Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
THIRD REGULAR SESSION

8080

HOUSE BILL NO.

INTRODUCED BY: REP. FERJENEL G. BIRON, M.D.

EXPLANATORY NOTE

Executive Order No. 226, otherwise known as “The Omnibus Investments Code,”
as amended, has been in effect since 1987. Since then, twelve other investment
promotion agencies have been established by the Philippine government, giving rise to
an extremely complex investment tax incentive system through 128 laws granting various
types of incentives, with little regard to cost-efficiency and effectiveness.

Incentives are major tools used to encourage investments in the country, and the
administration thereof includes registration, incentive evaluation and supervision are
inherently promotional. Tax incentives are important in attracting investments and
addressing market failures, but they need to be modernized in order to stay competitive
in view of the current business needs and developments.

This bill aims to establish a market-responsive, globally competitive, stable,
transparent, time-bound and performance-based investment regime and integrated
investment promotion programs and strategies.

As the administration of incentives and facilitation functions are inherently
promotional, and the discipline, knowledge and expertise required are totally different
from administration of fiscal and tax policies and collection of government revenues, a
separate and independent bill should be passed to address the regulation of investments
and administration of incentives and promotion and facilitation functions required of the
established and existing Investment Promotion Agencies.

It is for the aforesaid reasons that the immediate approval of this bill is earnestly
sought.

. FERJENEL G. BIRON, M.D.
4™ District, Hloilo


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
THIRD REGULAR SESSION

HOUSE BILL NO.

INTRODUCED BY: REP. FERJENEL G. BIRON, M.D.

THE OMNIBUS INVESTMENT CODE OF THE PHILIPPINES

in Congress assembled:

CHAPTER |
TITLE AND DECLARATION OF POLICY

SECTION 1. Title. This Act shall be known as “The Omnibus Investment Code of
the Philippines”.

SEC. 2. Declaration of Policy. The national economy shall be developed to
achieve inclusive growth and enhance global competitiveness. To accelerate this
objective, the grant and administration of incentives to investments should be geared to
industrial and services activities towards employment generation, countrywide
development and promotion of micro, small and medium enterprises. Accordingly, the
following are the declared policies of the State:

The State shall pursue a market-responsive and globally competitive
investment and incentive regime.

. The State shall formulate industry and sectoral development programs.

. The State shall promote investment activities and facilitate establishment,

expansion and diversification of investments.

The State recognizes the indispensable role of the private sector, encourages
private enterprise, and provides incentives to needed investments.

The State shall grant incentives that are simple to administer, time-bound,
performance-based, stable, and transparent.

The State shall ensure that investments granted tax incentives shall be
conducted in a manner consistent with the laws, including the protection of the
environment and natural resources, labor and good corporate governance
principles.


CHAPTER II
GENERAL PROVISIONS

SEC. 3. Scope and Coverage. This Code shall cover all existing Investment
Promotion Agencies (IPAs) and other IPAs that may be created by law. The existing IPAs
are the Board of Investments (BOI), Philippine Economic Zone Authority (PEZA), the
Bases Conversion Development Authority (BCDA), the Subic Bay Metropolitan Authority
(SBMA), the Clark Development Corporation (CDC), the John Hay Management
Corporation (JHMC), the Poro Point Management Corporation (PPMC), the Bataan
Technology Park Inc. (BTPI), the Cagayan Economic Zone Authority (CEZA), the
Zamboanga City Special Economic Zone Authority (ZCSEZA), the PHIVIDEC Industrial
Authority (PIA), the Aurora Pacific Economic Zone and Freeport Authority (APECO), the
Tourism Infrastructure and Enterprise Zone Authority (TIEZA), and the Authority of the
Freeport Area of Bataan (AFAB).

SEC. 4. Governing Provision for IPAs. All existing and future IPAs vested with
the power to confer and administer incentives shall process applications for registration
of enterprises pursuant to their respective charters under existing laws and in accordance
with the Strategic Investments Priority Plan implemented under this Code and export
activities.

SEC. 5 Administration and Grant of Incentives. All existing and future IPAs
shall grant the applicable incentives provided under this Code to their qualified registered
enterprises pursuant to this Code

SEC. 6. Existing Charters of IPAs. The IPAs shall maintain their functions as
provided for in their respective Charters except to the extent modified by the provisions
of this Code.

CHAPTER III
THE BOARD OF INVESTMENTS

SEC. 7. The Board of Investments. The Board shall implement the provisions of
this Code.

SEC. 8. Composition of the Board. The Board shall be composed of nine (9)
governors: The Secretary of Trade and Industry, the Secretary of the Department of
Finance (DOF), the Secretary of the National Economic Development Authority (NEDA),
three (3) Undersecretaries of Trade and Industry to be chosen by the President; and three
(3) representatives from the private sector. The Secretary of Trade and Industry shall be
concurrently Chairman of the Board and the Undersecretary of the Department of Trade
and Industry for Industry and Investments shall be concurrently the Vice-Chairman of the
Board and its Managing Head. The three (3) representatives from the private sector shall
be appointed by the President for a term of four (4) years; Provided, that upon the
expiration of his term, a governor shall serve as such until his successor shall have been
appointed and qualified; Provided, further, that no vacancy shall be filled except for the
unexpired portion of any term, and that no one may be designated to be governor of the
Board in an acting capacity but all appointments shall be ad interim or permanent;
Provided, finally, that, except, those, members of the Board representing the private
sector and the Secretary of Trade and Industry, other members of the Board shall,
whenever unable to attend any Board meetings, may have their respective alternates who
shall be the officials next in rank to them and who shall have the same powers, duties,
and privileges in these meetings as the Board members they are representing and whose
acts shall be considered the acts of their principals.


SEC. 9. Qualifications of Governors of the Board. The governors of the Board
shall be citizens of the Philippines, at least thirty-five (35) years old, of good moral
character and of recognized competence in the fields of economics, finance, banking,
‘commerce, industry, agriculture, engineering, law, management or labor.

SEC. 10. Powers and Functions of the Board. The Board shall be responsible
for the regulation and promotion of investments in the Philippines and exercise its powers
and functions, which shall include the following:

A. Regulatory Functions:

a. Promulgate rules, regulations and policies to implement the provisions of this
Code;

b. Formulate an evolving National Framework for Industrial Development (NFID).
The NFID shall identify key emerging markets, sectors or industries that will
substantially enhance the competitiveness of the country’s industries and
subject to periodic review;

c. Prepare the Strategic Investments Priority Plan in accordance with Chapter V
of this Code;

d. Formulate positions for bilateral, multilateral and regional investments and
investment-related trade agreements and/or arrangements, undertake
negotiations thereto;

e. Require submission of investment data and information on inbound and
outbound investments from investors and relevant agencies for statistical and
industrial development purposes;

f. Recommend to the President the grant of incentives to highly desirable projects
which may include other incentives not covered under this Code in accordance
with Chapter IX of this Code;

g. Formulate rationalization programs for industrial development or for certain
industries whose operation may result in dislocation, oversupply or inefficient
use of resources that impedes economic growth. In the interest of national
development and upon approval of the President, the Board may restrict, either
totally or partially, the importation or exportation of any equipment, raw
materials, intermediate goods or finished goods;

h. Formulate and implement programs to sustainably tighten the link between
large businesses and micro and small enterprises such as Inclusive Business;

i. Process and approve, deny, suspend, revoke applications for registration,
imposing terms and conditions as it may deem necessary to promote the
purposes of this Code, including the refund and forfeiture of incentives when
appropriate, and impose corresponding fees;

j. Prepare a list of export products or goods and services that will qualify for
incentives under this Code which shall be subject to periodic review;

k. Cancel the registration or suspend the incentives of a BOI-registered enterprise
and/or require refund of incentives, including interests and impose monetary
penalties;


|. Decide controversies concerning the implementation of this Code that may
arise between registered enterprises or investors therein. The Board shall have
the power to compel the production of books, papers and other evidence;

m. Recommend to the Commissioner of the Bureau of Immigration the entry into
the Philippines of foreign nationals for employment in BOl-registered
enterprises and the grant of investors visa;

n. Ascertain by inspection or verified reports, the proportion of the participation of
Philippine nationals in a BOI-registered enterprise to ensure compliance with
the nationality requirements of Philippine laws to retain registration under this
Act or to verify the compliance by registered enterprises with the terms and
conditions of registration;

0. Waive, condone or reduce fines or penalties imposed on all BOlI-registered
enterprises, including those existing at the time of the effectivity of this Code;

p. Appoint, discipline or remove its personnel consistent with the provisions of civil
service laws, rules and regulations; Determine the organizational structure of
the BO! and approve the position classification systems and qualification
standards of all officials and employees; and establish, revise and adjust the
compensation package with reasonable allowances, bonuses, privileges,
including health insurance coverage and benefit schemes, at least equivalent
to that of the Central Bank of the Philippines; and thus, shall be exempt from
existing laws, rules and regulations;

q. Establish and operate regional investment offices in the Philippines, and
overseas investment offices; and

r. Exercise all the powers necessary or incidental to meet the objectives of this
Code and other laws vesting additional functions on the Board.

B. Investment Promotion-Related Functions:

a. Formulate an evolving National Framework for Investment Promotions (NFIP)
that will govern all Investments Promotion Agencies (IPAs);

b. Promulgate rules, regulations and policies to implement the NFIP in
consultation with all IPAs and exercise monitoring functions overall investment
promotion activities of all IPAs;

c. Enter into agreements with other agencies for the simplification of systems and
procedures involved in the promotion of investments, operation of economic
zones and registered enterprises, and other activities necessary for the
effective implementation of this Code; and

d. Establish a One-Stop Investment Assistance Center (iAssist Center).

SEC. 11. Powers and Duties of the Chairman. The Chairman shall have the
following powers and duties:

a. To preside over the meetings of the Board;

b. To render annual reports to the President and such special reports as may be
requested;


c. To act as liaison between investors seeking joint venture arrangements in
particular areas of investments;

d. Recommend to the Board such policies and measures he may deem necessary
to carry out the objectives of this Code; and

e. Generally, to exercise such other powers and perform such other duties as
may be directed by the Board of Governors from time to time.

SEC. 12. Powers and Duties of the Vice-Chairman. The Vice-Chairman shall
have the following powers and duties:

a. To act as Managing Head of the Board;
b. To preside over the meetings of the Board in the absence of the Chairman;

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

d. Assist registered enterprises and prospective investors to have their papers
processed with dispatch by all government offices, agencies, instrumentalities
and financial institutions; and

e. (5) Perform the other duties of the Chairman in the absence of the latter, and
‘such other duties as may be assigned to him by the Board of Governors.

SEC. 13. The One-Stop Investment Assistance Center (iAssist Center). There
is hereby created an iAssist Center in the BO! that shall serve as the source of investment
information and the link to all government agencies to facilitate establishment, retention,
expansion and diversification of investments.

The iAssist Center shall be composed of all government agencies involved in the
establishment and operation of business including, but not limited to, all IPAs, the
Securities and Exchange Commission (SEC), the Bureau of Internal Revenue (BIR), the
Bureau of Customs (BOC), the Bureau of Immigration (BI), the Department of Trade and
Industry (DTI), the Department of the Interior and Local Government (DILG), the
Department of Agriculture (DA), the Department of Environment and Natural Resources
(DENR), the Department of Labor and Employment (DOLE), the Department of Foreign
Affairs (DFA), the Department of Energy (DOE), the Department of Public Works and
Highways (DPWh), the Department of Agrarian Reform (DAR) and such other agencies
as may be determined by the Board. The government agencies involved shall designate
representatives to the iAssist Center that are clothed with authority to act and approve or
deny any matter relating to their respective agencies.

SEC. 14. Powers and Functions of the iAssist Center. The iAssist Center shall
exercise and perform the following powers and functions:

a. Provide advice, guidance, information and procedure on various laws, rules
and regulations governing investments and the conduct of business in the
Philippines;

b. Ensure that all investment-related requirements are acted upon within ten (10)
working days. In cases of applications not acted upon within ten (10) working
days, the same shall be deemed approved: Provided, however, That deferment
shall be considered as an action;


c. Recommend the streamlining of existing procedures to ensure that all frontline
agencies, dealing with the operation of business, perform their tasks for
identified government to business transactions;

d. Establish an on-line investment facilitation system that will cover activities such
as but not limited to joint venture arrangements, issuance of registration
papers, clearances, endorsements, permits and licenses;

e. Act, in coordination with appropriate government offices or agencies, such as
the Office of the Ombudsman and the Civil Service Commission (CSC), on
complaints filed by any investor or potential investor against any public official
or employee or any office, agency or instrumentality, including local
government units (LGUs) and officials, as well as any government-owned and
-controlled corporation (GOCC), in connection with any act or duty required by
law to facilitate the establishment of local and foreign investments;

f. Assist registered enterprises and prospective investors in processing
transactions with government offices, agencies, instrumentalities, and financial
institutions and their subsidiaries, including utilities, power or
telecommunications; and

g. Perform such other functions as may be directed by the BOI.

The Board shall provide for reasonable honoraria and allowances for the iAssist
Center members and its personnel.

CHAPTER IV
DEFINITION OF TERMS.

SEC. 15. Definition of Terms. As used herein, the following shall mean:
a. “Board” shall mean the Board of Investments under this Code.

b. “Capital Equipment” refers to machinery, equipment, major components
thereof, spare parts, accessories, tools, devices, apparatus, fixtures, fittings
and accompaniments which are directly and reasonably needed in the
registered activity of the registered enterprise.

c. “Domestic enterprise” refers to a registered enterprise which produces
goods for sale or renders services exclusively to the domestic market or does
not comply with the minimum export requirement of an export enterprise.

d. “Domestic Industrial Zone” refers to a tract of land subdivided and
developed according to a comprehensive plan with provisions for basic
infrastructure and utilities, with or without pre-built standard factory buildings
and community facilities for the use of a community of industries.

e. “Export Enterprise” shall mean a registered enterprise which is a
manufacturer, processor of products listed in the SIPP, or service provider and
whose export sale of its products or services is at least ninety percent (90%) of
its total annual production of the preceding taxable year. Provided however,
that those exporting less than ninety percent (90%) but not lower than fifty
percent (50%) shall qualify for registration but with limited incentives.


f.

“Export sales of goods” refers to the sales revenues paid for in freely
convertible foreign currency, determined from invoices, bills of lading, inward
letters of credit, landing certificates, or other commercial documents, of the
following:

(1) the sale and actual shipment of goods from the Philippines to a foreign
country by an Export Enterprise;

(2) sales by an Export Enterprise to another Export Enterprise of capital
equipment, raw materials, production supplies, packaging materials, and
‘other production requirements forming part of the direct cost of the
registered activity of the Export Enterprise registered in accordance with
this Code;

(3) sales to diplomatic missions and to agencies or institutions allowed to
import said goods tax and duty-free;

(4) sales of an Export Enterprise to international sea or air transport
operations of goods, equipment, spare parts and supplies, except fuel,
forming part of direct costs and to be used in the aircraft or sea craft and
capital equipment needed for the shipping or air transport operations;

(5) sales to a nonresident buyer for delivery to a resident local Export
Enterprise of capital equipment, raw materials, production supplies,
packaging materials and other production requirements forming part of
the direct cost and are needed for the registered activity of the said Export
Enterprise.

Sales of locally manufactured or assembled goods for household and
personal use under the Internal Export Program and similar programs of
the government shall be deemed as “export sales’.

|. “Export sales of services” refers to the sales revenues and/or gross receipts

of an Export Enterprise, determined from contracts, invoices, vouchers, official
receipts, or other commercial documents of the following:

(1) services rendered to non-resident foreign corporations or to non-resident
aliens by Export Enterprises;

(2) services rendered by an Export Enterprise to another Export Enterprise
as a subcontractors and/or contractors in the manufacture or processing
of goods; other services forming part of the direct cost of the registered
activity of an Export Enterprise;

(3) services rendered to diplomatic missions and to other agencies or
institutions with tax and duty-free privileges;

(4) services for the overhaul, repair and maintenance for international
shipping or air transport operations, and foreign military aircraft or sea
craft rendered by an Export Enterprise even if rendered locally.

The foregoing notwithstanding, services rendered locally by registered
enterprises that are paid for in freely convertible foreign currency shall be
considered as “export sales”.


h. “Freeport” refers to an isolated and policed area adjacent to a port of entry
as defined by Section 3519 of the Tariff and Customs Code, which shall be
operated and managed as a separate customs territory to ensure free flow or
movement of goods, except those expressly prohibited by law, within, into and
exported out in the freeport zone where imported goods may be unloaded for
immediate transshipment or stored, repacked, sorted, mixed, or otherwise
manipulated without being subject to import duties. However, movement of
these imported goods from the free-trade area to a non-free trade area in the
country shall be subject to import duties and taxes.

i. “Less Developed Areas” shall refer to areas identified by the BOI in the
Strategic Investments Priority Plan, upon consultation with appropriate
government agencies, taking into account the following criteria: low per capita
gross domestic product, low level of investment, high rate of unemployment
and/or underemployment and low level of infrastructure development including
its accessibility to developed urban areas.

|. “Registered enterprise” shall mean any individual, partnership, corporation,
Philippine branch of a foreign corporation or other entity incorporated and/or
organized and existing under Philippine laws and registered with an IPA, in
accordance with this Code: Provided, however, That the term "registered
enterprise” shall not include any of the following service enterprises such as,
but not limited to, those engaged in customs brokerage, trucking/forwarding
services, janitorial services, security services, insurance and/or banking and
other financial services, consumers cooperatives, credit unions, consultancy
services, restaurants or such other similar services, as may be determined by
the Board, irrespective of location, whether inside or outside the zones.

k. “Special Economic Zone” or “Ecozone” refers to a selected area with highly
developed or which has the potential to be developed into agro-industrial,
industrial, information technology, tourist/recreational, whose metes and
bounds are fixed or delimited by Presidential Proclamations. An ecozone may
contain any or all of the following: export processing zones (EPZs), ICT parks
and centers, free trade zones and tourism estates; Provided, however, that
areas where mining operations are undertaken shall not be declared as
ecozones.

|. “Strategic Investments Priority Plan” refers to the list of industries, services
and other economic activities eligible for incentives under this Code, prepared
and determined as priority or preferred activities in accordance with Chapter IV
of this Code.

CHAPTER V.
QUALIFIED ACTIVITIES

SEC 16. Strategic Investments Priority Plan (SIPP). - The Board, in

coordination with the Office of the President, the concerned IPAs and other appropriate
government agencies and the private sector, shall formulate the SIPP to be submitted to
the President for his approval not later than December of the third year set for periodic
review. The SIPP shall be valid for a period of three (3) years subject to review and
amendment as the need arises.

The SIPP shall:
a. Include activities that comply with the following:

(1) The activity shall be covered by the Philippine Development Plan or its


equivalent and other government programs:
(2) The activity shall take into account any of the following:
(i) | Substantial amount of investments;
(ii) Considerable generation of employment;

(ili) Adopt inclusive business activities and value added production by
MSMEs;

(iv) Use of modern or new technology;
(v) Adoption of adequate environmental protection systems;

(vi) Address missing gaps in the supply/value chain and/or move up the
value chain or product ladder; and

(vii) Promotion of market competitiveness.

The threshold amount of investments and employment generation
required for a specific activity shall be subject to a periodic review every
three (3) years taking into consideration international standards and other
indicators;

b. identify the less developed areas, those recovering from armed conflict or a
major disaster, and Domestic Industrial Zones;

c. determine services and activities that can spur regional or global operations in
the country; and

d. include existing registered projects before the effectivity of this Code that shall
relocate from metro manila to other areas of the country.

The activity must comply with the specific qualification requirements and/or
conditions for a particular sector or industry and other limitations as set and determined
by the Board

SEC. 17. Criteria for the Identification of Domestic Industrial Zones. The
identification of domestic industrial zones referred to in Section 16 (b) of this Code
must conform to the following criteria:

a. The proposed area must be identified as a regional growth center in the
Philippine Development Plan or by the Regional Development Council or their
equivalents;

b. The provisions for the required infrastructure in the proposed domestic
industrial zones such as roads, railways, telephones, ports, airports and the
suitability and capacity of the proposed site to absorb such improvements;

c. The availability of water source and electric power supply for use of domestic
industrial zones;

d. The extent of vacant lands available for industrial and commercial development
and future expansion of domestic industrial zones as well as of lands


adjacent to domestic industrial zones available for the development of
residential areas for domestic industrial zone workers;

e. The availability of skilled, semi-skilled and non-skilled trainable labor force in
and around the domestic industrial zones;

f. The area must have a significant incremental advantage over the existing
economic zones and its potential profitability can be established;

g. The area must be strategically located; and

SEC 18. Amendments. — Subject to publication requirements and the criteria for
investment priority determination, the Board may, at any time, include additional areas in
the SIPP, alter any of the terms of the declaration of an investment area, and temporarily
or permanently suspend activities on the SIPP if it considers that such activity is no longer
a priority. In no case, however, shall any amendment of the SIPP impair the incentives
conferred on a registered enterprise. The IPAs shall not accept applications in an area
of investment prior to the approval of the same as a preferred area or after approval of its
deletion as a preferred area of investment in the SIPP.

SEC. 19. Publication. Upon approval of the SIPP, in whole or in part, or upon
approval of an amendment thereof, the SIPP or the amendment, specifying and declaring
the areas of investment shall be published in at least one (1) newspaper of general
circulation and all such areas shall be open for application until publication of an
amendment or deletion thereof.

CHAPTER VI
REGISTRATION OF ENTERPRISES

SEC. 20. Qualifications of a Registered Enterprise. To qualify for registration
and be entitled to avail of incentives, an applicant must satisfy the following conditions:

a. Itwill engage in an activity included in the SIPP or in an export activity or will
locate inside the Domestic Industrial Zones; and

b. Ifthe applicant is engaged or proposes to engage in activities other than the
registered projects, it shall install adequate accounting system that shall
identify the investments, revenues, costs and profits or losses of each
registered project undertaken by the enterprise separately from the
aggregate investments, revenues, costs and profits or losses of the whole
enterprise, or establish a separate corporation for each registered project if
the IPAs should so require, to facilitate the proper implementation of this
Code.

SEC. 21. Application for Registration. Applications shall be filed with an IPA
or any other government office authorized by the Board to accept applications,
recorded in a registration book and the date appearing therein and stamped on the
application shall be considered the date of official acceptance.

All applications and their supporting documents filed under this Act shall be
confidential and shall not be disclosed to any person except with the consent of the
applicant or upon an order of a court of competent jurisdiction.

SEC. 22. Criteria for Evaluation of Application. The following criteria shall
be considered in the evaluation of applications for registration under a preferred area:


a. Impact of the project on the overall economy;
b. Overall viability of the project;
c. The extent of employment generation;

d. The extent to which technological advances are applied and adopted to local
conditions; and

e. Such other criteria as the Board may determine.

SEC. 23. Certificate of Registration. — A registered enterprise under this Act
shall be issued a Certificate of Registration under the seal of the Board of Investments
and the signature of its Chairman and/or such other officer or employee of the Board as
it may empower and designate for the purpose. The certificate shall be in such form and
style as the Board may determine and shall state, among other matters:

a. The name of the registered enterprise;
b. The activity in which the registered enterprise is proposing to engage; and

c. The terms and conditions to be observed by the registered enterprise by
virtue of the registration.

SEC. 24. No Double Registration of Enterprises. Export or domestic enterprises
‘shall not be allowed to register their export or domestic activity in more than one (1)
IPA. In the event that an enterprise shall transfer to another IPA, only the remaining
unutilized incentives shall be granted to the enterprise or the transferee.

SEC. 25. Environmental Protection and Corporate Social
Responsibility. Every registered enterprise shall prepare a Program for
Environmental Protection and Corporate Social Responsibility (CSR) covering the
period for its entitlement to fiscal incentives. Such Program shall be undertaken on
@ per registration basis and shall be submitted as an accompanying document
to the application for registration to be submitted to the appropriate IPA.

The environmental program shall include activities such as, but not limited to,
requiring registered firms to plant trees.

For the CSR activities, the registered enterprise shall align such activities with
the priority programs and projects of the National Anti-Poverty Commission and other
special laws such as Republic Act No. 7942 or the Philippine Mining Act of
1995, as amended, and DOE Energy Regulation 1-94.

The amount spent for the CSR activities shall be reflected in the Notes to the
Audited Financial Statements.

CHAPTER VII
BASIC RIGHTS AND GUARANTEES OF REGISTERED ENTERPRISES

SEC. 26. Protection of investments. All investors and registered enterprises
are entitled to the basic rights and guarantees provided in the Constitution. Among
other rights recognized by the Government of the Philippines (GOP) are the
following:


a. Repatriation of Investments. In the case of foreign investments, the right to
repatriate the entire proceeds of the liquidation of the investment in the
currency in which the investment was originally made and at the exchange
rate prevailing at the time of repatriation, subject to the provisions of Section
74 of Republic Act No. 265, otherwise known as the “Central Bank Act”, as
amended.

For investments made pursuant to Executive Order No. 32, series of 1986,
entitled: “Directing the Establishment of a Program for the Conversion of
Philippine External Debt into Equity Investments”, and its implementing
rules and regulations, the repatriation of investments shall be as provided
therein;

b. Remittance of Earnings. In the case of foreign investments, the right to remit
earnings from the investment in the currency in which the investment was
originally made and at the exchange rate prevailing at the time of remittance,
‘subject to the provisions of Section 74 of Republic Act No. 265, as amended.
For investments made pursuant to Executive Order No. 32, series of 1986,
and its implementing rules and regulations, the remittance of earnings shall be
as provided therein;

c. Foreign Loans and Contracts. The right to remit at the prevailing rate at the
time of remittance such sums as may be necessary to meet the payments
of interest and principal on foreign loans and foreign obligations arising from
technological assistance contracts at the exchange rate prevailing at the time
of remittance, subject to the provisions of Section 74 of Republic Act No.
265, as amended;

d. Freedom from Expropriation. There shall be no expropriation by the
government of the property represented by investments or of the property
of the enterprise except for public use, public interest, lawful purpose, or in the
interest of national welfare or defense and upon payment of just
compensation. In such cases, foreign investors or enterprises shall have the
right to remit sums received as compensation for the expropriated property
in the currency in which the investment was originally made and at the
exchange rate at the time of remittance, subject to the provisions of Section
74 of Republic Act No. 265, as amended; and

e. Requisition of Investment. There shall be no requisition of the property
represented by the investment or of the property of enterprises, except in the
event of war or national emergency and only for the duration thereof. Just
compensation shall be determined and paid either at the time of requisition
or immediately after cessation of the state of war or national emergency.
Payments received as compensation for the requisitioned property may be
remitted in the currency in which the investment was originally made and at the
exchange rate prevailing at the time of remittance, subject to the provisions of
Section 74 of Republic Act No. 265, as amended.

CHAPTER VIII
ADMINISTRATION OF NON-FISCAL INCENTIVES

SEC. 27. Entitlement to Investor's Visa by a Foreign National. — A foreign
national who invests an amount of at least US$200,000, either in cash and/or equipment,
in a registered enterprise or in any publicly listed manufacturing enterprises shall be
entitled to an Investor's Visa: Provided, That:


a. Heis atleast eighteen (18) years of age;

b. He has not been convicted of a crime involving moral turpitude;

c. Heis not afflicted with any loathsome, dangerous or contagious disease; and
d. He has not been institutionalized for any mental disorder or disability:

Provided, further, that as a holder of the Investor's Visa, an alien shall be entitled to
reside in the Philippines while his investment subsists. For this purpose, he should submit
an annual report, in the form duly prescribed for the purpose, to prove that he has
maintained his investments in the country. Should said alien withdraw his investments
from the Philippines, then the Investor's Visa issued to him shall automatically expire.

The minimum amount for investment provided for under this Code shall be made
applicable to visas granted to investors by the BOI, the PEZA, the SBMA, the CDC, the
JHMC, the PPMC, the BTPI, the CEZA, the ZCSEZA, the PIA, the ASEZA, and other
IPAs that may be created under the law.

The investment amount heretofore stated shall be subject to a periodic review very
three (3) years by the Board.

Sec. 28. Employment of Foreign National. - Subject to the provisions of Section
29 of Commonwealth Act No. 613, as amended, a registered enterprise may employ
foreign nationals in supervisory, technical or advisory positions for a period not exceeding
ten(10) years from its registration, extendible for limited periods at the discretion of the
Board: Provided, however, That when the majority of the capital stock of a registered
enterprise is owned by foreign investors, the positions of president, treasurer, and general
manager or their equivalents may be retained by foreign nationals beyond the period set
forth within.

Foreign nationals under employment contract within the purview of this incentive,
their spouses and unmarried children under twenty-one (21) years of age, who are not
excluded by Section 29 of Commonwealth Act No. 613, as amended, shall be permitted
to enter and reside in the Philippines during the period of employment of such foreign
nationals.

A registered enterprise shall train Filipinos as understudies of foreign nationals in
administrative, supervisory and technical skills and shall submit annual reports on such
training to the Board.

Sec. 29. Financial Assistance Program. Government financial institutions such
as the Development Bank of the Philippines (DBP), Land Bank of the Philippines (LBP),
Phil-Exim Bank and other government financial institutions shall, in accordance with and
to the extent allowed by their respective charters or applicable laws, provide preferential
financial packages for the registered enterprises under this Code as duly recommended
and endorsed by the IPA concerned.

CHAPTER IX
GRANT OF INCENTIVES BY THE PRESIDENT

SEC. 30. Power of the President to Grant Incentives. The President may, in the
interest of national economic development and upon the recommendation of the Board,
grant incentives to highly desirable projects, in addition to those that are provided under


this Code: Provided That, the benefits that the government could derive from such
investment thereto is clear and convincing and far outweighs the cost of incentives that
will be granted

SEC. 31. Criteria for Availment. The Board shall consider any of the following
requirements in determining the types of incentives and the duration thereof that may be
granted:

a. The project is critical for economic development and public welfare;

b. Comprehensive sustainable development plan with clear inclusive business
approaches and innovations; or

c. Minimum investment of Five Hundred Million U.S. Dollars (US$500,000,000);
provided that a minimum direct employment generation of at least one
thousand five hundred (1,500) is generated within three (3) years from its
operation.

The Board may impose other terms and conditions taking into consideration the
amount or kind of incentives that will be granted to such investments.

SEC. 32. Use of Resources. The government may utilize its resources for the
grant of incentives such as land use, water appropriation, power provision, and the like
for such grant.

CHAPTER X
ADMINISTRATION OF FISCAL INCENTIVES

SEC. 33. Fiscal Incentives.- The registered enterprises under the SIPP and the
registered export enterprises shall be qualified to any of the following incentives:

1 Income Tax Incentives.

Income Tax Holiday (ITH). — The ITH shall be granted for a period not exceeding
three (3) years. provided, that after the expiration of the ITH, the following
incentives may be applied for a period not exceeding five (5) years, which includes
the period of ITH availment, except those in subparagraphs (f), (g) and (h):

a. Reduced Corporate Income Tax. — A reduced tax rate of fifteen percent (15%)
of the taxable income as defined under Section 31 of the National Internal
Revenue Code of 1997 (NIRC), as amended.

b. Tax Allowance for Investments. - An allowance of up to fifty percent (50%)
of the actual qualified capital expenditure incurred within three (3) years shall
be allowed as a deduction from the taxable income.

c. Double Deduction for Research and Development. - Expenses incurred for
research and development related to the registered activity, identified and
approved as such by the appropriate government agency/ies shall be
deductible from the gross income for income tax purposes to the extent of two
hundred percent (200%) on the year the said research and development
expenses were incurred.

d. Double Deduction for Training. - Expenses incurred for training given to
employees by the registered enterprise for the development of skills, identified
and approved as necessary by the appropriate government agency/ies shall be


deductible from the gross income for income tax purposes to the extent of two
hundred percent (200%) on the year the said training expense was incurred.

Additional Deduction for Labor Expense. — A registered enterprise may be
allowed an additional deduction from taxable income of fifty percent (50%) of
the wages corresponding to the increment in the number of direct labor.

One Hundred Percent (100%) Deduction on Infrastructure Development.
— Registered enterprises establishing their activity in an area that the SIPP
designates as necessary for country-wide development or in an area found to
be deficient in infrastructure, public utilities, and other facilities, such as
irrigation, drainage, or other similar waterworks infrastructure may deduct from
the gross income an amount equivalent to one hundred percent (100%) of
necessary and major infrastructure works it may have undertaken with the prior
approval and recommendation of the IPA concerned; provided, that the title to
all such infrastructure works shall upon completion, be transferred to the
Philippine government; provided further, that any amount not deducted for a
particular year may be carried over for deduction for subsequent years not
exceeding ten (10) years from commercial operation.

. Allowable Deduction for Reinvestment of Manufacturing Industry. When

@ manufacturing registered enterprise reinvests its undistributed profit or
surplus in any of the activities listed in the SIPP, the amount so reinvested shall
be allowed as a deduction from its taxable income within a period of five (5)
years from the time of such reinvestment: provided, that prior approval and
recommendation by the IPA concerned of such reinvestment was obtained by
the registered enterprise planning such reinvestment.

Enhanced Net Operating Loss Carry-Over (NOLCO). -The net operating loss
of the registered activity during the first five (5) years from the start of
commercial operation which had not been previously offset as deduction from
gross income may be carried over as deduction from gross income within the
next ten (10) consecutive taxable years immediately following the year of such
loss.

Accelerated Depreciation. - Plant, machinery, and equipment that are
reasonably needed and actually used for the production and transport of goods
and services may be depreciated using a rate not exceeding twice the rate
which would have been used had the annual allowance been computed in
accordance with the rules and regulations prescribed by the secretary of
finance and the provisions of the NIRC of 1997, as amended.

Value-Added Tax (VAT) and Customs Duty on Capital Equipment.
Exemption from VAT and customs duty on importation of capital equipment
directly and exclusively used in the registered activity for a period not
exceeding five (5) years by registered enterprises.

Value-Added Tax and Customs Duty on Raw Materials.

Exemption from VAT and customs duty on imported raw materials used in the
manufacture and processing of products and importation of source documents
by registered export enterprises whose export sales meet ninety percent (90%)
threshold as referred to under Section 36 (d) of this Code.

. Refund on the VAT and customs duty on importation of raw materials or source:

documents by registered export enterprises whose export sales are below


ninety percent (90%) but not lower than fifty percent (50%). The refund
mechanism shall be in accordance to Section 35 (d) of this Code

As used herein, the following shall mean:

a. “Processing” refers to converting raw materials into marketable form through
physical, mechanical, chemical, electrical, biochemical, biological, or other
means, or by a special treatment or a series of actions, such as slaughtering,
milling, pasteurizing, drying, or desiccating, quick freezing, that results in a
change in the nature or state of the products. mere packing or packaging shall
not constitute processing.

b. “Source documents” refer to input materials and documents reasonably
needed by |.T. and |.T.-enabled industries such as, but not limited to, books,
directories, magazines, newspapers, brochures, pamphlets, medical
records/files, legal records/files, instruction materials, and
drawings/blueprints/outlines; Provided further, that registered export
enterprises inside economic zones and freeports may avail of the tax and duty
free importation of raw materials directly and exclusively used in the registered
activity inside the zones.

SEC. 34. Determination in the Grant of Incentives by the IPA Board
Concerned. The IPA board concerned shall, at the time of registration of a qualified
project or activity, determine the incentives or any combination thereof based on the menu
of incentives in Section 33 of this Code. In the determination of the incentive or a
combination thereof, the IPAs shall be guided by the following:

a. Any income-tax based incentive or a combination thereof that will be granted
to a registered enterprise shall not exceed five (5) years, except in Section 33
(1) (f) (g), and (h); provided, that:

(1) The ITH incentive may be granted only for a non-renewable, non-extendible
period of three (3) years, and before entitlement to the reduced tax rate of
15% of the taxable income.

(2) The ITH incentive shall be reckoned from the time that the registered
enterprise has incurred taxable income on its registered activity but shall
not be later than the 4" year from start of actual commercial operations.

(3) The tax incentives under Section 33 (I) (a), (b), (c), (d), (e), and (i) may be
granted on a stand-alone basis, for straight 5 years.

(4) The tax incentives under Section 33 (I), (f), (g), and (h) may be granted on
a stand-alone basis for the periods specified therein.

(5) The following incentives may be granted as a stand-alone incentive or could
be availed in combination or along with the reduced tax rate of 15% of the
taxable income:

i. 100% deduction on infrastructure development;

i Deduction for reinvestment allowance to manufacturing industry;
i. | NOLCO;

iv. Accelerated depreciation; and

v. _ Any of the double deductions under Section 33 (I) (c), (d) and (e).

Any of the above-enumerated incentives that will be granted on a stand-


alone basis shall be reckoned from the start of actual commercial operation.
(6) The accelerated depreciation and NOLCO cannot be granted concurrently.

b. Any income-tax based incentive without a specific duration in the preceding
section shall in no case exceed five (5) years and shall be reckoned from the
start of actual commercial operation.

c. Value-added tax (VAT) and duty exemptions on imported capital equipment
shall in no case exceed five (5) years and shall be reckoned from the date of
registration.

d. Value-added tax (VAT) and duty exemptions without a specific duration in the
preceding section shall be reckoned from the date of registration.

e. In the availment of incentives, the concerned IPA shall endorse to the BIR the
rate of exemption of the registered enterprise for purposes of income tax
availment and VAT exemption or VAT refund, for registered export enterprises.

SEC. 35. Availment of Incentives. In the availment of the incentives under this
Chapter, the following shall apply:

a. Income Tax-based Incentives.

The registered enterprise shall file with the appropriate IPA an application for
an Income Tax Holiday (ITH) incentive availment within six (6) months from the
statutory deadline for filing relevant tax returns.

b. Customs Duties Exemption on Capital Equipment.

Importation of capital equipment by registered enterprises may be exempted to
the extent of one hundred percent (100%) customs duties provided that the
following conditions are complied with:

(1) The capital equipment is directly and/or reasonably needed and will be
used exclusively in the registered activity of the registered enterprise
unless prior approval of the IPA is secured for the part time utilization of
said equipment in a non-registered activity to maximize usage thereof or
the proportionate duties are paid on a specific equipment and machinery
being permanently used for non-registered activities;

(2) They are not manufactured domestically in sufficient quantity, of
comparable quality and at reasonable prices; and

(3) |The approval of the IPA was obtained by the registered enterprise for the
importation of such machinery, equipment and spare parts.

Approval of the IPA must be secured before any sale, transfer or disposition of
the imported capital equipment is made: Provided, That if such sale, transfer or
disposition is made within the first five (5) years from date of importation, any
of the following conditions must be present:

(1) If made to another enterprise enjoying duty exemption on imported
capital equipment;

(2) If made to another enterprise, upon payment of duties due on the net


book value of the capital equipment to be sold;

(3) Exportation of capital equipment, machinery, spare parts or source
documents or those required for pollution abatement and control; or

(4) For reasons of proven technical obsolescence.

When the aforementioned sale, transfer or disposition is made under any of the
conditions provided for in the foregoing paragraphs other than subparagraph
(b), the registered export enterprise shall not pay the duties waived on such
items: Provided further, That if the registered enterprise sells, transfers or
disposes the aforementioned imported items without prior approval within five
(5) years from the date of importation, the registered enterprise and the vendee,
transferee, or assignee shall be solidarily liable to pay twice the amount of the
duty exemption given it: Provided finally, That even if the sale, transfer or
disposition of the capital equipment is approved after five (5) years from the
date of importation, the registered enterprise is still liable to pay the duties
based on the net book value of the capital equipment if it has violated any of its
registration terms and conditions. Otherwise, it shall no longer be subject to the
payment of the duties waived thereon.

VAT and Customs Duty Exemption on Raw Materials.

Importation of raw materials, supplies and semi-finished products by Export
Enterprises inside the ecozone or freeports may be exempted to the extent of
one hundred percent (100%) of the VAT and customs duties provided that the
raw materials, supplies, and semi-finished products imported are exclusively
used by an Export Enterprise in the manufacture, processing or production of
the export products covered by its registered activity and it actually forms part
of the product exported. Provided, further, that the exemption herein may be
granted only to that portion of raw materials, supplies and semi-finished
products forming part of the product actually exported.

|. VAT Refund Mechanism on Importation of Raw Materials.

The VAT on importation raw materials paid by export registered enterprises
located outside ecozones and freeports shall be subject to refund.

In order to facilitate the immediate processing, clearance and release of refund
as provided in this act, a trust liability account (TLS) is hereby authorized to be
established in the bureau of treasury (BTR). All payments pertaining to the
importation of registered enterprises of capital equipment, raw materials or
source documents in the case of it export enterprise shall be deposited in the
TLA for the purpose of funding valid refund claims. The claims for refund shall
be made by the registered enterprise to the DOF, which, in turn, will process,
approve and release the vat refund.

A registered enterprise shall file a claim for refund within one (1) year from the
date of actual exportation. All amounts paid but no longer allowed for refund
shall immediately accrue to the general fund of the national government.

All applications for refund shall be processed and acted upon within thirty (30)
days after submission of complete documents. The refund shall be in a form
of cash or managers/cashiers check payable to the registered export
enterprise. The concerned official or employee who fails without justifiable
reason to act as required under this section shall be penalized, after due


process, by a fine equivalent to the official's or employee's basic salary for a
period of one (1) month to six (6) months or by suspension from government
service for not more than one (1) year, or both, in addition to any criminal and
administrative penalties imposable under existing laws.

SEC. 36. Local Government Unit Share. In lieu of payment of local taxes except
real property tax on land owned by developers, the registered enterprise shall directly pay
and remit to the LGU concerned as follows:

a. Ten percent (10%) of the tax due upon application of the other income-tax
based incentives, after ITH availment.

b. Two percent (2%) of the tax due upon application of the regular corporate
income tax under the NIRC, as amended, after entitlement to the five-year
income tax based incentives.

SEC. 37. Allocation of LGU Share. — The LGU sharing in the above-cited Section
shall be paid and remitted by the registered enterprises located inside the ecozone or
freeport in accordance with the existing sharing allocations provided in the IPAs
respective charters. For registered enterprises located outside the ecozones or free ports,
such LGU share shall be paid and remitted in equal shares between the province and
the city or municipality where the project is located.

SEC. 38. Investments Prior to the Effectivity of this Code. Existing registered
activities of registered enterprises granted with ITH shall be allowed to continue with the
availment of the said incentive for the remaining period of the ITH.

Existing registered activities of registered enterprises granted with special rate of
five percent (5%) on gross income shall, in lieu thereof, enjoy a reduced corporate income
tax rate of fifteen percent (15%) for a period of fifteen (15) years.

Notwithstanding the preceding paragraphs, existing registered enterprises may
opt to be governed by the provisions of this Code within two (2) years from effectivity
and be eligible for the incentives under this Code provided it is in good standing and
qualified for registration thereunder. Such exercise of option shall be deemed as an
express waiver to apply for and avail of the incentives provided in its previous
incentives law of registration.

CHAPTER XII
FINAL PROVISIONS

SEC. 39. Confidentiality of Applications. All applications and their supporting
documents filed under this Code shall be confidential and shall not be disclosed to any
person, except with the consent of the applicant or on orders of a court of competent
jurisdiction.

SEC. 40. Suspension and Forfeiture of Incentives of Registered Enterprises,
Refund and Penalties; Waiver and Condonation. The IPA may impose fines and
penalties, suspend, and/or forfeit the incentives granted to the registered enterprises
whenever there are violations of the registration terms and conditions by the latter, without
prejudice to the cancellation of the registration of said enterprise.

In case of cancellation of the Certificate of Registration granted under this Act, the
IPA may, in appropriate cases, require the refund of incentives availed of and impose
corresponding fines and penalties.


For this purpose, the IPA shall prepare a schedule of fees, fines and penalties not
exceeding One million pesos (P1,000,000.00) to be imposed on erring registered
enterprises depending on the gravity of the violation incurred.

In meritorious cases, the IPA may waive, condone or reduce fines or penalties
imposed on registered enterprises, provided that the minimum compromise rate, in case
of reduction, shall not be less than Forty percent (40%) of the basic assessed fines or
penalties.

SEC. 41. Appeals. All orders or decisions of the Board in cases involving
the provisions of this Code shall be immediately executory. No appeal from the order
or decision of the Board by the party adversely affected shall stay such order or
decision, unless a supersedeas bond equivalent to the amount stated in the order or
decision is posted by the appellant.

All appeals involving cases decided by the Board, except as provided in the
next paragraph, shall be filed with the Court of Appeats within fifteen (15)
days from the receipt of notice of the order or decision or of the denial of the
appellant's motion for reconsideration duly filed.

In cases involving registration matters, the party adversely affected by such
denial may appeal the same to the Office of the President within thirty (30) days from
the receipt of notice of the order denying the application for registration. Where an
appeal has been filed, the said order or decision shall be final and executory ninety
(90) days after the perfection of the appeal.

In all cases, only one (1) motion for reconsideration within the same period
provided for appeal shall be allowed.

SEC. 42. Relationship with other Laws. In the event of any inconsistency
between an existing law and this Code, the latter shall prevail to the extent of the
inconsistency.

SEC. 43. Implementing Rules and Regulations (IRR). The Board, in
coordination with the other IPAs, DOF and NEDA, and other concerned government
agencies, shall promulgate rules and regulations to implement the intent and provisions
of this Code within one hundred twenty (120) days from the effectivity of this Code. Such
rules and regulations shall take effect fifteen (15) days following its publication in a
newspaper of general circulation in the Philippines.

SEC. 44. Separability Clause. The provisions of this Code are hereby declared
to be separable and, in the event any of such provisions is declared unconstitutional, the
other provisions which are not affected thereby, shall remain in force and effect.

SEC. 45. Amending Clause. - The DOF, NEDA and DTI shall automatically serve
as members of the IPAs’ governing boards. Thus, the following provisions are amended
accordingly:

a. Article 4 of Executive Order No. 226, as amended, entitled “The Omnibus
Investments Code of 1987;”

b. Sections 9 and 13 (c) of Republic Act No. 7227, entitled “An Act Accelerating
the Conversion of Military Reservations into Other Productive Uses, Creating
the Bases Conversion and Development Authority for this Purpose, Providing
Funds therefor and for Other Purposes;”


c. Section 3 of Executive Order No. 80, series of 1993, entitled “Authorizing the
Establishment of the Clark Development Corporation as the Implementing Arm
of the Bases Conversion and Development Authority for the Clark Special
Economic Zone, and Directing All Heads of Departments, Bureaus, Offices,
Agencies and Instrumentalities of Government to Support the Program;”

d. Section 6 of Executive Order No. 132, series of 2002, entitled “Authorizing the
Creation of the Poro Point Management Corporation as the Implementing Arm
of the Bases Conversion Development Authority over the Poro Point Special
Economic and Freeport Zone and Renaming the John Hay Poro Point
Development Corporation as the John Hay Management Corporation;”

e. Section 9 of Republic Act No. 7903, entitled “An Act Creating a Special
Economic Zone and Freeport in the City of Zamboanga Creating for this
Purpose the Zamboanga City Special Economic Zone Authority, Appropriating
Funds therefor, and for other Purposes;”

f. Section 14 of Republic Act No. 9728, entitled “An Act Converting the Bataan
Economic Zone Located in the Municipality of Mariveles, Province Of Bataan,
into the Freeport Area of Bataan (Fab), Creating for this Purpose the Authority
of the Freeport Area of Bataan (AFAB), Appropriating Funds therefor and for
other Purposes;”

g. Section 65 of Republic Act No. 9593, entitled “An Act Declaring a National
Policy for Tourism as an Engine of Investment, Employment, Growth and
National Development, and Strengthening the Department of Tourism and its
Attached Agencies to Effectively Efficiently implement that Policy, and
Appropriating Funds therefor,”

h. Section 15 of Republic Act No. 9490, entitled “An Act Establishing the Aurora
Special Economic Zone in the Province of Aurora, Creating for the Purpose the
Aurora Special Economic Zone Authority, Appropriating Funds Therefor and for
other Purposes,” as amended by Republic Act No. 10083;

i. Section 7 of Republic Act No. 7922, entitled “An Act Establishing a Special
Economic Zone and Freeport in the Municipality of Santa Ana and the
Neighboring Islands in the Municipality of Aparri, Province of Cagayan
Providing Funds Therefor, and for other Purposes;”

j. Section 6 of Presidential Decree No. 538, entitled “Creating and Establishing
the Phividec Industrial Authority and Making It a Subsidiary Agency of the
Philippine Veterans Investment Development Corporation Defining its Powers,
Functions and Responsibilities, and for Other Purposes,” as amended by
Executive Order No. 1031, series of 1985;

k. Section 11 of Republic Act No. 7916, entitled “An Act Providing for the Legal
Framework and Mechanisms for the Creation, Operation, Administration, and
Coordination of Special Economic Zones in the Philippines, Creating For This
Purpose, The Philippine Economic Zone Authority (PEZA), and for Other
Purposes.”

SEC. 46. Repealing Clause. All other laws, decrees, executive orders, rules and
regulations, or parts thereof which are contrary to or inconsistent with this Code are
hereby repealed, amended, or modified accordingly. In particular, the provisions of the
following laws that are inconsistent with this code are hereby repealed:


. Book I, Title Ill, Article 39 (a), (b), (c), (d), (@), (g), (i), and (j); Title IV Article 40,
Book III Articles 59, 60, 61, Book IV Article 69, Book VI, Articles 77 and 78 of
Executive Order No. 226, series of 1987 entitled, “The Omnibus Investments
Code of 1987;"

Sections 4, 10, 24 and 40 of RA No. 7916 entitled “An Act Providing or The
Legal Framework and Mechanisms for The Creation, Operation,
Administration, And Coordination of Special Economic Zones In The
Philippines, Creating For The Purpose The Philippine Economic Zone Authority
(PEZA), And For Other Purposes (The Special Economic Zone Act of 1995)";

Section 12 (g) of RA 7227 entitled “An Act Accelerating the Conversion of
Military Reservations into Other Productive Uses, Creating the Bases
Conversion and Development Authority for this Purpose, Providing Funds
Therefor and for Other Purposes (The Bases Conversion and Development Act
of 1992)";

|. Section 4 (e) of RA 7922 entitled “An Act Establishing a Special Economic Zone
and Free Port in the Municipality of Santa Ana and the Neighboring Islands in
the Municipality of Aparri, Province of Cagayan, Providing Funds Therefor, and
for Other Purposes (Cagayan Special Economic Zone Act of 1995)":

Section 5 (n) of RA 9490 entitled “An Act Establishing the Aurora Special
Economic Zone in the Province of Aurora, creating for the Purpose the Aurora
Special Economic Zone Authority, Appropriating Funds Therefor and for Other
Purposes (Aurora Special Economic Zone Act of 2007)";

Section 17 (1) to (8) and Section 18 (a), (b), (c) and (f) of PD No. 66 entitled
“Creating The Export Processing Zone Authority and Revising Republic Act No.
5490;"

PD No. 529 (Restored by FIRB Resolution 19-87) entitled “Granting to
Petroleum Exploration Concessionaires Under the Petroleum Act Of 1949
Exemption From Customs Duty And Compensating Tax On Importations Of
Machinery And Equipment, Spare Parts And Materials Required For Their
Exploration Operations;”

. Sections 36 (e) and (f) of PD No. 705 entitled “Revising PD No. 389, otherwise
known as The Forestry Reform Code of the Philippines (Revised Forestry Code
of the Philippines);”

Section 16 (a), (b) and (c) and Section 17 (a) to (e) of PD 972 entitled
“Promulgating an Act to Promote an Accelerated Exploration, Development,
Exploitation, Production and Utilization of Coal (The Coal Development Act of
1976);”

Section 4 (a) and (d) of Presidential Decree No. 1442 - restored by FIRB
Resolution 19-87, entitled, “An Act to Promote the Exploration and
Development of Geothermal Resources;”

. Section 10 (1) to (6) of RA No. 7156 entitled “An Act Granting Incentives to
Mini-Hydro Electric Power Developers and for Other Purposes” (Mini-
Hydroelectric Incentive Act);”


|. Sections 16 and 17 of RA No. 7844 entitled “An Act to Develop Exports as a
Key towards the Achievement of the National Goals towards the Year 2000
(Export Development Act of 1994);”

m. Chapter XV, Section 83; Chapter XVI, Sections 90, 91, 92, 93 of RA No. 7942,
entitled, “An Act Instituting a New System of Mineral Resources Exploration,
Development, Utilization and Conservation (Philippine Mining Act of 1995);”

1. Section 9 of RA No. 8479 entitled “An Act Deregulating the Downstream Oil
Industry, and for Other Purposes (Downstream Oil Industry Deregulation Act of
1998);”

©. Section 3 (a) to (d) and (h) of RA No. 8502 entitled, “An Act to Promote the
Development of the Jewelry Manufacturing Industry, Providing Incentives
Therefor and for other Purposes (Jewelry Industry Development Act of 1998);”

p. Chapter Il, Article Il, Sec. 35 (b), (c) and (d) of RA No. 8550, entitled “An Act
Providing for the Development, Management and Conservation of the Fisheries
and Aquatic Resources, Integrating All Laws Pertinent Thereto, and for other
Purposes (The Philippine Fisheries Code of 1998);”

q. Executive Order No. 70 Series of 2012 amending EO No. 528, Series of 2006
and 313, Series of 2004 — “Reducing the Rates of Duty on Capital Equipment,
Spare Parts and Accessories Imported by BOI-registered new and expanding
Enterprises”;

r. Chapter II, Section 4 and Chapter VIII, Section 19 of RA No. 9295 entitled, “An
Act Promoting the Development of Philippine Domestic Shipping, Shipbuilding,
Ship Repair and Ship Breaking, Ordaining Reforms in Government Policies
Towards Shipping in The Philippines and for Other Purposes (Domestic
Shipping Development Act of 2004)";

s. Chapter VII, Sections 15, 19, 21, 22 and 23 of RA No. 9513 entitled “An Act
Promoting the Development, Utilization and Commercialization of Renewable
Energy Resources and for other Purposes (Renewable Energy Act of 2008)";

SEC. 47. Effectivity. This Act shall take effect fifteen (15) days following its

publication in the Official Gazette or in a newspaper of general circulation, whichever is
earlier.

Approved,