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EXPLANATORY NOTE

There is an observable growing phenomenon of increased tourist visits to
destinations being featured on television, video or the cinema screen. In their
research entitled "Promoting Destinations via Film Tourism: An Empirical
Identification of Supporting Marketing Initiatives" published in May 2006 in the
Journal of Travel Research, Simon Hudson and J.R. Brent Ritchie cited increased
tourist arrivals in destinations where famous films took place. The article cited as an
example the Wallace Monument in Scotland which saw a 300% increase in visitors a
year after the movie "Braveheart' was filmed which starred Mel Gibson in 1995.

Other examples of increased tourist arrivals in film locations include: Stee!
Magnolia in Louisiana, Harry Potter in various locations in U.K., Mission Impossible 2
in the National Parks in Sydney, Last of the Mohicans in Chimney Rock Park, North
Carolina, The Fugitive Dillsboro in North Carolina, Little Women Orchard House in
Concord, Massachusetts, Bull Durham in North Carolina, and The Beach in Koh Phi
Phi, Thailand

Many countries around the world are taking steps to attract foreign film or TV
productions, as well as animation or video game projects in a variety of ways such
as offering tax rebates or tax credits. In Australia, co-productions with Australian
producers can get a tax rebate of up to 40 percent of expenditure on feature films
Australia also offers rebates to those carrying out post-production work, regardless
of where the project was shot. A similar cash rebate of up to 40 percent is available
on projects at least partially produced in Colombia. In the United Arab Emirates, Abu
Dhabi offers a 30 percent cash rebate on production spending, with a $5 million cap
on feature films but not to animation.

The Philippines is not new to having international films being set in the
Philippines: Apocalypse Now (1979), The Year of Living Dangerously (1982),
Platoon (1986), Born on the Fourth of July (1989) and The Bourne Legacy (2012).
There were also several seasons of the Survivor TV series that were filmed in the
Caramoan Islands in Camarines Sur and Palaui Islands in Cagayan


This measure therefore proposes ways in which film tourism can boost our
country's tourism industry. It is estimated that one tourist can generate jobs in six
different industries and that one out of every ten jobs is directly attributable to
tourism.

Swift approval of this bill is eagerly sought.

LUIS R; ELM F. VILLAFUERTE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Queson City

SEVENTEENTH CONGRESS
First Regular Session

1794
HOUSE BILL NO.

AN ACT ESTABLISHING A FRAMEWORK FOR FILM AND TELEVISION
TOURISM IN THE PHILIPPINES, PROVIDING TAX INCENTIVES, MARKETING
THE INDUSTRY GLOBALLY AND PROVIDING EMPLOYMENT FOR THE
SECTOR AND FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled.

Section 1. Title. - This Act shall be known as the "Philippine Film and
Television Tourism Act of 2016."

Section 2. Declaration of Policy.- It is hereby declared to be the policy of the
State to treat the film and television tourism as a special investment and tourism tool
for national development

Consistent with the national goal of creating new areas of business to
generate employment opportunities as well as to recognize Filipino talent, film and
television tourism in the country is hereby made a new investment priority, including
but not limited to: making the Philippines a location for shooting or filming area
preserving or promoting the nation's historical and cultural heritage and resources as
well as artistic creations or sceneries depicted in films, and converting it into tourist
attractions; and championing Filipino film practitioners and artists and their
participations in foreign productions.

Section 3. Creation of Philippine Film and Television Tourism Authority
(PFTTA) .- The affairs related to film and television tourism shall be administered by
the Philippine Film and Television Tourism Authority (PFTTA), thus replacing the
Philippine Film Export Service Office (PFESO) under the Film Development Council
of the Philippines (FDCP), organized under Executive Order No. 674, Series of 2007.


The PFTTA shall be headed by the Chief Operating Officer (COO), a position
which shall be equivalent to an Executive Director Ill position of the Film
Development Council and which shall be a career executive service officer position
to be recommended by the Chairperson of the Film Development Council of the
Philippines and appointed by the President

The members of the Authority shall be composed of representatives from the
following agencies:

1. Department of Tourism
2. Department of Trade and Industry

3. Department of Interior and Local Government and its attached
agencies

4. Department of National Defense

5. Department of Finance

6. Department of Foreign Affairs

7. Department of Labor and Employment

8. Movie and Television Review Classification Board
9. National Commission for Culture and the Arts

10. Private sector representatives, one each from the movie and television
industries.

The heads of the above stated departments shall designate their regular
representatives, based on their position in the organization, but not lower than a
Director-level position. The said representatives of the various government agencies
shall, in addition to their duties in the Authority, also serve as the direct link to
streamline and develop a one-stop-shop system.

The Secretariat of the PFTTA shall be based in the Film Development Council
of the Philippines for financial and administrative support. It shall be composed of
eight (8) regular plantilla positions already approved and to be augmented by the
Department of Budget and Management, including existing positions in the Philippine
Export Services Office of the FDCP.

Section 4. Functions of PFTTA. - The PFTTA shall facilitate a one-stop-shop
system for foreign film or television production entities. It shall undertake the
following:


Facilitate the promotion and marketing of the Philippines as
location site for the production of international films and
television programs, such as but not limited to: creating and
maintaining a website and/ or a manual of Philippine Film and
Television Tourism sites for overseas contract workers;
participating and exposure in World Expo, recognized
international film festivals, activities for cinema and television
with global market penetration, tourism fairs of international
significance;

. Offer tax credits to productions deemed eligible under this Act,
which it shall issue no more than one month after the
completion of principal photography;

. Assist in the implementation of a reward and incentive package
for foreign film/television entities interested in shooting
films/television programs in the country and submit
recommendations related thereon,

Assist foreign film production entities in processing pertinent
documents and various requirements relative to the production
of international films/television programs in the country and in
complying with environmental regulations;

Coordinate with various government agencies and local
government units in assisting the entry and exit of a foreign
film/television production team, such as but not limited to
producers, artists and production crew;

Provide direct link between foreign production entities,
producers, filmmakers and artists with local production
manpower services, local artists, bit players and technical
crew, facilities and the like;

. Utilize the services of tourism attaches abroad, through the
Department of Tourism, in the promotion and marketing of
Philippine locations sites/resources and local film production
manpower;

. Maintain an inventory of areas in the country that may be
utilized as a film and television tourism site and a registry of
sectors including artists, film practitioners, technical personnel
and others for ready referrals;

Identify key film and television tourism sites used by
international or local filmmakers and establish a PFTTA mark;


10. Keep a progress report and actual impact of the initiative taking
into consideration the increase in the number of film tourists
and its contribution to the economy;

14.lmplement the Comprehensive Plan of the Inter-Agency
Committee on Film and Television Tourism as referred to in
Sections 8 and 10 of this Act

SECTION 65. Partnership with Local Government Units. (LGUs) - The PFTTA
shall partner and collaborate with Local Government Units in the performance of the
following

1. Identifying and promoting film and televesion tourism sites.

2. Facilitating and providing assistance in the easy issuance of permits,
certificates and other documents related thereto.

3. Assisting in screening, providing, and identifying the necessary
complementary manpower requirments before, during and after film anfd
television production.

4. Providing monetary and non-monetary incentives to the over-all film
production team as far as practicable.

SECTION 6. Amount of Tax Credit. -

(a) The minimum tax credit awarded to eligible productions shall be equal to
20 percent (20%) of qualifying expenses.

(b) In addition to the minimum tax credit, qualifying films, television shows,
movies of the week, mini-series, and web-series may gain further credits under a
point-based incentive system, to be administered by the PFTTA. Each point shall
correspond with an additional one percent rebate on all qualifying expenses. Any
production shall only be able to claim one rebate from the following subsections in
their entirety:

(1) Eligible productions may receive twenty (20) points if the final
product is set completely or largely within the Philippines, fifteen (15) points if
the final product contains ten (10) or more substantive scenes set within the
Philippines, and ten (10) points if the final product contains at least three
substantive scenes set within the Philippines;

(2) Eligible productions may receive twenty (20) points if at least one-
half of filming within the Philippines occurs within a community recovering
from a significant natural disaster that occurred within the preceding three


years or ten (10) points if at least one-fourth of filming within the Philippines
occurs within such an area; and

(3) Eligible productions may receive two points if they dedicate at least
seven seconds worth of screen time during the credit roll to a message
acknowledging the film's participation in the film tax credit program of the
Philippines and providing the URL to a website where viewers can learn about
tourism opportunities in the country.

(c) All qualifying international productions shall also receive the following tax
credits. However, in no situation may the total tax credit amount received for any
particular expense exceed forty percent (40%)

(1) Twenty percent (25%) of the cost of construction of any permanent
and useful infrastructure built in the Philippines for the purposes of filming,
including likely tourist attractions, subject to approval of the Department of
Tourism;

(2) Fifteen percent (15%) of all lodging within the Philippines booked for
production team members, for production-related purposes;

(3) Ten percent (10%) of the cost of all transportation to or from the
Philippines for production team members conducting either production-related
travel or the transportation of filming equipment into the Philippines;

(4) Five percent (5%) of the cost associated with the provision of
utilities or technology purchased within the Philippines.

SECTION 7. Qualified Expenses. -

(a) Qualified expenses for the purposes of determining the amount of a tax
credit shall include any expense incurred within the Philippines directly related to
pre-production, production, or post-production conducted within the Philippines,
unless otherwise exempted. However, expenses must be reasonable and prices may
not substantially exceed the market value of the procured product or service.

Qualified expenses include, but are not limited to, expenses such as or
related to:

(1) Salary, wages, or other compensation such as per diem provided to
members of the production team or subcontractors for any services rendered
within the Philippines;

(2) Creation, decoration, or operation of sets or shooting locations and
production offices;


(3) Filming equipment or supplies;

(4) Locally-sourced photography equipment or services;
(5) Locally-sourced editing equipment or services;

(6) Locally-sourced music;

(7) Catering equipment or services;

(8) Costumes, make-up, and similar products and services;
(9) Lodging and domestic, or international travel; or,

(10) Insurance.

(b) The PFTTA shall reserve the right to disqualify any expenses that clearly
do not fall within the spirit of the tax credit program, subject to administrative and
judicial appeal

‘As an assumption, the following shall not be recognized as qualified:

(1) Those related to distribution of the film, including but not limited to
marketing and promotion;

(2) Such as attorney or accounting fees, incurred in the process or as a
result of acquiring or challenging a government determination of eligibility for
incentives later reimbursed to the production;

(3) Items that are later resold by the production, minus any loss
incurred;

(4) Any amounts paid to members of the production as a result of profit
participation, residual, or similar agreements; and

(5) Expenses associated with the financing of production

Section 8. Tax Incentives Eligibility. -

The following requirements must be attained to be eligible for the incentives
program:


(a) Upon certification by PFTTA that the production is a professional endeavor
and has met the PFTTA’s requirements in terms of the amount of investment and the
amount of jobs the production will generate;

(b) Participating productions must agree to cooperate with any audits
conducted to ensure compliance with program eligibility requirements, both during
and after production;

Section 9. Creation of Inter-Agency Committee on Film and Television
Tourism. - An Inter-Agency Committee on Film and Television Tourism hereinafter
referred to as (IAC-FTT) is hereby created. It shall be the governing Board and
policy-making body of the PFTTA

Section 10. Composition of the IAC-FTT. - The Film Development Council of
the Philippines (FDCP) Chairperson shall act as the Administrator. The Department
of Tourism Secretary or his representative shall act as Co-Chair. The inter-agency
committee shall have six members: three (3) each from the private and public sector
representing but not limited to business and investments, league of local government
units, artists and film practitioners, travel and airline sector, historical and cultural
heritage, overseas Filipino workers, film and television groups and other relevant
partners, to be determined by the Chairperson and Co-Chair.

The Chairperson, Co-Chairperson and the members of the IAC-FTT shall be
entitled to allowances and per diems, in accordance with existing policies, rules and
regulations on the matter

The IAC-FTT shall automatically cease to operate upon the submission of the
Comprehensive Plan to Congress, or within five (5) years from the approval of this,
Act, whichever comes earlier. The IAC-FTT will automatically cease to exist upon
the expiration of the five (5) years, unless otherwise extended by Resolution of both
Houses of Congress

Section 11. Functions of the IAC-FTT. - For purposes of this Act, the Inter-
Agency Committee shall

1. Formulate a Comprehensive Plan detailing an inventory of film tourism
sites in the country, areas for improvement, sectors to be tapped and
partnerships, marketing strategies both local and international in
application;

2. Conduct the feasibility of establishing a film and television museum;

3. Coordinate with various stakeholders and market players for research and
study on feasibility of a reward and incentive system, and other aspects


combining tourism and film, including, but not limited to the system of
categories for the application of rewards and incentives depending on the
cinema grade and length of exposure of the identified Philippine Film and
Television Tourism site;

4. Coordinate with all Embassies and Consulates of the country to promote
film and television tourism;

5. Coordinate and partner with various associations of Filipino overseas
workers abroad in marketing, disseminating and propagating information
on Philippines as a film tourism destination; and

6. Coordinate and partner with known Filipinos of international stature in
promoting the country and fulfilling the implementation of this Act.

Section 12. Other Preferential Incentives. - International or foreign film and
television production entities may, upon certification from the PFTTA, be granted the
following:

1) Multiple Entry Visa.- Foreign nationals who are members of the
international film production entities, as duly endorsed by the PFTTA, shall be
issued a multiple entry special visa within seventy-two (72) hours upon
submission of all required documents, and which shall be valid for a period of
one (1) year to enter the Philippines: Provided, That a responsible officer of
the applicant entity submits a duly authenticated certificate to the effect that
the person who seeks entry into the Philippines is a member of the applicant
entity and will work exclusively for film and television production.

The admission and stay shall be coterminous with the validity of the multiple
entry special visa. The stay, however, is extendible for one hundred eighty
(180) days upon submission to the Bureau of Immigration of a sworn
certification by a responsible officer of the applicant entity, that its permit
remains valid and subsisting, and that no other source of income has been
made.

2) Tax and Duty Free Importation. - The international or foreign film or
television production entity shall enjoy tax and duty free importation of filming
equipment as determined and endorsed by the PFTTA

Section 13. Implementing Rules and Regulations. - The Film Development
Council, Department of Tourism, Department of Finance and the Bureau of
Immigration and Deportation, shall promulgate and issue the implementing rules and
regulations within ninety (90) days upon approval of this Act.


Section 14. Appropriations. - The amount necessary to implement the
provision of this Act shall be included in the Annual General Appropriations Act.

Section 15. Separability Clause. - In the event that any provision or part of
this Act shall be declared unconstitutional, the remaining provisions shall remain
valid and in full force and effect.

Section 16. Repealing Clause. - Section 105 (j) of the Tariff and Customs
Code is hereby repealed, accordingly. All other laws, orders, decrees, issuances,
rules and regulations or parts thereof inconsistent with the provisions of this Act are
hereby repealed, amended or modified accordingly

Section 17. Effectivity. - This Act shall take effect fifteen (15) days after its

complete publication in the Official Gazette or in at least two (2) newspapers of
general circulation, whichever comes earlier.

Approved,