be exempt to the extent of
one hundred percent (100%) of the customs duties
(a) Income Tax Holiday. and national internal revenue tax payable thereon:
Provided, That the importation of machinery and
(1) For six (6) years from commercial operation for equipment and accompanying spare parts shall
pioneer firms and four (4) years for non-pioneer firms, comply with the following conditions:
new registered firms shall be fully exempt from income
taxes levied by the National Government. Subject to (1) They are not manufactured domestically in
such guidelines as may be prescribed by the Board, sufficient quantity, of comparable quality and at
the income tax exemption will be extended for another reasonable prices;
year in each of the following cases:
(2) They are reasonably needed and will be used
i. the project meets the prescribed ratio of capital exclusively by the registered enterprise in the
equipment to number of workers set by the Board; manufacture of its products, unless prior approval of
the Board is secured for the part-time utilization of said
ii. utilization of indigenous raw materials at rates set by equipment in a non-registered activity to maximize
the Board; usage thereof or the proportionate taxes and duties
are paid on the specific equipment and machinery
iii. the net foreign exchange savings or earnings being permanently used for non-registered activities;
amount to at least US$500,000.00 annually during the and
first three (3) years of operation.
(3) The approval of the Board was obtained by the
The preceding paragraph notwithstanding, no registered enterprise for the importation of such
registered pioneer firm may avail of this incentive for a machinery, equipment and spare parts.
period exceeding eight (8) years.
In granting the approval of the importations under this
(2) For a period of three (3) years from commercial paragraph, the Board may require international
operation, registered expanding firms shall be entitled canvassing but if the total cost of the capital equipment
to an exemption from income taxes levied by the or industrial plant exceeds US$5,000,000, the Board
National Government proportionate to their expansion shall apply or adopt the provisions of Presidential
under such terms and conditions as the Board may
Decree Numbered 1764 on International Competitive processed products by registered enterprises shall be
Bidding. simplied by the Bureau of Customs.

If the registered enterprise sells, transfers or disposes

(g) Unrestricted Use of Consigned Equipment.
of these machinery, equipment and spare parts Provisions of existing laws notwithstanding,
without prior approval of the Board within five (5) years
machinery, equipment and spare part consigned to
from date of acquisition, the registered enterprise and any registered enterprises shall not be subject to
the vendee, transferee, or assignee shall be solidarily restrictions as to period of use of such machinery,
liable to pay twice the amount of the tax exemption equipment and spare parts Provided, that the
given it. appropriate re-export bond is posted unless the
importation is otherwise covered under subsections (c)
The Board shall allow and approve the sale, transfer or and (m) of this Article. Provided, further, that such
disposition of the said items within the said period of consigned equipment shall be for the exclusive use of
five (5) years if made: the registered enterprise.

(aa) to another registered enterprise or registered If such equipment is sold, transferred or otherwise
domestic producer enjoying similar incentives; disposed of by the registered enterprise the related
provision of Article 39 (c) (3) shall apply. Outward
(bb) for reasons of proven technical obsolescence; or remittance of foreign exchange covering the proceeds
of such sale, transfer or disposition shall be allowed
(cc) for purposes of replacement to improve and/or only upon prior Central Bank approval.
expand the operations of the registered enterprise.
(h) Employment of Foreign Nationals. Subject to the
(d) Tax Credit on Domestic Capital Equipment. A tax provisions of Section 29 of Commonwealth Act
credit equivalent to one hundred percent (100%) of the Number 613, as amended, a registered enterprise may
value of the national internal revenue taxes and employ foreign nationals in supervisory, technical or
customs duties that would have been waived on the advisory positions for a period not exceeding five (5)
machinery, equipment and spare parts, had these years from its registration, extendible for limited
items been imported shall be given to the new and periods at the discretion of the Board: Provided,
expanding registered enterprise which purchases however, That when the majority of the capital stock of
machinery, equipment and spare parts from a a registered enterprise is owned by foreign investors,
domestic manufacturer: Provided, That (1) That the the position of president, treasurer and general
said equipment, machinery and spare parts are manager or their equivalents may be retained by
reasonably needed and will be used exclusively by the foreign nationals beyond the period set forth herein.
registered enterprise in the manufacture of its
products, unless prior approval of the Board is secured Foreign nationals under employment contract within
for the part-time utilization of said equipment in a non- the purview of this incentive, their spouses and
registered activity to maximize usage thereof; (2) that unmarried children under twenty-one (21) years of
the equipment would have qualified for tax and duty- age, who are not excluded by Section 29 of
free importation under paragraph (c) hereof; (3) that Commonwealth Act Numbered 613, as amended, shall
the approval of the Board was obtained by the be permitted to enter and reside in the Philippines
registered enterprise; and (4) that the purchase is during the period of employment of such foreign
made within five (5) years from the date of effectivity of nationals.
the Code. If the registered enterprise sells, transfers or
disposes of these machinery, equipment and spare A registered enterprise shall train Filipinos as
parts, the provisions in the preceding paragraph for understudies of foreign nationals in administrative,
such disposition shall apply. supervisory and technical skills and shall submit
annual reports on such training to the Board.
(e) Exemption from Contractor's Tax. The registered
enterprise shall be exempt from the payment of (i) Exemption on Breeding Stocks and Genetic
contractor's tax, whether national or local. Materials. The importation of breeding stocks and
genetic materials within ten (10) years from the date of
(f) Simplification of Customs Procedure. Customs registration or commercial operation of the enterprise
procedures for the importation of equipment, spare shall be exempt from all taxes and duties: Provided,
parts, raw materials and supplies, and exports of That such breeding stocks and genetic materials are
(1) not locally available and/or obtainable locally in
comparable quality and at reasonable prices; (2) least seventy percent (70%) of production is exported;
reasonably needed in the registered activity; and (3) Provided, further, that such spare parts and supplies
approved by the Board. are not locally available at reasonable prices, sufficient
quantity and comparable quality; Provided, finally, That
(j) Tax Credit on Domestic Breeding Stocks and all such spare parts and supplies shall be used only in
Genetic Materials. A tax credit equivalent to one the bonded manufacturing warehouse of the registered
hundred percent (100%) of the value of national enterprise under such requirements as the Bureau of
internal revenue taxes and customs duties that would Customs may impose.
have been waived on the breeding stocks and genetic
materials had these items been imported shall be (n) Exemption from Wharfage Dues and any Export
given to the registered enterprise which purchases Tax, Duty, Impost and Fee. The provisions of law to
breeding stocks and generic materials from a domestic the contrary notwithstanding, exports by a registered
producer: Provided, 1) That said breeding stocks and enterprise of its non- traditional export products shall
generic materials would have qualified for tax and duty be exempted of its non-traditional export products shall
free importation under the preceding paragraph; 2) be exempted from any wharfage dues, and any export
that the breeding stocks and genetic materials are tax, duty, impost and fee.
reasonably needed in the registered activity; 3) that
the approval of the board has been obtained by the TITLE IV
registered enterprise; and 4) that the purchase is INCENTIVES TO LESS-DEVELOPED-AREA
made within ten (10) years from date of registration or REGISTERED ENTERPRISE
commercial operation of the registered enterprise.
Article 40. A registered enterprise regardless of
(k) Tax Credit for Taxes and Duties on Raw Materials. nationality located in a less-developed-area included in
Every registered enterprise shall enjoy a tax credit the list prepared by the Board of Investments after
equivalent to the National Internal Revenue taxes and consultation with the National Economic &
Customs duties paid on the supplies, raw materials Development Authority and other appropriate
and semi-manufactured products used in the government agencies, taking into consideration the
manufacture, processing or production of its export following criteria: low per capita gross domestic
products and forming part thereof, exported directly or product; low level of investments; high rate of
indirectly by the registered enterprise: Provided, unemployment and/or underemployment; and low level
however, that the taxes on the supplies, raw materials of infrastructure development including its accessibility
and semi- manufactured products domestically to develop urban centers, shall be entitled to the
purchased are indicated as a separate item in the following incentives in addition to those provided in the
sales invoice. preceding article:

Nothing herein shall be construed as to preclude the (a) Pioneer incentives. An enterprise in a less-
Board from setting a fixed percentage of export sales developed-area registered with the Board under Book I
as the approximate tax credit for taxes and duties of of this Code, whether proposed, or an expansion of an
raw materials based on an average or standard usage existing venture, shall be entitled to the incentives
for such materials in the industry. provided for a pioneer registered enterprise under its
law of registration.
(l) Access to Bonded Manufacturing/Trading
Warehouse System. Registered export oriented (b) Incentives for necessary and Major Infrastructure
enterprises shall have access to the utilization of the
and Public Utilities. Registered enterprise establishing
bonded warehousing system in all areas required by their production, processing or manufacturing plants in
the project subject to such guidelines as may be an area that the Board designates as necessary for
issued by the Board upon prior consultation with the the proper dispersal of industry or in area which the
Bureau of Customs. Board finds deficient in infrastructure, public utilities,
and other facilities, such as irrigation, drainage or
(m) Exemption from Taxes and Duties on Imported other similar waterworks infrastructure may deduct
Spare Parts. Importation of required supplies and from taxable income an amount equivalent to one
spare parts for consigned equipment or those imported hundred percent (100%) of necessary and major
tax and duty free by a registered enterprise with a infrastructure works it may have undertaken with the
bonded manufacturing warehouse shall be exempt prior approval of the Board in consultation with other
from customs duties and national internal revenue government agencies concerned; Provided, That the
taxes payable thereon, Provided, However, That at title to all such infrastructure works shall upon
completion, be transferred to the Philippine works, or the exercise of some of the functions
Government: Provided, further, That any amount not normally incident to, and in progressive prosecution of,
deducted for a particular year may be carried over for commercial gain or of the purpose and object of the
deduction for subsequent years not exceeding ten (10) business organization.
years from commercial operation.
Article 45. Non-Applicability to Banking Institutions.
TITLE V This Book shall not apply to banking institutions which
GENERAL PROVISIONS are governed and regulated by the General Banking
Act and other laws which are under the supervision of
Article 41. Power of the President to Rationalize the Central Bank.
Incentives. The President may, upon recommendation
of the Board and in the interest of national CHAPTER II
development, rationalize the incentives scheme herein INVESTMENTS
provided; extend the period of availment of incentives
or increase rates of tax exemption of any project Article 46. Permitted Investments.
whose viability or profitability require such
modification. (1) Without need of prior authority, anyone not a
Philippine national as that term is defined in Article 15
Article 42. Refund and Penalties. In case of of this Code, and not otherwise disqualified by law,
cancellation of the certificate granted under this Code, may invest:
the Board may, in appropriate cases, require the
refund of incentives availed of and impose (a) In any enterprise registered under Book One
corresponding fines and penalties. hereof, to the extent that the total investment of non-
Philippine nationals therein would not affect its status
Article 43. Benefits of Multiple Area Enterprises. as a registered enterprise under the law;
When a registered enterprise engages in activities or
endeavors that have not been declared preferred (b) In an enterprise not registered under Book One
areas of investments, the benefits and incentives hereof, to the extent that the total investment of non-
accruing under this Code to registered enterprises and Philippine nationals herein shall not exceed forty
investors therein shall be limited to the portion of the percent (40%) of the outstanding capital of that
activities of such registered enterprise as is a preferred enterprise, unless existing law forbids any non-
area of investment. Philippine ownership in the enterprise or limits
ownership by non-Philippine national to a percentage
BOOK II smaller than forty percent (40%).
FOREIGN INVESTMENTS WITHOUT INCENTIVES
(2) Within thirty (30) days after notice of the investment
TITLE I is received by it, the enterprise in which any
investment is made by a non-Philippine national shall
CHAPTER I register the same with the Board of Investments for
DEFINITIONS AND SCOPE OF THIS BOOK purposes of record. Investments made in the form of
foreign exchange or other assets actually transferred
Article 44. Definition of terms. As used in this Book, to the Philippines shall also be registered with the
the term "investment" shall mean equity participation in Central Bank. The Board shall assess and appraise
any enterprise formed, organized or existing under the the value of such assets other than foreign exchange.
laws of the Philippines; and the phrase "doing
business" shall include soliciting orders, purchases, Article 47. Permissible Investments. If an investment
service contracts, opening offices, whether called by a non-Philippine national in an enterprise not
"liaison" offices or branches; appointing registered under Book One hereof is such that the total
representatives or distributors who are domiciled in the participation by non-Philippine nationals in the
Philippines for a period or periods totalling one outstanding capital thereof shall exceed forty percent
hundred eighty (180) days or more; participating in the (40%), the enterprise must obtain prior authority from
management, supervision or control of any domestic the Board of Investments, which authority shall be
business firm, entity or corporation in the Philippines, granted unless the proposed investment
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
(a) Would conflict with existing constitutional (4) That the field of business or economic activity is
provisions and laws regulating the degree of required not one that is being adequately exploited by
ownership by Philippine nationals in the enterprise; or Philippine nationals; and

(b) Would pose a clear and present danger of (5) That the entry of applicant therein will not pose a
promoting monopolies or combinations in restraint of clear and present danger of promoting monopolies or
trade; or combinations in restraint of trade.

(c) Would be made in enterprise engaged in an area Article 49. Requirements to be Imposed by the Board.
adequately being exploited by Philippine nationals; or
Upon granting said certificate, the Board shall impose
the following requirements on the alien or the firm,
(d) Would conflict or be inconsistent with the association, partnership, corporation or other form of
Investment Priorities Plan in force at the time the business organization that is not organized or existing
investment is sought to be made; or under the laws of the Philippines

(e) Would not contribute to the sound and balanced (1) To appoint a citizen of the Philippines, of legal age,
development of the national economy on a self- good moral character and reputation, and sound
sustaining basis. financing standing, as resident agent, who shall be
authorized to accept summons and other legal process
Investments made in the form of foreign exchange or in behalf of the applicant;
other assets actually transferred to the Philippines
shall also be registered with the Central Bank. The (2) To establish an office in the Philippines and to
Board shall assess and appraise the value of such notify the Securities and Exchange Commission in
assets other than foreign exchange. writing of the applicant's exact address and of every
contemplated transfer thereof or of the opening of new
CHAPTER II offices, at least fifteen (15) days before the same are
LICENSE TO DO BUSINESS to be effected; and once effected, not later than ten
(10) days afterwards;
Article 48. Authority to Do Business. No alien, and no
firm association, partnership, corporation or any other (3) To bring assets into the Philippines to constitute
form of business organization formed, organized, the capital of the office or offices, of such kind and
chartered or existing under any laws other than those value as the Board may deem necessary to protect
of the Philippines, or which is not a Philippine national, those who may deal with the applicant, and to maintain
or more than forty per cent (40%) of the outstanding that capital unimpaired during the period it does
capital of which is owned or controlled by aliens shall business in the Philippines;
do business or engage in any economic activity in the
Philippines or be registered, licensed, or permitted by (4) To present prior proof that citizens of the
the Securities and Exchange Commission or by any Philippines and corporations or other business
other bureau, office, agency, political subdivision or organizations organized or existing under the laws of
instrumentality of the government, to do business, or the Philippines are allowed to do business in the
engage in any economic activity in the Philippines country or individual state within the federal country of
without first securing a written certificate from the which applicant is a citizen or in which it is domiciled:
Board of Investments to the effect: Provided, however, That if the state or country of
domicile of the applicant imposes on, or requires of,
(1) That the operation or activity of such alien, firm, Philippine nationals other conditions, requirements or
association, partnership, corporation or other form of restrictions besides those set forth in this Code, the
business organization, is not inconsistent with the Board of Investments shall impose the said other
Investment Priorities Plan; conditions, requirements or restrictions on the
applicant, if in its judgment, the imposition thereof shall
(2) That such business or economic activity will foster the sound and balanced development of the
contribute to the sound and balanced development of national economy on a self-sustaining basis;
the national economy on a self-sustaining basis;
(5) To submit to the Securities and Exchange
(3) That such business or economic activity by the Commission certified copies of applicant's charter and
applicant would not conflict with the Constitution or by-laws and all amendments thereto, if any, with their
laws of the Philippines; translation into an official language within twenty (20)
days after their adoption or after the grant of the That aliens or foreign firms, associations, partnerships,
prescribed certificate by the Board of Investments and corporations or other forms of business organization
annually of applicant's financial statements showing all not organized or existing under the laws of the
assets, liabilities and net worth and results of Philippines which may have been lawfully licensed to
operations, setting out separately those pertaining to do business in the Philippines prior to the effectivity of
the branch office; R.A. 5455, shall, with respect to the activities for which
they were licensed and actually engaged in prior to the
(6) To keep a complete set of accounting records with effectivity of said Act, not be subject to the provisions
the resident agent, which shall fully and faithfully of Article 48 and 49 but shall be subject to the
reflect all transactions within the Philippines, and to reporting requirements prescribed by the Board:
permit inspections thereof by the Securities and Provided, further, That where the issuance of said
Exchange Commission, the Bureau of Internal license has been irregular or contrary to law, any
Revenue and the Board of Investments; person adversely affected thereby may file an action
with the Regional Trial Court where said alien or
(7) To give priority to resident creditors as against non- foreign business organization resides or has its
resident creditors and owners or stockholders in the principal office to cancel the said license. In such
distribution of assets within the Philippines upon cases, no injunction shall issue without notice and
insolvency, dissolution or revocation of the license; hearing; and appeals and other proceedings for review
shall be filed directly with the Supreme Court.
(8) To give the Securities and Exchange Commission
at least six (6) months advance notice in writing of TITLE II
applicant's intention to stop doing business within the GENERAL PROVISIONS
Philippines; and to give such public notice thereof as
the Securities and Exchange Commission may require Article 51. Mergers and Consolidations. The
for the protection of resident creditors and others provisions of this Book Two shall apply to any merger,
dealing with the applicant; and consolidation, syndicate or any other combination of
firms, associations, partnership or other forms of
(9) Not to terminate any franchise, licensing or other business organization that will result in ownership or
agreement that applicant may have with a resident of control by persons or entities that are not Philippine
the Philippines authorizing the latter to assemble, nationals or have foreign equity participation, of more
manufacture or sell within the Philippines the products than forty per cent (40%) of the outstanding capital of
of the applicant, except for violation thereof or other whatever organizations results from the merger,
just cause and upon payment of compensation and consolidation, syndicate or other combination.
reimbursement of investment and other expenses
incurred by the licensee in developing a market for the Article 52. Local Government Action. No agency,
said products: Provided, however, That in case of instrumentality or political subdivision of the
disagreement, the amount of compensation or Government shall take any action in conflict with or
reimbursement shall be determined by the country which will nullify the provisions of Book Two of this
where the licensee is domiciled or has its principal Code, or any certificate of authority granted hereunder.
office who shall require the applicant to file a bond in
such amount as, in its opinion, is sufficient for this Article 53. Automatic Registration. Application filed
purpose. under this Book shall be considered automatically
approved if not acted upon within ten (10) working
The above requirements shall be in addition to those days from official acceptance thereof.
set forth in the Corporation Code of the Philippines for
authorizing foreign corporations to transact business in Article 54. Publication and Posting of Notices.
the Philippines. Immediately after the application has been given due
course by the Board, the Secretary of the Board or any
Article 50. Cause for Cancellation of Certificate of official designated by the Board shall require the
Authority or Payment of Fine. A violation of any of the applicant to publish the notice of the action of the
requirements set forth in Article 49 or of the terms and Board thereon at his expense once in a newspaper of
conditions which the Board may impose shall be general circulation in the province or city where the
sufficient cause to cancel the certificate of authority applicant has its principal office, and post copies of
issued pursuant to this Book and/or subject firms to said notice in conspicuous places, in the office of the
the payment of fines in accordance with the rules and Board or in the building where said office is located;
regulations issued by the Board: Provided, however, setting forth in such copies the name of the applicant,
the business in which it is engaged or proposes to (3) If the offense is committed by a juridical entity, its
engage or invest, and such other data and information president and/or other officials responsible therefor
as may be required by the Board. No approval or shall be subject to the penalty prescribed above. If the
certificate shall be valid without the publication and offender or the president/official, in cases where the
posting of notices as herein provided. offense was committed by a juridical entity, is an alien,
he shall be deported without further proceedings on
Article 55. Limited Authority to do Business. When the part of the Deportation Board in addition to the
appropriate, the Board may grant permissible penalty herein prescribed and shall, if naturalized, be
investments or authority to do business under Book automatically denaturalized from the date his sentence
Two of this Code for a limited period where the need to becomes final.
prove economic viability of such activity warrants the
issuance of a temporary authorization. (4) Payment of the tax due after apprehension shall
not constitute a valid defense in any prosecution for
Article 56. Periodic Reports. The Board shall violation of any provision of this Code.
periodically check and verify compliance with these
provisions, either by inspection of the books or by BOOK III
requiring regular reports from aliens or foreign firms, INCENTIVES TO MULTINATIONAL COMPANIES
domestic enterprises with foreign investments and new ESTABLISHES REGIONAL OR AREA
entities licensed to do business under Article 48 of this HEADQUARTERS IN THE PHILIPPINES
Code.
CHAPTER I
A summary of said reports shall be periodically LICENSING OF THE MULTINATIONAL COMPANY
submitted by the Board to the President. For this
purpose, the Board may require other government Article 58. Qualifications of Multinational Company.
agencies licensing and/or regulating foreign Any foreign business entity formed, organized and
enterprises or domestic firms with foreign equity, to existing under any laws other than those of the
furnish the Board with reports on such foreign Philippines whose purpose, as expressed in its
investments. organizational documents or by resolution of its Board
of Directors or its equivalent, is to supervise,
Article 57. Penal Clause. superintend, inspect or coordinate, its own affiliates,
subsidiaries, or branches in the Asia-Pacific Region
(1) Without prejudice to the provisions of Articles 42 may establish a regional or area headquarters in the
and 50 hereof a violation of any provision of Books I Philippines, after securing a license therefor from the
and II of this Code, or of the terms and conditions of Securities and Exchange Commission, upon the
registration, or of the rules and regulations favorable recommendation of the Board of
promulgated pursuant thereto, or the act of abetting or Investments.
aiding in any manner any such violation, shall be
punished by a fine not to exceed one hundred The Securities and Exchange Commission shall, within
thousand pesos (P100,000.00) or imprisonment for not thirty (30) days from the effectivity of this Code, issue
more than ten (10) years, at the discretion of the the implementing rules and regulations. The following
Court. minimum requirements shall, however, be complied
with by the said foreign entity.
(2) No official or employee of the government, its
subdivisions or instrumentalities shall appear as (a) A certification from the Philippine Foreign Trade
counsel for or act as agent or representative of, or in Senior Officer or in the absence of such an official, a
any manner intervene or intercede, directly or Philippine Consul in the foreign firm's home country
indirectly, in behalf of any party in any transaction with that said foreign firm is an entity engaged in
the Board regarding any application under Books I and international trade with affiliates, subsidiaries or
II of this Code. The penalty for violation of this branch offices in the Asia-Pacific Region.
prohibition is the same as that provided for in the
preceding paragraph. If the offender is an appointive (b) A certification from a principal officer of the foreign
official or employee, the maximum of the penalty entity to the effect that the said foreign entity has been
herein prescribed shall be imposed, and the offender authorized by its Board of Directors or governing copy
shall suffer the additional penalty of perpetual to establish its regional headquarters in the
disqualification from public office, without prejudice to Philippines, specifying that:
any administrative action against him.
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 applicant company and will work exclusively for
in 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
Investments and the Securities and Exchange in the Philippines an amount equivalent to at least
Commission of any decision to close down or suspend twelve thousand United States dollars, or the
operations of its headquarters or terminate the equivalent in other foreign currencies per annum.
services 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
necessary to cover its operations in the Philippines but sworn certification by a responsible officer of the
which amount will not be less than fifty thousand regional or area headquarters; that its license to
United States dollars or its equivalent in other foreign operate remains valid and subsisting; that he has been
currencies annually. Within thirty (30) days from paid in the Philippines from the date of original
receipt of Certificate of Registration from the Securities admission, the equivalent of at least one thousand
and Exchange Commission, the multinational United States dollars per month, or its equivalent in
company will submit to the Securities and Exchange other foreign currencies; and that the regional or area
Commission a Certificate of inward remittance from a headquarters has withheld the tax due on said
local bank showing that it has remitted to the compensation and the same has been paid to the
Philippines the amount of at least thirty thousand Bureau of Internal Revenue.
United States dollars or its equivalent in other foreign
currencies and converted the same to Philippine Non-immigrant who have been admitted under the
currency. Annually, within thirty (30) days from the multiple entry special visa, as well as their respective
anniversary date of the multinational company's spouses and dependents, shall be exempt from: the
registration as a regional or area headquarters with the payment of all fees due under the immigration and
Securities and Exchange Commission, it will submit alien registration laws; securing alien certificates of
proof to the Securities and Exchange Commission of registration; and obtaining immigration clearance
inward remittance amounting to at least fifty thousand certificates, and all types of clearances required by
United States dollars or its equivalent in other foreign any government department or agency, except that
currencies during the past year. upon final departure from the Philippines the employer
of the said non-immigrants shall so advise in writing
(d) Any willful violation by the regional or area the Commission on Immigration and Deportation at
headquarters of a multinational company of any of the least five (5) working days prior to the non-immigrant's
provisions of this Code, or its implementing rules and departure, and the finally departing non-immigrant
regulations, or other terms and conditions of its employee shall be required to submit to the said office
registration, or any provision of existing laws, shall a tax clearance from the Bureau of Internal Revenue.
constitute a sufficient cause for the cancellation of its
license or registration. Article 60. Withholding Tax of 15 %. Aliens employed
by regional or area headquarters of multinational
CHAPTER II corporations shall be subject for each taxable year
INCENTIVES TO EXPATRIATES upon their gross income received from the regional or
area headquarters established in the Philippines by
Article 59. Multiple entry visa. Foreign personnel of multinational companies as salaries, wages, annuities,
regional or area headquarters of multinational compensations, remunerations, and emoluments to a
companies, their respective spouses, and unmarried tax equal to fifteen percentum of such gross income.
children under twenty-one years of age, if
accompanying them or if following to join them after
Article 61. Tax and Duty Free Importation. An alien corresponding taxes and duties: Provided, That such
executive of the regional or area headquarters of a motor vehicles shall be for the exclusive use of its
multinational company shall enjoy tax and duty free expatriate executives and that the number thereof
importation of personal and household effects as shall not exceed the number of its expatriate
provided for under Section 105 (h) of the Tariff and executives and that such motor vehicles may be
Customs Code, as amended, and Section 169 (b) (4) replaced every three (3) years from their importation.
of the Internal Revenue Code, as amended.
Article 67. Exemption from Registration
Article 62. Travel Tax Exemption. Personnel of Requirements. The regional or area headquarters of
multinational companies performing technical and multinational companies shall be exempt from the
supervisory functions with regional headquarters at, provisions of Book II of this Code.
but not engaged in business in the Philippines and the
dependents of such foreign personnel if joining them BOOK IV
during the period of their assignment in the INCENTIVES TO MULTINATIONAL COMPANIES
Philippines, as certified to by the Board of ESTABLISHING REGIONAL WAREHOUSES TO
Investments, shall be exempted from the payment of SUPPLY SPARE PARTS OR MANUFACTURED
travel tax imposed under Section 1 of Presidential COMPONENTS AND RAW MATERIALS TO THE
Decree No. 1183, by securing a Travel Tax Certificate ASIA-PACIFIC REGION AND OTHER FOREIGN
from the Philippine Tourism Authority. MARKETS

CHAPTER III Article 68. Qualifications. A multinational company

INCENTIVES TO THE REGIONAL HEADQUARTERS organized and existing under any laws other than
those of the Philippines which is engaged in
Article 63. Exemption from Income Tax. Regional or international trade and supplies spare parts or
area headquarters established in the Philippines by manufactured components and raw materials to its
multinational corporations and which headquarters do distributors or markets in the Asia-Pacific Area and
not earn or derive income from the Philippines and other foreign areas and which has established or will
which act as supervisory, communications and simultaneously establish a regional or area
coordinating center for their affiliates, subsidiaries, or headquarters in the Philippines in accordance with the
branches in the Asia-Pacific Regional shall not be provisions of Book III of this Code and the rules and
subject to income tax. regulations implementing the same may also establish
regional warehouse or warehouses in the Philippines,
Article 64. Exemption from Contractor's Tax. The after securing a license therefor from the Board of
regional or area headquarters established in the Investments.
Philippines by multinational corporations, including
their alien executives, are exempted from the The following minimum requirements shall be
contractor's tax. submitted or complied with by the said foreign entity in
accordance with the rules and regulations to be issued
Article 65. Exemption from all Kinds of Local Licenses by the Board of Investments as provided for in Article 7
Fees, Dues. The regional or area headquarters of (2) of this Code.
multinational companies shall be exempt from all kinds
of local licenses, fees, dues, imposts or any other local (a) A certification from the Foreign Trade Officer or in
taxes or burdens. the absence of such an official, a Philippine Consul in
the foreign firm's home country that said foreign firm is
Article 66. Tax and Duty Free Importation of Training engaged in international trade and supplies or will
Materials; Importation of Motor Vehicles. Regional or supply spare parts or manufactured components and
area headquarters shall also enjoy tax and duty free raw materials to its distributors or markets in the Asia-
importation of equipment and materials for training, Pacific Region.
conferences which are needed for the functions of the
regional or area headquarters and which are not (b) A certification from a principal officer of the foreign
locally available subject to the prior approval of the entity to the effect that said foreign entity has been
Board of Investments. authorized by its Board of Directors or governing body
to establish its regional warehouse in the Philippines,
Regional or area headquarters shall be entitled to the specifying that:
importation of motor vehicles subject to the prior
approval of the Board and the payment of the
1. The activities of the regional warehouse shall be and aimed at providing speedy procedure for its
limited to serving as a supply depot for the storage, establishment, subject to the following conditions:
deposit, safekeeping of its spare parts or
manufactured components and raw materials including 1) That the articles to be stored in the warehouse are
the packing, covering, putting up, marking, labelling spare parts or manufactured components and/or raw
and cutting or altering to customer's specification, materials of the multinational company operator for
mounting and/or packaging into kits or marketable lots distribution and supply to its Asia-Pacific markets
thereof, to fill up transactions and sales made by its including packaging, coverings, brands, labels and
head offices or parent companies and to serving as a warehouse equipment as provided in Art. 69 (a)
storage or warehouse of goods purchased locally by hereof;
the home office of the multinational for export abroad;
Provided, That said locally purchased goods for export 2) That the entry or importation, storage or re-export of
may be stored in the regional warehouse only after the goods destined for or to be stored in the regional
they have been cleared for export in accordance with warehouse will not involve any dollar outlay from
the laws and regulations, including those of the Central Philippine sources;
Bank and simplified procedures governing exports.
The regional warehouse shall not directly engage in 3) That they are of such character as to be readily
trade nor directly solicit business, promote any sale, identifiable for re-export; and in case of local
nor enter into any contract for the sale or disposition of distribution they shall be subject to Article 69
goods in the Philippines. paragraph (b) and the guidelines implementing Book
IV of this Code;
2. The regional warehouse will not derive any income
from the sources within the Philippines and its 4) That they shall be allowed provisional entry
personnel will not participate in any manner in the expeditiously by means of a pro forma invoice of the
management of any subsidiary, affiliate or branch parent company, identified, examined and appraised
office it might have in the Philippines. by the Regional Collector of Customs and they shall
be directly delivered to and kept in the regional
3. The personnel of the regional headquarters shall be warehouses and released therefrom only in
responsible for the operation of the regional accordance with Article 69 paragraphs (a) and (b) and
warehouse subject to the provisions of this Code. the guidelines implementing Book IV of this Code;

(c) The multinational company shall pay the Board of In the absence of a Regional Collector of Customs
Investments and the appropriate Regional Collector of where the volume of the establishment of regional
Customs the corresponding license fees and storage warehouses does not yet warrant the creation of said
fees to be determined by said offices. offices, the duties of the Regional Collector of
Customs shall be performed by the Collector of
(d) An application for the establishment of a regional Customs of the district where the regional warehouse
warehouse shall be made in writing to the Board of will be located.
Investments upon recommendation of the Bureau of
Customs. The application shall describe the premises, 5) Each shipment of goods which will be stored in the
the location and capacity of the regional warehouse regional warehouse shall be covered by an affidavit of
and the purpose for which the building is to be used. the multinational company operator setting forth that
said articles shall be exclusively used as supply for its
The jurisdiction and responsibility of supervising the Asia-Pacific markets and stating the C & F price
regional warehouses shall be vested on the Bureau of thereof;
Customs.
6) That it shall file an ordinary warehousing bond in an
The Board of Investments, in consultation with the amount equal to ONE HUNDRED PER CENT (100%)
Regional Director of Customs of the district where the of the ascertained customs duties on the articles
warehouse will be situated shall cause an examination imported without prejudice to its filing a general
of the premises to be made with reference particularly warehousing bond in lieu of the ordinary warehousing
to the location, construction and means provided for bond.
the safekeeping of its articles and if found satisfactory,
it may authorize its establishment without complying 7) The percentage of annual allowable withdrawal for
with the requirements of any other government body domestic use shall be subject to the approval of the
Board of Investments; Provided, however, That in no
case shall such withdrawals exceed thirty per cent 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 notwithstanding, articles duly entered for warehousing
Re-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, regional warehouse, which period may be extended
raw 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 provisions of said guidelines shall be forfeited pursuant
Regional Collector of Customs for distribution to its to the provisions of Article 69, paragraph (b) hereof.
Asia-Pacific and other foreign markets in accordance
with the guidelines implementing Book IV of this Code Article 71. Rules and Regulations on the Jurisdiction,
including 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 and the Bureau of Customs shall jointly issue special
tax nor to local taxes, the provisions of law to the rules and regulations on the receiving, handling,
contrary 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
subject to the payment of customs duties, taxes and and other foreign markets and keeping a proper
other charges and for which purpose, the proper balance between promoting the Philippines as a center
commercial invoice of the head offices or parent for multinational regional warehouses and
companies shall be submitted to the Regional safeguarding the revenue laws of the
Collector of Customs; and shall be subject to laws and country. lawphi1.net
regulations governing imported merchandise,
Provided, that in case any of the foregoing items are The Commissioner of customs is directed is directed to
sold, bartered, hired or used for purposes other than expedite the immediate re-exportation or transhipment
they were intended for without prior compliance with of the foregoing goods destined for regional
the guidelines implementing Book IV of this Code and warehousing to their Asia-Pacific and other foreign
without prior payment of the duty, tax or other charge markets, including the emergency withdrawal for re-
which would have been due and payable at the time of exportation by air and ship and the partial liquidation of
entry if the articles had been entered without the bonds adopting simplified export procedures therefor.
benefit of this decree, shall be subject to forfeiture and
the importation shall constitute a fraudulent practice Article 72. Penalties. Any willful violation by the
against customs revenue punishable under Section regional or area headquarters of a multinational
3602, as amended, of the Tariff and Customs Code of company which has established regional warehouse or
the Philippines; Provided, further, that a sale pursuant warehouses of the provisions of existing laws and the
to a judicial order shall not be subject to the preceding implementing guidelines of Book IV of this Code shall
constitute a sufficient cause for the cancellation of its association, partnership, corporation or any other form
license or registration in addition to the penalties of business organization formed, organized, chartered
hereinabove provided in Article 69, paragraph (b) or existing under any law other than those of the
hereof. Philippines, or which is not a Philippine national, or the
working capital of which id fully owned or controlled by
Article 73. The regional or area headquarters of aliens to do business or engage in an industry inside
multinational companies establishing regional the export 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 its registration, extendible for limited periods at the
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 positions of president, treasurer, and general manager
moral 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 employment of such foreign nationals. They shall be
least US$75,000.00 in the Philippines; Provided, That issued a multiple entry visa, valid for a period of three
the foregoing invested amount shall be lowered to years, to enter and leave the Philippines without
US$50,000 for aliens availing of Executive Order No. further documentary requirements other than valid
63 and Executive Order No. 1037 subject to the passports or other travel documents in the nature of
conditions imposed by said legislations: Provided, passports. The validity of the multiple entry special
further, That for purposes of compliance with this visa shall be extendible yearly. Foreign Nationals who
particular condition, the alien-applicant should prove have been issued multiple entry special visas under
that he has remitted such amount in acceptable this provision, as well as their respective spouses and
foreign currency to the Philippines. dependents, shall be exempt from obtaining alien
certificates and all types of clearances required by any
Article 75. Reportorial Requirements. As a holder of government department or agency. For this purpose,
the Special Investors Resident Visa, an alien shall be the Commission on Immigration and Deportation and
entitled to reside in the Philippines while his the authority shall jointly issue the necessary
investment subsists. For this purpose, he should implementing rules and regulations.
submit an annual report, in the form fully prescribed for
the purpose, to prove that he has maintained his A registered enterprise shall train Filipinos as
investment in the country. Should said alien withdraw understudies of foreign nationals in administrative,
his said investment from the Philippines, then the supervisory and technical skills and shall submit
Special Investors Resident Visa issued to him will annual reports of such training to the Board.
automatically expire.
Article 77. Tax Treatment of Merchandise in the Zone.
BOOK VI
INCENTIVES OF EXPORT PROCESSING ZONE (1) Except as otherwise provided in this Code, foreign
ENTERPRISES and domestic merchandise, raw materials, supplies,
articles, equipment, machineries, spare parts and
Article 76. Employment of Foreign Nationals. The wares of every description, except those prohibited by
provisions of law to the contrary notwithstanding, law, brought into the zone to be sold, stored, broken
Export Processing Zone Authority, hereinafter referred up, repacked, assembled, installed, sorted, cleaned,
to as the "Authority" may authorize an alien or an graded, or otherwise processed, manipulated,
manufactured, mixed with foreign or domestic (8) Unless the contrary is shown, merchandise taken
merchandise whether directly or indirectly related in out of the zone shall be considered for tax purposes to
such activity, shall not be subject to customs and have been sent to customs territory. lawphi1.net
internal revenue laws and regulations nor to local tax
ordinances, the provisions of law to the contrary Article 78. Additional Incentives. A zone registered
notwithstanding. enterprise shall also enjoy all the incentive benefits
provided in Article 39 hereof under the same terms
(2) Merchandise purchased by a registered zone and conditions stated therein. In addition zone
enterprise from the customs territory and subsequently registered enterprises shall also be entitled to the
brought into the zone, shall be considered as export following:
sales and the exported thereof shall be entitled to the
benefits allowed by law for such transaction. (a) Exemption from Local Taxes and Licenses.
Notwithstanding the provisions of law to the contrary,
(3) Domestic merchandise sent from the zone to the zone registered enterprise shall, to the extent of their
customs territory shall, whether or not combined with construction, operation or production inside the zone
or made part of other articles likewise of local origin or be exempt from the payment of any and all local
manufactured in the Philippines while in the export government imposts, fees, licenses or taxes except
processing zone, be subject to internal revenue laws real estate taxes which shall be collected by the
of the Philippines as domestic goods sold, transferred Province/City/Municipality responsible for the
or disposed of for local consumption. collection thereof under the provisions of the Real
Property Tax Code: Provided, That machineries
(4) Merchandise sent from the export processing zone owned by zone registered enterprises which are
to the customs territory shall, whether or not combined actually installed and operated in the Zone for
with or made part of other articles while in the zone, be manufacturing, processing or for industrial purposes
subject to rules and regulations governing imported shall not be subject to the payment of real estate taxes
merchandise. The duties and taxes shall be assessed for the first three (3) years of operation of such
on the value of imported materials (except when the machineries: Provided, further, That fifty percent (50%)
final product is exempt) and the internal revenue taxes of the proceeds of the real estate taxes collected from
on the values added. all real properties located in the Zone and such other
areas owned or administered by the Authority shall be
(5) Domestic merchandise on which all internal remitted to the Authority by the
revenue taxes have been paid, if subject thereto, and province/city/municipality responsible for the collection
foreign merchandise previously imported on which of such taxes under the provisions of the Real
duty or tax has been paid, or which have been Property Tax Code. All real estate taxes accruing to
admitted free of duty and tax, may be taken into the the Authority as herein provided shall be expanded for
zone from the customs territory of the Philippines and such community facilities, utilities and/or services as
be brought back thereto free of quotas, duty or tax. the Authority may determine.

(6) Subject to such regulations respecting identity and (b) Production equipment or machineries, not attached
safeguarding of the revenue as the Authority may to real estate, used directly or indirectly, in the
deem necessary when the identity of an article entered production, assembly or manufacture of the registered
into the export processing zone under the immediately product of the zone registered enterprise shall be
preceding paragraph has been lost, such article when exempt from real property taxes.
removed from the zone and taken to the customs
territory shall be treated as foreign merchandise FINAL PROVISIONS
entering the country for the first time, under the
provisions of the Tariff and Customs Code. Article 79. Interpretation. All doubts concerning the
benefits and incentives granted enterprises and
(7) Articles produced or manufactured in the zone and investors by this Code shall be resolved in favor of
exported therefrom shall, on subsequent importation investors and registered enterprises.
into the customs territory, be subject to the import laws
applicable to like articles manufactured in a foreign Article 80. Vested Rights. Existing registered
country; enterprises which are enjoying the incentives under
the laws repealed by Books One and Six of this Code
shall continue to enjoy such incentives for the period
therein stated: Provided, however, That firms which
made investments in new or expansion projects 7) Presidential Decree 2032
approved or registered by the Board of the Authority
on or after December 1, 1986 but before the effectivity 8) Executive Order 815
of this Code may opt to be governed by the provisions
of this Code. 9) Executive Order 1945 (1985)

Article 81. Confidentiality of Applications. All All other laws, decrees, executive orders,
applications and their supporting documents filed administrative orders, rules and regulations or parts
under this Code shall be confidential and shall not be thereof which are inconsistent with the provisions of
disclosed to any person, except with the consent of the this Code are hereby repealed, amended or modified
applicant or on orders of a court of competent accordingly. lawphi1.net
jurisdiction.
Article 86. Effectivity. This Code shall take effect
Article 82. Judicial Relief. All orders or decisions of immediately upon approval.
the Board in cases involving the provisions of this
Code shall immediately be executory. No appeal from DONE in the City of Manila, this 16th day of July, in
the order or decision of the Board by the party the year of Our Lord, nineteen hundred and eighty-
adversely affected shall stay such order or decision: seven.
Provided, That all appeals shall be filed directly with
the Supreme Court within thirty (30) days from receipt
of the order or decision.
Republic of the Philippines
Article 83. Effectivity of Implementing Rules and Congress of the Philippines
Regulations. The Board shall promulgate rules and Metro Manila
regulations to implement the intent and provisions of
this Code and shall have the authority to impose such Twelfth Congress
fines in amounts that are just and reasonable in cases Second Regular Session
of late submission or non-compliance on the part of
registered enterprises, with reporting and other Begun and held in Metro Manila, on Monday, the
requirements under this Code and its implementing twenty-second day of July, two thousand two.
rules and regulations. Such rules and regulations shall
take effect fifteen (15) days following its publication in Republic Act No. 9178 November 13, 2002
newspaper of general circulation in the Philippines.
AN ACT TO PROMOTE THE ESTABLISHMENT OF
Article 84. Separability Clause. The provisions of this BARANGAY MICRO BUSINESS ENTERPRISES
Code are hereby declared to be separable and, in the (BMBEs), PROVIDING INCENTIVES AND BENEFITS
event any such provisions is declared unconstitutional, THEREFOR, AND FOR OTHER PURPOSES.
the other provisions which are not affected thereby
shall remain in force and effect. Be it enacted by the Senate and House of
Representatives of the Philippines in Congress
Article 85. Repealing Clause. The following provisions assembled.
or laws are hereby repealed:
PRELIMINARY PROVISIONS
1) Batas Pambansa 44
Section 1. Short Title – This Act shall be known as the
2) Batas Pambansa 391 (1983) "Barangay Micro Business Enterprises (BMBE's) Act
of 2002."
3) Presidential Decree 218
Section 2. Declaration of Policy – It is hereby declared
4) Presidential Decree 1419 to be the policy of the State to hasten the country's
economic development by encouraging the formation
5) Presidential Decree 1623, as amended and growth of barangay micro business enterprises
which effectively serve as seedbeds of Filipino
6) Presidential Decree No. 1789 (1981) entrepreneurial talents, and intergranting those in the
informal sector with the mainstream economy, through
the rationalization of bureaucratic restrictions, the BMBE's and issue a Certificate of Authority to enable
active granting of incentives and benefits to generate the BMBE to avail of the benefits under this Act. Any
much-needed employment and alleviate poverty. such applications shall be processed within fifteen (15)
working days upon submission of complete
Section 3. Definition of Terms – As used in this Act, documents. Otherwise, the BMBEs shall be deemed
the following terms shall mean: registered. The Municipal or City Mayor may appoint a
BMBE Registration Officer who shall be under the
(a) "Barangay Micro Business Enterprise," Office of the Treasurer. Local government units
hereinafter referred to as BMBE, refers to any (LGU's) are encouraged to establish a One-Stop-
business entity or enterprise engaged in the business Registration Center to handle the efficient
production, processing or manufacturing of registration and processing of permits/licenses of
products or commodities, including agro- BMBEs. Likewise, LGUs shall make a periodic
processing, trading and services, whose total evaluation of the BMBE's financial status for
assets including those arising from loans but monitoring and reporting purposes.
exclusive of the land on which the particular
business entity's office, plant and equipment The LGUs shall issue the Certificate of Authority
are situated, shall not be more than Three promptly and free of charge. However, to defray the
Million Pesos (P3,000,000.00) The Above administrative costs of registering and monitoring the
definition shall be subjected to review and BMBEs, the LGUs may charge a fee renewal.
upward adjustment by the SMED Council, as
mandated under Republic Act No. 6977, as The Certificate of Authority shall be effective for a
amended by Republic Act No. 8289. period of two (2) years, renewable for a period of two
(2) years for every renewal.
For the purpose of this Act, "service" shall
exclude those rendered by any one, who is duly As much as possible, BMBEs shall be subject to
licensed government after having passed a minimal bureaucratic requirements and reasonable
government licensure examination, in fees and charges.
connection with the exercise of one's
profession. Section 5. Who are Eligible to Register – Any person,
natural or juridical, or cooperative, or association,
(b) "Certificate of Authority" is the certificate having the qualifications as defined in Section 3(a)
issued granting the authority to the registered hereof may apply for registration as BMBE.
BMBE to operate and be entitled to the benefits
and privileges accorded thereto. Section 6. Transfer of Ownership - The BMBE shall
report to the city or municipality of any changer in the
(c) "Assets" refers to all kinds of properties, real status of its ownership structure, and shall surrender
or personal, owned by the BMBE and used for the original copy of the BMBE Certificate of Authority
the conduct of its business as defined by the for notation of the transfer.
SMED Council: Provided, That for the purpose
of exemption from taxes and fees under this INCENTIVES AND BENEFITS
Act, this term shall mean all kinds of properties,
real or personal, owned and/or used by the Section 7. Exemption from Taxes and Fees – All
BMBE for the conduct of its business as defined BMBEs shall be exempt from tax for income arising
by the SMED Council. from the operations of the enterprise.

(d) "Registration" refers to the inclusion of The LGUs are encouraged either to reduce the
BMBE in the BMBE Registry of a city or amount of local taxes, fees and charges imposed or to
municipality. exempt BMBEs from local taxes, fees and charges.

(e) "Financing" refers to all borrowings of the Section 8. Exemption from the Coverage of the
BMBE from all sources after registration. Minimum Wage Law – The BMBEs shall be exempt
from the coverage of the Minimum Wage
REGISTRATION AND OPERATION OF BMBE Law: Provided, That all employees covered under this
Act shall be entitled to the same benefits given to any
Section 4. Registration and Fees - The Office of the regular employee such as social security and
Treasurer of each city or municipality shall register the healthcare benefits.
Section 9. Credit Delivery – upon the approval of this and Gaming Corporation (PAGCOR) and shall be
Act, the land Bank of the Philippines (LBP), the administered by the SMED Council.
Development Bank of the Philippines (DBP), the Small
Business Guarantee and Finance Corporation The Department of Trade and Industry (DTI), the
(SBGFC), and the People's Credit and Finance Department of Science and Technology (DOST), the
Corporation (PCFC) shall set up a special credit university of the Philippines Institute for Small Scale
window that will service the financing needs of BMBEs Industries (UP ISSI), Cooperative Development
registered under this Act consistent with the Banko Authority (CDA), Technical Education and Skills
Sentral ng Pilipinas (BSP) policies; rules and Development Authority (TESDA), and Technology and
regulations. The Government Service Insurance Livelihood Resource Center (TLRC) may avail of the
System (GSIS) and Social Security System (SSS) said Fund for technology transfer, production and
shall likewise set up a special credit window that will management training and marketing assistance to
serve the financing needs of their respective members BMBEs.
who wish to establish a BMBE. The concerned
financial institutions (FIs) encouraged to wholesale the The DTI, in coordination with the private sector and
funds to accredited private financial institutions non-government organization (NGOs), shall explore
including community-based organizations such as the possibilities of linking or matching-up BMBEs with
credit, cooperatives, non-government organizations small, medium and large enterprises and likewise
(NGOs) and people's organizations, which will in turn, establish incentives therefor.
directly provide credit support to BMBEs.
The DTI, in behalf of the DOST, UP ISSI, CDA.
All loans from whatever sources granted to BMBEs TESDA and TLRC shall be required to furnish the
under this Act shall be considered as part of appropriate Committees of both Houses of Congress a
alternative compliance to Presidential Decree no, 717,, yearly report on the development and
otherwise known as the Agri-Agra Law, or to Republic accomplishments of their projects and programs in
Act. No. 6977, known as the Magna Carta for Small relation to technology transfer, production and
and Medium Enterprises, as amended. For purposes management training and marketing assistance
of compliance with presidential Decree no. 717 and extended to BMBEs.
Republic Act No. 6977, as amended, loans granted to
BMBEs under this Act shall be computed at twice the Section 11. Trade and Investment Promotions – The
amount of the face value of the loans. data gathered from business registration shall be
made accessible to and shall be utilized by private
To minimize the risks in lending to the BMBEs, the sector organizations and non-government
SBGFC and the Quedan and Rural Credit Guarantee organizations for purposes of business matching, trade
Corporation (QUEDANCOR) under the Department of and investment promotion.
Agriculture, in case of agribusiness activities, shall set
up a special guarantee window to provide the INFORMATION DISSEMINATION
necessary credit guarantee to BMBEs unde rtheir
respective guarantee programs. Section 12. Information Dissemination - The
Philippine Information Agency (PIA), in accordance
The LBP, DBP. PCFC, SBGFC, SSS, GSIS, and with the Department of Labor and Employment
QUEDANCOR shall annually report to the appropriate (DOLE), the DILG and the DTI, shall ensure the proper
Committee of Both Houses of Congress on the status and adequate information dissemination of the
of the implementation of this provision. contents and benefits of this Act to the general public
especially to its intended beneficiaries specifically in
The BSP shall formulate the rules for the the barangay level.
implementation of this provision and shall likewise
establish incentive programs to encourage and PENALTY
improve credit delivery to the BMBEs.
Section 13. Penalty - Any person who shall willfully
Section 10. Technology Transfer, Production and violates any provision of this Act or who shall in any
Management Training, and marketing Assistance – A manner commit any act to defeat any provisions of this
BMBE Development Fund shall be set up with an Act shall, upon conviction, be punished by a fine of not
endowment of Three Hundred Million pesos less than twenty-five Thousand Pesos (P25,000.00)
(P300,000,000.00) from the Philippine Amusement but not more than Fifty Thousand Pesos (P50,000.00)
and suffer imprisonment of not less than six (6) the Senate and the House of Representatives on
months but not more than two (2) years. October 24, 2002 and October 23, 2002, respectively.

In case of non-compliance with the provisions of OSCAR G. YABES ROBERTO P. NAZARENO

Section 9 of this Act, the BSP shall impose Secretary of Senate Secretary General
administrative sanctions and other penalties on the House of Represenatives
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.

Section 16. Separably Clause - If any provision or part

hereof, is held invalid or unconstitutional, the
remainder of the law or the provision not otherwise
affected shall remain valid and subsisting.

Section 17. Repealing Clause – Existing laws,

presidential decrees, executive orders, proclamations
or administrative regulations that are inconsistent with
the provisions of this Act are hereby amended,
modified, superseded or repealed accordingly.

Section 18. Effectivity – This Act shall take effect

fifteen (15) days after its publication in the Office
Gazette or in at least two (2) newspaper of general
circulation.

Approved,

FRANKLIN DRILON JOSE DE VENECIA JR.

President of the Senate Speaker of the House of
Representatives

This Act, which is a consolidation of Senate Bill No.

1855 and House Bill No. 4871 was finally passed by