1 
) 
L I  
THIRTEENTH CONGRESS 
First Regular Session 
OF THE REPUBLIC OF THE PHILII~PINES 
\ 
SENATE 
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B 
SFnate 6ill Nc 
lntrodu6ed by Senator Richard J. Gordon 
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EXPLANATORY NOTE 
The Philippines is wea1thy’:beyond imagining, in the richness of its history, culture and 
natural environment. But what hale we done to fully utilize such capital in the development of 
our nation? Tourism is the only;industry 
that can use such capital assets in a sustainable 
manner. Tourism is the 
and most efficient way of generating foreign exchange, 
investments and 
is an engine of growth that can empower our economy 
to alleviatexe 
Yet we have done too little to make tourism the 
centerpiece of the Philippine econ@ny. i 
We have lagged far behinG our neighbors in tourism. In 2001, Thailand and Malaysia 
had visitors in excess of 10 millidn, while Indbiesia and Singapore had more than 5 million. 
Even Vietnam, a country ravaged4by war and held back by a communist economy, surpassed 
the 2 million mark. Our nation, o n b e  other hand, did not even break 2 million visitors that year. 
If one were to simply think of each,tourist spending US$lOOO in our country, how much foreign 
exchange can be generated iflweflccrease our tourist arrivals from 2 million to 10 million? How 
much cash will be generated,, carnal liberated, money invested and jobs created? 
Filipinos can be lifted up out of paverty? We do so much to encourage foreign in 
industry. But most if not all the mdney these investors make is sent back out to 
spending hundreds of billions of dhlars. We have been blessed by the 
With tourism, however,,we will; be ringing the money in, and it will stay in. 
ir 
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Tourism is the largest ,ind&ry in the world, with 700 million tourists a 
resources to make us competitiv&n that market. For us to share and succeed in that market, 
all it takes for us is the will to do so. 
Government must have the political will to devote its resources in pursuit of that goal, 
and must declare that tourism,is an industry of national interest, and that it is our primary engine 
of growth and development. We must find our future in the Philippines. 
This bill seeks to change the philosophy of government toward tourism, and to create the 
necessary political and,legal structures to make tourism grow rapidly and lift our people out from 
poverty, by giving them jobs and opportunities, and allowing them to live in pride and dignity. 
No longer will we need to send our people abroad, expose them to the dangers of war and the 
oppressions of alien cultures, ,in order to put food on our tables. This bill, if quickly passed into 
law, will be a key step in attaining the President‘s goals of ten million jobs for Filipinos within the 
next six years. 
R 


THIRTEENTH CONGRESS 
1 
First Regular Session 
1 
OF THE REPUBLIC OF THE PHILIPPINES ) 
L 
SENATE 
17 
-* 
Senate Bill No. 
Introduced by the Honorable Senator Richard J. Gordon 
AN 
ACT 
STRENGTHENING, 
REORGANIZING 
AND 
STREAMLINING THE DEPARTMENT OF TOURISM, AND 
DECLARING A NATIONAL POLICY FOR TOURISM AS THE 
PRIMARY 
ENGINE 
OF INVESTMENT, 
EMPLOYMENT, 
GROWTH AND NATIONAL DEVELOPMENT 
SECTION 1. Short Title. This act shall be known as the Tourism Act of 2004. 
SECTION 2. Declaration of Policy, It is the policy of the State that tourism is an indispensable 
element of the national economy and an industry of national interest and importance, such that 
it must be harnessed gs an engine of socio-economic and cultural growth to provide investment, 
foreign exFtiange and-employment, and an enhanced sense of national pride, for all Filipinos. 
The Department of Tourism may call upon all government departments, agencies and offices to 
coordinate their efforts in the implementation of this policy. This can be achieved by providing 
the necessary infrastructure, creating an atmosphere of peace, order and security, and 
inculcating within the people a culture of sustainable tourism, whereby the benefits of tourism 
will spread to the greater population and significantly alleviate the poverty of Filipinos. 
THE DEPARTMENT OF TOURISM 
SECTION 3. Mandate. There shall be a Department of Tourism (the "Department" which shall 
be the primary government agency charged with the responsibility to determine to rism policy, 
develop, promote and regulate tourism, instill in the Filipino its fundamental impo ance in the 
SECTION 4. Powers and Functions. The Department shall have the following powers and 
generation of employment, investment and foreign exchange. 
functions: 
a. Formulate policies, plans, programs, and projects for tourism as an engine of socio- 
economic and cultural growth. 
b. Oversee and coordinate the implementation of tourism policy, plans and projects. 
c. Delegate to regional offices in coordination with local governments specific powers and 
functions in the implementation of tourism policy, plans and projects. 
d. Call upon all agencies to properly carry out their programs in relation to and in 
coordination with the policies, plans and projects of the Department, and to assist in the 
implementation of tourism policy, plans and projects. 
e. Represent the government in all conferences and meetings concerning tourism and 
discharge such responsibilities of the government arising from treaties and international 
agreements to which it is signatory. 
f. 
Request the President for representation on all government agencies, offices, boards, 
commissions or committees that may, directly or indirectly, affect tourism, including but 
not limited to, transportation and travel, peace and order, national emergencies and 
disaster coordination,, public utilities and other public infrastructure, foreign relations and 
immigration. 
g. Protect, maintain and preserve historical, cultural and natural endowments with the 
cooperation of appropriate government agencies and the private sector, 
h. Require relevant private or public entities to provide increased access to Philippine 
airports and seaports for tourists, and atidpt measures to attract and assure them of their 
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Call upon relevant government departments, agencies and offices to rem0 e barriers to 
travel, facilitate the process of obtaining and extending visas, and integrat and simplify 
Monitor conditions of any community in the Philippines and issue advi 1 
ories on the 
safety. 
of travel regulations and immigration procedures. 
safety or viability of travel to such communities. 
Formulate and promulgate rules and regulations for tourism prescribing minimum levels 
of operating quality and efficiency to ensure that facilities, personnel and services are 
maintained in accordance with the highest local and international standards. 
Regulate tourism establishments and services, issue licenses therefor, and prohibit the 
operation of establishments and services that fail to meet minimum operating standards; 
Accredit tourism establishments and services that comply with prescribed standards, 
and create incentives for compliance. 
Approve and enforce, through local government units, construction, safety and fire 
standards, among others, of accredited tourism industry establishments and services. 
Approve tourism development plans of local government units. 
Develop programs for training and education in standards and regulatory enforcement to 
support local government units in the performance of their accreditation, regufation, and 
enforcement functions. 
SECTION 5. Structure of the Department. The Department shall consist of the Department 
Proper, Department Services, Bureaus and Offices and the Department's Regional Offices. The 
Department Proper shall consist of the Offices of the Secretary and Undersecretaries. 
SECTION 6. Office of the Secretary. The Office of the Secretary shall consist of the Secretary 
and his immediate staff. 
SECTION 7. Undersecretaries. The Secretary shall be assisted by three (3) Undersecretaries, 
namely: 
a. Undersecretary for Tourism Development, who shall be responsible for the Office of 
Tourism Develepment Planning, and Office of Tourism Coordination. 
b. Unxersecretary for Tourism Regulation, who shall be responsible for the Office of 
Tourism Standards and Training, and all Regional Offices. 
c. Undersecretary for Internal Services. 
SECTION 8. Office of Tourism Development Planninq. The Office of Tourism Development 
Planning shall, in coordination with Tourism Philippines, have the following functions: 
a. Formulate policies, programs and plans for national tourism development, and approve 
local government tourism development plans; 
b. Monitor and 
c. Analyze specific 
agencies and local government units 
development plans for tourism enterprise zones 
preparation of a 
d. Formulate, in coordination with 
sectoral plans for the area. 
SECTION 9. Office of Tourism Coordination. The Office of Tourism Coordination shall have the 
following functions: 
a. Coordinate with government agencies, local government units, non-governmental 
organizations, and other private entities for the development and implementation of the 
national tourism plans and policies; 
b. Call upon the assistance and support of any or all of the government agencies in the 
implementation of the policies of the Department; and 
c. Support the private sector in all tourism activities requiring governmental assistance. 
SECTION I O .  Office of Tourism Standards and Traininq. The Office of Tourism Standards and 
Training shall have the following functions: 


... 
functions as may be assigned or delegated to it by the Secretary. 
ATTACHED AGENCIES 
Tourism Enterprise Zone Authority 
a. 
b. 
C. 
d. 
Formulate and enforce standards for tourism establishments and services prescribing 
minimum levels of operating quality and efficiency in order to ensure that facilities, 
personnel and services are maintained in accordance with acceptable local and 
international standards; 
License and accredit tourism establishments and services that comply with prescribed 
Coordinate with the Tourism Enterprise Zone Authority, government ag ncies, local 
government units, non-governmental organizations, and private entit es in the 
formulation of, rules and regulations for the preservation such historical, cultural or 
natural assets or relics giving the zone its tourism value and significance; and assure 
standards, and create incentives for compliance; 
adherence to approved zone development plans; and 
Provide training and education programs to improve the quality of tourism services; i 
SECTION 11. Reqional Offices. The Department shall establish, operate and maintain a 
Regional Office in each of the administrative regions of the country. A Regional Office shall be 
headed by a Regional Director and shall, within its administrative region, have the following 
functions: 
a. Implement laws, policies, plans, programs, rules and regulations of the Department, 
particularly those relating to compliance and accreditation of tourism establishments and 
services promulgated by the Department; and 
b. Coordinate with regional offices of other departments, bureaus, and agencies, local 
government units, non-governmental organizations, and the regional offices of the 
Department's attached agencies in the implementation of such laws, policies, plans 
programs and rules and regulations. 
SECTION 12. 
Abolished Offices. The Bureaus for Domestic and International Tourism 
Promotion, and the Offices, of Tourism Information and Product Development are hereby 
abolished. Resources for and personnel performing relevant functions within these bureaus and 
offices shall, insofar as possible, be integrated within the Tourism Enterprise Zone Authority and 
Tourism Philippines. 
SECTION 13. Nature of Internal Services and their Heads. The Internal Services shall be 
essentially staff in character, each of which shall be headed by a Service Chief. 


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seaports or airports, and reasonable connection with power, water and sewage systems; while 
possessing-sufficient &a to be further utilized for the establishment of tourism enterprises, may 
be designated, or interested iparties from the private Sector or local government may apply for 
an area’s designation as, a TEZ. 
In connection with and in implementation of this Act, the lntramuros Administration created 
under Presidential Decree No. 1616, the Taal Lake Trust Zone created under Republic Act No. 
7623, and the Presidential Commission for the Restoration, Conservation and Preservation of 
The Vlgan Heritage ‘Village, created under Executive Order No. 358 of 1996 are hereby 
reorganized as TEZs in accordance with this Act. 
Any other area specifically defined as a tourism area or zone under any special or eneral law, 
decree, or presidential issuance shall, as soon as possible, be organized into a T Z under the 
The National Parks Development Committee created under Executive Order No. 30 of 1963, as 
provisions of this Act. 
amended, is hereby abolished, and TEZs shall then be created under the provision, of this Act 
for each and every national park whenever and wherever practicable. 
The Tourism Enterprise Zone Authority shall coordinate with the Protected Areas and Wildlife 
Bureau for the development of policies, plans and programs for the conversion of certain areas 
or portions of national iparks under the National Integrated Protected Areas System into TEZs. 
The Tourism Enterprise Zone Authority shall coordinate with Tourism Philippines for the transfer 
of assets of the Philippine Tourism Authority that may be organized as TEZs. 
SECTION 19. Development Strateclv of TEZs. The strategy and priority of development of each 
TEZ established pursuant to this Act shall be formulated by the Department through TEZA. 
TEZs may be established,on the initiative of the national government, local government with the 
assistance of’ the national government, or private initiative with the approval of the national 
government. 
It shall be the policyi of the government to encourage and provide incentives and facilitate 
private sector participation ’ in the construction and operation of the public utilities and 
infrastructure in TEZs; using any of the schemes allowed under the Build Operate and Transfer 
Law (Republic Act No: 6957, as amended). 
Lands identified as part of a TEZ shall be exempt from the coverage of the Urban Development 
and Housing Program Act of 1992 (Republic Act No. 7279) and the Comprehensive Agrarian 
Reform Law (Republic Act No. 6657). 
SECTION 20. Administration. The TEZA shall be governed by a Board of Directors (the “TEW 
Board”), coaposed asfellows: 
r 
a. The Department Secretary, as chairperson 
b. The Undersecretary for Tourism Development 
c. The Administrator of the Tourism Enterprise Zone Authority 
d. A representative each from the Departments of Public Works and Highways, Transport 
and Communications, ,Interior and Local Governments, and Trade and Industry 
e. Four directors appointed by the President 
The TEZA’s powers, business and property shall be exercised, conducted and held by the 
TEZA Board. The TEZA Administrator shall implement the actions required by the T ZA Board. 
SECTION 21. The TEZA Administrator. The TEZA shall have and Administrator ho must be 
a Filipino, have a postgraduate degree in busiiess, law, tourism, or public admini ration, and 
have demonstrated expertise in any of those fields. He must have been en aged in a 
SECTION 22. 
Directors bv, Aopointment of the President (Reoresentative Directors). The 
Tourism Related Industries Congress shall recommend at least eight persons, from which the 
managerial capacity for at least five (5) years prior to his appointment, 
1 


President shall appoint four to serve as Representative Directors to represent the tourism 
industry, specifically the following sectors: air, sea and land transportation; hotel and resort 
sectors; tour operators; and real estate development. A Representative Director must be a 
Filipino engaged in the management of business in the sectors they represent for at least ten 
(IO) years, and have demonstrable expertise in their respective industries or sectors. 
These directors shall serve terms of three years. The first three directors appointed under this 
provision shall serve th-me; two and one years respectively. 
SECTION 23. Meetinas of the Board. The TEZA Board shall meet at least once a month at the 
TEZA's principal office unless the TEZA Board had previously agreed in writing to meet at 
another location. 
SECTION 24. General Powers and Functions of the TEZA. The TEZA Board shall have the 
general powers of a body corporate, which includes the power of succession, to sue and be 
sued in such corporate name, to acquire, hold and dispose of real and personal property, to 
adopt, amend and repeal its bylaws, and to enter into contracts of every kind. In relation to its 
functions, it shall also specifically have the power to: 
l 
a. 
b. 
C. 
d. 
e. 
f. 
g. 
h. 
I. 
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k. 
Enter into, make, perform and carry out contracts of every class, kind and description 
which are necessary or incidental to the realization of its purposes with any erson, firm 
Contract loans, indebtedness and credit, issue commercial papers and b 1 
nds, in any 
or corporation, private or public, and with foreign government entities; 
local or convertible foreign currency from any international financial institutions, foreign 
government entities, and local or foreign private commercial banks or similar institutions 
under terms and conditions prescribed by law, rules and regulations; 
Execute any deed of guarantee, mortgage, pledge, trust or assignment of any property 
for the purpose of financing the programs and projects deemed vital for the early 
attainment of its goals and objectives, subject to the provisions of Article VII, Section 20, 
and Article XII, Section 2, paragraphs (4) and (5) of the Constitution; 
Construct, own, lease, operate and maintain public utilities as well as infrastructure 
facilities; 
Reclaim or undertake reclamation projects as it may deem necessary in areas adjacent 
or contiguous to the T W s  lands described in Section 7 of this Act either by itself or in 
collaboration with the Public Estates Authority (PEA) established under Presidential 
Decree No. 1084 as amended; 
Receive donations, grants, bequests and assistance of all kinds from local and foreign 
governments and private sectors and utilize the same; 
Exercise eminent domain; 
Develop policies, plans and programs in coordination with the Department for the 
development and operation of TEZs, recommending to the local government units or 
other appropriate authorities the location, incentives, basic services, utilities and 
infrastructure required or to be made available for said entities; 
Register, regulate and monitor enterprises in TEZs; 
Coordinate with local government units and exercise general supervision over the 
development, plans, activities and operations of the TEZs; 
Review proposals for the establishment of TEZs based on criteria provided hereunder 
as further defined by rules and regulations, and facilitate and assist in the organization 
of said entities. - ~- 
. 
The TEZAThall be deemed a government infrastructure corporation under the provisions of the 
Administrative Code of 1987 (Executive Order No. 292, Book IV, Chapter 13, Section 58). 
SECTION 25. Powers and Functions of the TEZA Administrator. The TEZA Administrator shall 
coordinate the policies, plans ,and programs concerning TEZs. As such, he shall provide overall 
supervision over and general direction to the development of TEZs. He shall determine the 
structure and the staffing pattern and personnel complement of the TEZA and establish offices 
when necessary, all subject to the approval of the TEZA Board. 
In addition, he shall have the following specific powers and responsibilities: 
a. Coordinate with the Philippine National Police in safeguarding all the land , buildings, 
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b. 
C. 
d. 
e. 
f. 
g. 
h. 
records, monies, credits and other properties and rights of investors within TEZs; 
Ensure that all revenues of the TEZs are collected and applied in accordance with law; 
Submit to the Board ,the ongoing and proposed projects, work and financial programs, 
annual budget of receipts, and expenditures of the TEZs; 
Acquire jurisdiction, as he may deem proper, over the protests, complaints, and claims 
of the residents and enterprises in a TEZ concerning administrative matters; 
Recommend to the Department Secretary the grant, approval, refusal, amendment or 
termination of the TEZ franchises, licenses, permits, contracts, and agreements in 
accordance with the policies set by the Department Secretary; 
Require owners of houses, buildings or other structures constructed without the 
necessary permit whether constructed on public or private lands, to remove or demolish 
such houses, buildings, structures within sixty (60) days after notice and upon failure of 
such owner to remove or demolish such house, building or structure within said period, 
the-TEZA 
Administrator or his authorized representative may summarily cause its 
removal or demolition at the expense of the owner, any existing law, decree, executive 
order and other issuances or part thereof to the contrary notwithstanding; 
Take such emergency measures as may be necessary to avoid fires, floods and mitigate 
the effects of storms and other natural or public calamities; and 
Subject to the approval of the Department Secretary, issue rules and regulations to 
implement the provisions of this Act. 
SECTION 26. 
Capitalization. The national government shall appropriate the sum of five 
hundred million pesos ,for the capitalization of TEZA. 
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SECTION 27. 
The TEZA shall, in coordination with appropriate 
authorities and neighboring cities and municipalities, conduct a survey of the phys cal, natural 
assets and potentialities of TEZ areas under their jurisdiction. 
SECTION 28. Registration. ,Business enterprises within a TEZ shall register with t, e TEZA to 
avail of all incentives and benefits provided for in this Act. 
SECTION 29. Civil Dispute Resolution. IThe TEZA shall establish a civil dispute mediation 
office to assist in the resolution of civil disputes within a TEZ where one of the parties to the 
dispute is a non-resident alien. No civil dispute in a TEZ involving a non-resident alien may be 
filed in court without having undergone mediation proceedings under this section. The TEZA 
shall charge reasonable fees for civil dispute mediation. 
SECTION 30. Labor Dispute Resolution. To resolve disputes between workers and employers 
for any violation of thelabor Code (Presidential Decree No. 442, as amended), the TEZA shall 
establish a labor dispute resolution office :to mediate between workers and employers. The 
TEZA shall charge reasonable fees for labor dispute resolution. 
In order to promote a stable investment climate, and realizing the critical role tourism plays in 
the Philippine economy, employees operating enterprises operating within the Zone shall be 
prohibited from engaging in strikes or strike-related activity within five years from the 
establishment of the enterprise. 
The Department of Labor andi Employment !and the National Labor Relations Commission shall 
not acquire jurisdiction over any complaints arising from a violation of the Labor Code or its 
rules and regulations from an enterprise located and operating within a TEZ unless such a 
complaint has undergone labor dispute resolution with the TEZA. 
SECTION 31. Comuensation.of Emplovees. Recognizing the critical employment condition of 
the Philippines, employers operating establishments within a Zone are hereby authorized, 
subject to rules jointly promulgated by the TEZA and the DOLE, to comply with minimum wage 
laws and regulations bx crediting the fair' value of supplements and facilities provided the 
worker, sucti-as but not limited to housing, meals, transportation, health care and other benefits, 
in the computation of minimum wages paid. 
SECTION 32. Investiaation and Inquiries. Upon a written formal complaint made under oath, 
which on its face provides reasonable basis to believe that some anomaly or irregularity might 
have been committed within the TEZ, the TEZA Administrator shall have the power to inquire 
Survev of Resources. 
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into the conduct of firms or employees in the TEZ and to conduct investigations. For that 
purpose, he may subpoena witnesses, administer oaths, and compel the production of books, 
papers, and other evidence. The TEZA Administrator may also grant immunity from prosecution 
to any person whose testimony or whose possessions of documents or other evidence is 
necessary or convenient to determine the truth in any investigation conducted by him or under 
his authority. 
SECTION 33. One-stop Shop Processing. At the national TEZA office and within every TEZ, 
the TEZA shall establish an office where a TEZ investor or enterprise can obtain all necessary 
permits and licenses from all national and local government offices. All government agencies 
shall assign representativesito TEZs to coordinate with the TEZA for the issuance of such 
permits and licenses. 
SECTION 34. Subsidiaw Corporations. In the fulfillment of its mandate, TEZA is hereby 
authorized to create wholly, or partially owned subsidiary corporations for the ownership, 
operation or management of enterprises within TEZs. 
SECTION 35. Administration of TEZs. Each TEZ shall be administered by a zone administrator 
appointed by the TEZA Board on recommendation of the TEZA Administrator. No person shall 
be appointedizone administrator unless he is a Filipino, with a postgraduate degree in business, 
law, tourism, or public administration, and demonstrated expertise in any of those fields. He 
must have been engaged in a managerial capacity for at least five (5) years prior to his 
appointment. 
SECTION 36. Consultative Committees. To assist the zone administrator in the performance of 
his functions, a consultative committee shall be formed of all the local government chief 
executives of the local government units whose territories overlap, are part of, or are included in 
the TEZ, as well as one representative each from the TEZ's investors and registered labor 
unions. The TEZA Board may, in view of specific relevant interests other groups or sectors may 
have in the operation of a TEZ, allow representation on the consultative committe from other 
concerned groups or sectors, such as but not limited to religious groups, indige ous cultural 
SECTION 37. Privatelv-owned TEZs. Privately owned TEZs shall operate auton mously.and 
independently of the TEZA, but shall nevertheless be monitored by the T 1 ,  
ZA for the 
communities, and non-governmental organizations. 
implementation of incentives. 
Tourism Philippines 
SECTION 38. Tourism Philippines. The Philippine Tourism Authority (PTA) and the Philippine 
Convention and Visitors Corporation (PCVC) are hereby absorbed and reorganized into 
Tourism Philippines. All the assets of the PTA and the PCVC are hereby transferred to Tourism 
Philippines. The principal office of Tourism Philippines shall be located in Metro Manila. 
SECTION 39. Mandate. Consistent with policies defined and provided by the Department, 
Tourism Philippines shall be a body corporate primarily responsible for marketing and promotion 
of the Philippines as a tourism destination and its tourism products, and secondarily, in the 
planning, research, apd development of tourism products, as well as the construction, operation 
and management of necessary infrastructure for tourism development. 
SECTION 40. Administration. Tourism Philippines shall be governed by a Board of Directors 
(the Tourism Board), composed as follows: 
a. The Department Secretary, as chairperson 
b. The Tourism Philippines Chief Operating Officer 
c. Four directors appointed by the President 
d. Three directors appointed by the Department Secretary 
The Tourism Board shall exercise all of.Tourism Philippines's powers, conduct its business, and 
control and hold its property: The Chief Operating Officer, in coordination with the Executive 
Directors, shall implement the actions required by the Tourism Board. 
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SECTION 41. The Chief Operatina Officer. The Chief Operating Officer shall be appointed by 
the Department Secretary. The Chief Operating Officer must be a Filipino, have a postgraduate 
degree in business, law, tourism, or public administration, and have demonstrated expertise in 
any of those fields. He must,have been engaged in the managerial capacity for at least five (5) 
years prior to his appointment. 
SECTION 42. Directors bv Appointment of the President (Representative Directors). The 
Tourism Related Industries Congress shall recommend at least eight persons, from which the 
President shall appoint four; to serve as Representative Directors to represent the tourism 
industry, specifically the following sectors: air, sea and land transportation; hotel and resort 
sectors; tour operators; and other leisure activity enterprises. A Representative Director must 
be a Filipino engaged, in the management of business in the sectors they represent for at least 
ten (IO) years, and have demonstrable expertise in their respective industries or sectors. 
These directors shall serve terms of three years. The first three directors appointed under this 
provision shall serve three, two and one years respectively. 
SECTION 43. Directors bv Appointment of the Department Secretarv (Executive Directors). 
The Secretary shall appoint1 three persons to serve as Executive Directors to manage the 
primary and secondary functions of Tourism Philippines. An Executive Director must be a 
Filipino, having a postgraduate degree in a field relevant to the function to which he has been 
assigned to perform, and must have been engaged in a managerial capacity for at least five (5) 
years prior to his appointment, performing functions relevant to the tasks of his office. 
SECTION 44. 
The Tourism Philippines, as a body 
corporate, shall have a-corpo,rate name and a corporate seal, the power of succession, to sue 
and be suea-in its own name. 
It shall also have the power to enter into contracts in the performance of its functions, and to 
hold, possess, lease; own, idispose or alienate real and personal property as it deems 
necessary for the conduct of its business. In relation thereto, it may: 
a. Enter into contracts as provided under the Build-operate-transfer Law (Republic Act No. 
6957, as amended); 
b. Contract loans, indebtedness, credit and issue commercial papers and bonds, in any 
local or convertible foreign currency from any international financial instituti ns, foreign 
government entities, and local or foreign private commercial banks or similar institutions 
for the purpose of financing the programs and projects deemed vital fo the early 
attainment of its goals and objectives, subject to the provisions of the 1 
,onstitution 
under terms and conditions prescribed by law, rules and regulations; 
c. Execute any deed of guarantee, mortgage, pledge, trust or assignment of a y property 
(Article VII, Section 20, and Article XII, Section 2, paragraphs (4) and (5)); and 
d. Receive donations, grants, bequests and assistance of all kinds from local and foreign 
governments and private sectors and utilize the same. 
SECTION 45. Meetinqs of the Board. The Tourism Board shall meet at least once a month at 
the Tourism Philippines's principal office unless the Board had previously agreed in writing to 
meet at another location. 
A quorum for the holding of a meeting shall consist of four voting members, and two non-voting 
members. The voting members of the Board are the Chairman, the TEZA Administrator, the 
Chief Operating Officer and the Representative Directors. The Executive Directors shall be 
present at and participate in Tourism Board meetings, but shall not vote. 
Section 46. Structure and Functions of the Tourism Philippines. The Tourism Board shall, upon 
the recommendation of the Chief Operating Officer, have the power to organize the Tourism 
Philippines in a manner most efficient and economical for the conduct of its business. 
The Chief Operating Officer shall carry out administrative and financial functions, as well as 
oversee the operations of foreign and domestic offices. 
The Executive Directors shall be appointed to carry out the following functions: 
Powers of the Tourism Philippines. 


a. 
b. 
Primary function: Marketing and Promotions, which involves the pr motion and 
advertising of tourism products, both domestically and internationally, pu lic relations 
and advertising, and the coordinating with the private sector for the conduct of 
conventions and other tourism events; 
Secondary functions: 
I. 
ii. 
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Planning and Development, which involves the development of tourism products, 
market,research and statistics, and education and training; 
Business and ;Investments Management, which involves the assessment of the 
assets ,of the PTA and PCVC, determining how these assets may best be 
utilized, and maximizing the value of such assets by their disposition or 
operation. The operations of Duty Free Philippines shall be the responsibility of 
the Executive Director for Business and Investments Management. Tourism 
Philippines may also establish and operate tourism establishments or services 
when and where necessary. 
The Tourism Board is hereby encouraged to enter into contractual arrangements to outsource 
the performance of Tourism Philippines's functions but under the full control and supervision of 
the Board through the responsible Executive Director, subject to the provisions of relevant laws, 
in order to minimize the cost of Tourism Philippines's operations. 
SECTION 47. CaDitalization. 1 The capital of Tourism Philippines shall consist of the combined 
assets of the PTA and the PCVC. Immediately after the effectivity of this Act, an audit shall be 
conducted to determine the true extent and value of the assets of the PTA and PCVC. 
The national government shall further appropriate an amount of two hundred million pesos to 
capitalize the operations of Tourism Philippines. 
SECTION 48. Funding. Tourism Philippines shall obtain the funds for its operations through 
the following: 
a. The-National GGGernment shall, for the first five years from the effectivity of this Act, 
appropriate an amount for the Tourism Philippines equivalent to at least the 
Department's 2004 allocation for marketing and promotions and product development, 
as well as any appropriations in 2004 for the PTA and the PCVC; 
b. The full amount collected from travel taxes: 
c. Income from the operations of Duty Free Philippines, Tourism Enterprise Zones as 
hereinafter provided, and Tourism Philippines investments and subsidiaries; 
d. A reasonable percentage to be determined by the President but not less than 25% of the 
revenues of the Philippine Amusements and Gaming Corporation; and 
e. A reasonable percentage to be determined by the President but not less than 25% of all 
collections on fees imposed upon the travel of persons by airports and seaport 
The Department shall collect a fee of one to two percent (1% to 2%) of the gross eceipts of 
tourism industry establishments and services not located within tourism enterprise zones, of 
which 40% shall be remitted to the Tourism Philippines, and 60% for the national go 1 
ernment. 
The appropriate rate to be imposed shall be determined on the nature of the establishment's 
business, and the establishment's compliance with Department's prescribed standards for 
accreditation. 
At least half of all Tourism Philippines funding shall be devoted to the marketing and promotions 
function of Tourism Philippines. 
SECTION 49. Personnel and Compensation. The Chief Operating Officer shall, with the 
approval of the Board of Directors, create a reasonable system of employee compensation, 
position qualification and qualification standards. 
The employees, Executive Directors, and Chief Operating Officer of the Tourism Philippines 
shall be exempt from the salary standardization law. Their compensation shall be determined by 
the financial condition of the Tourism Philippines, the need to maintain a fund for its operations, 
and prevailing market rates for employees in similar positions. 


The Department Secretary and the Representative Directors shall not be entitled to 
compensation, but may receive reasonable per diems for attendance at regular and special 
Board meetings. 
Within one year from the effectivity of this Act, Tourism Philippines shall r tionalize its 
manpower and staffing requirements. Employees separated from the service as a r sult of such 
SECTION 50. Subsidiarv Corporations. In the fulfillment of its mandate, Tourism kilippines is 
rationalization shall be entitled to benefits provided by law. 
hereby authorized to create wholly or partially owned subsidiary corporations forth , ownership, 
operation or management of tourism related enterprises. 
Other Attached Aqencies 
I 
SECTION 51. National Commission for Culture and the Arts, In view of the fundamental 
importance of history, culture and the arts in tourism and tourism development, the National 
Commission for Culture and the Arts (NCCA), as well as its attached agencies, specifically: 
National Historical Institute, Cultural Center of the Philippines, National Library, National 
Museum, and the Record Management and Archives Office, shall be realigned with the 
Department of Tourism. An Assistant Secretary for History and Culture shall sit as Ex-officio 
Chairman of the NCCA and shall ensure that its policies, plans and programs are coordinated 
with those of the Department. 
SECTION 52. Philippine S~orts Commission. In view of the of importance domestic and 
international sports competitions in promoting domestic and international exchanges, exposure 
and tourism, The Philippine Sports Commission (PSC) shall be realigned with the Department of 
Tourism. An Assistant Secretary for Sports and Athletics shall sit as Chairman of the PSC and 
shall ensure that its policies, plans and programs are coordinated with those of the Department. 
SECTION 53. Philippine Leisure Retirement Authority. The Philippine Retirement Park System 
created under Executive Order No. 1037 of 1985 presently organized as the Philippine Leisure 
Retirement Authority (PLRA) shall hereby be realigned with the Department of Tourism. 
TEZA INVESTMENT INCENTIVES 
SECTION 54. Fiscal and Non-fiscal Incentives. Importations of capital goods into a TEZ for 
use by a T E D  registerred enterprises within a TEZ shall be imported without duties. The 
Departmentdin conjunction with the Bureau of Internal Revenue (BIR) and the Bureau of 
Customs shall promulgate rules and regulations for the implementation of this provision, 
provided that no importations of foreign capital goods shall be allowed where competitive 
products with significant Philippine component are available in the domestic market. 
Purchases of local goods and services by TEZA registered enterprises for use within the TEZ 
shall be value-added tax zero-rated. 
TEZA registered enterprises shall be entitled to an income tax holiday for five years from the 
start of its operations. Such an income tax holiday may be extended for up to an ad itional five 
years if the TEZA registered enterprise undertakes a major expansion or upgrade of it facilities. 
The additional period shall computed in proportion of the cost of the expansion or pgrade in 
After the expiration of the income tax holiday, TEZA registered enterprises shall also i 
e entitled, 
relation to the total assets of the enterprise. 
in lieu of all national and local taxes, a tax on gross income at a rate of two percent to three 
percent (2 to 3%), depending on the amount of investment and the number of persons 
employed. The Department, together with the BIR, will promulgate the necessary rules for the 
implementation of this provision. 
One-third of the proceeds of such a tax shall be remitted to the affected local governments, 
communities one-sixth to Tourism Philippines, one-sixth to TEZA, and one-sixth shall be 
remitted to the national government. The remaining one-sixth shall be placed in a special fund 
to be used specifically for the preservation of the local culture, heritage sites and the 


environment in or around the TEZ. 
TEZ regisgred enterprises shall be entitled to avail of preferential rates for power, water and 
other public utilities for industrial consumers. 
SECTION 55. Remittance of Foreian Exchancie. Without prior Bangko Sentral approval, after 
tax profits and other earnings of foreign investments in enterprises in the Zone may be remitted 
outward in the equivalent foreign exchange through any of the banks licensed by the Bangko 
Sentral ng Pilipinas inithe TEZ provided such foreign investments in said enterprises have been 
previously registered with the Bangko Sentral. 
SECTION 56. Lease of Land. Consistent with the provisions of the Investor' 
- 
.- . 
(Republic Act No. 7652), lands and buildings in each TEZ may be leased to 
a period not exceeding fifty (50) years, renewable once for a period of not more 
(25) years. The leasehold right acquired under long-term contracts may be 
assigned, subject to the conditions set forth under the Investor's Lease Act. 
SECTION 57. Restoration of, Cultural Heritacie. The cost of restoring material cultural heritage 
within a TEZ in accordance with rules and regulations issued by the National Historical Institute 
shall be a fully deductible expense. Likewise, income derived by construction enterprises from 
such restoration activities shall be tax-exempt. 
SECTION 58. Visa Privileaes. Any investor within the a TEZ whose initial investment shall not 
be less than one hundred thousand dollars, and hidher spouse and dependent children under 
twenty-one years of age shall be granted permanent resident status. 
The TEZA shall issue working visas renewable every two years to foreign executives and other 
aliens, possessing highly-technical skills which no Filipino within the TEZ possesses, as certified 
by the Department of Labor and Employment. The names of aliens granted permanent resident 
status and working vis,as by the.TEZ shall be reported to the Bureau of Immigration within thirty 
days after issuance thereof. 
MISCELLANEOUS PROVISIONS 
SECTION 59. Tourism Coordinatinci Council. A council shall be formed consisting of the 
Department Secretary, as chairman, his undersecretaries, the TEZA Administrator, the Chief 
Operating Officer of Tourism Philippines, the Tourism Industries Congress representatives on 
the Boards of Tourism Philippines and TEZA, the heads of other attached agencies, the 
Secretaries of the Departments of Transportation and Communication (DOTC), Public Works 
and Highways (DPWH), Foreign Affairs (DFA), Environment and Natural Resources (DENR), 
Education (DepEd) and Interior and Local G,overnment (DILG), Labor and Employment (DOLE) 
and the heads of the Philippine National 'Police (PNP) and Bureau of Immigration (81) and such 
other government agencies that the President may designate, that shall serve as a coordinating 
body for national tourism_development 
..- . 
efforts. 
SECTION 60. The Tourism Industries Conaress. Tourism related industries, and such other 
service providers as the Department Secretary may define and designate, shall form a Tourism 
Industries Congress (TRICON) under such terms and conditions as they may agree upon, that 
shall serve as the private sector consultative body to assist the government in the development, 
implementation and coordination of Philippine tourism policy. 
Tourism related industries consist of, but are not limited to, the following establishments or 
service providers: tour operators, tourist transport operators, whether of land, sea or air 
transportation, tour guides, mountain/cave guides, professional convention organize s; hotels, 
resorts, apartelles, tourist inns, motels, pension houses, restaurants, shops & d partment 
stores, sports & recreational centers, spas, museums & galleries, foreign exchang dealers, 
homestay sites, theme parks, convention centers and zoos. The Department Secr tary may 
designate other industries, establishments or service providers as part of the TRICON. 
SECTION 61. Civil Aeronautics Board. Realizing the critical importance aviation plays in the 
tourism industry, the Department Secretary shall ,be designated as ex-officio vice-chairman of 
the Civil Aeronautics Board. 
~. 
i 


SECTION 62. 
Manila International Airport Authority. 
Realizing the critical importance 
international airports play in, increasing fast and friendly access by international tourists, the 
Department Secretary shall be designated ex-officio vice-chairman of the Manila International 
Airport Authority. 
SECTION 63. Incentives for Accredited Non-TEZ Tourism lndustrv Enterprises and Services. 
Accredited tourism industry enterprises and services not registered with the TEZA shall be 
entitled to%ail of preferential rates for power, water and other public utilities for industrial 
consumers. 
Accommodation establishments shall be entitled, for purposes of taxation, to fully deduct the 
cost of major expansions, renovations and upgrading of facilities. 
SECTION 64. 
Education. ' The Department shall work closely with the DepEd for the 
development of educational :programs for the primary and secondary educational levels that 
assist in the creation of a culture of tourism, specifically through the enhancement of education 
The Department shall also work closely,with the Commission for Higher Educ tion in the 
regulation of colleges, and universities that grant undergraduate and postgraduat degrees in 
in languages, history and culture. 
tourism. 
The Technology and 
~ Skills 'Manpower Development Administration is hereby mandated to 
develop programs, in conjunction with the Department, for the training of tourism entrepreneurs 
by providing programs for languages, history and cultural appreciation, and small business 
management. 
SECTION 65. Government Banks and Financial Institutions. Insofar as allowed by applicable 
laws and their respective charters, government owned and controlled banks and financial 
institutions should provide microfinance schemes for the assistance and development of 
entrepreneurial enterprises in ,the tourism industry. 
SECTION 66. Visa Privileqes for Tourists. In view of the urgent need to make the Philippines a 
more tourist-friendly destination, the. Department and the DFA are hereby directed to jointly 
promulgate rules creating a liberalized system for granting tourist visas within six months from 
the effectivity of this Act, taking into particular consideration the fees charged, the periods 
granted, and the procedures undertaken. 
SECTION 67. No lniunctions Clause. No ,temporary restraining order or preliminary injunction 
shall be issued or be effective against the TEZA unless the same is issued by the Supreme 
Court of the Republic of the Philippines. 
SECTION 68. Local Governments. In view of the urgent need to develop a national strategy for 
tourism development within a framework for decentralized governance, the Department and 
local governments shall work closely for tourism development. 
The Department shall regulate and prescribe standards for the operation of tourism industry 
enterprises and services. No local government unit shall allow the operation of a tourism 
industry enterprise or sepice within its territory unless such operation is consistent with the local 
government3 tourism development plans, and that such enterprise or service has obtained a 
certification from the Department that such enterprise or service is reasonably needed in the 
context of the national tourism developmental plans. The Department may require that every 
tourism industry enterprise or service post a bond for the performance of functions in 
accordance with prescribed standards. 
Each and every province and city shall have d tourism officer who shall coordinate with the 
proper Department regional office for the preparation of strategic tourism development plans. 
Municipalities seeking to develop tourism in their areas may have a tourism officer who shall 
in the enforcement of tourism laws, rules and regulations. 
1 
coordinate with the provincial tourism officer in the preparation of strategic tourism d 
plans. Local government tourism officers shall work closely with the Department 


The Department shall develop support and trming programs to enhance the capacities and 
capabilities of local governments to monitor and administer tourism activities, and enforce 
tourism laws, rules and regulations in their respective jurisdictions. 
Except as herein provided, local government units the territorial jurisdictions of which comprise, 
overlap, embrace or include a TEZ shall retain their basic autonomy and identity. The cities 
shall be governed by their respective charters and the municipalities shall operate and function 
in accordance with Republic Act No. 7160,iothet~ise known as the Local Government Code of 
1991. 
SECTION 69. 
Relationship with Economic Zones. 
The Department and the DTI shall 
promulgate rules and regulations to govern the relationship between TEZs created under this 
Act, and economic zones created under Republic Acts No. 7227 or 7916, as amended, where 
the area comprising ti TEZ overlaps, falls1 within or encompasses that of an economic zone, 
provided, that such rules and regulations shall consider the special nature and requirements of 
tourism in relation to other industries, establishments and operations in economic zones. 
SECTION 70, Other Investment Incentives. Tile investment incentives offered under this Act 
shall be without prejudice to the availment of other incentives provided under other laws, 
decrees, presidential issuances. 
However, where such other laws, decrees or issuances 
provide. for similar or identical benefits, the beneficiary may only elect to avail of the benefit 
provided under one particular law, decree or issuance. 
SECTION 71. lmplementina Rules and Reaulations. The Secretary of Tourism sh II have the 
SECTION 72. Conaressional Oversiqht. T,he Senate and House Committees on T urism shall 
power to issue rules and regulations to implement this Act. 
exercise oversight functions over the implementation of this Act. 
SECTION 73. Repealinu Clause. 
Presidential Decree No. 189, as amended, creating the 
Philippine Tourism Authority, Presidential Decree No. 1448, as amended, creating the Philippine 
Convention and Visitors Corporation, and Presidential Decree No. 161 6, as amended, creating 
the lntramuros Administration, are hereby ,repealed. The provisions of Executive Orders No. 
292 (The Administrative Code, of 1987, as amended), the Labor Code (Presidential Decree No. 
442, as amended), the Local Government Cod- (Republic Act No. 7160), Executive Order No. 
30 of 1963 and Executive Order No. 358 of 1996, and all other laws, presidential decrees, 
executive orders, proclamations and administrative regulations inconsistent with the provisions 
of this Act are hereby amended, modified, superseded or repealed accordingly. 
SECTION 74. SeDarabilitv Clause. In the ievent that any provision of this Act or parts thereof 
be declared unconstitutional, such declaration shall not affect the validity of the other provisions. 
SECTION 75. Effectivitv Clause. This Act shall take effect one month after the completion of its 
publication in a newspaper of general circulation. 
Approved, 
1