.... 
FOURTEENTH CONGRESS OF THE ) 
First Regular Session 
Introduced by Senator Richard J. Gordon 
, :*. , 
EXPLANATORY NOTE 
The Philippines is wealthy beyond imagining, in the richness of its history, culture 
and natural environment. But what have 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 fastest and most efficient way of generating foreign 
exchange, investments and employment. Tourism is an engine of growth that can empower 
our economy to alleviate the poverty of the Filipino people. Yet we have done too little to 
make tourism the centerpiece of the Philippine economy. 
We have lagged far behind our neighbors in tourism. In 2001, Thailand and 
Malaysia had visitors in excess of 10 million, while Indonesia and Singapore had more than 
5 million. Even Vietnam, a country ravaged by war and held back by a communist 
economy, surpassed the 2 million mark. Our nation, on the 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 if we increase our tourist 
arrivals from 2 million to 10 million? How much cash will be generated, capital liberated, 
money invested and jobs created? How may Filipinos can be lifted up out of poverty? We 
do so much to encourage foreign investment in industry. But most, if not all, the money 
these investors make is sent back out to their countries. With tourism, however, we will be 
bringing the money in, and it will stay in. 
Tourism is the largest industry in the world, with 700 million tourists a year, 
collectively spending hundreds of billions of dollars. We have been blessed by the 
accidents of fortune with resources to make us competitive in 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 /o change the philosophy of government toward tourism, and to 
create the necgssay p?litical 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 'obs for Filipinos during her term as the Chief Executive. 
'i 
I 
' RICHARD J. GORDON 
Senator 


., 
, I  I 
-. , 
! '!;",fE 
,1. 
..b,.. 
.. 
. . .~ 
SECfa 
FOURTEENTH CONGRESS OF THE ) 
Firsf Regular Session 
SENATE 
Introduced by Senator Richard J. Gordon 
AN ACT DECLARING A NATIONAL POLICY FOR TOURISM AS AN ENGINE 
OF INVESTMENT, EMPLOYMENT, GROWTH AND NATIONAL DEVELOPMENT, 
REORGANIZING THE DEPARTMENT OF TOURISM AND ITS ATTACHED 
AGENCIES TO EFFECTIVELY AND EFFICIENTLY IMPLEMENT THAT POLICY, 
PROVIDING NECESSARY INCENTIVES FOR INVESTMENT AND 
APPROPRIATING FUNDS THEREFOR 
Be it enacted by fhe Senafe and fhe House of Representatives of the Philippines in Congress 
Assembled: 
1 
2 
3 
4 
5 
6 
I 
8 
9 
10 
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
CHAPTER I. GENERAL PROVISIONS 
SECTION 1. Short Title. - This Act shall be known as "The Tourism Act of 2007". 
SEC. 2. Declaration of Policy. - The State declares tourism as an indispensable element 
of the national economy and an industry of national interest and importance, which must be 
harnessed as an engine of socio-economic growth and cultural affirmation to generate investment, 
foreign exchange and employment, and to continue to mold an enhanced sense of national pride 
for all Filipinos. 
Towards this end, the State shall develop the country as a prime tourist hub in Asia, as well 
as a center of world congresses and conventions, by promoting tourism anchored principally on the 
country's history, culture and natural endowments. The State shall further encourage agri-tourism 
for countryside development and preservation of rural life. 
The State shall further promote a focused, sustainable, responsible and participative tourism 
that is ecologically and culturally sensitive, economically viable, and ethically and socially equitable 
for local communities. 
SEC. 3. Definition of Terms. - The following terms, as used in this Act, are defined as 
follows: 
a. "Department" refers to the Department of Tourism created pursuant to Presidential Decree 
No. 189, as amended; 
b. "Secretary" refers to the Secretary of Tourism: 
c. "Department of Budget and Management" (DBM) refers to the government agency created 
pursuant to Executive Order No. 292 (1987); 
1 


1 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
1s 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
d. 
e. 
f. 
g. 
h. 
i. 
j. 
k. 
1. 
m 
n. 
0. 
P. 
4. 
"Department of Environment and Natural Resources" (DENR) refers to the government 
agency created pursuant to Executive Order No. 192 (1986); 
"Department of Finance" (DOF) refers to the government agency created pursuant to 
Executive Order No. 127, (1986) as amended; 
"Duty Free Philippines" (DFP) refers to the government agency created pursuant to 
Executive Order No. 46 (1986); 
"Duty Free Philippines Corporation" (DFPC) refers to the corporate entity created out of 
DFP pursuant to this Act; 
"Philippine Conventions and Visitors Corporation" (PCVC) refers to the corporate entity 
created pursuant to Presidential Decree No. 867, as amended; 
"lntramuros Administration" (IA) refers to the government agency created pursuant to 
Presidential Decree No. 1616: 
"Philippine Retirement Authority" (PRA) refers to the government agency created pursuant 
to Executive Order No. 1037 (1985); 
"Tourism Enterprise Zone Authority" (TEZA) refers to the government agency created 
pursuant to this Act; 
"Zone" refers to a Tourism Enterprise Zone created pursuant to this Act; 
"Zone Operator" refers to a Tourism Enterprise Zone Operator; 
"Registered Enterprise" shall refer to an enterprise located within a Zone that is duly- 
registered with the TEZA; 
"Philippine Tourism Authority" (PTA) refers to the existing implementation arm of the 
Department of Tourism created pursuant to Presidential Decree No. 189, as amended; 
"Tourism Philippines" (TP) shall refer to the body corporate created under this Act; 
"Tourism enterprises" shall refer to facilities, services and attractions involved in tourism, 
such as, but not limited to: travel and tour services; tourist transport services, whether for 
land, sea or air; tour guides; adventure sports services, involving such sports as 
mountaineering, spelunking, scuba diving, and other sports activities of significant tourism 
potential; convention organizers; accommodation establishments, including but not limited 
to hotels, resorts, apartelles, tourist inns, motels, pension houses, home stay operators; 
tourism estate management services, restaurants, shops and department stores, sports 
and recreational centers, spas, museums and galleries, theme parks, convention centers 
and zoos; 
2 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
r. 
"Primary tourism enterprises" shall refer to travel and tour services; land, sea and air 
transport services exclusively for tourist use; accommodation establishments; convention 
and exhibitions organizers; tourism estate management services; and such other 
enterprises as may be identified by the Secretary, after due consultation with concerned 
sectors; 
s. 
"Secondary tourism enterprises" shall refer to all other tourism enterprises not covered by 
the preceding subsection: 
t. 
"Affected local government unit" shall refer to a province or city that has a Zone, or part 
thereof, within its territorial jurisdiction; 
U. "Greenfield Tourism Zone" refers to a new or pioneer development, as determined by the 
TEZA and 
v. "Brownfield Tourism Zone" refers to an area with existing infrastructure or development as 
determined by the TEZA. 
CHAPTER II. TOURISM GOVERNANCE 
Subchapter 11-A. Structure of the Department 
SEC. 4. Mandate. - The Department of Tourism, hereinafter referred to as the Department, 
shall be the primary planning, programming, coordinating and implementing government agency in 
the development of the tourism industry, both domestic and international, in coordination with 
attached agencies, and other government instrumentalities. 
SEC. 5. Powers and Funcfions. - The Department shall have the following powers and 
functions: 
a. 
b. 
C. 
d. 
e. 
f. 
Formulate tourism policies, plans, and projects; 
Supervise and coordinate the implementation of tourism policy, plans and projects; 
In coordination with local governments, delegate to regional offices specific powers 
and functions in the implementation of tourism policies, plans and projects; 
Communicate to the President, the heads of departments, agencies and 
instrumentalities of government, the impact upon tourism and the economy of 
proposed governmental actions; 
Represent the Government in all domestic and international conferences, and in all 
multilateral or bilateral treaties and international agreements, concerning tourism, and 
ensure government's implementation and compliance with all obligations arising 
therefrom; 
Effect the removal of unnecessary barriers to travel, the integration and 
simplification of travel and tourist transport regulations, and ensure their efficient, fair 
and courteous enforcement to assure expeditious and hospitable reception of all 
3 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
g. 
h. 
I .  
i. 
k. 
I. 
visitors; 
Issue timely advisories on the safety or viability of travel to particular places within 
the Philippines; 
In cooperation with appropriate government agencies and the private sector, support, 
advance and promote the protection, maintenance and preservation of historical, 
cultural and natural endowments; 
In consultation with the private sector, formulate and promulgate rules and regulations 
prescribing standards for the operation of tourism enterprises in accordance with the 
highest relevant international standards; 
Accredit and classify tourism enterprises, create standards for accreditation, and 
impose reasonable penalties for violations of, or failure to obtain accreditation, 
including recommending to the local government unit concerned the suspension or 
prohibition of operation of a tourism enterprise, to maintain and improve standards of 
operation and service; 
Ensure the proper coordination, integration, prioritization and implementation of local 
government tourism development plans with that of the national government; 
Receive and investigate complaints concerning tourism enterprises, and act on such 
complaints to properly implement the provisions of this Act; 
m. Collect necessary fees and charges for the proper implementation of tourism policies, 
plans and projects; and 
n. Exercise such other powers and functions as are necessary or incidental to the 
implementation of this Act. 
SEC. 6. Structure of the Department. - The Department shall consist of the Department 
Proper, Department Services, Bureaus and Offices and the Department's Regional Offices. 
SEC. 7. Department Proper. - The Department Proper shall consist of the offices of the 
SEC. 8. Office of the Secretafy. - The Office of the Secretary shall consist of the Secretary 
secretary, undersecretaries and assistant secretaries. 
and hislher immediate staff. 
SEC. 9. Undersecretaries and Assistant Secretaries. - The Secretary shall be assisted by 
three (3) Undersecretaries, namely: 
a, 
Undersecretary for Tourism Development, who shall be responsible for the Bureau of 
Tourism Development Planning and Bureau of Tourism Coordination. 
b. 
Undersecretary for Tourism Regulation, who shall be responsible for the Bureau of 
Tourism Standards, Regulations and Industry Manpower Development, and all Regional 
Offices; and 
4 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
C. 
Undersecretary for Department Services. 
There shall be at least three Assistant Secretaries to be appointed by the President. 
SEC. IO. Depan'ment Services. - The Department Services shall consist of a financial and 
management service, an administrative affairs service, and a legal affairs service. 
SEC. 11. Financial and Management Service. - The Financial and Management 
Service shall provide the Department with staff advice and assistance on budgetary, financial and 
management matters and shall perform such other related functions as may be assigned or 
delegated to it by the Secretary. 
SEC. 12. Administrative Affairs Service. - The Administrative Service shall provide the 
Department with staff advice and assistance on personnel information, records, communications, 
supplies, equipment, collection, disbursements, security, other custodial work and such other 
related duties and responsibilities as may be assigned or delegated to it by the Secretary. 
SEC. 13. Legal Affairs Service. - The Legal Affairs Service shall provide the Department 
with staff advice and assistance on all legal matters affecting the Department and perform such 
other related functions as may be assigned or delegated to it by the Secretary. 
SEC. 14. Bureau of Tourism Development Planning. - Recognizing the value of national 
tourism development planning, the Bureau of Tourism Development Planning shall have the 
following functions: 
a. Prepare a National Tourism Development Plan identifying geographic areas with potential 
tourism value, outlining approaches to developing such areas: 
b. Provide continuing research and statistical analysis on the social and economic impact, 
market and competition, standards and ethics of tourism, and such other data as necessary 
basis for tourism policies and programs; 
c. Formulate, in coordination with local government units, local tourism development plans 
which are consistent with the National Tourism Development Plan; and 
d. d. Monitor and evaluate the implementation of plans and programs of the Department and 
of the local government units. 
SEC. 15. 
Bureau of Tourism Coordination. - Recognizing that increased linkages are 
necessary between various government offices and the private sector to properly implement 
tourism policy, the Bureau of Tourism Coordination shall have the following functions: 
a. 
Assist in the coordination with national government agencies, local government units, 
non-governmental organizations, and other private entities for the development and 
implementation of the national tourism plans and policies: 
Call upon the assistance and support of any or all of the government agencies in the 
implementation of the policies of the Department; and 
b. 
5 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
c. 
Support the private sector in all tourism activities requiring governmental coordination. 
SEC. 16. Bureau of Tourism Sfandards, Regulations and lndustry Manpower Development. - 
Recognizing the need for internationally competitive standards of facilities and services, the Bureau 
of Tourism Standards, Regulations and Industry Manpower Development shall have the following 
functions 
a. 
b. 
C. 
d. 
e. 
f. 
9. 
Formulate and enforce standards for the operation and maintenance of tourism 
enterprises, prescribing minimum and progressive levels of operating quality and 
efficiency consistent with local and international standards; 
Coordinate with relevant tourism enterprise associations, including adventure sports 
associations, in the formulation of rules and regulations, accreditation, and 
enforcement; 
Develop and enforce a comprehensive system of mandatory accreditation for primary 
tourism enterprises, and voluntary accreditation for secondary tourism enterprises, in 
accordance with prescribed guidelines and standards; 
Establish a system of registration, information, linkage, and mutual assistance among 
accredited tourism enterprises to enhance the value of accreditation and improve the 
quality of service rendered by such enterprises; 
In coordination with appropriate government agencies, conduct seminars on Philippine 
history, culture, environment and related subjects; 
Develop training courses and apprenticeship programs for tourist guides, and other 
similar workers jointly with concerned tourism enterprises; and 
Provide technicai assistance, training and education programs to local governments, 
tourism enterprises, and other entities to improve the quality tourism services. 
SEC. 17. Regional Offices. - The Department shall establish, operate and maintain a 
Regional Office in each of the administrative regions of the country. A Regional Office shall be 
headed by a Regional Director and shall, within its administrative region, have the following 
functions: 
Implement and enforce laws, policies, plans, programs, rules and regulations of the 
Department, particularly those relating to the accreditation of tourism enterprises 
promulgated by the Department. 
Coordinate with regional offices of other departments, bureaus, and agencies, local 
government units, non-governmental organizations, and the regional offices of the 
Department's attached agencies in the implementation of such laws, policies, plans 
programs and rules and regulations. 
Together with local government units, establish such tourist information and assistance 
a. 
b. 
c. 
6 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
centers at strategic locations as are necessary to assist tourists and tourism enterprises. 
Subchapter 11-B. Rationalization of Functions 
SEC. 18. Reorganizafion of Offices. - The Philippine Tourism Authority (PTA) is hereby 
reorganized as the Tourism Enterprise Zone Authority, as hereinafter provided. The Philippine 
Conventions and Visitors Corporation (PCVC) is hereby reorganized as Tourism Philippines, as 
hereinafter provided. 
The Bureaus for Domestic and International Tourism Promotions, and the Offices of Tourism 
Information and Product Development of the Department are hereby absorbed into Tourism 
Philippines. 
SEC. 19. Human Resources. -Where certain functions are declared redundant on account 
of the reorganization, the Department, the TEZA Board, and the Tourism Board shall provide for the 
reassignment, insofar as practicable, of affected employees to similar positions within the 
Department and its attached agencies, taking into consideration their skills and experience, without 
loss of seniority or other rights and privileges. In any case, all relevant laws, decrees, executive 
orders, rules and regulations concerning the rights of government employees in the reorganization 
of an office shall be respected. 
SEC. 20. Rationalization of Assets. - The assets and liabilities of the Philippine Tourism 
Authority shall be held in trust and managed by a special committee composed of the Secretaries 
of Tourism, Budget and Management, and Finance. Within one hundred and twenty (120) days 
from the effectivity of this Act, the committee shall prepare a report identifying all the assets of the 
Philippine Tourism Authority, indicating their values, and recommendations on the proper 
disposition of those assets. 
When economically feasible and financially viable, assets may be assigned to the TEZA for 
sale, lease andlor development into Zones, as hereinafter provided. 
SEC. 21. Retirement and Separation Compensation. - Should any employee be separated 
from government service on account of the reorganization of the Department, said employee shall 
be entitled to claim such separation pay, retirement benefits, or such other benefits provided by 
law, decree or executive order. 
SEC. 22. Foreign Field Offices. -The operation and supervision of foreign field offices of the 
Department of Tourism shall be transferred to Tourism Philippines. 
Subchapter Il-C. Attached Agencies and Corporations 
SEC. 23. Attached Agencies. - Tourism Philippines and the Tourism Enterprise Zone 
Authority created herein shall be attached tu the Department and shall be under the supemision of 
the Secretary for program and policy coordination. Furthermore, the following agencies and 
corporations shall be attached to the Department under the supervision of the Secretary for 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
program and policy coordination: the Duty-Free Philippines Corporation as hereinafter provided; 
the lntramuros Administration; the National Parks Development Committee, created under 
Executive Order No. 30 (1963); the Nayong Pilipino Foundation, created under Presidential Decree 
No. 37, as amended; and the Philippine Retirement Authority. Except as hereinafter provided, each 
of the attached agencies shall continue to operate under their respective charters. 
SEC. 24. Duty-Free Philippines Corporation. -The Duty Free Philippines System shall be 
reorganized as a body corporate to be known as Duty-Free Philippines Corporation (DFPC), 
which shall operate the duty and tax free merchandising system 
for tourists and generate 
foreign exchange for the Philippines. 
Duty-Free Philippines Corporation shall have the exclusive authority to operate, or to 
contract out the operation of, stores and shops that would sell, among others, tax and duty-free 
merchandise, goods and articles, in international airports and seaports, and in tourism enterprise 
zones throughout the country, in a manner that: 
1, 
2. 
3. 
Is competitive with international standards; 
Effectively showcases Philippine culture, craftsmanship and industry; and 
Efficiently and effectively generates foreign exchange. 
The Duty Free Philippines Corporation and the operation of the duty free stores 
and shops shall always remain in government control and shall not be bidded out to 
private parties, except as provided for in Republic Act No. 6768, as amended, "An 
Act Instituting A Balikbayan Program". Such merchandise, goods and articles shall 
be sold only to departing persons for their consumption abroad. 
Such merchandise, goods and articles shall only be sold to persons 
departing for abroad. Under such limitations, rules and regulations that may be 
provided by the Department of Tourism and concurred in by the Department of 
Finance, such merchandise, goods and articles may be sold passengers arriving into 
the Philippines from abroad. 
In the performance of its functions, Duty-Free Philippines shall have all the 
general powers of a corporation established under the Batas Pambansa Big. 68, the 
Corporation Code in furtherance of its Charter. 
a. 
b. 
Duty-Free Philippines shall be governed by a Board of Directors composed as 
follows: 
1. The Secretary of Tourism as Chairman; 
2. The General Manager of Duty-Free Philippines as Vice-chairman; 
3. The Chief Operating Officer of Tourism Philippines; 
4. The Administrator of Tourism Enterprise Zone Authority; and 
8 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
5. Four persons appointed by the President with recognized competence in 
The General Manager shall be appointed by the Secretary of Tourism to 
implement the plans, programs and policies of the Board of Directors. Helshe 
must have recognized competence in business management, marketing, finance, 
tourism and related fields. 
business management, marketing, finance, tourism and related fields. 
c. The properties, assets and funds currently being utilized by the present Duty-Free 
Philippines system shall be considered as the capitalization of the new corporate 
entity. 
d. Consistent with the nature of its operations and primary function to operate as a tax 
and duty free merchandising system, and to enable it to compete in the international 
tax and duty free market, DFPC shall be entitled to the following tax exempt 
privileges: 
1. Duties and taxes, including excise and VAT, relative to the importation of 
merchandise for sale: 
2. Local taxes and fees imposed by the local government units; and 
3. Income Taxation. 
SEC. 25. lntramuros Administration. - In order to fully implement the mandate of the 
lntramuros Administration under Presidential Decree No. 161 6, as amended, the area delineated 
as the lntramuros is hereby declared as a Tourism Enterprise Zone and the lntramuros 
Administration its Zone operator, under the supervision of the TEZA. The delimitations of the 
lntramuros may be modified by executive order, upon recommendation of the TEZA. 
Philippine Retirement Authority. - For purposes of policy and program 
coordination, the Philippine Retirement Authority is hereby attached to the Department and placed 
under the supervision of the Secretary. The Secretary shall be ex-officio Chairman of its Board of 
Trustees. 
SEC. 26. 
SEC. 27. Philippine Commission on Sports Scuba Diving. - The Philippine Commission on 
Sports Scuba Diving is hereby abolished and, to insure more stringent monitoring, its functions 
shall be hereby assumed by the Bureau of Tourism Standards and Manpower Development. 
Subchapter Il-D. Control and Supervision of Areas of 
Overlapping Jurisdictions 
SEC. 28. Rationalization of Tourism Zones, Areas and Spots. - Any jurisdiction over any 
tourism zone, area or spot previously vested by law, executive order or presidential decree on the 
PTA or any other national government agency shall be vested in the Department. 
In the interest of efficiency in supervision and in recognition of local autonomy, within one 
9 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
11 
18 
19 
20 
21 
22 
23 
24 
25 
26 
21 
28 
29 
30 
31 
32 
33 
34 
35 
year from the effectivity of this Act, the Department, through appropriate agreements, may transfer 
control over a tourism zone, area or spot, or a portion thereof, to another agency or office of the 
government, or to a local government unit. 
Within ninety (90) days from the transfer of control, the relevant agencies, offices or local 
government units shall prepare comprehensive plans for the use, development, preservation and 
promotion of all tourism zones, areas, or spots, in a manner consistent with the tourism master 
plan. Such plans shall be subject to the approval of the Department. 
The Department shall exercise supervisory powers over such agency, office or local 
government unit in accordance with the terms of the agreement of transfer, or the development 
plan of the zone, area or spot. Where a national government agency or a local government unit 
fails to implement the comprehensive plan approved by the Department, the Department may, after 
due notice and hearing, revoke the agreement transferring control over the tourism zone, area or 
spot. 
SEC. 29. National Integrated Protected Areas System and the National Eco-tourism Policy, 
- Within one year from the effectivity of this Act, the Department and the Department of 
Environment and Natural Resources (DENR) shall identify areas covered by the National 
Integrated Protected Areas System with ecotourism potential and prepare comprehensive plans for 
the use, development, preservation and promotion of these areas subject to prior environmental 
impact assessments, When practicable, and with the concurrence of the DENR, the Protected 
Area, or portions thereof, and areas currently covered by the Ecotourism Policy proclaimed under 
Executive Order No. 111 (1999), may be organized as Zones under the supervision of the TEZA, 
as hereinafter provided. 
Subchapter Il-E. Shared Responsibilities of National and 
Local Governments 
SEC. 30. Coordination between National and Local Governments. - In view of the urgent 
need to develop a national strategy for tourism development while giving due regard for the 
principle of local autonomy the Department and the local governments shall integrate and 
coordinate local and national plans for tourism development. The Department shall provide 
financial and technical assistance, training and other capacity-building measures to local 
governments for the preparation and implementation of tourism development plans, giving due 
priority to areas that have been identified as strategic in the implementation of the national tourism 
development plan. Local governments shall endeavor to implement such plans. 
Tourism 
Philippines shall prioritize promotion and development assistance for local governments that 
successfully adopt and implement their tourism development plans. 
SEC. 31. Local Tourism Development Planning. - Local governments are encouraged to 
10 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
utilize their powers under the local Government Code to ensure the preparation and 
implementation of a tourism development plan. They shall, insofar as practicable, draft tourism 
development plans that integrate zoning, land use, infrastructure development, the national system 
of standards for tourism enterprises, heritage and environmental protection imperatives in a 
manner that encourages sustainable development. 
SEC. 32. National TOUriSm Development Planning. - The Department of Tourism, in 
coordination with its attached agencies and local government units, shall continously update the 
existing national tourism development plan in view of evolving needs and capabilities of local 
governments and the domestic and global tourism market. 
SEC. 33. Reports. - Every provincial or city local government unit shall periodically report 
to the Department on the status of tourism, plans and programs, tourist arrivals, and tourism 
enterprises, among others, within their jurisdictions. 
SEC. 34. Accreditation. - In order to encourage global competitiveness, strengthen data 
gathering and research on tourism, as well as facilitate the promotion of individual enterprises and 
the industry as a whole, primary tourism enterprises shall be periodically required to obtain 
accreditation from the Department as to the quality of their facilities and standard of services. 
accreditation shall be voluntary for secondary tourism enterprises. 
Under such a system of accreditation, the Department shall evolve a system of standards 
for such enterprises that adheres, insofar as practicable, to those recognized internationally. 
The Department shall act on complaints regarding accredited tourism enterprises, and after 
notice and hearing, may impose fines, downgrade, suspend or revoke accreditation for violation of 
the terms of accreditation. 
When an enterprise fails to obtain or loses accreditation, the National Government shall 
notify the relevant local government to take appropriate action in relation to an enterprise’s 
licenses and permits to operate. 
The Department may, under such relevant terms and conditions stipulated, delegate the 
enforcement of the system of accreditation to local governments that have adopted and 
successfully implemented their tourism development plan. 
SEC. 35. Local Government Capabilities Enhancement. - The Department shall develop 
support and training 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, Funding for such programs shall be shared between the Department and 
the local government. 
SEC. 36. Value ofAccreditation. - The Department shall develop a system that enhances 
the value of accreditation among primary and secondary tourism enterprises. Accredited 
11 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
21 
28 
29 
30 
31 
32 
33 
34 
35 
enterprises shall be preferred in promotional, training and other programs of the Department and 
its attached agencies. 
Accredited enterprises shall, insofar as practicable, in obtaining relevant services, give due 
preference to other accredited enterprises. 
The Department shall develop an integrated system of accreditation with government 
agencies and instrumentalities that independently accredit tourism and other enterprises in order to 
reduce the regulatory and financial burden on the private sector. 
CHAPTER Ill. TOURISM MARKETING AND PROMOTIONS 
Subchapter Ill-A Tourism Philippines 
SEC. 37. Tourism Philippines. - Under the supervision of the Secretary and attached to the 
Department for purposes of program and policy coordination shall be a body corporate known as 
Tourism Philippines. 
SEC. 38. Mandate. - Tourism Philippines shall be responsible for marketing and promoting 
the Philippines domestically and internationally as a major global tourism destination, highlighting 
the uniqueness of its tourism products, and assisting the development of such tourism products. 
Further, it shall also be responsible for marketing the Philippines as a major convention 
destination in Asia. To this end, it shall take care of attracting, promoting, facilitating, and servicing 
large-scale events, international fairs and conventions, congresses, sports competitions and 
expositions. 
SEC. 39. Board of Directors. - Tourism Philippines shall be governed and its powers 
exercised by a Board of Directors the ("Tourism Board"), composed as follows: 
The Department Secretary, as chairperson; 
The Tourism Philippines Chief Operating Officer, as vice-chairperson; 
The General Manager of Duty-Free Philippines Corporation; 
a. 
b. 
C. 
d. 
e. 
A representative from the Philippine Amusements and Gaming Corporation: 
A representative from the international airport or seaport providing the largest 
contribution to the Tourism Development Fund as provided under Subchapter 111-8, 
Section 49; 
f. One representative each from the League of Cities of the Philippines and the League of 
Provinces of the Philippines; 
g. One representative from the Union of Local Authorities of the Philippines (ULAP); 
h. One representative from the Regional Tourism Councils; and 
i. Eight directors elected by the Tourism Congress as provided below. 
SEC. 40. The Chief Operating Officer, - Tourism Philippines shall have a Chief Operating 
Officer who shall be Filipino with a degree in business, law, tourism, public administration, or 
12 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
relevant fields, and have demonstrated expertise therein. Helshe must have been engaged in the 
managerial capacity for at least five (5) years prior to hislher appointment. The Chief Operating 
Officer shall be elected by a majority of the members of the Tourism Board, and shall serve at its 
pleasure. 
SEC. 41. Elected Directors. - The Tourism Congress as created under Chapter VI, Section 
85 shall elect from among its members the directors to represent the tourism industry, specifically 
the following sectors: 
a. Accommodation enterprises; 
b. Travel and tour services; 
c. Air and sea tourist transport services; 
d. Land tourist transport services; 
e. Conventions and exhibitions organizers; and 
f. Three representatives from other tourism enterprises. 
All directors shall serve terms of two years. These directors must be Filipinos engaged in 
the management of a business in the sectors they represent for at least five years, and must 
remain engaged in business in the sector they have been elected to represent throughout their 
term of office. 
SEC. 42. Powers of Tourism Philippines. -Tourism Philippines shall have all the powers of a 
corporation provided under Batas Pambansa Blg. 68, the Corporation Code. Furthermore, it shall 
also have the following powers: 
Contract loans, indebtedness, credit and issue commercial papers and bonds, in any 
local or convertible foreign currency from international financial institutions, foreign 
government entities, and local or foreign private commercial banks or similar institutions 
under terms and conditions prescribed by law, rules and regulations; 
Execute any deed of guarantee, mortgage, pledge, trust or assignment of any property 
for the purpose of financing the programs and projects deemed vital for the early 
attainment of its goals and objectives, subject to the provisions of the Constitution 
(Article VII, Section 20, and Article XII, Section 2, paragraphs (4) and (5)); 
a. 
b. 
c. 
Receive donations, grants, bequests and assistance of all kinds from local and foreign 
governments and private sectors and utilize the same; 
Extend loans, provide grants and other forms of financial assistance for manpower 
training, heritage preservation, infrastructure development, and other programs of the 
Department; and 
Obtain the services of local and foreign consultants, and enter into contracts locally and 
abroad in the performance of its functions. 
d. 
e. 
13 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
SEC. 43. Meetings offhe Board. -The Tourism Board shall meet at least once a month at the 
Tourism Philippines' principal office unless the Board had previously agreed in writing to meet at 
another location. 
SEC. 44. Internal Structure. - The Tourism Board shall have the power to determine its 
operational and staffing structure in a manner that will allow it to best implement its mandate. 
SEC. 45. Capifalizafion. - From the collections of travel taxes, the national government 
shall set aside an amount of two hundred fifty million pesos (PhP 250,000,000) to capitalize the 
operations of Tourism Philippines. 
SEC. 46. Strategic Marketing Plan. - Tourism Philippines shall draft comprehensive short-, 
medium- and long-term marketing plans for the Philippines as a destination for travel, business and 
investment, particularly tourism investment. It shall coordinate, insofar as practicable, with relevant 
agencies of government and the private sector in the preparation of such plans. 
Such plans shall be duly approved by the Tourism Board. The Chief Operating Officer shall 
ensure that the marketing plans are duly implemented, and shall periodically report to the Tourism 
Board the status of their implementation. Helshe shall also coordinate to ensure that the other 
agencies of government and the private sector which assisted in the preparation of marketing plans 
perform their respective duties under the plans. 
SEC. 47. Foreign and Domestic Promofions Ofices. - In the implementation of its mandate, 
Tourism Philippines shall establish foreign and domestic offices, which shall be responsible in their 
respective areas for marketing and promotions, market research, and such other functions 
delegated by the Board. Each office shall submit periodic reports to both the Tourism Board and 
the Secretary on the performance of its functions. 
Subchapter 111-8 Tourism Promotion and 
Development Fund 
SEC. 48. Tourism Promotion and Development Trust. - The Tourism Promotion and 
Development Trust shall hereby be established from the proceeds of the sale or lease of the assets 
of the Philippine Tourism Authority, The Trust shall be managed by a government-owned bank or 
financial institution selected by the Tourism Board and approved by the President. Said bank or 
institution shall report on a quarterly basis to the Secretary and the Joint Congressional Tourism 
Oversight Committee the status and profitability of the Trust. 
SEC. 49. Tourism Promotion and Development Fund. - The proceeds of the following shall 
be placed in a special Tourism Promotion and Development Fund to finance the activities of 
Tourism Philippines: 
a. 
The investment earnings from the Tourism Promotion and Development Trust; 
b. 
The full amount of travel taxes less the statutory allocation for the National 
14 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
C. 
d. 
e. 
f. 
Commission on Culture and the Arts; 
An appropriation from the national government of not less than five hundred million 
pesos (PHP 500,000,000) annually for at least five years; 
At least 50% of the net income of Duty Free Philippines, in lieu of its statutory 
remittance to the National Government under Republic Act No. 7656; 
At least 25% of net income of the Philippine Amusements and Gaming Corporation, to 
be taken from the share of the National Government under Republic Act No. 7656; 
and 
At least 25% of the net income of international airport and seaports, to be taken from 
the share of the National Government under Republic Act No. 7656. 
In no case shall promotions and marketing activities receive less than fifty percent (50%) 
of the annual utilization of the Fund. Not more than ten percent (10%) of the Fund shall be used for 
all other administrative and operating expenses of Tourism Philippines. The unallocated portion of 
the Fund shall be earmarked by the Tourism Philippines as follows: 
a. 
For use by TEZA in the development of Tourism Enterprise 
Zones: 
b. The Department, to enhance its programs for development planning, 
heritage preservation, and infrastructure development, and manpower training 
including but not limited to scholarships for trainings and courses abroad to enhance 
skills and acquire relevant knowledge and skills, among others, or; 
industry. 
The collections of travel taxes, and portions of the net income of government corporations 
and other enterprises provided under this section due Tourism Philippines shall be remitted directly 
to Tourism Philippines on a quarterly basis. 
SEC. 50. Special Contingency Fund. -At the beginning of each year, ten percent (10%) of 
the allocation for promotions and marketing shall be set aside as a special contingency fund to 
provide Tourism Philippines with sufficient resources to undertake marketing and promotions 
activities to encourage sustained tourism interest in the Philippines in the event of emergencies 
which may adversely affect the tourism industry. The Special Contingency Fund shall only be 
utilized upon a two-thirds vote of all the members of the Tourism Board upon a resolution 
recognizing the existence of an emergency and authorizing the release of the fund. Any balance at 
the end of each year in the Special Contingency Fund shall be returned to the Tourism Promotion 
and Development Fund. 
c. Such other purposes as may contribute to the development of the tourism 
15 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
CHAPTER IV. TOURISM ENTERPRISE ZONES 
Subchapter IV-A Tourism Enterprise Zones 
SEC. 51. Tourism Enterprise Zones. - Any geographic area 
with the following characteristics may be designated as a Zone: 
a. Capable of being defined into one contiguous territory; 
b. With areas of historical and cultural significance, environmental beauty, or existing or 
potential integrated leisure facilities within its bounds or within reasonable distances 
from it; 
c. Having, or potentially having, strategic access through transportation infrastructure, 
and reasonable connection with utilities infrastructure systems; 
d. Possessing sufficient area to be further utilized for bringing in new investments in 
tourism establishments and services; and 
e. Possessing strategic location to catalyze the socio-economic development of 
neighboring communities. 
SEC. 52. Designation. - The designation of a Zone may be proposed to the Tourism 
Enterprise Zone Authority by the national government, city governments, provincial governments 
with the consent of component municipalities, private initiative, or by joint ventures between the 
public and private sectors. 
developmental value to the national economy. 
SEC. 
53, Development P/anning. - Each application for designation as a Zone shall be 
accompanied by a Zone development plan which shall, consistent with principles of economic, 
cultural and environmentally sustainable development, specifically identify: 
Zones shall not proliferate in a manner that diminishes their strategic economic and 
a. 
b. 
C. 
d. 
e. 
f. 
Features which satisfy the requisites for the designation of a Zone enumerated under 
Section 53 of this Chapter; 
Areas for infrastructure development, for investment, and for preservation, as well as 
the kind of development, nature of investment, or the sustainable activities allowed 
within preserved areas, respectively; 
Medium and long-term studies on market trends, and corresponding development 
strategies for the Zone; 
Studies on the economic impact of development within the Zone and in surrounding 
communities; 
Studies on the environmental, cultural and social carrying capacity of the Zone and 
surrounding communities; and 
Design plans for structures which incorporate design and sustainability principles from 
16 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
local architecture and the surrounding environment. 
No Zone shall be designated without a duly approved development plan by TEZA. Any 
deviation or modification from the development plan shall require the prior authorization of TEZA. 
TEZA may cause the suspension of granted incentives, withdrawal of recognition as a Zone 
Operator, as well as impose reasonable fines and penalties, upon Zone Operators and responsible 
persons for any failure to properly implement the approved development plan. 
Lands identified as part of a Zone shall qualify for exemption 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) subject to rules and regulations to 
be crafled by the TEZA, the Housing and Urban Development Coordinating Council and the 
Department of Agrarian Reform. 
SEC. 54. Operation of the Zone. - The Zone proponent shall establish a corporate entity 
to administer the Zone and supervise activities within the Zone. 
The designation of a Zone does 
not vest ownership of the resources therein upon the Zone Operator. Where the Zone Operator 
possesses rights to land or other resources within the Zone, the Zone Operator shall be entitled to 
exercise such rights as allowed by existing laws in a manner consistent with the duly-approved 
development plan as provided above. 
Where rights to land and other resources within the Zone are vested in a private third party, 
the Zone Operator shall encourage the private third party to participate in policy, planning and 
program development and implementation by encouraging their registration as tourism enterprises 
where appropriate, and through the judicious administration of incentives and provision of services. 
Except as herein provided, the local government units which comprise, overlap, embrace or 
include a Zone in their territorial jurisdictions shall retain their basic autonomy and identity in 
accordance with Republic Act No. 7160, the Local Government Code of 1991. 
The government shall encourage, provide incentives, and facilitate private sector 
participation in the construction and operation of the public utilities and infrastructure in and around 
Zones using any of the schemes allowed under the Build Operate and Transfer Law (Republic Act 
No. 6957, as amended). 
Subchapter IV-B. Tourism Enterprise Zone Authority 
SEC. 55. The Tourism Enferprise Zone Aufhorify. - Under the superision of the Secretary 
shall be a body corporate known as the Tourism Enterprise Zone Authority (TEZA). 
SEC. 56, Mandate. - The TEZA shall supervise the cultural, economic and environmentally 
sustainable development of Zones. 
Pursuant thereto, it shall have the sole and exclusive 
jurisdiction to issue permits and licenses for the regulation of commercial activity, and enforce 
environmental and cultural heritage, zoning and traffic, and construction laws within Zones. It shall 
17 


1 
2 
3 
4 
5 
6 
I 
8 
9 
10 
11 
12 
13 
14 
15 
16 
11 
18 
19 
20 
21 
22 
23 
24 
25 
26 
21 
28 
29 
30 
31 
32 
33 
34 
35 
also coordinate with appropriate agencies and government units for the facilitation of investments, 
and the development of communities surrounding or adjoining Zones. 
Tourism enterprises outside of zones shall be governed by the provisions of 
the Local Government Code. The Department shall exercise powers of accreditation over said 
enterprises as provided under this Act. 
SEC. 57. Board of Directors. - The TEZA shall be governed and its powers exercised by a 
Board of Directors ( hereinafter referred to as the “TEZA Board), composed as follows: 
a. The Department Secretary, as chairperson; 
b. The Administrator of the Tourism Enterprise Zone Authority, as vice-chairperson; 
c. The Undersecretary for Tourism Development; 
d. A representative from the Department of Environment and Natural Resources; 
e. A representative from the Department of Labor and Employment; 
f. A representative from the Department of Trade and Industry; 
g. A representative from the Department of the Interior and Local Government; 
h. One representative each from the League of Cities of the Philippines and the League 
of Provinces of the Philippines; 
i. The chairperson of the National Commission of Culture and the Arts; and 
j. 
Five directors elected by the Tourism Congress as provided below. 
SEC. 58. Administrator. - The TEZA Administrator must be a Filipino with a bachelor’s 
degree in business, law, tourism, public administration, urban planning, or other relevant fields, and 
have demonstrated expertise therein. Helshe must have been engaged in a managerial capacity 
for at least five (5) years prior to hislher appointment. Helshe shall be appointed by the President 
and shall have a term of office of five (5) years. 
SEC. 
59, Directors Elected by the Tourism Congress. - The Tourism Congress shall elect 
directors to represent each of the following sectors: 
a. 
Tourism estate managers; 
b. 
C. 
d. 
These directors must be Filipinos engaged in management in the sectors they represent for 
at least five years, and have recognized expertise in their respective sectors. These directors shall 
serve terms of four years. 
SEC. 
60. Meetings of the Board. - The TEZA Board shall meet at least once a month at the 
TEZA‘s principal office unless the TEZA Board had previously agreed in writing to meet at another 
location. 
Hotels, resorts and other accommodation establishments; 
Air, sea and land tourism transport services; and 
Two representatives from other tourism enterprises. 
18 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
SEC. 61. General Powers and Functions of the E Z A .  - The TEZA Board 
shall have the general powers of a corporation as provided under Batas Pambansa Blg. 68, the 
Corporation Code. Furthermore, it shall also have the following powers: 
a. 
b. 
C. 
d. 
e. 
f. 
g' 
h, 
I. 
i. 
k. 
I, 
m. 
Adopt rules and regulations necessary for the implementation of the provisions of this 
Chapter; 
Enter into, make, perform and carry out contracts of every class, kind and description 
which are necessary or incidental to the realization of its purposes with any person, 
firm or corporation, private or public, and with foreign government entities; 
Contract loans, indebtedness and credit, issue commercial papers and bonds, in any 
local or convertible foreign currency from international financial institutions, foreign 
government entities, and local or foreign private commercial banks or similar 
institutions under such terms and conditions prescribed by law, rules and regulations: 
Execute any deed of guarantee, mortgage, pledge, trust or assignment of any 
property for the purpose of financing the programs and projects deemed vital for the 
early attainment of its goals and objectives, subject to the provisions of Article MI, 
Section 20, and Article XII, Section 2, paragraphs (4) and (5) of the Constitution; 
In coordination with local government units andlor appropriate agencies concerned, to 
construct, own or lease, operate and maintain infrastructure facilities, and grant 
franchises for, and supervise the operation of, public utilities within Zones; 
Undertake, or authorize the undertaking of reclamation projects within Zones: 
Receive donations, grants, bequests and assistance of all kinds from local and 
foreign governments and private sectors and utilize the same; 
Exercise eminent domain; 
Coordinate with the local government units and other government offices for the 
provision of basic services, utilities and infrastructure required by Zones; 
Review and approve proposals for the designation of Zones based on criteria 
provided herein and approve, facilitate and assist in the organization of Zone 
Operators; 
Supervise the operations of Zone Operators, review and enforce their development 
plans, and establish and implement other policies, plans and programs for the 
development and operation of Zones; 
Register, monitor and regulate enterprises seeking to invest and operate within a 
Zone, and approve and grant incentives to such registered enterprises as provided 
under this Act: and 
Collect taxes as provided under Section 74 below, and necessary fees to defray 
19 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
administrative and operational expenses, and impose penalties and fines for 
violations of duly promulgated rules and regulations. 
TEZA shall be deemed a government infrastructure corporation under the provisions of 
SEC. 62. Powers and Functions of the Administrator. - The Administrator shall implement 
the policies, plans and programs of TEZA Board, and shall periodically report to the TEZA Board 
the status of their implementation. The TEZA Administrator shall also recommend to the TEZA 
Board all necessary acts to properly supervise the operations of Zone Operators. In addition, 
he/she shall have the following specific powers and responsibilities: 
the Administrative Code of 1987 (Executive Order No. 292, Book IV, Chapter 13, Section 58). 
a. Subject to the approval of the TEZA Board, determine the structure, staffing pattern, 
and personnel complement of TEZA; 
b. Coordinate with the Philippine National Police for the proper maintenance of peace and 
order within Zones; 
c. Ensure that all Zone Operators properly perform their functions and duties in 
accordance with this Act, TEZA implementing rules and regulations, and all other 
relevant laws and executive issuances; 
d. Receive all protests, complaints, and claims concerning Zone Operators, and make 
recommendations to the TEZA Board for appropriate action; 
e. Enforce all legal easements along seashores, lakeshores, riverbanks, among others, to 
allow free and open access thereto and aid in the proper development of the national 
patrimony; and 
f. Take such emergency measures as may be necessary to avoid or mitigate the impact 
of fires, floods, storms and other natural or public calamities upon persons or properties 
within Zones and adjoining communities. 
SEC. 63. Capitalization. - From the collections of travel taxes, the national government shall 
appropriate the sum of two hundred fifly million pesos (PhP 250,000,000.00) for the capitalization 
of TED. 
SEC. 64. Registration. - Business enterprises within a Zone must be registered with 
TEZA to avail of the incentives and benefits provided for in this Act. 
SEC. 
65. One-stop Shop Processing. - TEZA shall establish offices where prospective Zone 
investors can register to obtain the incentives and benefits under this Act, and obtain all necessary 
permits and licenses from all national and local government offices. All government agencies shall 
coordinate with TEZA for the issuance of such permits and licenses. 
SEC. 66. investigation and Inquiries. - Upon a written formal complaint made under oath, 
which on its face provides reasonable basis to believe that some anomaly or irregularity might have 
20 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
been committed within the Zone, the TEZA Administrator shall have the power to inquire into and 
investigate the conduct of Zone Operators, registered enterprises, or their employees. For that 
purpose, he/she may subpoena witnesses, administer oaths, and compel the production of books, 
papers, and other evidence. 
Subchapter IV-C. Zone Administration 
SEC. 67. Adminisfrafion of Zones. - Each Zone shall be administered and supervised by a 
Zone Operator. A Zone Operator shall be an entity duly incorporated under general Philippine law, 
whose capital may be provided by the national government, one or more city and/or provincial 
governments, andlor private entities. 
SEC. 68. Articles of lncorporafion and By laws of Zone Operators. - Except as provided 
herein and as may be provided by rules and regulations duly promulgated by TED, each Zone 
Operator may draft its articles of incorporation and by-laws in accordance with the Corporation 
Code. 
SEC. 69. Boards of Directors and Consultative Bodies ofzone Operators, -The seats of the 
Board of Directors of a Zone Operator shall be allocated pro-rata according to the respective 
capital contributions of the Zone Operator's shareholders. 
Zone Operators are encouraged to reserve seats on their Boards of Directors for special 
interest groups relevant to their Zones, such as those representing environmental, religious, 
cultural communities, Zone investors, Zone residents, and other interests. In any case, Zone 
Operators shall form consultative bodies for such special interest groups to assist it in the 
formulation and implementation of policies, plans and projects. 
SEC. 70. Zone Administrafion. - The Board of Directors of each Zone Operator shall 
appoint its Zone Administrator. The Zone Administrator shall be responsible for implementing the 
policies, plans and projects of the Zone Operator Board of Directors. TEZA shall provide guidelines 
on the necessary educational and practical qualifications required of a Zone Administrator. In 
addition to such qualifications, all Zone Administrators must undergo, complete and pass a training 
program created by the Department to provide Zone Administrators with knowledge and skills 
relevant to the operation of the Zone. 
SEC. 71, Civil Dispute Resolution. - TEZA shall establish a civil dispute mediation office to 
effectively and efficiently resolve civil disputes within the Zone where at least one (I) 
of the parties 
to the dispute was temporarily residing in the Zone at the time the dispute arose, and is still 
residing within the Zone at the time the complaint was filed with the mediation office. No civil 
dispute may be filed in court without having undergone mediation proceedings as provided under 
this section except in extraordinary cases where a party may suffer irreparable damage. 
Subchapter IV-D. Incentives for Zone Operators and Locators 
21 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
SEC. 73. Grant and Administration of Incentives. - Recognizing the strategic economic 
importance of tourism, the necessity that investments within Zones be properly coordinated with 
environmental, cultural and developmental imperatives, and fundamental differences between the 
export manufacturing and tourism industries, TEZA shall have sole and exclusive jurisdiction to 
grant the incentives hereinafter provided. 
In the formulation of rules and regulations defining and implementing the incentives 
hereinafter provided, and without derogating from the incentives granted herein, TEZA may 
coordinate with the Board of Investments and other government agencies or entities responsible 
for the grant and administration of incentives to assist in the development of a rationalized national 
investment incentive policy. In the grant of incentives, it shall give equal preference to large 
investments and those with great potential for employment generation and those of local small and 
medium enterprises. 
TEZA shall further coordinate with the Bureau of Customs and the Bureau of Internal 
Revenue in the preparation and enforcement of rules and regulations to prevent the abuse of these 
incentives. 
The jurisdiction of TEZA in the grant and administration of incentives cannot be impliedly 
repealed or modified. 
SEC. 74. Fiscal Incentives Available to Zone Operators and Registered Enterprises. - The 
following incentives may, in the discretion of the TEZA Board, be granted to registered tourism 
enterprises within Zones: 
a. 
Income Tax Holiday. New enterprises in Greenfield and Brownfield Tourism 
Zones shall, from the start of operations, not be subject to any tax on income for a 
period of six years. This income tax holiday may be extended if the enterprise 
undertakes a substantial expansion or upgrade of its facilities prior to the expiration of 
the first six years. This extension shall consider the cost of such expansion or 
upgrade in relation to the original investment, but shall in no case exceed an 
additional six (6) years. 
An existing enterprise in a Brownfield Tourism Zone shall be entitled to avail of 
a non-extendible income tax holiday if it undertakes an extensive expansion or 
upgrade of facilities. Such an income tax holiday shall consider the cost of such 
expansion or upgrade in relation to the original investment, but shall in no case 
exceed six (6) years. 
b. 
Gross Income Taxation. In lieu of all other national and local taxes, license fees, 
imposts and assessments, except real estate taxes and such fees as may be 
imposed by the TEZA, a new enterprise shall pay a tax of three percent (3%) on its 
22 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
gross income, which shall be distributed as follows: 
1. 
2. One-third to the national government; and 
3. One-third to the TEZA for the funding of its operations and its programs in Zones, 
which shall include the protection, maintenance and enrichment of the 
environment, tangible cultural and historical heritage, and the intangible cultural 
heritage of communities within and surrounding Zones. 
Gross income as used herein is defined under Republic Act No. 8424 (The 
National Internal Revenue Code), Section 27(A) and further defined under 
relevant rules and regulations. 
One-third to be proportionally allocated among affected local governments; 
c. 
Capital Investment and Equipment. Subject to rules and regulations which properly 
define capital investments and equipment necessary for various kinds of tourism 
enterprises, registered enterprises shall be entitled to an exemption of one hundred 
percent of all taxes and customs duties on importations of capital equipment. 
Goods and Services. Subject to rules and regulations which properly define goods 
and services necessary for various kinds of tourism enterprises, registered 
enterprises shall be entitled to the following: 
1. 
Importation of goods actually consumed in the course of services actually 
rendered by or through registered enterprises within a Zone shall be exempt one 
hundred percent (100%) of all taxes and customs duties; Provided however, That 
no goods shall be imported for the purpose of operating a wholesale or retail 
establishment in competition with Duty-Free Philippines. 
d. 
2. A tax credit equivalent to all national internal revenue taxes paid on all locally- 
sourced goods and services directly or indirectly used by the registered 
enterprise for services actually rendered within the Zone, 
e. 
Social Responsibilitv Incentive. A registered enterprise shall be entitled to a tax 
deduction equivalent to a reasonable percentage, not exceeding fifty percent (50%), 
of the cost of environmental protection or cultural heritage presewation activities, 
sustainable livelihood programs for local communities, and other similar activities it 
undertakes. 
SEC. 75. Non-fiscal lncenfives Available to Zone Operafors and Locafors. - The following 
incentives may, in the discretion of the TEZA Board, be granted to registered tourism enterprises 
within Zones: 
a. 
Emolovment of foreign nationals. A registered enterprise may employ foreign 
nationals in executive, supervisory, technical or advisory positions for such 
23 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
b. 
C. 
reasonable periods and under such terms as may be provided by the TEZA Board, 
with due regard for the proper protection and representation of foreign investments 
in registered enterprises, and the need to ensure easy travel into and out of the 
Philippines by such nationals and their immediate families. 
Special Investor's Resident Visa. Under such terms as may be provided by the 
TEZA Board, a foreign national who shall have made an investment with a value of 
at least Two hundred thousand US dollars (US$200,000) in a registered enterprise 
shall be entitled to a Special Investor's Resident Visa. With such Visa, the foreign 
national shall be entitled to reside in the Philippines while hislher investment 
subsists. 
Foreian Currency Transactions. Subject to the provisions of 
Section 74 of 
Republic Act No. 265 as amended: 
1, 
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. 
Remittance of Foreign Exchanae. The right to remit earnings from a foreign 
investment in the currency in which the investment was originally made and at 
the exchange rate prevailing at the time of remiffance. 
2. 
3. 
Foreian Loans and Contracts. The right to remit at the exchange rate 
prevailing 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. 
d. Requisition of Investment. There shall be no requisition of the property of enterprises 
or represented by investment, except in the event of war or national emergency, 
and only for the duration thereof. In any case, the affected person shall be entitled 
to just compensation, and shall have the right to repatriate such compensation as 
provided in paragraph c above. 
e. Lease and Ownership of Land. Without prejudice to existing laws regulating the 
ownership of land by individuals and corporations, and consistent with the 
provisions of the Investor's Lease Act (Republic Act No. 7652), lands and buildings 
in each Zone may be leased to foreign investors for a period not exceeding fifty (50) 
years, renewable once for a period of not more than twenty-five (25) years. The 
leasehold right acquired under long-term contracts may be sold, transferred or 
assigned, subject to the conditions set forth under the Investor's Lease Act. 
24 


1 
2 
3 
4 
5 
6 
CHAPTER V. INCREASED TOURIST ACCESS 
SEC. 76. 
lnterflafional and Domestic Tourist Travel. - The Department, thru the 
development of an inter-modal international and domestic land, sea, and air access system, in 
coordination with relevant government agencies, shall increase and improve the accessibility of 
the Philippines to domestic and foreign tourists. Realizing the critical importance of a liberalized 
civil aviation environment in the development of the country’s international and domestic tourism 
7 
sector: 
8 
a. 
9 
b. 
10 
11 
12 
13 
C. 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
The Secretary shall be ex officio Chairman of the Civil Aviation Board; 
The Secretary shall be ex officjo Chairman of the Manila International Airport 
Authority and the governing boards of other international airports. The Secretary 
shall be authorized to appoint a representative to the Board of Directors of each 
international seaport of the Philippines; and 
To enhance the standards of transportation services for tourist use, the 
Department and the relevant government agency shall develop an integrated, one- 
stop shop system for the speedy issuance of franchises and accreditation for tourism 
transport operators. 
SEC. 77. Visas. - The Department and the Departments of Justice and of Foreign Affairs 
shall develop a system of visas that encourages the arrival and longer stay of tourists in the 
Philippines 
CHAPTER VI. CREATING A CULTURE OF TOURISM 
SEC. 78. Tourism Coordinating Council. - A council shall be formed consisting of the 
Department Secretary, as chairman; representatives from the Tourism Congress; the beads of 
other agencies attached to the Department; the Secretaries of the Departments of Transportation 
and Communication, Public Works and Highways, Foreign Affairs, Environment and Natural 
Resources, Education, Interior and Local Government, and Labor and Employment; and the heads 
of the Philippine National Police, Bureaus of Immigration, National Historical Institute, National 
Commission for Culture and the Arts, Philippine Amusements and Gaming Corporation, the 
Leagues of Local Governments, and such other government agencies that the President may 
designate, that shall serve as a coordinating body for national tourism development efforts. 
The Council shall prepare 5-year strategic plans to develop and enhance a culture of 
tourism. It shall also approve an annual infrastructure development plan that shall promote access 
to and from airports and seaports, and Zones and other tourism destinations which shall be 
accorded priority by the relevant infrastructure agencies of the national government. 
SEC. 79. Education. -The Department shall work closely with the Department of Education 
for the development of educational programs for the primary and secondary educational levels that 
25 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
assist in the creation of a culture of tourism, specifically through the enhancement of education in 
languages, history and culture. 
The Department shall also work closely with the Commission for Higher Education in the 
regulation of colleges and universities that grant undergraduate and postgraduate degrees in 
tourism. 
The Technology and Skills Manpower Development Administration is hereby mandated to 
develop programs, in conjunction with the Department, for the training of tourism entrepreneurs by 
providing programs for languages, history and cultural appreciation, and small business 
management. 
SEC. 80. Peace and Order. - The Philippine National Police shall establish a Tourism 
Security Force to assist in maintaining peace and order within areas of high tourism traffic. The 
Department shall ensure the training of members of the Force in cultural sensitivity, languages and 
relevant laws. 
SEC. 81. Funding Grassroofs Tourism Enterprises. - Insofar as allowed by applicable laws 
and their respective charters, government-owned and controlled banks and financial institutions 
shall provide microfinance schemes for the assistance and development of small and medium 
scale enterprises in the tourism industry. 
SEC. 82. Congressional Oversight. - An oversight committee consisting of five members 
each from both houses of Congress shall constitute a Joint Congressional Oversight Committee 
responsible for overseeing the implementation of this Act. The Oversight Committee shall be 
composed of representatives from each House from their respective Committees of Tourism; 
Government Corporations and Public Enterprises; Environment; Education, Arts and Culture; and 
Local Governments. 
The Secretary shall report to the Oversight Committee on a monthly basis the latest 
statistics on tourism arrivals and other relevant data. Helshe shall also report on a quarterly basis 
the status of implementation of this Act. 
SEC. 83, The Tourism Congress. - Within thirty (30) days from the effectivity of this Act, the 
Secretary shall convene a Tourism Congress of representatives of all accredited tourism 
enterprises to serve as the private sector consultative body to assist the government in the 
development, implementation and coordination of Philippine tourism policy. 
Under a constitution adopted and ratified by the Congress, it shall elect its officers and 
establish a secretariat, both for the Congress as a whole and for component sectors. It shall also 
elect such representatives as required under this Act. 
CHAPTER VII. MISCELLANEOUS PROVISIONS 
SEC. 84. Personnel and Compensation. - The employees and management of TEZA, 
26 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
Tourism Philippines and DFPC shall be exempt from the coverage of the Salary Standardization 
Law. 
Subject to existing constitutional and legal prohibitions on double compensation for Board 
members in an ex-officio capacity, the members of the TEZA Board, Tourism Board, DFP Board 
shall not be entitled to compensation, but may receive reasonable per diems for attendance at 
regular and special Board meetings. 
SEC. 85. Reportorial Requiremenfs. -All attached agencies of the Department shall submit 
a quarterly report to the Secretary and to the Joint Congressional Oversight Committee on Tourism 
on the implementation of their respective programs, 
SEC. 86. Budgefary Approval. -All attached agencies of the Department shall submit their 
annual budgets to the Secretary for hislher approval, and shall furnish copies of the same to the 
Joint Congressional Oversight Committee on Tourism. 
The budgets of TEZA, Tourism Philippines and DFP reported to the Joint Congressional 
Oversight Committee must contain detailed information on the compensation and benefits received 
by their employees. 
SEC. 87. Other Incentives. - 
17 
a. 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
b. 
34 
35 
Tourism enterprises not located within Zones shall, upon approval by the 
Department, be entitled to avail of any economic incentives found under existing laws, 
such as the Omnibus Investments Code, Foreign Investments Act, Special Economic 
Zone Act of 1995, the Bases Conversion and Development Act, among others. 
Importation of transportation and the accompanying spare parts of new and 
expanding tourism-registered enterprises shall be exempt from customs duties and 
national taxes: Provided, That they are not manufactured domestically in sufficient 
quantity, of comparable quality and at reasonable prices, and that they are reasonably 
needed and will be used exclusively by an accredited tourism enterprise. 
Subject to rules and regulations jointly promulgated by the Department and 
the relevant government agency, such as the Board of Investments or the Philippine 
Economic Zone Authority, an existing accommodation establishment not located within 
a Zone shall be entitled to claim an income tax holiday for up to six (6) years for any 
significant expansion, renovations or upgrades in its facilities in relation to the amount 
of the original investment. They shall also be entitled to import capital equipment free 
of taxes and duties when necessary for such expansion, renovation or upgrades. 
The Department and the Department of Trade and Industry shall promulgate rules and 
regulations to govern the relationship between Zones created under this Act, and 
economic zones created under Republic Acts No. 7227 or 7916, as amended, where 
21 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
C. 
d. 
e. 
f. 
an area comprising a Zone overlaps, falls 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. 
The investment incentives offered under this Act shall be without prejudice to availing 
other incentives provided under other laws, decrees, and presidential issuances. 
However, where such other laws, decrees or presidential issuances provide for similar 
or identical benefits, the beneficiary may only elect to avail of the benefit provided 
under one particular law, decree or presidential issuance. 
Local governments are likewise encouraged to provide incentives for tourism 
enterprises through, among others, reductions in applicable real estate taxes, and 
waivers of fees and charges, among others. Should a local government grant such 
incentives, it shall report the same to the Department and Tourism Philippines to 
assist in the marketing and promotions of investment in that local government. 
The grant of fiscal and other incentives to enterprises not located within Tourism 
Enterprise Zones shall be governed by the following provisions: 
1. Tourism enterprises may avail of incentives provided under Executive Order No. 
226 (/9%7), the Omnibus Investments Code, provided that: 
1.1 
plan; 
1.2 
Rules and regulations concerning the grant of incentives to tourism 
enterprises shall be jointly formulated by the Board of Investments and the 
Department; 
The income tax holiday provided under section 39.1 of the Omnibus 
Investments Code shall also apply to existing accommodation enterprises 
undergoing substantial expansions, renovations or upgrades of facilities; and 
1.4 
Accredited tourism enterprises shall be entitled to import 
transportation and accompanying spare parts free of taxes and duties, provided 
that such transportation shall be exclusively used by the enterprise in its 
operations, and provided further that such are not manufactured domestically in 
sufficient quantity, comparable quality and prices. 
2. Tourism enterprises located in special economic zones created under Republic 
Act No, 7916 or by special charter shall continue to be governed by the same. 
The incentives offered under this Act shall be without prejudice to the availment of 
other incentives provided under other laws, such as, but not limited to, those 
Tourism activities shall, always be included in the investments priority 
1.3 
28 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
concerning infrastructure, or micro-, small- and medium enterprises. However, where 
such laws provide for similar benefits as those contained herein, the beneficiary may 
elect to avail of the benefit provided only under one particular law, decree or issuance. 
SEC. 88. lmplemenfing Rules and Regulations. - Except as otherwise provided, the 
Secretary of Tourism shall have the power to issue rules and regulations to implement this Act. 
SEC. 89. 
Repealing Clause. - 
The provisions of Executive Orders No. 292 (The 
Administrative Code of 1987, as amended), Presidential Decree No. 189, as amended (Creating 
the Philippine Tourism Authority), Presidential Decree No. 1448, as amended (Creating the 
Philippine Convention and Visitors Corporation), the Local Government Code (Republic Act No. 
7160), Presidential Decree No. 1616 (Creating the lntramuros Administration), 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. 
SEC. 90, Separability Clause. - In the event that any provision of this Act or parts thereof be 
SEC. 91, Effectivify Clause. - This Act shall take effect one month after the completion of its 
Approved, 
declared unconstitutional, such declaration shall not affect the validity of the other provisions. 
publication in a newspaper of general circulation 
29