FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B. No. 13'9 4 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
This bill seeks to grant tax incentives to members of the broadcast and film 
industry that will produce educational programs for children, in order to make quality 
education accessible to children, especially those from the countryside. 
Section 1, Article XIV of the 1987 Philippine Constitution provides that the State 
shall protect and promote the right of all citizens to quality education at all levels and 
shall take appropriate steps to make such education accessible to all. Furthermore, 
Section 24, Article I1 declares that the State recognizes the vital role of information in 
nation-building. Pursuant to this, government launched various efforts to make 
education accessible to all, particularly to children in the countryside. One such method 
is by encouraging the production of educational programs for children, given the wide 
reach and universal appeal of broadcast media to them. 
Republic Act No. 8370 otherwise known as the "Children's Television Act of 1997" 
was enacted to promote and encourage the production and broadcasting of 
developmentally-appropriate 
television programs 
for 
children through 
the 
administration of a national endowment fund for children's television. The National 
Endowment Fund was created for the promotion of high standards of iiidigenous 
program development in children's television and media specifically intended for 
Filipino children. An amount of Thirty million pesos (P30,000,000) sourced from the 
income of the lotto operations of the Philippine Charity Sweepstakes Office (PCSO) and 
another Thirty million pesos (P30,000,000) from the gross income of the Philippine 
Gaming Corporation (PAGCOR) shall form part of the Fund. Access to the Fund shall 
be provided by the Council through a grant application process for qualified producers 
and organizations with proven track record in the production of high quality children's 
television programs. 
Despite this law, there are still less child-friendly programs in television, while 
no law has been passed to encourage the production of films that especially cater to 
children in our country. This must be brought about by the heavy taxes imposed on 
mass media and the profit-oriented operations and market-driven functions under 
which they struggle. 
It is therefore imperative that the State intervene in the form of relevant 
legislation to encourage media entities to invest in our children's future thru the 


production of educational programs that would make quality education accessible thru 
mass media. 
This bill aims to accomplish that by exempting the machineries, equipment, tools 
for production, spare parts, supplies, materials and transportation and communication 
facilities to be used actually, directly and exclusively for educational purposes by media 
producers and publishers from paying duty and internal revenue tax. 
Under this proposed measure, the net income derived from educational 
programs and publications shall be tax-exempt for (5) years from the start of its initial 
operation or until the producer and publisher shall have attained reasonable return of 
their Investment. Likewise, all expenses incurred in the production of commercials and 
advertisement for educational purposes and approved by the Secretary of Education, 
shall enjoy tax deduction of not more than ten percent (10%) of the gross operating 
expenses of the advertisers or sponsors. Finally, broadcast media and print media shall 
be given ten percent (10%) lower airtime rates and cost of space for every paid feature 
of production or publication with educational content. 
In view of the foregoing, immediate passage of this bill is earnestly requested. 
Senator 


FOURTEENTH CONGGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
1 
SENATE 
S.B. No. 137 4 
Introduced by Senator Loren Legarda 
AN ACT 
GRANTING FISCAL INCENTIVES TO MEDIA ENTITIES DEVOTING AIR TIME 
AND SPACE TO EDUCATIONAL PROGRAMS FOR CHILDREN, AND TO 
ADVERTISERS OR SPONSORS SUPPORTING SUCH PROGRAMS, AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress Assembled 
SECTION. 1. Declaration of Policy - It is hereby declared the policy of the State 
to. recognize the vital roles of communication and information in nation building and 
shall take appropriate steps to make education accessible to all. Pursuant to this policy, 
the State shall promote, support, and provide incentives to mass media, as well as to 
sponsors or advertisers, who devote air time and space for educational purposes. 
SECTION. 2. Coverage - This Act shall apply to all kinds of mass media 
operating within the Republic of the Philippines 
SECTION. 3. Definition of Terms - For the purpose of this Act, the following 
terms shall mean: 
a) Mass media - refers to means of communication which includes both broadcast, 
film and print media that reach very large numbers of people; 
b) Broadcast media - refers to radio, television, cable broadcast and the like; 
c) Print media - refers to newspapers, magazines, reviews, bulletins and other 
publications appearing at regular interval, with fixed prices for subscriptions 
appearing at regular interval, with fixed prices for subscription and sale and 
published within the Philippines; 
d) Commercials and advertisements - shall mean announcement, description, 
presentation, advertising or promoting of something, as of goods for sale, in 
newspaper, magazine, television, radio, etc.; 


e) Advertiser or sponsor - shall mean the owner or the principal of the thing or 
product to be advertised or sponsored; 
f) Educational purposes - includes, but not limited to, educational programs, 
publications, commercials and advertisements which 
(1) 
(2) promote social values; 
(3) 
(4) 
(5) 
give positive influence on entertainment; 
mobilize community support to, and wage information campaigns 
directed at parents to promote the importance of basic education; 
improve the image of technical education and skills training and to 
inculcate the necessary values needed for productive employment; 
propagate culture, foster patriotism and nationalism and other values 
that serve as an instrument in the struggle for Filipino sovereignty, 
identity, national unity and integration; and 
Such other similar descriptions the Secretary of Education may provide 
pursuant to the implementation of this Act. 
(6) 
SECTION. 4. Tax Exempt Importation - The provisions of existing laws to the 
contrary notwithstanding, the machineries, equipment, tools for production, spare 
parts, supplies, materials and transportation and communication facilities to be used 
actually, directly and exclusively for educational purposes by media producers and 
publishers are not subject to duty and internal revenue tax: Provided, that where the 
National Economic and Development Authority certifies to the availability of the 
abovementioned items in the local market of sufficient quantity, comparable quality, 
and price to meet the needs of said items shall be subject to applicable taxes, the 
importation of such tax-exempt items brought or imported into the Philippines are 
subsequently sold, transferred or exchanged in the Philippines are subsequently sold, 
transferred or exchanged in the Philippines to be devoted to non-educational purposes, 
the purchasers or recipients shall be considered the importer thereof, and shall be liable 
of the duty and internal revenue tax due on such importation subject to depreciation 
allowance. The tax due on such items shall constitute a lien on the article itself, superior 
to all other charges or 1iens;irrespective of the possessor thereof. 
SECTION. 5. Donations for Educational Purpose - For purpose of this Act, any 
amount paid and contributed for educational programs and publications by any 
individual or corporation which shall not exceed ten percent (10%) of their respective 
annual income computed without the benefit of any tax incentives under existing law 
shall be tax deductible. 
Properties other than cash donated shall be valued in accordance with the rules 
and regulations prescribed by the Secretary of Finance in consultation with appropriate 
government agencies. 
SECTION. 6. Program and Publication - The net income derived from 
educational programs and publications shall be tax-exempt for (5) years from the start 
of its initial operation or until the producer and publisher shall have attained reasonable 
return of their investment. Thereafter, no part of the net income of which inures to the 
benefit of the producer or publisher in an amount not in excess of twenty-five percent 
(25%) of the taxable income derived from the program or publication shall be allowed. 


The excess amount of the net income shall be devoted for the enhancement of the 
educational program and publication and for other educational purposes. 
SECTION. 7. Commercial and Advertisements - All expenses incurred in the 
production of commercials and advertisement for educational purposes under Section 3 
paragraph f of this Act, and approved by the Secretary of Education, shall enjoy tax 
deduction of not more than ten percent (10%) of the gross operating expenses of the 
advertisers or sponsors: Provided, that these commercials and advertisements are 
actually delivered to the general public. 
SECTION. 8. Airtime Rates and Cost of Space - Broadcast media and print 
media shall given ten percent (10%) lower airtime rates and cost of space for every paid 
feature of production or publication with educational content, as approved and certified 
by the Secretary of Education, or any equivalent Government agency, the difference 
from the regular rate shall be chargeable to the value-added tax accruable. 
SECTION. 9. Government Cooperation - Every department, bureau, office 
agency or instrumentality, of the government, including government-owned or 
controlled corporation, are enjoined to cooperate with the private sector in order to 
achieve the objectives of this Act. 
SECTION. 10. Separability Clause - If any provision of this Act shall be 
declared unconstitutional, the other provisions which are not affected thereby shall 
continue in force and effect. 
SECTION. 11. Repealing Clause - Any law, act, decree, order, proclamation, 
repealed and modified accordingly. 
SECTION. 12. Effectivity Clause -This Act shall take effect upon approval. 
Approved,