Republic of the Philippines
HOUSE OF REPRESENTATIVES © RECEIVED &

Quezon City IS DATBARO 4 202

pn
EIGHTEENTH CONGRESS aN Naina wae o
First Regular Session

House Bill No. 6476

INTRODUCED BY REPRESENTATIVE CARLOS 0. COJUANGCO
EXPLANATORY NOTE

Creative industry refers to those which have their origin in
individual creativity, skill and talent and which have a potential for wealth
and job creation through the generation and exploitation of intellectual
property.

The products of this industry are the outcome of human labor
(industrial, artistic or artisanal) and require the exercise of human
creativity for their production. They express or convey some form of
symbolic meaning, which endows them with a cultural value or
significance, distinct from whatever commercial value they may possess.
And, they generate, or may generate, intellectual property, whether or not
they are protected under existing intellectual property legislation.

In 2008, a survey on the Copyright Industry in the Philippines,
conducted by several Philippine educational and cultural organizations in
cooperation with the World Intellectual Property Organization (WIPO),
revealed that the Copyright Industry, contributed 4.82 % to the Gross
Domestic Product (GDP) and accounted 11.1% to national employment
in large establishments. The same study was conducted in 2014 and the
results were even staggering — 7.34% contribution to the GDP and
occupied 14.4% of the country’s labor force. These figures have the
potential to further go up once a more comprehensive survey that will
include the “gray” or underground economy and the last two sub-sectors
enumerated below is finally taken into consideration.



At present, following the industry classification of the United
Nations Conference on Trade and Industry (UNCTAD), the creative
industry in the Philippines could be classified according to the following
sub-sectors:

e Performing Arts (music, theater, dance, performance art and all
their related products and services)

e Visual Arts (painting, sculpture, photography, video art, graphic
design and all their related products and services)

e Publishing, Printing and Literature (books, newspapers,
magazines, periodicals, e-books, and other printed and electronic
materials and services)

¢ Design (interior design, fashion, graphic, jewelry, toys and other
design materials and services)

e Audiovisual_and new media (film, video, radio, television,
animation, game development, entertainment software, internet
creativity sites, broadcasting and other products and services)

e Creative Services (architecture, advertising, cultural & recreational
services, digital & other creative services)

e Cultural sites (archaeological and historical sites, museums,
libraries and archival sites and exhibitions)

¢ Traditional _cultural_expressions (Arts and crafts, traditional
festivals and celebrations).

Under this proposed measure, a long-term program for creative
industry development and promotion shall be crafted. Under this
program, there shall be established, among others, financial enabling
mechanisms, such as loan programs and access to credit, for the
Philippine creative industry. There shall be continuous skills and talent
training and development. There shall also be incentives to encourage
and sustain entrepreneurship in the arts.


Many of our Asian neighbors particularly China, Japan, Korea,
Singapore, Thailand and Malaysia have definitive national development
plans for the Creative Industry. On the contrary, the Philippines is yet to
develop its development plans for the industry.

In this regard, the creation of a Creative Industry Development
Council is appropriate. This Council shall provide the overall policy and
program directions and coordinate the activities of various agencies and
instrumentalities to ensure the implementation, accomplishment, and
periodic review and enhancement of the Creative Industry Development
and Promotion Program.

In view of the foregoing, the passage of the bill is earnestly sought.

REP. CARLOS O. CO, 0

Represent:
1% District,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 6476

INTRODUCED BY REPRESENTATIVE CARLOS 0. COJUANGCO

AN ACT
PROMOTING AND SUPPORTING THE DEVELOPMENT OF
THE CREATIVE INDUSTRY, APPROPRIATING FUNDS
THEREFOR, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled.

SECTION 1. Short Title. - This Act shall be known as the ‘Creative
Industry Development Act of 2016.’

SECTION 2. Declaration of Policy. - \t is hereby declared the policy
of the State to promote and support the development of the creative industry.

For this purpose, the State shall have a long term program for creative
industry development and promotion to establish financial enabling
mechanisms for the Philippine creative industry, nurture the creative industry
human resources. create employment, and, provide incentives to encourage
and sustain entrepreneurship in the arts.

SECTION 3. The Creative Industry. — For purposes of this Act,
creative industry shall refer to those industries which have their origin in
individual creativity, skill and talent and which have a potential for wealth and
job creation through the generation and exploitation of intellectual property.

Creative industry shall be classified according to the following sub-
sectors:

1. Performing Arts, music, theater, dance, performance art and all their
related products and services;

2. Visual Arts painting, sculpture, photography, video art, graphic design
and all their related products and services;


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isual Arts painting, sculpture, photography, video art, graphic
design and all their related products and services;

3. Publishing, Printing and__Literature, books, newspapers,
magazines, periodicals, e-books, and other printed and electronic
materials and services;

4. Design (interior design, fashion, graphic, jewelry, toys and other
design materials and services)

5. Audiovisual_and_new media (film, video, radio, television,
animation, game development, entertainment software, internet
creativity sites, broadcasting and other products and services)

6. Creative Services (architecture, advertising, cultural &
recreational services, digital & other creative services)

7. Cultural sites (archaeological and historical sites, museums,
libraries and archival sites and exhibitions)

8. Traditional cultural expressions (Arts and crafts, traditional
festivals and celebrations).

SECTION 4.The Creative Industry Development and
Promotion Program. — There is hereby established a Creative Industry
Development and Promotion Program, hereinafter the Program, which
shall refer to the comprehensive set of objectives, targets, strategies
and activities for the growth and development of creative industry. The
Program shall include the following objectives, among others:

a) Promote investments in the creative industry development programs;

b) Establish strong linkages among stakeholders and advance market
access of the creative industry on the national and international
levels.

c) Create financial assistance, investments schemes and loan
programs for availment of small and medium-sized cultural
enterprises (SMCE's);

d) Make available to the creative industry relevant and current research
and technological information and new product lines, and extend
technical and financial assistance for the development, processing,
commercialization and marketing of various creative products;

e) Promote employment, and provide continuous human resource
training, talent and skills education and capacity building in the
creative industry; and

f) Ensure the sustainability and viability of the creative industry;

g) Review and recommend laws and enact policies in support of the
creative industry, including laws to further protect copyrights and
other intellectual properties;



SECTION 5. Creative Industry Development Council. — There
is hereby created a Creative Industry Development Council, herein
referred to as the Council, which shall provide the overall policy and
program directions and coordinate the activities of various agencies and
instrumentalities to ensure the implementation, accomplishment, and
periodic review and enhancement of the Creative Industry Development
and Promotion Program.

The Council shall be administratively attached to the Department
of Trade and Industry (DTI).

SECTION 6. Powers and Functions of the Council. - The
Council shall have the following powers and functions:

a) Formulate, advocate, coordinate, oversee and assess the
implementation of the Creative Industry Development and Promotion
Program;

b) Identify specific programs and projects in support and in line with the
Creative Industry Development and Promotion Program;

c) Identify sources of financing to expand creative industry
development;

d) Identify programs, projects and activities to be funded by the
Creative Industry Development Trust through a resolution;

e) Submit annual reports to the Office of the President, the Senate
Committee on Trade and Commerce and Entrepreneurship, and the
House of Representatives Committee in Trade and Industry on the
status of the implementation of the Creative Industry Development
and Promotion Program;

f) Create technical panels, working groups, or task forces that will
assist the Council in the performance of its functions; and,

g) Promulgate such rules and regulations and exercise such other
powers and functions as may be necessary to carry out effectively
the attainment of the purposes and objectives of this Act.

SECTION 7. Composition. - The Council shall be composed of
the following:

a) Secretary of the Department of Trade and Industry (DTI) as the
Chairperson;

b) Secretary of the Department of Education (DepEd);

c) Chairman of the Commission on Higher Education (CHED);

d) Chairman of the National Commission for Culture and the Arts
(NCCA);

e) Secretary of Department of Labor and Employment (DOLE);


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f) Four (4) private sector representatives from the different sub-sectors
of the creative industry.

The ex officiomembers of the Council may designate their
respective alternates who shall be at least Bureau Director in rank and
their acts shall be considered the acts of their principals.

The private sector representatives shall be appointed by the
President of the Republic of the Philippines from the list of nominees
submitted from nominees of the organizations and associations of the
respective sub sector creative industry.

The representatives must be citizens and residents of the
Philippines and must be knowledgeable in creative industry and
committed to the policies and programs provided under this Act. They
shall serve for a term of three (3) years, and may be reappointed once.

The Council shall meet quarterly and may hold special meetings
whenever the need arises to consider urgent matters upon the call of
the Chairman or any seven (7) Council members.

SECTION 8. Creative Industry Research and Development
Center. - The Creative Industry Research and Development Center,
hereinafter referred to as the Center, shall be created to serve as the
secretariat of the Council to be headed by an executive director. The
Center shall consist of divisions for the following purposes: research
and development; trade promotion and education; networking and
linkages; internal administration; and such other purposes as
necessary. The composition of the divisions shall be prepared by the
executive director and approved by the Council.

The organizational structure, staffing pattern, and compensation
schedule of the Center shall be drawn up in accordance with existing
laws, rules and regulations. Other member agencies of the Council shall
provide additional administrative and technical staff support upon the
determination of the necessity by the Council.

SECTION 10. The Executive Director of the Center. - The
Executive Director shall be appointed on a permanent capacity by the
President of the Republic of the Philippines from the list of nominees
submitted by the DTI Secretary. He/she must be a citizen and resident
of the Philippines and must possess executive and management
experience of at least three (3) years and with considerable knowledge
in creative industry development.

The Executive Director, in addition to his/her duties in the Center,
shall have the following powers and functions:

a) Assist the Council in the performance of its task;


b) Provide technical and administrative support to the Council;

c) Oversee the day-to-day operations of the Center; and

d) Perform such other functions, duties and responsibilities as may be
necessary to implement this Act.

SECTION 9. Establishment of Local Creative Industry
Development Councils. - Regions, provinces, cities and
municipalities, when applicable, shall establish their respective local
Creative Industry Council. Local government units shall regularly
conduct a survey of existing creative industry creative enterprises in
their respective localities.

SEC 10. Provision of Incentives to Investors in Creative
Industry Enterprises. - The following incentives shall be provided to
creative industry enterprises, workers and other stakeholders:

a) The Board of Investments (BOI) shall classify creative industry
enterprises as preferred areas of investment under its Investment
Priorities Plan (IPP) subject to pertinent rules and regulations;

b) Creative industry enterprises shall be exempt from the payment of

import duties for imported machines and equipment subject to

pertinent rules and regulations;

Expenses incurred shall be allowed as deductible expenses for

income tax purposes, subject to the provisions of the National

Internal Revenue Code of 1997, as emended. Provided, that the

deduction shall only apply to the taxable period, when expenses

were incurred;

Creative Industry Enterprises shall be given priority to access credit

assistance and guarantee schemes being granted by government-

owned, controlled and/or-supported financial institutions;

Skills and talent trainings for entrepreneurs, workers, trainees and

toher stakeholders; and,

f) Scholarship program for the underprivileged but deserving college
and post graduate students who are taking up courses in relevant
field of disciplines in SUCs which have programs in creative industry.

SEC 11. The Creative Industry Development Trust Fund. —
There is hereby established a Special Account in the General with the
National Treasury to be called the Creative Industry Development Trust
Fund herein referred to as the Trust Fund. The purpose of the fund is
for research and development, trade promotion, credit, human resource
development in the creative industry and for the welfare of artists,
workers and other stakeholders. The Trust Fund shall be capitalized,

c)

d)

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manage, utilized, and accounted for in the manner provided under this
Act.

Upon approval of this law, the Office of the President, through
Philippine Amusement and Game Corporation (PAGCOR) shall allocate
One Hundred Million Pesos (PHP 100,000,000.00) as initial funding for
the Trust Fund for the implementation of this Act. Thereafter, the
amount of not less than Two Hundred Million Pesos (PHP
200,000,000.00) shall be allocated every year for the next twenty (20)
years for the Trust Fund lodged in the Center.

The program of expenditure for the programs, projects and
activities to be funded by the Trust Fund shall be itemized on a project-
to-project basis and submitted annually to Congress. In the identification
and prioritization if specific programs, projects and activities, the Council
shall conduct prior consultation with the representatives of the industry.

SEC 12. Appropriations. - The sum of One Hundred Million
Pesos (PHP 100,000,000.00) to be sourced from the unexpected
contingency fund of the Office of the President and the existing budget
for creative industry development under the DTI is hereby appropriated
for the initial budgetary requirements of the Center. Thereafter, such
amount as may be necessary for the continuous operation of the Center
shall include in the annual GAA. The budgetary requirements of
cooperating agencies shall be incorporated in their respective annual
budgets.

SECTION 13. Implementing Rules and Regulations. — Within
sixty (60) days from the effectivity of this Act, the DTI Secretary, in
consultation with other concerned government agencies, the industry
representatives and non-government organizations, shall promulgate
the necessary implementing rules and regulations for the effective
implementation of this Act.

SECTION 14. Separability Clause. - |f any provision of this Act
is declared unconstitutional, the validity of the remaining provisions
hereof shall remain in full force and effect.

SECTION 15. Repealing Clause. - All laws, decrees, executive
orders and rules and regulations or parts thereof inconsistent with any
provision of this Act are hereby repealed, modified or amended
accordingly.

SECTION 16. Effectivity Clause. - This Act shall take effect
after fifteen (15) days from its publication in the Official Gazette or in at
least two (2) newspapers of general circulation.

APPROVED.