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I 
THIRTEENTH CONGRESS 
1 
Second Regular Session 
1 
5 OCT 12 P6:A8 
OF THE REPUBLIC OF THE PHILIPPINES ) 
S E N A T E  
RECEIVEO BY : 
Senate Bill No. 2138 
Prepared jointly by the Committees on Tourism; Finance; Civil Service and 
Government Reorganization; and Ways and Means with Senators Gordon, 
Ejercito Estrada (J.), Angara, Defensor Santiago, Villar, Lacson and Recto 
as authors thereof 
AN ACT 
DECLARING A NATIONAL POLICY FOR TOURISM AS THE PRIMARY 
ENGINE OF INVESTMENT, EMPLOYMENT, GROWTH AND NATIONAL 
DEVELOPMENT, REORGANIZING THE DEPARTMENT OF TOURISM 
AND 
ITS 
ATTACHED 
AGENCIES 
TO 
EFFECTIVELY 
AND 
EFFICIENTLY IMPLEMENT THAT POLICY, PROVIDING NECESSARY 
INCENTIVES FOR INVESTMENT AND APPROPRIATING FUNDS 
THEREFOR 
Be it enacted by the Senate and the House of Representetives of the Philippines in Congress Assembled: 
CHAPTER 1. GENERAL PROVISIONS 
SECTION 1. Short Title. - This Act shall be known as "The Tourism Act 
of 2005". 
SEC. 2. 
Declaration of Policy. - The State declares tourism as an 
indispensable element of the national economy and an industry of national 
interest and importance, which must be harnessed as an engine of socio- 
economic and cultural growth to generate investment, foreign exchange and 
employment, and mold an enhanced sense of national pride for all Filipinos. 
The Department of Tourism may call upon all government departments, 
agencies and offices to coordinate thelr efforts In the implementation of thls 
policy by providing the necessary infrastructure, creating an atmosphere of 
peace, order and security, and inculcating within the people a culture of tourism, 
wlthln a framework of sustalnable development, such that the benefits of tourlsm 
will contribute to bringing an end to poverty. 
SEC. 3. Declaration of Prlnclples. - In the pursuit of this policy, the 
interpretation and implementation of thls Act and all other laws, decrees, 
presidential issuances, and implementing rules and regulations on tourism, shall 
hereafter be governed by the following principles: 
a. 
Tourism development must be focused. The nation must seek to 
make the Philippines a premiere tourist destlnation In Asia, if not the 


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. 
b. 
C. 
world. Its government and its people must devote resources to attract 
tourists to generate investments, foreign exchange, employment and 
national pride. 
Tourism development must be sustainable. The state must protect and 
preserve with pride not only our natural, historical and cultural 
endowments, but more importantly the dignity of the Filipino people, 
such that future generations of Filipinos will be proud of themselves, 
and of their nation. 
Tourism development must be coordinated. 
All government 
departments, agencies and offices must realize the fundamental 
importance of tourism as an engine of growth and must direct their 
efforts to support the Department of Tourism in the creation of peace 
and order, public infrastructure, and a proud culture that cultivates 
tourism. 
d. 
Tourism development must be responsive. Any investment made into 
every tourism enterprise must result in real jobs for real people, in the 
context of the needs of every affected community. 
Only by the 
creation of real opportunities and real employment can people truly 
benefit from the benefits of tourism development. 
e, 
Tourism development must begin at home. Only when Filipinos come 
to know and love their own country through domestic tourism and a 
dynamic educational system can a culture of tourism truly be created, 
allowing the Philippines and the Filipinos to truly take their place in, 
and connect with the rest of, the world. 
SEC. 4. Definition of Terms. - The following terms, as used in this Act, are 
defined as follows: 
a. 
Department - Department of Tourism 
b. Secretary - Secretary of Tourism 
c. 
TEZA -Tourism Enterprise Zone Authority 
d. Zone -Tourism Enterprise Zone 
e. 
Zone Operator - Tourism Enterprise Zone Operator 
f. 
Reglstered Enterprlse - An enterprlse located within a Zone that is 
duly-registered with the TEZA 
PTA - Philippine Tourism Authority 
PCVC - Philippine Conventions and Visitors Corporation 
g. 
h. 
i. DFP - Duty-Free Philippines 
j. Tourism enterprises - shall refer to facilities, services and attractions 
involved In tourlsm, such as, but not llmited to: travel agents: tour 
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operators; tourist transport operators, whether for land, sea or air 
transportation; tour guides; adventure sports operators, such as those 
for mountaineering, spelunking, scuba diving and other water sports, 
and other sports activities of significant tourism potential: convention 
organizers: accommodation establishments, such as hotels, resorts, 
apartelles, tourist inns, motels, pension houses, home stay operators; 
restaurants, shops & department stores, sports & recreational centers, 
spas, museums & galleries, theme parks, convention centers and 
zoos. 
k. Affected local government unit - shall refer to a province or city that 
has a Zone, or part thereof, within its territorial jurisdiction. 
CHAPTER II. TOURISM GOVERNANCE 
Subchapter II-A. Structure of the Department 
SEC. 5. Mandate. - The Department of Tourism shall be the primary 
government agency charged with the responsibility of determining tourism 
policies and programs to develop and regulate tourism, implement such policies 
and programs on its own, through attached agencies, and in coordination with 
other government instrumentalities, and instill in the Filipino the fundamental 
importance of tourism in the generation of employment, investment and foreign 
exchange. 
Powers and Functions. - The Department shall have the 
following powers and functions: 
SEC. 6. 
a. 
b. 
C. 
d. 
e. 
Formulate policies, plans, programs and projects for tourism as an 
engine of socio-economic and cultural growth. 
Oversee and coordinate the implementation of tourism policy, plans 
and projects. 
In coordination with local governments, delegate to regional offices 
specific powers and functions In the implementation of tourism 
policies, plans and projects. 
Call upon all agencies of Government to properly carry out their 
programs in relation to and in coordination with the policies, plans and 
projects of the Department, and to assist in the implementation of 
tourism policies, plans and projects. 
Represent the Government in all domestic and international 
conferences, and in all multilateral or bilateral treaties and 
international 
agreements, 
concerning 
tourism, 
and 
ensure 
government's implementation and compliance with all obligations 
arlsing there from, particularly those that facilitate travel by air, sea 
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and land. 
Effect the removal of unnecessary barriers to travel, the integration 
and simplification of travel regulations, and ensure their efficient, fair 
and courteous enforcement to assure expeditious and hospitable 
reception of all visitors. 
Issue timely advisories on the safety or viability of travel to particular 
communities within the Philippines. 
Participate at meetings of government agencies, offices, boards, 
commissions or committees that may, directly or indirectly, affect 
tourism, including but not limited to, transportation and travel, peace 
and order, national emergencies and disaster coordination, public 
utilities and other public infrastructure, foreign relations and 
immigration. 
In cooperation with appropriate government agencies and the private 
sector, support, advance and promote the protection, maintenance 
and preservation of historical, cultural and natural endowments. 
In consultation with the private sector, formulate and promulgate rules 
and regulations prescribing standards for the operation of tourism 
enterprises in accordance with the highest relevant international 
standards. 
k. 
License, accredit and classify tourism enterprises, and when 
necessary to maintain the quality of service, suspend or prohibit their 
operation in accordance with duly promulgated rules and regulations. 
f. 
g. 
h. 
i. 
j. 
I. 
Ensure the proper coordination, integration, prioritization and 
implementation of local government tourism development plans with 
that of the national government. 
m. Receive and investigate complaints concerning tourism enterprises, 
act on such complaints, and exercise quasi-judicial functions in the 
process of accreditation, suspension, or prohibition of the operation of 
tourism enterprises, and in such other processes necessary to 
properly implement the provisions of this Act. 
Collect necessary fees and charges for the proper implementation of 
tourism policies, plans and projects. 
SEC. 7. Structure of the Department. - The Department shall consist of 
the Department Proper, Department Services, Bureaus and Offices and the 
Department's Regional Offices. The Department Proper shall consist of the 
Offlces of the Secretary, Underseoretarles and Assistant Seoretarles. 
n. 
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SEC. 8. 
Office of the Secretary. - The Office of the Secretary shall 
SEC. 9. Undersecretaries and Assistant Secretaries. - The Secretary 
consist of the Secretary and hislher immediate staff. 
shall be assisted by three (3) Undersecretaries, namely: 
a. 
Undersecretary for Tourism Development, who shall be responsible for 
the Bureau of Tourism Development Planning and Bureau of Tourism 
Coordination. 
Undersecretary for Tourism Regulation, who shall be responsible for 
the Bureau of Tourism Standards, Regulations and Industry Manpower 
Development, and all Regional Offices. 
There shall be such number of Assistant Secretaries appointed by the 
b. 
c. 
Undersecretary for Internal Services. 
President as may be required by the operations of the Department. 
SEC. I O .  Bureau of Tourism Development Planning. - Recognizing the 
value of national tourism development planning, the Bureau of Tourism 
Development Planning shall have the following functions: 
a. Analyze specific geographical areas with potential tourism value leading 
to the preparation of a national tourism development plan. 
b. Conduct research on the economic impact of tourism, and on necessary 
policies and programs for the sustainable tourism development of 
natural, cultural and historical endowments. 
c. Formulate policies, programs and plans for 
national tourism 
development, coordinate with local government units for the formulation 
and preparation of local tourism development plans, and insure not only 
the integration of such local plans with that of the nation as provided 
under Subchapter 11-E. 
Department and of the local government units. 
d. Monitor and evaluate the implementation of plans and programs of the 
SEC. 11. Bureau of Tourlsm Coordination. - Recognizing increased 
linkages are necessary between various government offices and the private 
sector to properly Implement tourism pollcy, the Bureau of Tourism Coordination 
shall have the following functions: 
a. Assist in the coordination with national government agencies, local 
government units, non-governmental organizations, and other private 
entities for the development and implementation of the national tourism 
plans and policies; 
b. 
Call upon the assistance and support of any or all of the government 
agenolss In the lrnplementatlon of the pollcles of the Department: and 
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c. 
Support the private sector in all tourism activities requiring 
SEC. f2. 
Bureau of Tourism Standards, Regulations and Industry 
Manpower Development. - Recognizing the need for internationally competitive 
standards of service, the Bureau of Tourism Standards, Regulations and Industry 
Manpower Development shall have the following functions: 
governmental coordination. 
a. 
b. 
C. 
d. 
e. 
Formulate and enforce standards for tourism enterprises, prescribing 
minimum levels of operating quality and efficiency in order to ensure 
that facilities, personnel and services are maintained in accordance 
with acceptable local and international standards. 
Coordinate with relevant tourism enterprise associations, including 
adventure sports associations, in the formulation of rules and 
regulations, accreditation, and enforcement. 
License, regulate, classify, and monitor the operation of tourism 
enterprises, accredit tourism enterprises that comply with prescribed 
standards through a mandatory system of accreditation, and penalize 
and prohibit the operation of tourism enterprises that fail to meet such 
standards, under such terms as provided under Subchapter Il-E. 
Establish a system of registration, information, linkage, and mutual 
assistance among accredited tourism enterprises to enhance the value 
of accreditation and improve the quality of service rendered by such 
enterprises. 
Provide technical assistance, training and education programs to local 
governments, tourism enterprises, and other entities to improve the 
quality tourism services. 
SEC. 13. Regional Offices. - The Department shall establish, operate and 
maintain a Regional Office in each of the administrative regions of the country. A 
Regional Office shall be headed by a Regional Director and shall, within its 
administrative region, have the following functions: 
a. 
b. 
C. 
Implement and enforce laws, policies, plans, programs, rules and 
regulations of the Department, particularly those relating to the 
accreditation of tourism enterprises promulgated by the Department. 
Coordinate with regional offices of other departments, bureaus, and 
agencies, local government units, non-governmental organizations, and 
the regional offices of the Department's attached agencies in the 
implementation of such laws, policies, plans programs and rules and 
regulations. 
Together with local government units, establlsh such tourist Information 
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and assistance offices as are necessary to assist tourists and tourism 
enterprises in all relevant matters. 
SEC. 14. Internal Services. - The Internal Services shall consist of the 
following services, and such other services as may be established by law, decree 
or executive order, each of which shall be headed by a Service Chief. 
SEC. 15. Financial and Management Service. - The Financial and 
Management Service shall provide the Department with staff advice and 
assistance on budgetary, financial and management matters and shall perform 
such other related functions as may be assigned or delegated to it by the 
Secretary. 
SEC. 16. Administrative Affairs Service. - The Administrative Service 
shall provide the Department with staff advice and assistance on personnel 
information, 
records, 
communications, 
supplies, 
equipment, 
collection, 
disbursements, security, other custodial work and such other related duties and 
responsibilities as may be assigned or delegated to it by the Secretary. 
SEC. 17. Legal Affairs Service. -The Legal Affairs Service shall: 
a. 
Exercise quasi-judicial functions in disputes relating to the system of 
permits and accreditation, as provided herein. 
b. Provide the Department with staff advice and assistance on all legal 
matters affecting the Department and perform such other related 
functions as may be assigned or delegated to it by the Secretary. 
Subchapter Il-B. Rationalization of Functions 
SEC. 18. Reorganization of Offices. - The Philippine Tourism Authority 
(PTA), created under Presidential Decree No. 189, as amended, is hereby 
renamed as the Philippine Tourism Assets Corporation, as hereinafter provided. 
The Philippine Conventions and Visitors Corporation (PCVC), created under 
Presidential Decree No. 1448, as amended, is hereby reorganized as Tourism 
Philippines, as hereinafter provided. 
The Bureaus for Domestic and International Tourism Promotions and the 
Offices of Tourism Information and Product Development of the Department 
provided under the Admlnlstratlve Code of 1987 are hereby absorbed within 
Tourism Philippines. 
SEC. 19. Human Resources. - Where certain functions are declared 
redundant on account of the reorganization, the Department, the TEZA Board, 
and the Tourism Board shall provide for the reassignment, insofar as practicable, 
of affected employees to similar positions within the Department and its attached 
agencies, taking into consideration their skills and experience, without loss of 
senlority or other rights and privileges. In any case, all relevant laws, decrees, 


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executive orders, rules and regulations concerning the rights of government 
employees in the reorganization of an office shall be respected. 
SEC. 20. Rationalization of Assets. - The assets and liabilities of the 
Philippine Tourism Authority shall be held in trust and managed by a special 
committee composed of the Secretaries of Tourism, Budget and Management, 
and Finance. Within one hundred and twenty (120) days from the effectivity of 
this Act, the committee shall prepare a report identifying all the assets of the 
Philippine Tourism Authority, indicating their values, and recommendations on 
the proper disposition of those assets. 
When economically feasible and financially viable, assets consisting of 
tracts of land may be assigned to the TEZA for sale, lease and/or development 
into Zones, as hereinafter provided. All other assets, particularly those involving 
business operations, as well as liabilities and obligations, shall continue to 
pertain to the Philippine Tourism Authority, which shall hereinafter be renamed 
the Philippine Tourism Assets Corporation. 
SEC. 21. Retirement and Separation Compensation. - Should any 
employee be separated from government service on account of the 
reorganization of the Department, said employee shall be entitled to claim 
separation or retirement benefits as may be provided under existing laws 
governing the civil service, as well as benefits granted under relevant laws, 
presidential decrees and executive orders. 
SEC. 22. 
Foreign Field Offices. - The operation and supervision of 
foreign field offices of the Department of Tourism shall be transferred to Tourism 
Philippines. 
Subchapter Il-C. Attached Agencies and Corporations 
Other Attached Agencies. - Tourism Philippines and the 
Tourism Enterprise Zone Authority created herein below shall be attached to the 
Department and shall be under the supervision of the Secretary for program and 
policy coordination. Furthermore, the following agencies and corporations shall 
be attached to the Department under the supervision of the Secretary for 
program and policy coordination: the Duty-Free Philippines Corporation as 
hereinafter provided; the Film Development Council of the Philippines, as created 
under Republic Act No. 9167; the lntramuros Administration, created under 
Presidential Decree No. 1616, as amended; the National Parks Development 
Committee, created under Executive Order No. 30 (1963); the Nayong Pilipino 
Foundation, created under Presidential Decree No. 37, as amended: the 
Philippine Retirement Authority, created under Executive Order No. 1037, as 
amended: and the Philippine Tourism Assets Corporatlon, created under 
SEC. 23. 
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Presidential Decree No. 189. 
attached agencies shall continue to operate under their respective charters. 
Duty-Free Philippines Corporation. - A body corporate, 
“Duty- Free Philippines Corporation”, is hereby created to operate the duty and 
tax free merchandising system in the Philippines to augment the service facilities 
for tourists and to generate foreign exchange and revenue for the government, 
as established under Executive Order No. 46 (1986). 
Duty-Free Philippines shall have the exclusive authority to operate, 
or to contract out the operation of, stores and shops that would sell, 
among others, tax and duty-free merchandise, goods and articles, in 
international airports and seaports, and in tourism enterprise zones 
throughout the country, in a manner that: 
1. Is competitive with international standards; 
2. Effectively showcases Philippine culture, craftsmanship and 
industry; and 
3. Efficiently and effectively generates foreign exchange. 
Except as hereinafter provided, each of the 
SEC. 24. 
a. 
b. 
C. 
Such merchandise, goods and articles shall only be sold to 
persons departing for abroad. Under such limitations, rules and 
regulations that may be provided by the Department of Tourism and 
concurred in by the Department of Finance, such merchandise, 
goods and articles may be sold to foreign tourists for consumption 
within a tourism zone, or to passengers arriving into the Philippines 
from abroad. 
The Department shall adopt appropriate rules to 
delimit the operations of Duty-Free Philippines within Zones in a 
manner that allows the establishment, growth and development of 
other retailing and merchandising enterprises therein. 
In the performance of its functions, Duty-Free Philippines shall have 
all the general powers of a corporation established under the Batas 
Pambansa Blg. 68, the Corporation Code in furtherance of its 
Charter. 
Duty-Free Philippines shall be governed by a Board of Directors 
composed as follows: 
1. The Secretary of Tourism as Chairman, 
2. The General Manager of Duty-Free Philippines as Vlce- 
3. The Chief Operating Officer of Tourism Philippines, 
4. The Administrator of Tourism Enterprise Zone Authority, 
5. And four persons appointed by the President wlth recognlzed 
Chairman, 
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competence in business management, marketing, finance, tourism 
and related fields. 
The General Manager shall be appointed by the Secretary of 
Tourism to implement the plans, programs and policies of the Board 
of Directors, Hekhe must have recognized competence in business 
management, marketing, finance, tourism and related fields. 
d. The properties, assets and funds currently being utilized by the 
present Duty-Free Philippines system shall be considered as the 
capitalization of the new corporate entity. 
SEC. 25. lntramuros Administration. - Consistent with Presidential 
Decree No. 1616, Section 13, as amended, the lntramuros Administration is 
hereby authorized to administer Tourism Enterprise Zone incentives as provided 
under Chapter IV of this Act to enterprises within Intramuros, as lntramuros is 
hereby declared a Tourism Enterprise Zone. In addition to such incentives, an 
enterprise engaged in the restoration of structures within lntramuros shall be 
entitled to a tax credit equivalent to the full cost of such restoration activities. The 
TEZA shall supervise the grant of incentives by the lntramuros Administration. 
SEC. 26. Philippine Retirement Authority. - For purposes of policy and 
program coordination, the Philippine Retirement Authority is hereby attached to 
the Department and placed under the supervision of the Secretary. 
The 
Secretary shall be ex-officio Chairman of its Board of Trustees. 
SEC. 27. 
The Film Development Council of the Philippines. - To 
further integrate national promotions efforts, the Film Development Council of the 
Philippines shall be attached to the Department, and the Secretary shall be its 
ex-officio 
Chairman. 
In the award of privileges under its charter, the Film 
Development Council shall give preference to films which highlight Philippine 
history and culture, particularly those which receive international recognition. 
Philippine Commission on Sports Scuba Diving. - The 
Philippine Commission on Sports Scuba Diving is hereby abolished and, to 
Insure more stringent monitoring, its functions shall be hereby assumed by the 
Bureau of Tourism Standards and Manpower Development. 
Philippine Tourism Assets Corporation. - In lieu of the 
mandate of the former Philippine Tourism Authority provided under Presidential 
Decree No. 189, as amended, the Philippine Tourism Assets Corporation shall 
hereinafter be specifically mandated to manage tourism enterprises it currently 
operates with the specific goal of attaining self-sufficiency in its operations within 
five years from the effectivity of this Act. Toward this end, it shall be entitled to 
receive the amount of one hundred million pesos (PHP 100,000,000) from the 
SEC. 28. 
SEC. 29. 
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annual collections of travel taxes by way of subsidy for its operations for five (5) 
years from the date of effectivity of this Act, Should it fail to attain self-sufficiency 
at the end of that period, the corporation shall be dissolved and its assets 
disposed. The proceeds of such a disposition of assets shall be set aside in a 
trust fund as provided under Subchapter 111-6, Section 50. 
Subchapter Il-D. Control and Supervision of Areas of 
Overlapping Jurisdictions 
SEC. 30. Rationalization of Tourism Zones, Areas and Spots. - Any 
jurisdiction over any tourism zone, area or spot previously vested by law, 
executive order or presidential decree on the PTA or any other national 
government agency shall be vested in the Department. 
In the interest of efficiency in supervision and in recognition of local 
autonomy, within one (1) year from the effectivity of this Act, the Department, 
through appropriate agreements, may transfer control over a tourism zone, area 
or spot, or a portion thereof, to another agency or office of the government, or to 
a local government unit. 
Within ninety (90) days from the transfer of control, the relevant agencies, 
offices or local government units shall prepare comprehensive plans for the use, 
development, preservation and promotion of all tourism zones, areas, or spots, in 
a manner consistent with the tourism master plan. Such plans shall be subject to 
the approval of the Department. 
The Department shall exercise supervisory powers over such agency, 
office or local government unit in accordance with the terms of the agreement of 
transfer, or the development plan of the zone, area or spot. Where a national 
government agency or a local government unit fails to implement the 
comprehensive plan approved by the Department, the Department may, after 
due notice and hearing, revoke the agreement transferring of control over the 
tourlsm zone, area or spot. Where a local government unit Is involved, the 
Department may also exercise powers provided under Subchapter Il-E. 
SEC. 31. National Protected Areas System and the National Eco- 
tourism Policy. - Within one (I) 
year from the effectivity of this Act, the 
Department and the Department of the Environment and Natural Resources 
(DENR) shall identify areas covered by the National Integrated Protected Areas 
System with ecotourism potential and prepare comprehensive plans for the use, 
development, preservation and promotion of these areas. When practicable, and 
with the concurrence of the DENR, the Protected Area, or portions thereof, and 
areas currently covered by the Ecotourlsm Pollcy proclalmed under Executive 
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Order No. I 1  1 (1999), may be organized as Zones under the supervision of the 
TEZA, as hereinafter provided. 
Subchapter Il-E. Shared Responsibilities of National and 
Local Governments 
SEC. 32. Coordination beiween National and Local Governments. - In 
view of the urgent need to develop a national strategy for tourism development 
within a framework for decentralized governance in areas outside of Zones 
created under Chapter IV of this Act, the Department and the local governments 
shall integrate and coordinate local and national plans for tourism development. 
Recognizing the strategic developmental value of tourism spearheaded by the 
national government, and the significant role local governments play in tourism 
development, greater coordination and support are required between national 
and local governments to truly implement a national policy for tourism. The 
Secretary, in the exercise of hislher tule making powers as required by the needs 
of industry regulation, shall have the power to identify the enterprises covered by 
this Subchapter. 
SEC. 33. Tourism Development Planning. - Local governments shall 
coordinate with the Department for the preparation and implementation of 
tourism development plans for their respective jurisdictions. 
SEC. 34. Licenses and Permits. - Every local government unit with a 
duly-prepared tourism development plan shall have the authority to grant 
licenses and permits for the operation of tourism enterprises within their 
respective jurisdictions. Where the local government has not prepared a tourism 
development plan in coordination with the Department, the local government 
shall be empowered only to issue provisional licenses and permits for the 
operation of tourism enterprises. Such power to issue provisional licenses and 
permits shall not exceed two (2) years from the approval of this Act. Thereafter, 
any local government without a duly-prepared tourism development plan shall be 
prohibited from issuing licenses or permits for the operation of tourism 
enterprises. 
The local government shall not renew any license or permit of any tourism 
enterprise that has failed to obtain or has lost accreditation from the Department. 
The Department shall, on its own or upon complaint, have the authority to 
review the grant of such licenses and permits to ensure that the tourism 
development master plan Is properly implemented. The Department is further 
empowered to require the relevant local government unit to adopt necessary 
measures and impose reasonable penalties to insure the proper implementation 
of the tourism development master plan. 
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SEC. 35. Mandatory Accreditation. - In addition to the permits and 
licenses issued by the local government, every tourism enterprise shall, on a 
regular basis, obtain accreditation from the Department in relation to the quality 
of facilities and standard of service offered by such enterprise. 
Where an 
enterprise fails to obtain or qualify for accreditation, the Department shall notify 
the enterprise, giving it sufficient time to obtain accreditation, or to address 
deficiencies observed in the accreditation process. Where the enterprise still 
fails to obtain or qualify despite due notice, the Department shall notify the 
relevant local government unit of the fact, requiring it to take appropriate action 
against the enterprise, which may include monitoring, investigation, Imposition of 
fines, or the suspension or cancellation of its license of permit. Where the local 
government fails to act within fifteen (15) days from receipt of notice, the 
Department shall be empowered to suspend or cancel the license or permit to 
operate of the enterprise. 
SEC. 36. Supervision over Local Governments. - Where the local 
government unit fails to act as required under this Subchapter, after proper notice 
and hearing the Department shall take necessary action, which may include: 
a, 
Suspension of services rendered by the Department and its 
attached agencies to the local government. 
b. 
Suspension of the power of the local government to issue licenses 
and permits for tourism enterprises. 
Imposition of reasonable fines and penalties against the responsible 
local government executive and subordinates. 
Elevation of the matter to the President in the latter's exercise of 
supervision over local governments. 
c. 
d. 
SEC. 37. 
Local Government Capabilities Enhancement. - The 
Department shall develop support and training programs to enhance the 
capaclties and capabllltles of local governments to monitor and administer 
tourism activities, and enforce tourism laws, rules and regulations in their 
respective jurisdictions. Funding for such programs shall be shared between the 
Department and the local government. 
Reports. - Every local government unit shall periodically 
report to the Department on the status of tourism, plans and programs, tourist 
arrivals, and tourism csnterprlses, among others, within their jurlsdlctlons. 
SEC. 38. 
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CHAPTER 111. TOURISM MARKETING AND PROMOTIONS 
Subchapter Ill-A Tourism Philippines 
SEC. 39. Tourism Philippines. - Under the supervision of the Secretary 
and attached to the Department for purposes of program and policy coordination 
shall be a body corporate known as Tourism Philippines. 
SEC. 40. 
Mandate. - Tourism Philippines shall be responsible for 
marketing and promoting the Philippines domestically and internationally as a 
major global tourism destination, highlighting the uniqueness of its tourism 
products, development and assisting the development of such tourism products. 
SEC. 41. Board of Directors. - Tourism Philippines shall be governed 
and its powers exercised by a Board of Directors the ("Tourism Board"), 
composed as follows: 
a. The Department Secretary, as chairperson 
b. The Tourism Philippines Chief Operating Officer, as vicechairperson 
c. The General Manager of Duty-Free Philippines 
d. A representative from the Philippine Amusements and Gaming 
Corporation 
e. 
A representative from the international airports and seaports providing 
the largest contribution to the Tourism Development Fund as provided 
under Subchapter Ill-B, Section 52 
f. Five directors elected by the Tourism Congress as provided under 
Section 43 below 
SEC. 42. The Chief Operating Officer. - Tourism Philippines shall have 
a Chief Operating Officer who shall be Filipino with a degree in business, law, 
tourism, public administration, or relevant fields, and have demonstrated 
expertise therein. He/she must have been engaged in the managerial capacity 
for at least five (5) years prior to hidher appointment. The Chief Operating 
Officer shall be elected by a majority of the members of the Tourism Board, and 
shall serve at its pleasure. 
SEC. 43. Elected Dlrectors. - The Tourism Congress as created under 
Chapter VI, Section 85 shall elect from among its members the directors to 
represent the tourism industry, specifically the following sectors: 
a. air, sea and land tourist transportation operators: 
b. hotel and resort and other accommodation enterprises: 
c. tour operators; 
d. travel agents; 
e. conventions organizers; and 
f. other tourism enterprises. 
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Under the first election to implement this provision, the directors elected 
from the first three (3) sectors as mentioned in this Subchapter, Section 43, shall 
serve terms of three (3) years, while those from the last three (3) sectors shall 
serve terms of two (2) years. Thereafter, all directors shall serve terms of two (2) 
years. These directors must be Filipinos engagbd in the management of a 
business in the sectors they represent for at least five (5) years, and must remain 
engaged in business in the sector they have: been elected to represent 
throughout their term of office. 
SEC. 44. Powers of Tourism Philippines. - Tourism Philippines shall 
have all powers of a corporation provided under the Batas Pambansa Blg. 68, 
the Corporation Code. Furthermore, it shall also have the following powers: 
a. Contract loans, indebtedness, credit and issue commercial papers and 
bonds, in any local or convertible foreign currency from international 
financial institutions, foreign government 'entities, and local or foreign 
private commercial banks or similar institutions under terms and 
conditions prescribed by law, rules and regulations. 
b. Execute any deed of guarantee, mortgage, pledge, trust or assignment 
of any property for the purpose of financing the programs and projects 
deemed vital for the early attainment of its goals and objectives, subject 
to the provisions of the Constitution (Article VII, Section 20, and Article 
XII, Section 2, paragraphs (4) and (5)). 
c. Receive donations, grants, bequests and assistance of all kinds from 
local and foreign governments and private:sectors and utilize the same. 
d. Extend loans, provide grants and other forms of financial assistance for 
manpower training, heritage preservation', infrastructure development, 
and other programs of the Department. 
e. Obtain the services of local and foreign consultants, and enter into 
contracts locally and abroad .in the performance of its functions. 
SEC. 45. Meetings of the Board. -The Tourism Board shall meet at least 
once a month at the Tourism Philippines' principal office unless the Board had 
previously agreed in writing to meet at another location. 
SEC. 46. Internal Structure. -The Tourism Board shall have the power to 
detarmlne Its operattonal and stafflng structure In a manner that wlll allow It to 
best implement its mandate. 
SEC. 
47. 
Capitalization. From the collections of travel taxes, the 
national government shall set aside an amount of two hundred fifty million pesos 
(PhP 250,000,000) to capltallze the operatlons of Tourlsm Philippines. 
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SEC. 48. 
Strategic Marketing Plan. - Tourism Philippines shall draft 
comprehensive short-, medium-and long-term marketing plans for the Philippines 
as a destination for travel, business and investment, particularly tourism 
investment. It shall coordinate, insofar as practicable, with relevant agencies of 
government and the private sector in the preparation of such plans. 
Such plans shall be duly approved by the! Tourism Board. The Chief 
Operating Officer shall ensure that the marketing !plans are duly implemented, 
and shall periodically report to the Tourism ;Board the status of their 
implementation. He/she shall also coordinate to ensure that the other agencies 
of government and the private sector which assisted in the preparation of 
marketing plans perform their respective duties under the plans. 
SEC. 49. 
Foreign and Domestic Promotions Oftices. - 
In the 
implementation of its mandate, Tourism Philippin& shall establish foreign and 
domestic offices, which shall be responsible in their respective areas for 
marketing and promotions, market research, and such other functions delegated 
by the Board. Each office shall submit periodicireports to both the Tourism 
Board and the Secretary on the performance of itsifunctions. The head of each 
Tourism Philippines foreign office shall be considered as a representative of the 
Philippine government for matters related to tourism. 
Subchapter Ill-B Tourism Promotion and 
Development Fund 
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SEC. 50. Tourism Promotion and Development Trust. - Should the 
Philippine Tourism Assets Corporation fail to attaiA self-sufficiency as provided 
under Subchapter 11-C, Section 29, Tourism Prombtion and Development Trust 
shall hereby be established from the proceeds 0'; the sale of its assets. The 
Trust shall be managed by a government-owned bank or financial institution 
selected by the Tourism Board and approved byi.the President. Said bank or 
institutlon shall report on a quarterly basis to t'he Secretary and the Joint 
Congressional Tourlsm Overslght Commlttee the 'status and profitability of the 
Trust. 
SEC. 51. Tourism Promotlon and Develo/Jrnent Fund. - The proceeds 
of the followlng shall be placed In a speclal Tourism!Promotion and Development 
Fund to finance the activities of Tourlsm Philippines! 
a. The investment earnings from thd Tourism Promotion and 
Development Trust. 
b. The full amount of travel taxes less the statutory allocations for the 
National Commission on Culture and the Arts, the Commission on 
Higher Educatlon and the Phlllpplne Tdurlsm Assets Corporation as 
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C. 
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provided above. 
An appropriation from the national government of five hundred million 
pesos (PHP 500,000,000) annually for i v e  (5) years representing the 
budget formerly allocated to the Department of Tourism's Bureaus for 
Domestic and International Promotions. 
At least 50% of the net income of Duty 'Free Philippines, in lieu of its 
statutory remittance to the National GoGernment under Republic Act 
No. 7656. 
At least 25% of net income of the Philippine Amusements and 
Gaming Corporation, to be taken fro& the share of the National 
Government under Republic Act No. 7656. 
At least 25% of the net income of international airport and seaports, to 
be taken from the share of the National Government under Republic 
Act No. 7656. 
A minimal tourism fee which shall initiaily not exceed five US dollars 
(USD 5) to be collected from foreign guests per night spent in 
accommodation 
establishments, 
to I 
be 
collected 
by 
said 
establishments and remitted to Tourism Philippines. The amount 
shall be initially fixed and maybe revisbd from time to time by the 
Board. In determining and reviewing th4fee, the Board shall consider 
the level of accreditation of the establishment, its location and its 
market. 
! 
In no case shall promotions and marketing activities receive less than 
fifty percent (50%) of the annual utilization of the Fund. Not more than ten 
percent (10%) of the Fund shall be used for all other administrative and operating 
expenses of Tourism Philippines. The unallocated portion of the Fund shall be 
utilized by the Tourism Philippines in coordination with the Department to fund 
manpower training programs, particularly the grant of scholarships to trainings 
and courses abroad to enhance local sklils and knowledge relevant to tourism, 
heritage preservation, and infrastructure development, among others. 
The collections of travel taxes, portions of the net income of government 
corporations and other enterprises, and all other fees and collections provided 
under thls sectlon due Tourism Phllipplnes shall be remltted directly to Tourism 
Philippines. 
SEC. 52. Special Contingency Fund. - At the beginning of each year, 
ten percent (10%) of the allocation for promotions and marketing shall be set 
aside as a special contingency fund to provide Tourism Philippines with sufficient 
resources to undartake marketlng and promotlone, actlvitles to encourage 
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sustained tourism interest in the Philippines in thd, event of emergencies which 
may adversely affect the tourism industry. The Sdecial Contingency Fund shall 
only’be utilized upon a two-thirds vote of all the members of the Tourism Board 
upon a resolution recognizing the existence of an emergency and authorizing the 
release of the fund. 
Any balance at the end bf each year in the Special 
Contingency Fund shall be returned to the.Touris4 Promotion and Development 
Fund. 
CHAPTER IV. TOURISM ENTE~PRISE ZONES 
Subchapter IV-A Tourism Entelprise Zones 
SEC. 53. Tourism Enterprise Zones. - Any geographic area with the 
following characteristics may be designated as a Zdne: 
a. 
b. 
Capable of being defined into one contiguous territory. 
With areas of historical and culturai significance, environmental 
beauty, or existing or potential integr 4 
fed leisure facilities within its 
bounds or within reasonable distances jfrom it. 
Having, or potentially having, strategic kccess through transportation 
infrastructure, and reasonable connection with utilities infrastructure 
systems. 
d. 
Possessing sufficient area to be further utilized for bringing in new 
investments in tourism establishments hnd services. 
e. Possessing strategic location to catalyze the socio-economic 
SEC. 54. Designation. - The designation of a Zone may be proposed to 
the Tourism Enterprise Zone Authority by the national government, city 
governments, provincial governments with tne consent of component 
municipalities, private initiative, or by joint ventures between the public and 
Zones shall not proliferate in a manner tdat diminishes their strategic 
economic and developmental value to the national economy. 
SEC. 55. Development Planning. - Each kpplication for designation as 
a Zone shall be accompanied by a Zone deielopment plan which shall, 
consistent with principles of economic, cultural and environmentally sustainable 
development, specifically identify: 
a. 
Features which satisfy the requisites fbr the designation of a Zone 
enumerated under Section 53 of this Chiapter. 
b. Areas for infrastructure development, for investment, and for 
preservation, as well as the kind !of development, nature of 
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Investment, or the sustalnable actlvitihs allowed within preserved 
c. 
development of neighboring communitikh. 
private sectors. 
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areas, respectively. 
c. Medium and long-term studies on markkt trends, and corresponding 
development strategies for the Zone. 
Studies on the economic impact of development within the Zone and 
in surrounding communities. 
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Studies on the environmental, cultural abd social carrying capacity Of 
the Zone and surrounding communities. I 
Design plans for structures which incorpdrate design and sustainability 
principles from local architecture and the Furrounding environment. 
No Zone shall be designated without a! duly approved development 
plan by TEZA. 
Any deviation or modification fro& the development plan shall 
require the prior authorization of TEZA. TEZA day cause the suspension of 
granted incentives, withdrawal of recognition, as a Zone Operator, as well as 
impose reasonable fines and penalties, upon Zonk~ Operators and responsible 
persons for any failure to properly implement the apbroved development plan. 
Lands identified as part of a Zone shall bei'exempt from the coverage of 
the Urban Development and Housing Program Act of 1992 (Republic Act No. 
7279) and the Comprehensive Agrarian Reform Lbw (Republic Act No. 6657). 
The TEZA shall, in coordination with the Department of Land Reform, adopt the 
necessary rules and regulations to implement this piovision. 
SEC. 56. Operation of the Zone. - The Zone proponent shall establish 
a corporate entity to administer the Zone dnd supervise activities within 
the Zone. 
The designation of a Zone ddes not vest ownership of the 
resources therein upon the Zone Operator. Where the Zone Operator 
possesses rights to land or other resourc$s within the Zone, the Zone 
Operator shall be entitled to exercise such '!rights as allowed by existing 
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laws in a manner consistent with the duly-approved development plan as 
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provided under Subchapter IV-A, Section 55i 
Where rights to land and other resources wiihin the Zone are vested in a 
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private third party, the Zone Operator shall encourage the private third party to 
participate in policy, planning and program develobment and implementation by 
encouraging their registration as tourism enterpribes where approprlate. and 
through the judicious administration of incentives anb provision of services. 
Except as herein provided, the local government units which comprise, 
overlap, embrace or include a Zone in their territorial jurisdictions shall retain 
their basic autonomy and identlty in accordance kith Republic Act No, 7160, 
otherwise known as the Local Government Code of ,{I991 
d. 
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The government shall encourage, provide incentives, and facilitate private 
sector participation in the construction and operation of the public utilities and 
infrastructure in and around Zones using any of the schemes allowed under the 
Build Operate and Transfer Law (Republic Act No. 6957, as amended). 
Subchapter IV-B. Tourism Enterprise Zone Authority 
SEC. 57. 
The Tourism Enterprise Zorie Authority. - 
Under the 
supervision of the Secretary shall be a body corporate known as the Tourism 
Enterprise Zone Authority (TEZA). 
SEC. 58. Mandate. - The TEZA shall supervise the cultural, economic 
and environmentally sustainable development of Zones. Pursuant thereto, it 
shall have the sole and exclusive jurisdiction to issue permits and licenses for the 
regulation of commercial activity, and enforce environmental and cultural 
heritage, zoning and traffic, and construction laws within Zones. It shall also 
coordinate with appropriate agencies and government units for the facilitation of 
investments, and the development of communities surrounding or adjoining 
Zones. 
Supervisory jurisdiction over all tourism enterprises outside of Zones shall 
be shared between the local governments and the Department, as provided 
under Subchapter Il-C of this Act. Where investments in tourism enterprises are 
to be made in areas outside of Zones, they shall continue to be supervised by the 
relevant investment agency, subject to the Department‘s notification and 
approval. 
SEC. 59. Board of Directors. - The TEZA shall be governed and its 
powers exercised by a Board of Directors the (“TEZA Board), composed as 
follows: 
a. 
b. 
C. 
d, 
e. 
f. 
g. 
The Department Secretary, as chairperson 
The Administrator of the Tourism Enterprise Zone Authority, as vlce- 
chairperson 
The Undersecretary for Tourism Development 
A representative from the Department of Environment and Natural 
Resources 
A representative from the Department of ILabor and Employment 
A representative from the Department of’Trade and Industry 
Four directors to be appointed by the President as provided in 
Subchapter IV-B, Section 61. 
SEC. 60. Administrator. - The TEZA Administrator must be a Filipino 
with a bachelor’s degree in business, law, tourism; public administration, urban 
planning, or other relevant fields, and have denionstrated expertise therein. 
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He/she must have been engaged in a managerial capacity for at least five (5) 
years prior to hidher appointment. He/she shall be appointed by the President 
and shall have a term of office of five (5) years. 
SEC. 61. Directors Appointed by the Prdsident. - The President shall 
appoint directors to represent each of the following sectors: 
a. Real estate development and land use planning; 
b. Hotels, resorts and other accommodatioh establishments; 
c. Air, sea and land tourism transport operators; 
d. Other tourism enterprises. 
These directors must be Filipinos engaged in management in the sectors 
they represent for at least five (5) years, and have: recognized expertise in their 
respective sectors. These directors shall serve terks of four (4) years. However, 
the first directors appointed under this provision shall respectively serve four (4), 
three (3), two (2) and one (I) 
years. 
SEC. 62. Meetings of the Board. - The TEZA Board shall meet at least 
once a month at the TEZA’s principal office unless the TEZA Board had 
previously agreed in writing to meet at another location. 
SEC. 63. General Powers and Function; 
of the TEZA. - The TEZA 
Board shall have the general powers of a corporabon as provided under Batas 
Pambansa Blg. 68, the Corporation Code. Furthermore, it shall also have the 
following powers: 
a. 
b. 
C. 
d. 
e. 
Adopt rules and regulations necessary for the implementation of the 
provisions of this Chapter. 
Enter into, make, perform and carry out contracts of every class, kind 
and description which are necessary or incidental to the realization of 
its purposes with any person, firm or corporation, private or public, 
and with foreign government entities. 
Contract loans, indebtedness and credit, issue commercial papers 
and bonds, in any local or convertible foreign currency from 
international financial institutions, foreign government entities, and 
local or foreign private commercial banks or similar institutions under 
such terms and conditions prescribed by law, rules and regulations. 
Execute any deed of guarantee, mortgage, pledge, trust or 
assignment of any property for the purpose of financing the programs 
and projects deemed vital for the early attainment of its goals and 
objectives, subject to the provisions of Article VII, Section 20, and 
Article XII, Section 2, paragraphs (4) and (5) of the Constitution, 
Construct, own or lease, operate and maintain infrastructure 
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facilities, and grant franchises for, and supervise the operation of, 
public utilities within Zones. 
Undertake, or authorize the undertaking of reclamation projects 
within Zones. 
Receive donations, grants, bequests. and assistance, of all kinds 
from local and foreign governments and private sectors and utilize 
the same. 
h. Exercise eminent domain. 
i. Coordinate with the local government! units and other government 
offices for the provision of basic servicks, utilities and infrastructure 
required by Zones. 
Review and approve proposals for the designation of Zones based 
on criteria provided herein and approve, facilitate and assist in the 
organization of Zone Operators. 
k. Supervise the operations of Zone Oderators, review and enforce 
their development plans, and establish and implement other policies, 
plans and programs for the development and operation of Zones. 
Register, monitor and regulate enterprises seeking to invest and 
operate within a Zone, and approve and grant incentives to such 
registered enterprises as provided under this Act. 
m. Collect taxes as provided under Section 77 below, and necessary 
fees to defray administrative and operational expenses, and impose 
penalties and fines for violations of duly promulgated rules and 
regulations. 
TEZA shall be deemed a government infrastructure corporation 
under the provisions of the Administrative Code ~f 1987 (Executive Order No. 
292, Book IV, Chapter 13, Section 58). 
SEC. 64. Powers and Functions of ,the Administrator. - The 
Admlnistrator shall imptement the policies, plans and programs of TEZA Board, 
and shall periodically report to the TEZA Board the status of their 
implementation. The TED! Administrator shall aldo recommend to the TEZA 
Board all necessary acts to properly supervise the dperations of Zone Operators. 
In addition, helshe shall have the following specific dowers and responsibilities: 
a. 
Subject to the approval of the TEZA Board, determine the structure, 
staffing pattern, and personnel compleme,nt of TEZA. 
b. coordinate with the Philippine National Police for the proper 
maintenance of peace and order within Zones. 
c. Ensure that all Zone Operators properlg perform thelr functions and 
f. 
g. 
j. 
I. 
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duties in accordance with this Act, 'TEZA implementing rules and 
regulations, and all other relevant laws and executive issuances. 
d. Receive all protests, complaints, and claims concerning Zone 
Operators, and make recommendatiods to the TEZA Board for 
appropriate action. 
e. Enforce all legal easements along seasiores, lalteshores, riverbanks, 
among others, to allow free and open &cess thereto and aid in the 
proper development of the national patrimony. 
Require owners of houses, buildings or',other .structures constructed 
without the necessary permit whether constructed on public or private 
lands within Zones, to remove or demdlish such houses, buildings,, 
structures within sixty (60) days after n&ce and upon failure of such 
owner to remove or demolish such house, building or structure within 
said 
period, the 
TEZA 
Administrafbr or 
hislher 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. 
g. Take such emergency measures as may be necessary to avoid or 
mitigate the impact of fires, floods, stormk and other natural or public 
calamities upon persons or properties :within Zones and adjoining 
communities. 
SEC. 65. Capitalization. - From the annual collections of travel taxes, 
the national government shall appropriate the sum of two hundred fifty million 
pesos (PhP 250,000,000.00) for the capitalization of TEZA. 
SEC. 66. Registration. - Business enterprises within a Zone must be 
registered with TEZA to avail of the incentives and benefits provided for in this 
Act. 
SEC. 67. One-stop Shop Processing. - 'TEZA shall establish offices 
where prospective Zone investors can register tb obtain ,the incentives and 
benefits under this Act, and obtain all necessary permits and licenses from,all 
national and local government offices. All governmbnt agencies shall coordinate 
with TEZA for the issuance of such permits and licenses. 
SEC. 68. 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 within the Zone, the 
TEZA Administrator shall have the power to inqhire into and investigate the 
conduct of Zone Operators, registered enterprises,'l or their employees. For that 
purpose, hekhe may subpoena witnesses, admidister oaths, and compel the 
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production of books, papers, and other evidence. The TEZA Administrator may 
also 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 himlher or under hislher 
authority. 
Subchapter IV-C. Zone Administration 
SEC. 69. Administration of Zones. - Each Zone shall be administered 
and supervised by a Zone Operator. A Zone Operator shall be an entity duly 
incorporated under general Philippine law, whose dbpital may be provided by the 
national government, one or:more civ andlor proviriyal governments, and private 
entities. 
SEC. 70. Articles of Incorporation and BB laws of Zone Operators. - 
Except as provided herein and may be provided dy rules and regulations duly 
promulgated by TEZA, each Zone Operator may draft its articles of incorporation 
and by-laws as it sees fit. 
SEC. 71. 
Boards of Directors and Cobsultative Bodies of Zone 
Operators. - The seats of the Board of Directors !of a Zone Operator shall be 
allocated pro-rata according to the respective capital contributions of the Zone 
Operator's shareholders. 
Zone Operators are encouraged to resede seats on their Boards of 
Directors for special interest groups relevant to :!their Zones, such as those 
representing environmental, religious, cultural cdmmunities, Zone investors, 
Zone residents, and other interests. In any case', Zone Operators shall form 
consultative bodies for such special interest groups! to assist it in the formulation 
and implementation of policies, plans and projects. 
SEC. 72. Zone Administration. - The Boird of Directors of each Zone 
Operator shall appoint its respective Zone Administiator. The Zone Administrator 
shall be responsible for implementing the policies, plans and projects of the Zone 
Operator Board of Directors. 
TEZA shall provide guidelines on the necessa(y educational and practical 
qualifications required of a Zone Administrator. In dddition to such qualifications, 
all Zone Administrators must undergo, complete i n d  pass a training program 
created by the Department to provide Zone Administrators with knowledge and 
skills relevant to the operation of the Zone. 
SEC. 73. Civll Dispute Resolution. - TEm! shall establish a civil dispute 
mediation office to effectively and efficiently reso1ve":civil disputes within the Zone 
where at least one (I) 
of the parties to the dispute das temporarily residing in the 
Zone, at the time the dispute arose, and is still residlng wlthln the Zone, 
at the time 
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the complaint was filed with the mediation office. 40 civil dispute may be filed in 
court without having undergone mediation proceebings as provided under this 
section. 
SEC. 74. 
Labor Dispute Resolution. - To resolve disputes between 
employees and employers for any violation of the Labor Code (Presidential 
Decree No. 442, as amended), the TEZA, in coordination with the Department of 
Labor and Employment, shall establish special labor dispute resolution offices 
within or near each Zone to effectively and efficiently resolve disputes between 
registered enterprises and their employees. Any dther agency charged with the 
enforcement of the Labor Code or its rules and !regulations shall ,not acquire 
jurisdiction over any dispute involving a registered enterprise unless such a 
complaint has undergone labor dispute mediation 'ihrough such offices, and that 
such mediation has failed. 
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In order to promote a stable investment clidtate, realizing the critical role 
tourism plays in the Philippine economy, and reco$nizing that the right to strike 
may be regulated by law, employees of registered'dnterprises shall be prohibited 
from engaging in strikes or strike-related activity 'Lithin five (5) years from the 
Subchapter IV-D. Incentives for Zone Operators and Locators 
SEC. 75. Grant and Administration of Incentives. - Recognizing the 
strategic economic importance of tourism, the necessity that investments within 
Zones be properly coordinated with environmental, cultural and developmental 
imperatives, and fundamental differences between, ihe export manufacturing and 
tourism industries, TEZA shall have sole and exclusive jurisdiction to grant the 
incentives hereinafter provided, and administer them through Zone Operators, in 
a manner that ensures that incentives properly etkourage the development of 
tourism enterprises within Zones, consistent with TEZA's mandate to ensure the 
cultural, economic and environmentally sustainable bevelopment of the Zones. 
In the formulation of rules and regulatlons defining and implementing the 
incentives hereinafter provided, and without derogating from the incentives 
granted herein, TEZA may coordinate with the Board of Investments and other 
government agencies or entities responsible for the grant and administration of 
Incentives to asslst In the development of a ratlmalized national investment 
incentive policy. 'In the grant of incentives, it shall give greater preference to 
large investments and those with great potential for'bmployment generation. 
TEZA shall further coordinate with the Bureau of Customs and the Bureau 
of Internal Revenue In the preparatlon and enforce'thent of rules and regulatlons 
to prevent the abuse of these incentives. 
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registration of the enterprise. 
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The jurisdiction of TEZA in the grant and/ administration of incentives 
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Fiscal Incentives Available/. to Zone Operators and 
Registered Enterprises. - The following incentives may, in the discretion of the 
TEZA Board, be granted to registered enterprises within Zones: 
Income Tax Holiday. 
New enterprises shall, from the start of 
operations, not be subject to any tax onjincome for a period of six (6) 
years. This income tax holiday may de extended if the enterprise 
undertakes a substantial expansion or dpgrade of its facilities prior to 
the expiration of the first six (6) years, iThis extension shall consider 
the cost of such expansion or upgrafe in relation to the original 
investment, but shall in no case exceedIan additional six (6) years. 
An existing enterprise shall bel entitled to avail of a non- 
extendible income tax holiday if it undedakes an extensive expansion 
or upgrade of facilities. Such an incohe tax holiday shall consider 
the cost of such expansion or upgrahe in relation to the original 
investment, but shall in no case exceedlsix (6) years. 
b. Gross Income Taxation. In lieu of all ther national and local taxes, 
license fees, imposts and assessments: except real estate taxes and 
such fees as may be imposed by the iEZA, a new enterprise shall 
pay a tax of three percent (3%) on its $ross income, which shall be 
distributed as follows: 
'1. One-third to be proportionally allokated among affected local 
governments; 
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2. One-third to the national government; and 
3. One-third to the TEZA for the funding of its operations and its 
programs in Zones, 
which shdll include the protection, 
maintenance and enrichment of the, environment, tangible cultural 
and hlstorlcal herltage, and the idtangible cultural heritage of 
communities within and surrounding $ones. 
Gross income as used herein is defined under Republic 
Act No. 8424 (The National Interdal Revenue Code), Section 
27(A) and further defined under relewnt rules and regulations. 
c. 
CaDltal Investment and Eaubment . SJbject to rules and regulations 
which properly define, capital investmeqts and equipment necessary 
for various kinds of tourism enterprised, registered enterprises shall 
cannot be impliedly repealed or modified. 
SEC. 76. 
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be entitled to the following: 
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1. Accelerated depreciation at a rate Wlce 
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in accordance with the provisions ofithe NIRC; Provided, That the 
taxpayer notifies in writing the Com@sioner of Internal Revenue 
at the beginning of the depreciation deriod as to what depreciation 
rate allowed thereunder shall be use! by it. 
2. Importations of capital, equipment s'hall be exempt one hundred 
percent (100%) of all taxes and custims duties. 
d. 
Goods and Services. Subject to rules and regulations which properly 
define goods and services necessaryj,for various kinds of tourism 
enterprises, registered enterprises shall be entitled to the following: 
1. Importation of goods actually cbnsumed in the course' of 
services actually rendered by or tdrough registered enterprises 
within a Zone shall be exempt one tundred percent (100%) of all 
taxes and customs duties; Ptvviibd however, That no goods 
shall be imported for the purpose/of operating a wholesale or 
retail establishment in competition vhth Duty-Free Philippines. 
2. A tax credit equivalent to all nationel internal revenue taxes paid 
on all locally-sourced goods and bervices directly or indirectly 
used by the registered enterprise ?or services actually rendered 
within the Zone. 
e. 
Social ResDonsibilitv Incentive. A registered enterprise shall be 
entitled to a tax credit equivalent to a!' reasonable percentage, not 
exceeding fifty percent (50%), of the cost of environmental protection 
or cultural heritage preservation adi$ities, sustainable livelihood 
programs for local communities, an4 other similar activities it 
undertakes. 
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SEC. 77. Non-fiscal Incentives Available; to Zone Operators and 
Locators. -The following incentives may, in the ddretion of the TEZA Board, be 
granted to registered enterprises within Zones: 
a. 
EmDlovment of foreiqn nationals. b registered enterprise may 
employ foreign nationals in executibe, supervisory, technical or 
advisory positions for such reasonable periods and under such 
terms as may be provided by the T E h  Board, with due regard for 
the proper protection and representation of foreign investments in 
registered enterprises, and the need to ensure easy travel into and 
out of the Philippines by such nationals and thelr immediate 
families. 
Specla1 Investor's Resident Visa. U der such terms as may be 
provided by the TEZA Board, a forglgn national who shall have 
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made an investment with a value df at least fifty thousand US 
dollars (US$ 50,000) in a registered Lnterprise shall be entitled.to 
a Special Investor's Resident Visa.: 1. With such Visa, the foreign 
national shall be entitled to reside in!. the Phiiippines while hislher 
investment subsists. 
c. 
Foreiqn Currency Transactions. 
Subject to the provisions of 
Section 74 of Republic Act No. 265 as amended: 
I. Repatriation of Investments. [ In the case of foreign 
investments, the right to repatriaie the entire proceeds of the 
investment was originally made/ and at the exchange rate 
prevailing at the time of repatriatio'n. 
2. Remittance of Foreian Exchanad. The right to remit earnings 
from a foreign investment in '!he 
currency in which the 
investment was originally madel: and at the exchange rate 
prevailing at the time of remittance. 
3. Foreign Loans and Contracts. 1, The right to remit at the 
exchange rate prevailing at ,the time of remittance such sums 
as may be necessary to meet tLe payments of interest and 
principal on foreign loans and foieign obligations arising from 
technological assistance contracts. 
Freedom from Expropriation. Therd shall be no expropriation by 
the government of the property of a registered enterprise or 
represented by investments except for public use or in the interest 
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liquidation of the investment in!: 
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of national welfare or defense. In any case, the affected person 
shall be entitled to just compensatioh, and shall have the right to 
repatriate such compensation as pro$ided in paragraph c above. 
e. Reauisition of Investment. There sfiall be no requisition of the 
property of enterprises or represented, by investment, except in the 
event of war or national emergencj, and only for the duration 
thereof. In any case, the affected pdrson shall be entitled to just 
compensation, and shall have th& right to repatriate such 
compensation as provided in paragrap'h c above. 
f. Lease of Land. Consistent. with the :,provisions of the Investor's 
Lease Act (Republic Act No. 7652), iands and buildings in each 
Zone may be leased to foreign invest& for a period not exceeding 
fifty (50) years, renewable once for a period of not, more than twenty- 
five (25) years. 
The leasehold rlg(t acqulred under long-term 
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contracts may be sold, transferred br assigned, subject to the 
conditions set forth under the Investor'$, Lease Act. 
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CHAPTER v. INCREASED TOURIST ACCESS 
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SEC. 78. International Tourist Travel. - Tfie department shall utilize its 
powers to increase and improve the accessibility /:of the Philippines to foreign 
tourists. Realizing the critical importance fast, frienflly and flexible travel plays in 
the development of tourism: 
a. 
b. 
The Secretary shall be Chairman of the, bivil Aviation Board. 
The Secretary shall be ex officio Chairdan of the Manila International 
Airport Authority and the governing t)oards of other international 
airports. 
The Secretary shall bel authorized to appoint a 
representative to the Board of Directorsiof each international seaport 
of the Philippines. 
Unless otherwise provided by relevant international agreements, or 
curtailed by the requirements of natio L al security, emergencies or 
crises, short stay visas for the entry 0) tourists shall be valid for a 
minimum of thirty (30) days. The Se4retary shall further have the 
power to allow the visa free entry fc$ up to thirty (30) days for 
particular nationalities or classes of tourists. 
SEC. 79. Domestic Tourist Travel. - Transbortation for tourist use must 
first obtain the approval of the Department prior to the issuance of a certificate of 
public convenience from the pertinent agency of government. 
Only taxis 
accredited by the Department shall be authorized to pick up passengers at 
international and domestic airports. 
CHAPTER VI. CREATING A CULTUdE OF TOURISM 
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SEC. 80. Tourism Coordinating Council.! A council shall be formed 
consisting of the Department Secretary, as chaird,an, hislher undersecretaries, 
the TEZA Administrator, the Tourism Philippin&i Chief Operating Officer, 
representatives, from the Tourism Congress, th& heads of other agencies 
attached to the Department, the Secretaries' of the Departments of 
Transportation and Communication, -Public Works ahd Highways, Foreign Affairs, 
Environment and Natural Resources, Education, lnjerior and Local Government, 
and Labor and Employment, and the heads of thh Philippine National Police, 
Institute, National Commission for Culture and' ithe Arts, Philippine Sports 
Commission, Philippine Amusements and Gaming /Corporation, the Leagues of 
Local Governments, and such other government aggncles that the President may 
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designate, that shall serve as a coordinating 1 body for national tourism 
The Council shall prepare 5-year strategic plans to develop. and enhance 
a culture of tourism. It shall also approve an annuh infrastructure development 
plan that shall promote access to and from airports bnd seaports, and'Zones and 
other tourism destinations which shall be accorbed priority by the relevant 
infrastructure agencies of the national government.: j 
Education. - The Department]:shall work closely with the 
Department of Education for the development of educational programs for the 
primary and secondary educational levels that assist in the creation of a culture 
of tourism, specifically through the enhancement\, of education in languages, 
history and culture. 
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The Department shall also work closely witp the Commission for Higher 
Education in the regulation of colleges and,universfges that grant undergraduate 
and postgraduate degrees in tourism. 
The Technology and Skills Manpower Development Administration is 
hereby mandated to develop programs, in conjunction with the Department, for 
the training of tourism entrepreneurs by providihg programs for languages, 
history and cultural appreciation, and small business management. 
SEC. 82. Peace and Order. - Under the'supervision of the Philippine 
development efforts. 
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SEC. 81. 
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National Police and in coordination with local government units, the Department 
shall establish a Tourism Security Force to assist the Philippine National Police in 
maintaining peace and order within areas of high tobrism traffic. The Department 
shall ensure the training of members of the Force in cultural sensitivity, 
Security arrangements within particular Zones shall be the responsibility of 
the Zone Operator. 
SEC. 83. 
Funding Grassroots Touris4 Enterprises. - Insofar, as 
allowed by applicable laws and their respective chatters, government-owned and 
controlled banks and financial institutions shall provide microfinance schemes for 
the assistance and development of small and mejiutn scale enterprises in the 
tourism industry. 
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SEC. 84. Congressional Oversight. - An oiersight committee consisting 
of flve (5) members each from both houses of ConDress shall constitute a Joint 
Congressional 
Oversight 
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respondible 
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overseeing 
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implementation of this Act. The Oversight Comdittee shall be composed of 
representatlves Prom each House from their respeqtive Committees of Tourism; 
languages and relevant laws. 
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Government Corporations and Public Enterprises; 
The Secretary shall report to the Oversight ommittee on a monthly basis 
and Culture; and Local Governments. 
the latest statistics on tourism arrivals and other relevant data. He/she shall also 
report on a quarterly basis the status of implementa ion of this Act. 
SEC. 85. 
The Tourism Congress. - Wi i 
hin thirty 30 days from the 
effectivity of this Act, the Secretary shall conv ne a Tourism Congress of 
sector consultative body to assist the goverdment in the development, 
implementation and coordination of Philippine touridm policy. 
Under a constitution adopted and ratified by \he Congress, it shall elect its 
component sectors. It shall also elect such representatives as required under 
this Act. 
nvironment; Education, Arts 
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es to serve as the private 
officers and establish a secretariat, both for the 4 
'ongress as a whole and for 
CHAPTER vi!. MiscELLmEous iPRovisioNs 
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SEC. 86. Personnel and Compensation! - The employees of TEZA, 
Tourism Philippines and DFP, including the TFZA Administrator, Tourism 
Philippines Chief Operating Officer, and DFP General Manager, shall be covered 
by the salary standardization law. However, their respective Boards of Directors 
shall be empowered to grant bonuses and other incentives in consideration of the 
financial condition of the corporation, its su&ess 
in generating sales, 
investments or in meeting tourist arrival targets, as the case may be. 
Subject to existing constitutional and Idgal prohibitions on double 
compensation for Board members in an ex-officio capacity, the members of the 
TEZA Board, Tourism Board, DFP Board shall not: be entitled to compensation, 
but may receive reasonable per diems for attendance at regular and special 
Board meetings. 
SEC. 87. Reportorial Requirements. - All attached agencies of the 
Department shall submit a quarterly report to the Secretary and to the Joint 
Congressional Overslght Commlttee on Tourism ok the implementation of their 
respective programs. 
Budgetary Approval. - All:I,attached agencies of the 
Department shall submit their annual budgets 40 the Secretary for hislher 
approval, and shall furnish copies of the same! to the Joint Congressional 
The budgets of TEZA, Tourism Philippines dhd DFP reported to the Joint 
Congressional Oversight Committee must contain1 detailed information on the 
Compensation and benefits received by their employees. 
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Oversight Committee on Tourism. 
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SEC. 89. Other Incentives. - 
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Tourism enterprises not located within {ones shall, upon approval by 
the Department, be entitled to avail of aky economic incentives found 
under existing laws, such as the Omnibus Investments Code, Foreign 
Investments Act, Special Economic Z&e Act of 1995, the Bases 
Conversion and Development Act, among others. 
Subject to rules and regulation4 jointly promulgated by the 
Department and the relevant governme& agency, such as the Board 
of Investments or the Philippine Econon& Zone Authority, an existing 
accommodation establishment not locdted within a Zone shall be 
entitled to claim an income tax holiday ?or up to six (6) years for any 
significant expansion, renovations or Fpgrades in its facilities in 
relation to the amount of the original indestment. They shall also be 
entitled to import capital equipment free of taxes and duties when 
necessary for such expansion, renovatioh or upgrades. 
The Department and the Department bf Trade and Industry shall 
Zones created under this Act, and echomic zones, created under 
Republic Acts No. 7227 or 7916, ai, amended, where an area 
comprising a Zone overlaps, falls withid or encompasses that of an 
economic zone; Provided, That such 1 rules and regulations shall 
consider the special nature and requirements of tourism in relation to 
other industries, establishments and opdrations in economic zones. 
The investment' incentives offered under this Act shall be without 
prejudice to availing other incentives jprovided under other laws, 
decrees, and presidential issuances. !However, where such other 
laws, decrees or presidential issuances rovide for similar or ,identical 
benefits, the beneficiary may only el'ect to avail of the benefit 
provided under one particular law, decree or presidential issuance. 
Local governments are likewise encourdged to provide incentives for 
tourism enterprises through, among otders, reductions in applicable 
real estate taxes, and waivers of fees and charges, among others. 
Should a local government grant such Incentives, it shall report the 
same to the Department and Tourism!: Philippines to assist in the 
marketing and promotions of investmentl'in that local government. 
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SEC. 90. Implementing Rules and Reguldtions. - Except as otherwise 
provided, the Secretary of Tourism shall have the power to issue rules and 
regulations to implement this Act. 
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SEC. 91. Repealing Clause. - The provisions of Executive Orders No. 
292 (The Administrative Code of 1987, as amended), Presidential Decree No. 
189, as amended, (Creating the Philippine Tourism Authority), Presidential 
Decree No. 1448, as amended, (Creating the Philibpine Convention and Visitors 
Corporation), the Labor Code (Presidential Decree No. 442, as amended), the 
Local Government Code (Republic Act No. 7160), Presidential Decree No. 1616 
(Creating the lntramuros Administration), and all otier laws, presidential decrees, 
executive orders, proclamations and administrativd regulations inconsistent with 
the provisions of this Act are hereby amended, modified, superseded or repealed 
accordingly. 
SEC. 92. Separability Clause. - In the event that any provision of this Act 
or parts thereof be declared unconstitutional, such declaration shall not affect the 
validity of the other provisions. 
SEC. 93. Effectivity Clause. - This Act shall take effect one month after 
the completion of its publication in a qewspaper of $enera1 circulation 
Approved, 
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