OF THE PHILIPPINES 
1 
First Regular Session 
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S E N A T E  
I>EC:EIVEU PIV: .I_ 
63 
S. BILLNO. 
INTRODUCED BY SENATOR RALPH G. RECTO 
EXPLANATORY NOTE 
This bill seeks to grant the Fiscal Incentives Review Board (FIRB) the sole authority to 
approve all applications for fiscal privileges to prevent the practice of some investors 
who 'shop' for tax perks much to the demiment of the country's revenue collection and 
investment program. 
This proposal empowers the FIRB to receive, process and act on applications for 
incentive grants involving foreign and domestic entities proposing to conduct its interests 
in the Philippines regardless of whether the coverage is for fiscal or non-fiscal incentives 
The FIRB was created by PD 775 and subsequently amended by EO 93. Through this 
bill, the grant of ,tax privileges will be institutionalized thereby creating a national 
body/lead agency responsible for all grants of fiscal and non-fiscal privileges of domestic 
and foreign entities seeking fiscal and non-fiscal privileges to foreign and domestic 
entities in the Philippines. 
The enactment of this bill shall rationalize the grant of fiscal privileges such as tax and 
duty exemptions or subsidy availment thereby cutting back on loss of revenues due the 
government because of non-payment of proper taxes. 
The authority to 'grant fiscal incentives is vested to Board of Investments (BOI), 
Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority 
(SBMA), and Clark Special Economic Zone (CSEZ). 
Unscrupulous investors 'shop' 
around. these agencies to get the best package of tax perks available thereby putting into 
disadvantage local investors who are precluded or not qualified to avail of tax privileges. 
The Department bf Finance reported that in 1999, revenues foregone from fiscal 
incentives are estimated at Php 124.47 B. The bulk of these are revenues under special 
investment incentives laws to investors estimated at Php 104.92 B and Php 86.55 B or 
70% of the estimated Php 124.47 13 of this revenue forgone is accounted for by 
importations of PEZA pursuant to RA No. 7916. 
After all, it is the policy of the State to maintain a stable and market-responsive 
incentives regime to encourage private investors. 
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13'h CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
13 
S. BILLNO. 
INTRODUCED BY SENATOR RALPH G. RECTO 
AN ACT 
GRANTING THE FISCAL INCENTIVES REVIEW BOARD (FIRE) THE SOLE 
AUTHORITY TO APPROVE ALL APPLICATIONS FOR TAX INCENTIVES 
AND SUBSIDIES, THEREBY AMENDING PRESIDENTIAL DECREE NO. 776 
AS AMENDED BY EXECUTIVE ORDER NO. 93 SERIES OF 1986 AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. The Fiscal Incentives Review Board (FIRB) created under Presidential 
Decree No. 776, as amended by Executive Order No. 93, series of 1986, is hereby 
granted sole authority to approve all applications for tax incentives and subsidies granted 
to national government agencies and government owned and controlled corporations; tax 
incentives on merit goods such as, but not limited to, senior citizens, disabled persons, 
education for poor but deserving students, campus journalism, dual training system, 
breastfeeding, rnanlilikha ng bayan, adopt-a-school program, inventors, promotion of 
sports, labor unions, and Veterans Federation of the Philippines; and fiscal incentives 
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granted under the following: 
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(a) 
the 1987 Constitution; 
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government; 
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(c) 
the National Internal Revenue Code, as amended; 
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(d) 
the Tariff and Customs Code, as amended; 
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(e) 
the Local Government Code, as amended, 
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the Omnibus Investments Code of 1987, as amended; 
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(b) 
inteFtiona1 treaties or agreements entered into by the Philippine 
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(8) 
Presidential Decree No.538, creating the Philippine Veterans Industrial 
Development Corporation (PHNIDEC); 
Special Economic Zone Act of 1995 as amended by Republic Act 
(h) 
No.8748; 
Bases Conversion Act of 1992; 
The  comprehensive Agrarian Reform Program (CARP); 
The’Clean Air Act of 1999; 
The Ecological Solid Waste Management Act of 2000, and 
(i) 
(j) 
(k) 
(1) 
(m) 
Other special laws. 
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SEC. 2. 
The Fiscal Incentives Review Board shall submit an annual report 
to Congress detailing the costs and benefits of the fiscal incentives granted during the 
preceding year to the national economy and to make the necessary recommendation 
for the withdrawal, modification, revocation, or suspension of the enforceability of 
any of the above cited statutory subsidies or tax exemptions, except those granted by 
the Constitution, for reasons of compatibility with the national government’s declared 
economic policies. 
SEC.3. 
To effectively cany out the objectives of this Act, the Fiscal 
Incentives Review Board (FIRB) created under Presidential Decree No. 776, as 
amended by Executive Order No. 93, series of 1986, shall be reorganized and shall be 
composed of representatives from the following government agencies: 
, 
(a) 
Department of Finance; 
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(b) 
(c) 
National Economic Development Authority; 
(d) 
Board of Investments; 
(e) 
Burkau of Customs; 
(f) 
Bureau of Internal Revenue; 
(g) 
National Tax Research Center; 
(h) 
Philippine Economic Zone Authority; 
Department of Trade and Indistry; 
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(i) 
Subic Bay Metropolitan Authority, 
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Clark Development Corporation;and 
(k) 
Other special economic zone authorities. 
The Fiscal Incentives Review Board shall be headed in a permanent 
capacity by the representative of the Department of Finance who shall 
hold the rank of an undersecretary. 
SEC. 4. 
Appropriations. 
- In addition to the current appropriations of 
the Fiscal Incentives Review Board, such amount as may be necessary for the 
implementation of 'this Act shall be charged against the appropriations for the Department 
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of Finance under the current General Appropriations Act. Thereafter, the amount of Five 
Million Pesos (P5,000,000,000.00) shall be included in the General Appropriations Act. 
SEC. 5. 
Implementing Rules and Regulations. - The Department of 
Finance shall issue the necessary rules and regulations for the effective implementation of 
this Act. 
SEC. 6. 
Repealing Clause. - All 
laws 
orders, decrees, rules 
and 
regulations which are inconsistent with or contrary to the provision of this Act are hereby 
amended or repealed accordingly. 
SEC 7. 
Ejfectivity. - This Act shall take effect fifteen (15) days after its 
complete publication in at least two (2) newspapers of general circulation. 
Approved, 
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