Republic cif the Philippine 
SENATE OF THE PHILIPPINES 
Pasay City 
'senah> 
(~HI;' tIl til' :i>",'t.r~ 
'14 
MAR -4 P 1 :13 
SIXTEENTH CONGRESS 
First Regular Session 
S. B. No.2160 
RECEIVI':O nYc '.' f 
INTRODUCED BY SENATOR SONNY ANGARA 
EXPLANATORY NOTE 
Film tourism is a growing phenomenon wherein a destination is visited by tourists 
because it was featured in a movie, television or video. To cite as an example, New 
Zealand's international visitor arrival increased by 50% since the first installment 
showing of the trilogy, "The Lord of the Rings" in 2001, according to its tourism office. 
By boosting the country's film tourism, the Philippines st"nds to increase the 
number of tourist arrival and stimulate its economy. A dollar spent by a tourist for 
accommodations is multiplied 2.1 times for the economy as it creates jobs and 
opportunities and spreads its effect in other industries as well. 
Our very own local film industry has been begging attention. According to the 
National Statistical Coordination Board, from 1960 to 1999, the Philippines produced an 
average of about 140 movies each year. However, from 2000 to 2009, local film output 
fell to an average of 73 annually with only 11 percent of the market. Last year, only 78 
local films were made. 
New Zealand, through its Large Budget Screen Production and Post Digital & 
Visual Effects Grants, offers a cash grant equivalent to 20% of the Qualifying New 
Zealand Production Expenditure (QNZPE). Association with films such as The Hobbit 
movies also offers New Zealand a wider opportunity to enhance its international profile 
as an innovative and creative nation, and as a great place to make films and do 
business. 
Other countries like Singapore, Malaysia, South Korea, and UK offer 
comparative and competitive incentive schemes to garner a market share in the. 
lucrative international motion picture production industry. 
Recognizing the potential of international and local motion picture production to 
create jobs, grow the economy, and raise the nation's international profile, offering 
production tax incentives and empowering the Film Development Council of the 
Philippines (FDCP) to provide additional benefits, are necessary steps our nation ought 
to take to sieze this new opportunity as levers for growth and development. 
In view of the foregoing, approval of this bill is earnestly sought. 
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.i 
I? nil t e 
SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
d)tf.; •• r t~, !i-""I~r~ 
'14 
MAR -4 P 1 :13 
SENATE 
S. B. No. 2160 
INTRODUCED BY SENATOR SONNY ANGARA 
AN ACT 
PROMOTING TOURISM AND FOSTERING INVESTMENT THROUGH LOCAL AND 
INTERNATIONAL MOVIES BY PROVIDING INCENTIVES FOR MOTION PICTURE 
PRODUCTION, OTHERWISE KNOWN AS THE "FILM'ACT" 
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled: 
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SECTION 1. Short Title. This Act shall be known as the "Fostering Investment 
2 
through Local and International Movies (FILM) Act." 
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SECTION 2. Declaration of Policy. The State recognizes that labor is a primary social 
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economic force and endeavors to provide adequate employment opportunities. 
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Recognizing the potential of motion picture production to create jobs, grow the 
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economy, and raise the nation's international profile, it is the policy of the State to 
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encourage the local motion industry and promote international movie picture production 
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within the Philippines to showcase: its beauty and culture as well as facilitate the 
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exchange of technical knowledge and expertise in the industry. In furtherance of this, 
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the State commits to implementing production tax incentives and empowering the Film 
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Development Council of the Philippines (FDCP) to provide additional benefits. 
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SECTION 3. Program Establishment and Administration. 
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(a) The FDCP shall offer tax credits to productions deemed eligible under this Act, 
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which it shall issue no more than one month after the completion of principal 
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photography. 
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(b) The FDCP, under the auspices of its Philippine Film Export Service Office (PFESO), 
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shall promote the Philippines as a destination for filmmakers. 
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(c) The FDCP shall expand its One-Stop Shop System, including creating a website, 
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dedicated to promote its program and serve filmmakers who intend to avail of the 
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incentives stated in this Act. The FDCP, in its capacity, will specifically assist foreigners 
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who will set up film production in the country in securing visas, permits, certificates and 
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other requirements related to their film production, including but not limited to 
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coordination with local government units, scouting of locations and talents. The FDCP 
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shall endeavor to reduce bureaucratic red tape pursuant to R.A. No. 9485, otherwise 
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known as the Anti-Red Tape Act of 2007, and its implementing rules and regulations. 
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(d) The FDCP shall facilitate the usage and receipt of these incentives by production 
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companies. 
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(e) While the FDCP is in charge of promoting the country's film tourism, it is also 
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responsible in ensuring that environmental regulations are properly adhered to by all 
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production companies in the process of filming .. 
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(e) The NCCA, as an advocate of the conservation of our cultural heritage, shall be a 
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resource for filmmakers looking to enrich the content of their materials by showcasing 
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Filipino culture, traditions and values. 
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(f) The Department of Tourism (DOT) shall provide the FDCP with a list of locations it is 
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promoting for purposes, 
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SECTION 4. Amount of Credit. 
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(a) The minimum tax credit awarded to eligible productions shall be equal to 20 percent 
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of qualifying expenses. 
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(b) In addition to the minimum tax credit, qualifying films, television shows, movies of 
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the week, mini-series, and web-series may. gain fu'rther credits under a point-based 
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incentive system, to be administered by the FDCP. Each pOint shall correspond with an 
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additional 1 percent rebate on all qualifying expenses. Any production shall only be able 
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to claim one rebate from the following. subsections in their entirety: 
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(1) Eligible productions may receive 20 points if the final product is set completely or 
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largely within the Philippines, 15 points if the final product contains 10 or more 
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substantive scenes set within the Philippines, and 10 points if the final product 
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contains at least 3 sUbstantive scenes set within the Philippines; 
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(2) Eligible productions may receive 20 points if at least one-half of filming within the 
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Philippines occurs within a community recovering from a significant natural 
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disaster that occurred within the preceding 3 years or 10 points if at least one-
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fourth of filming within the Philippines occurs within such an area; 
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(3) Eligible productions may receive 2 points if they dedicate at least seven seconds 
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worth of screen time during the credit roll to a message acknowledging the film's 
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participation in the film tax credit program of the Philippines and providing the 
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URL to a website where viewers can learn about tourism opportunities in the 
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country. 
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(c) All qualifying international productions shall also receive the following tax credits. 
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However, in no situation may the total tax credit amount received for any particular 
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expense exceed 40 percent: 
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(1) 25 percent of the cost of construction of any permanent and useful 
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infrastructure built in the Philippines for the purposes of filming, including 
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likely tourist <;lttractions, subject to approval of the DOT; 
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(2) 15 percent of all lodging within the Philippines booked for production team 
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members, for production-related purposes; 
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(3) 10 percent of the cost of all transportation to or from the Philippines for 
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production team members conducting either production-related travel or the 
transportation of filming equipment into the Philippines;) 
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(4) 5 percent of the cost associated with the provision of utilities or technology 
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purchased within the Philippines. 
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SECTION 5. Qualified Expenses. 
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(a) Qualified expenses for the purposes of determining the amount of a tax credit shall 
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include any expense incurred within the Philippines directly related to pre-
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production, production, or post-production conducted within the Philippines, unless 
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otherwise exempted. However, expenses must be reasonable and prices may not 
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substantially exceed the market value of the procured product or service. 
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Qualified expenses include, but are not limited to, expenses such as or related to: 
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(1) Salary, wages, or other compensation such as per diem provided to members 
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of the production team or subcontractors for any services rendered within the 
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Philippines; 
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(2) Creation, decoration, or operation of sets or shooting locations and production 
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offices; 
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(3) Filming equipment or supplies; 
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(4) Locally-sourced photography equipment or services; 
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(5) Locally-sourced editing equipment or services; 
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(6) Locally-sourced music; 
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(7) Catering equipment or services; 
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(8) Costumes, make-up, and similar products and services; 
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(9) Lodging and domestic, or international travel; or, 
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(10) Insurance. 
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(b) The FDCP shall reserve the right to disqualify any expenses that clearly do not fall 
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within the spirit of the tax credit program, subject to administrative and judicial appeal. 
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As an assumption, the following shall not be recognized as qualified: 
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(1) Those related to distribution of the film, including but not limited to marketing 
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and promotion; 
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(2) Such as attorney or accounting fees, incurred in the process or as a result of 
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acquiring or challenging a government determination of eligibility for incentives 
5 
later reimbursed to the production; 
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(3) Items that are later resold by the production, minus any loss incurred; 
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(4) Any amounts paid to members of the production as a result of profit 
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participation, residual, or similar agreements; and 
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(5) Expenses associated with the financing of production. 
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Section 6. Program Eligibility. 
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The following requirements must be attained to be eligible for the incentives program: 
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(a) For foreign productions: Upon certification by FDCP that the production is a 
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professional endeavor and has met the FDCP's requirements in terms of the amount of 
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investment and the amount of jobs the production will generate; 
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(b) For local production: Upon certification of FDCP that the production is a professional 
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endeavor and has met the FDCP's requirements in terms of the amount of investment 
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and the amount of jobs the production will generate; 
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(c) Participating productions must agree to cooperate with any audits conducted to 
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ensure compliance with program eligibility requirements, both during and after 
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production; 
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(d) In addition to the abovementioned criteria, a local movie production may only avail of 
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should any of the following criteria are met: 
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(1) If the final product is set completely or largely in a historical or cultural site as 
26 
determined by the NCCA; and, 
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(2) If the final product showcases substantive scenes of traditional practice or 
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custom. 
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SECTION 7. Additional Incentives. 
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(a) Unless otherwise requested by the production, all productions approved by the 
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FOCP for tax credits shall also be: 
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(1) exempt from all fees for or associated with filming permits; 
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(2) given free access to any public lands where filming is allowed; 
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(3) provided with free police protection at filming locations where safety is a 
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reasonable concern; 
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(4) provided free and expedited work visas for all members of the production 
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team that meet immigration requirements; and, 
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(5) assigned a liaison at the FOCP responsible for coordinating all permits, 
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facilitating receipt of tax credits, securing immigration visas, and assisting in 
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whatever other bureaucratic tasks are found necessary in order for film ing to 
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occur, such that the production should not need to interact with any organ of the 
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Philippine government other than the FOC in making logistic and financial 
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arrangements. 
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SECTION 8. Transferability. 
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(a) Motion picture tax credits assigned under this Act may be transferred, sold, or 
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otherwise exchanged. 
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(b) A taxpayer who purchases or otherwise acquires a motion picture tax credit may 
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apply the credit toward any tax levied by the Bureau of Internal Revenue, which shall 
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honor any such credits at full face value. 
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(c) Productions may sell their tax credits to any taxpayer without restriction, and no 
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element of the Philippine government, nor person meaningfully affiliated with the 
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government, may instruct, suggest, or advice in any manner as to where the credits 
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should be sold. 
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(d) Upon sale of a credit, a production may choose to either remit their profits abroad or 
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retain them in the Philippines, and in neither scenario shall any additional taxes or fees 
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be assessed. 
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SECTION 9. Appropriations. The amount of P20,OOO,OOO.OO is hereby appropriated to 
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the FDCP for facilitating compliance with this Act. Initially, the fund may be sourced from 
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travel taxes collected by Tourism Infrastructure and Economic Zone Authority (TIEZA). 
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Thereafter, the sum necessary for the continued implementation of this Act shall be 
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included in the Annual General Appropriations Act. 
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SECTION 10. Separability Clause. if, for any reason, any section or provision of this 
21 
Act is held unconstitutional or invalid, no other section or provision shall be affected. 
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SECTION 11. Effectivity. This Act shall take effect fifteen (15) days after its publication 
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in at least two (2) national newspapers of general circulation. 
Approved, 
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