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FIFTEENTH CONGRESS 
) 
CONGRESS OF THE PHILIPPINES ) 
First Regular Session 
) 
l~ffm~ (If tfp;, ~j.I;'",rf"f:Hll 
'11 
MAR 22 P 5 :39 
Introduced by Senator EDGARDO J, ANGARA 
EXPLANATORY NOTE 
Emerging market economies worldwide have been faced with a number of 
external and internal trends and developments that affect the fiscal sector: the 
recent global economic crisis, liberalization, a marked shift from state to market 
and from the public to the private sector, and the increasing demands for greater 
transparency, accountability, and participation. 
As a consequence of these trends and developments, emerging economies 
like the Philippines are presented with the challenge of implementing fiscal 
reforms necessary to help sustain the country's economic growth. 
The proposed bill on the Rationalization of Fiscal Incentives seeks to 
harmonize the existing incentive system which is provided under different laws 
with differing provisions. It specifically intends to eliminate competition among 
ecozone administrators on account of their unequal investment incentive regimes 
and grants incentives that are at par with regional neighbors. 
It further aims to promote countryside development by granting appropriate 
tax incentives to investors that would choose to locate in the poorest provinces of 
the country. 
It is likewise geared to promote exports equally, regardless of 
location, whether outside or inside economic zones. 
The measure introduces institutional reforms by enhancing capacities and 
clarifying the mandates and roles of concerned government agencies while 
strengthening the monitoring processes and mechanisms in implementing the 
incentive system, thus, generally improving the effectiveness of fiscal institutions 
and procedures, respectively. 
The proposed legislative measure has long been under consideration in both 
Houses of Congress. There is urgency to pass this piece of legislationin order to 
provide for a more effective policy framework that would promote consistency, 
transparency, and predictability in the country's investment regime. 


FIFTEENTH CONGRESS 
) 
CONGRESS OF THE PHILIPPINES) 
Firs! Regular Session 
) 
SENATE 
Senate Bill No. 2'755 
Introduced by Senator Edgardo J. Angara 
'11 
MAR 22 P 5 :39 
THE INVESTMENTS AND INCENTIVES C;ODE OF THE PHILIPPINES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
PRELIMINARY TITLE 
CHAPTER I 
TITLE AND DECLARATION OF POLICY 
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SECTION 1. Title. - This Act shall be known as "The Investments and Incentives Code of the 
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Philippines". 
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SECTION. 2. Declaration of Investment Policies. - The national economy shall be developed so 
as to enhance its competitiveness in the global economy and geared towards investment and 
employment generation and countrywide development, through industry development, policy 
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formulation, investment promotion and investor servicing. Accordingly, the following are the 
declared policies of the State: 
a. The State shall pursue a market-responsive investment regime; 
b. The State shall formulate industry and sectoral development programs; 
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c. The State shall undertake investment promotion activities; 
d. The State shaH grant incentives that are simple to administer, time-bound and 
performance-based; and 
e. The State recognizes that industrial peace is essential to attracting investments. 
CHAPTER II 
ORGANIZATION AND FUNCTIONS OF TH~ BOARD OF INVESTMENTS 
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SECTION. 3. The Board of Investments (BOl). - The Board of Investments hereinafter referred 
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to as the "BOl" shall implement the provisions of this Act except as otherwise provided therein. 


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SECTION. 4. Relationship of !PAs with the BO! and Other Government Agencies. - IPAs shall 
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maintain their functions as provided for in their respective Charters except to the extent modified 
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by the provisions of (his Act. PrOVided, however that, the IP As not covered by this Act may opt 
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to administer the incentives provided hereunder and apply the relevant policies adopted by the 
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Board. 
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For purposes of efficient database on investment statistics and other investment data and 
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information, all IPAs are required to submit to the BOI all investment data and information and 
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such other related data semi -annually or as often as may be required. 
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SECTION. 5. Composition of the BO! Board of Governors. - The BOI Board of Governors, 
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hereinafter referred to as the "Board", shall be composell of nine (9) governors: the Secretary of 
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the Department of Trade and Industry (DTI), the Secretary of the Department of Finance (DO F), 
, 
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the Director General of the National Economic Development Authority (NEDA), the DTI 
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Undersecretary for Investments and Industry Group (nG), the DTI Undersecretary of 
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International Trade Group (ITG), the DTI Undersecretary of Regional Operations Group (ROG) 
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and three (3) representatives from the private sector. The. Secretary of the DTI shall concurrently 
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be (he Chairman of the BOI and the DTI Undersecretary for Investments and Industry Group 
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shall be the concurrent Vice Chairman and Managing Governor of the BOI. The three (3) 
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representatives from the private sector shall be appointed by the President for a term not 
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exceeding four (4) years: Provided, That a governor may be reappointed: Provided, further, That 
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a governor shall serve as such until his successor shall have been appointed and qualified. 
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The Managing Governor of the BO! shall be assisted by Jour (4) career officials with the rank of 
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Deputy Managing Governor, who shall be appointed by the Board, upon the recommendation of 
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the Managing Governor. 
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Members of the Board shall receive a reasonable per diem for every meeting attended. 
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SECTION. 6. Qualifications of the BO! Board of Governors. - The governors of the BOI shall 
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be citizens of the Philippines, at least thirty-five (35) years old, with proven probity and integrity, 
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of good moral character and of recognized competence in law, economics, business, marketing, 
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advertising, management or its equivalent. 
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SECTION. 7. Powers and Functions of the Board. - The Board shall be responsible for industry 
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development, policy formulation, investment promotion, and investment facilitation and 
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aftercare services. It shall hold meetings at least once a week for the conduct of business or as 
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often as may be necessary upon the instance of the Chairman or the Managing Governor. The 
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notice of regular and special meetings shall be given to all the members of the Board and the 
presence of five (5) members shall constitute a quorum and the affirmative vote of five (5) 
members in a meeting validly held shall be necessary to exercise its powers and perform its 
functions which shall include the following: 
a. Formulate an evolving National Framework for Investment Promotions (NFIP) and 
promulgate its rules, regulations and policies that will govern all Investments Promotion 
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Agencies (IP As); 
b. Formulate an evolving National Framework for Industrial Development (NFID) and 
promulgate its rules, regulations and policies in consultation with the private sector. The 
NFID shall identify key emerging markets or industries that will substantially enhance 
the competitiveness of the country, which include among others, research and 
development, agricultural technology, biomedical devices and systems, renewable 
energy, logistics and information communications and technologies; 
c. Promulgate rules, regulations and policies on the administration of incentives which the 
IP As are mandated to implement; 
d. Plan and implement industrial programs to hasten economic development including those 
relating to the implementation of international trade, investment and industry-related 
environmental agreements and protocols; 
e. Prepare the Investments Priorities Plan (IPP) in accordance with Title III, Chapter I of 
this Act; 
f. 
Formulate rationalization programs for certain industries whose operation may result in 
dislocation, oversupply or inefficient use of resources that impedes economic growth. In 
the interest of national development and upon approval of the President, the Board may 
restrict, either totally or partially, the importation or exportation of any equipment, raw 
materials, intermediate goods or finished goods; 
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g. Formulate and negotiate positions for bilateral, multilateral and regional investments and 
investment-related trade agreements and/or arral\gements; 
h. Establish the Investment Promotion Action Center (i-PAC); 
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Establish and operate regional investment centers in the Philippines, and establish and 
operate overseas investment offices; 
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Extend assistance to micro and small enterpriSes in the preparation of feasibility and 
other pre-investment project studies; 
k. Process and approve, deny, suspend, revoke applications for registration, imposing terms 
and conditions as it may deem necessary to promote the purposes of this Act, including 
the refund and forfeiture of incentives when appropriate, restricting availment of 
incentives not needed by the project as determined by the Board, requiring performance 
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bonds from BOI -accredited bonding companies, and payment of application, registration, 
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publication and other fees and when warranted may limit the availment of Income Tax 
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Holiday incentive to the extent that the investors' country law or treaties with the 
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Philippines allows credit for taxes deemed paid in the Philippines; 
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1. Recommend to the President the suspension of the nationality requirement provided for 
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in this Act in appropriate cases such as those involving bilateral, multilateral, or regional 
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investments, or other trading agreements of the Philippines with other countries; or when 
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the existing laws of another country where the investor comes from provides no 
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nationality restrictions for Filipino investors or provides for reciprocal nationality 
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accommodations; 
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m. In meritorious cases, waive, condone or reduce fines or penalties imposed on registered 
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enterprises, provided, that in case of reduction, the minimum compromise rate shall not 
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be less than 40 % of the basic assessed fines or penalties; 
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n. Enter into agreements with other agencies for the simplification of systems and 
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procedures involved in the promotion of investments, operation of zones and registered 
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enterprises, and other activities necessary for the effective implementation of this Act; 
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o. Gather, consolidate and monitor incentives data and information from all IP As and other 
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concerned govermnent agencies for submission tQ the President and Congress; 
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p. Regulate the implementation of Regional Operating Headquarters, Retail Trade Law, 
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Long-Term Lease and other laws as mandated; . 
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q. Cancel registration or suspend the availment incentives of a registered enterprise andlor 
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require the refund of incentives, including interests and monetary penalties, when 
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warranted; 
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r. Mediate controversies andlor disputes involving investors; 
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s. After due hearing, decide controversies that may arise between BOI-registered 
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enterprises therein arising from the implementation of this Act. The Board shall have the 
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power to subpoena witnesses, administer oaths, and compel the production of books, 
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papers and other evidence, and to cite for contempt any person or organization that fails 
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to comply with the aforestated processes: PrOVided, That the Board may grant immunity 
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from prosecution to any person whose testimony or documents or other evidence is 
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necessary or relevant to the case: Provided further, That a registered enterprise may file a 
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motion for reconsideration of a decision or final order within fifteen (15) days from 
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notice thereof, with proof of service on the parties affected. No second motion for 
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reconsideration of a decision or final order by the same party shall be entertained; 
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Act on investment projects covered by bilateral, multilateral, and regional agreements 
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subject to rules and guidelines to be formulated by the Board; 
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u. Determine the organizational structure of the BOI; and 
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v. Exercise all the powers necessary or incidental to attain the purposes of this Act and other 
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laws vesting additional functions on the Board. 
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SECTION. 8. Powers and Duties o/the Managing Governor. -
The Managing Governor shall 
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have the following powers and duties: 
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a. Preside over the meetings of the Board in the absence of the Chairman; 
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b. Prepare the Agenda for the meetings of the Board and submit for its consideration and 
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approval the policies and measures which the Chairman deems necessary and proper to 
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carry out the provisions of this Act; 
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c. Recommend to the Board such policies and measUres he may deem necessary to carry out 
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the objectives of this Act; 
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d. Assist registered enterprises and prospective investors to have their papers processed with 
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dispatch by all government offices, agencies, instrumentalities and financial institutions; 
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e. Act as liaison to investors, government, affiliated organizations and other stakeholders; 
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Coordinate the policies, plans and programs of the BOr. As such, he shall exercise 
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overall supervision and general direction on the operations and affairs of the BOI; 
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g. Perform the other duties of the Chairman in the absence of the latter, and such other 
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duties as may be assigned to him by the Board of Governors; and 
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h. Generally, to exercise such other powers and perform such other duties as may be 
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directed by the Board from time to time. 
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SECTION 9. BOI Personnel. - All positions in the BOI shall be governed by compensation, 
position classification systems, and qualification standards approved by the Board based on a 
comprehensive job analysis and audit of actual duties and responsibilities. The compens?ltion 
plan shall be comparable with the prevailing compensation plan of other IP As such as Philippine 
Economic Zone Authority (PEZA) and shall be subject to periodic review by the Board without 
prejudice to yearly merit reviews or increases based on productivity. The BOI shall therefore be 
exempt from existing laws, rules and regulations on compensation, position classification and 
qualification standards. 
For this purpose, the current BOI shall be reorganized in accordance with its mandate provided 
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under this Act. Those who will opt to retire from government service shall be entitled to three (3) 
months pay for every year of service and to gratuities and benefits provided for under existing 
laws. The Department of Budget and Management shall allocate an appropriate budget for the 
retirement and separation pay. 
SECTION. 10. The Investment Promotion Action Center.(i-PAC}. - There is hereby created an i-
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PAC at the BOI that shall serve as the link to all government agencies to facilitate entry, 
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retention, expansion and diversification of investments. The BOI shall serve as the Coordinator 
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of the i-PAC. 
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The i-PAC shall be composed of all government agencies involved in the establishment or 
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operation of business including, but not limited to, <)11 IPAs, the Securities and Exchange 
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Commission (SEC), the Bureau of Internal Revenue (BIR), the Bureau of Customs (BOC), the 
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Bureau of Immigration (BI), the Department of Trade and Industry (DTI), the Department of the 
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Interior and Local Government (DILG), the Department of Agriculture (DA), the Department of 
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Environment and Natural Resources (DENR), the Department of Labor and Employment 
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(DOLE), the Department of Foreign Affairs (DFA), the Department of Energy (DOE), the 
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Department of Public Works and Highways (DPWH), the Department of Agrarian Reform 
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(DAR) and such other agencies as may be determined by the Board. The government agencies 
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involved shall designate representatives to the i-PAC that are clothed with authority to act and 
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approve/deny any matter relative to their respective agencies. 
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SECTION. 11. Powers and Functions of the i-PAC. - The i-PAC shall exercise and perform the 
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following powers and functions: 
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a. Provide advice, guidance, information and procedure on various laws, rules and 
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regulations governing investments and the conduct of business in the Philippines. 
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b. Ensure that all investment-related requirements are acted upon within ten (10) working 
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days. 
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c. Recommend the streamlining of existing procedures to ensure that all frontline agencies, 
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dealing with the operation of business, perform their tasks for identified government to 
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business transactions. 
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d. Establish an on-line investment facilitation system. 
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e. Act, in coordination with appropriate government offices or agencies, such as the Office 
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of the Ombudsman and the Civil Service Commission (CSC), on complaints filed by any 
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investor or potential investor against any public official or employee or any office, 
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agency or instrumentality, including local government units (LGUs) and officials, as well 
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as any government-owned and -controlled corp~ration (GOCC), in connection with any 
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act 01' duty required by law to facilitate the entry oflocal and foreign investments. 
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f. Perform such other functions as may be directed by the Board. 
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SECTION. 12. Honoraria and Allowances. - The Board shall provide for reasonable honoraria 
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and allowances for the i-PAC members and its personnel. 
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TITLE II 
DEFINITION OF TERMS 
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SECTION. 13. Definition of Terms. - As used herein, the following shall mean: 
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a. "BOr or the "Board" shall refer to the Board of Investments created under this Act. 
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b. "Investments Promotion Agencies (IPAs)" shall include the BOI, the Philippine 
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Economic Zone Authority (PEZA), the Bas\)s Conversion Development Authority 
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(BCDA), the Subic Bay Metropolitan Autho~ity (SBMA), the Clark Development 
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Corporation (CDC), the John Hay Managemerlt Co~oration (JHMC), the Poro Point 
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Management Corporation (PPMC), and all other IPAs that may be created by law. 
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c. "Registered Enterprise" shall mean any individual, partnership, co~oration, Philippine 
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branch of a foreign corporation or other entity inco~orated and/or organized and existing 
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under Philippine laws and registered with an IP A, in accordance with this Act: Provided, 
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however, That the term "registered ente~rise'" shall not include any of the following 
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service ente~rises such as, but not limited to, those engaged in customs brokerage, 
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trucking/forwarding services, janitorial services, security services, insurance and/or 
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banking and other financial services, consumers cooperatives, credit unions, consultancy 
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services, restaurants or such other services, 'Yithin the economic zones, as may be 
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determined by the IPA Board, duly accredited and/or licensed by any of the IPAs and 
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whose income derived within the economic zones shall be subject to taxes under the 
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National Internal Revenue Code (NIRC) of 1997, as amended. 
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d. "Investments Priorities Plan (IPP)" shall refer to the list of industries, services and other 
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economic activities, which will be eligible for incentives under this Act, prepared and 
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determined as priority or preferred activities in accordance with Title III, Chapter I of 
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this Act. 
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e. "New product or service" shall refer to any product or service not locally or not 
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sufficiently manufacturedlrendered to meet the demand. 
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f. "Gross income earned' refers to gross sales or gross receipts derived from the registered 
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activity less sales returns, discounts and allowanc,es and cost of goods sold. 
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g. "Tax credit" shall mean any credits against taxes and/or duties equal to those actually 
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paid or would have been paid. Tax credit certificate shall be issued by the Secretary of 
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Finance or his representative, or the concerned IPA, if so delegated by the Secretary of 
Finance. The tax credit certificate issued pursuant to this Act shall not be transferable to 
another registered enterprise under this Act. In case the industry is in a state of distress, 
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as declared by the Board, the tax credit certificate held by enterprises of such distressed 
industry shall be freely transferable. The tax credit shall be valid only for a period of five 
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(5) years from the date of issuance. The tax credit certificate shall be used to pay taxes, 
duties, charges and fees due to the national government, except withholding tax. 
"Export sales of goods" shall mean the sales revenues paid for in freely convertible 
foreign currency, determined from invoices, bills of lading, inward letters of credit, 
landing certificates, or other commercial documents, of the following: 
1) the sale and actual shipment of goods from the Philippines to a foreign country by a 
registered enterprise; 
2) sales of goods to an export enterprise registered in accordance with this Act; to 
diplomatic missions and to agencies or institutions allowed to import said goods tax 
and duty-free; to international shipping or international air transport operations; and 
to foreign military aircraft or seacraft; 
3) sales to a nonresident buyer for delivery to a resident local export enterprise of 
capital equipment, raw materials, production supplies, packaging materials and 
other production requirements needed for the registered activity of the export 
enterprise; or 
4) sales of goods to a nonresident buyer, except automobiles and non-essential goods, 
manufactured or processed in the Philippines, for delivery to a resident in the 
Philippines: Provided, That they are paid for in acceptable foreign currency. 
Provided, That in the case of paragraph (2) above, only sales to an export enterprise of 
capital equipment, raw materials, production supplies, packaging materials and other 
production requirements needed for the registered activity of the export enterprise; and 
sales to international sea or air transport operations of goods, equipment, spare parts and 
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supplies, except fuel, to be used in the aircraft or seacraft and capital equipment needed 
for the shipping or air transport operations, shall be entitled to incentives for export 
enterprises under this Act. 
Sales of locally manufactured or assembled goods for household and personal use under 
the Internal Export Program and similar programs of the government shall be deemed as 
"export sales". 
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i. "Export sales of services" shall mean the sales revenues or receipts, determined from 
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contracts, invoices, vouchers, official receipts, or other commercial documents of the 
following: 
I) services rendered for clients abroad by registered enterprises; 
2) services rendered for an export enterprise registered in accordance with this Act; to 
diplomatic missions and to other agencies or institutions with tax and duty-free 
privileges; 
3) services rendered to international airlines or shipping lines, or foreign military 
aircraft or seacraft, or information and communication teclmology enterprises, even 
if rendered locally. 
Provided, That in the case of paragraph (2) above, only services for an export enterprise 
performed by subcontractors and/or contractoFs in the manufacture or processing of 
goods; other services necessary for the registered activity of an export enterprise; and in 
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the case of paragraph (3), only services for the overhaul, repair and maintenance for 
international shipping or air transport operations, and foreign military aircraft or seacraft, 
shall be entitled to incentives for export enterprises under this Act. 
The foregoing notwithstanding, services rendered locally by registered enterprises that 
are paid for in freely convertible foreign currency' shall be considered as "export sales". 
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An "export enterprise" shall mean a registered enterprise which is a manufacturer, 
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processor or service provider and whose export sale of its products or services exceeds 
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seventy percent (70%) of its total annual production of the preceding taxable year. The 
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export requirement herein provided may be reduced, but shall not be less than fifty 
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(50%), in meritorious cases under such conditions as the Board may determine. 
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An export trader that buys and sells for its own account products of micro and small 
enterprises and earns one hundred percent (100%) of its annual sales from exports of the 
same shall be deemed to be an export enterprise. 
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k. A "domestic enterprise" shall mean a registered enterprise, which produces goods for 
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sale or renders services exclusively to the dome~tic market or does not comply with the 
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minimum export requirement of an export enterprise. 
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"Service enterprise" is an enterprise engaged or proposing to engage in rendering 
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teclmical, professional or other services listed in the IPP. 
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Service enterprise that earns its revenues in foreign currency generated from nonresident 
clients shall be entitled to the incentives provided to an "export" enterprise. 
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m. "Source documents" shall refer to input materials and documents reasonably needed by 
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the registered enterprise such as, but not limited to, books, directories, magazines, 
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newspapers, brochures, pamphlets, medical records or files, legal records or files, 
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instruction materials, drawings, blueprints or outlines. 
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n. "Processing' shall mean converting raw material~ into marketable form through physical, 
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mechanical, chemical, electrical, biochemical, biological or other means, or by a special 
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treatment or a series of actions, such as slaughtering, milling, pasteurizing, drying or 
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desiccating, quick freezing, that results in a change in the nature or state of the products. 
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Processing shall include assembly provided that a distinct or new product is formed. 
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Mere packing or packaging shall not constitute processing. 
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o. "ECGZGNES" or "Special Economic Zones (SEZ)" shall refer to selected areas with 
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highly developed or which have the potential to be developed into agro-industrial, 
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industrial, supply chain city, information technology, tourist/recreational, commercial, 
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banking, investment and financial centers, retirement and medical zones whose metes and 
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bounds are fixed or delimited by presidential proclamations. An ecozone may contain 
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any or all of the following: industrial estates (lEs), export processing zones (EPZs), 
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supply chain cities, leT parks and centers, free trade zones and tourism estates: Provided, 
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however, That areas where mining operations are undertaken shall not be declared as 
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ecozones. 
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p. "Ecozone developer" shall refer to a business entity duly registered with the PEZA or the 
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BOI, as the case may be, to develop, operate and maintain an ecozone that will pnt np the 
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required infrastructure facilities and utilities, to 'include among others, light and power 
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system, water supply and distribution system, sewerage and drainage system, pollution 
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control devices, communication facilities, paved road network, administration building, 
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standard factory buildings, and other facilities as may be required by enterprises 
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registered with the PEZA. 
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q. "Export ProceSSing Zone (EPZ)" or "Export Zone" shall refer to a specialized industrial 
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estate located physically and/or administratively outside the customs territory and 
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predominantly oriented to export production. 
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r. "Freeport" is an isolated and policed area adjacent to a port of entry as defined by 
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Section 3519 of the Tariffand Customs Code, which shall be operated and managed as a 
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separate customs territory to ensure free flow or movement of goods, except those 
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expressly prohibited by law, within, into and exported out in the freeport zone where 
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imported goods may be unloaded for immediate transshipment or stored, repacked, 
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sorted, mixed or otherwise manipUlated without being subj ect to taxes and duties. 
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s. "Tourism estate" is a tract of land with defined boundaries, suitable for development into 
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an integrated resort complex to render tourism services for both local and foreign tourists, 
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travelers and investors, with prescribed carrying capacities, of tourist facilities and 
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activities such as, but not limited to, sport, gaming and recreation centers, 
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accommodations including hotels, apartelles, tourist irms/villas, pension houses, 
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convention and cultural facilities, food and beverage outlets, commercial establishments 
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and other special interest and attraction activities/establishments, and provided with 
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roads, water supply facilities, power distribution facilities, drainage and sewage systems, 
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and other necessary infrastructures and facilities. A tourism estate shall be under unified 
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and continuous management, and can either be a component of an ecozone or the whole 
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ecozone itself. 
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t. 
"Information and Communications Technology (ICT) park" or "ICT park:' shall refer to 
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an area which has been developed into an integrated development complex capable of 
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providing infrastructure and other support facilities required by ICT enterprises, as well 
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as amenities required by professionals and workers involved in rCT enterprises, or easy 
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access to such amenities. 
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u. "ICT center" shall refer to a building which has been developed by public or private 
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corporate entities to provide infrastructure and other support facilities required by ICT 
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enterprises, as well as amenities required by professionals and workers involved in ICT 
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enterprises, or easy access to such amenities. 
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v. "Capital equipment" refers to machinery, equipment, major components thereof, spare 
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parts, accessories, tools, devices, apparatus, fixtures, fittings and accompaniments which 
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are directly and/or reasonably needed in the registered activity of the enterprise and those 
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required for pollution abatement and control, cleaner production and water reduction! 
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conservation. 
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w. "Less Developed Area (LDA)" shall refer to an area that is included in the list prepared by 
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the BOI, after consultation with appropriate government agencies. Such listing shall take 
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into consideration the following criteria: low per capita gross domestic product, low level 
of investments, high rate of unemployment and/or underemployment and low level of 
infrastructure development including its accessibility to developed urban centers. 
TITLE III 
• 
INVESTMENTS WITH INCENTIVES 
CHAPTERI . 
QUALIFIED ACTIVITIES 
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SECTION. 14.Investments Priorities Plan (IPP). - The BOI, upon consultation with the Office 
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of the President, concerned IP As and appropriate govetnment agencies and the private sector, 
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shall formulate the IPP to be submitted to the President for his/her approval. 
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14 
In the listing of the activity in the IPP, the following shall be complied with: 
15 
16 
a. The activity shall be covered by the current Medium Term Philippine Development Plan 
17 
(MTPDP) and Medium Term Philippine Investment Plan (MTPIP) or its equivalent; 
18 
19 
b. The activity shall satisfy the following conditions: 
20 
1) 
Substantial amount of investments; 
21 
2) Considerable generation of employment; 
22 
3) Use of modern or new technology; or 
23 
4) Installation of adequate environmental protection systems: 
24 
25 
Provided, That items b(1) and b( 4) above shall be present in all activities, and the 
26 
threshold amount of investments and employment generation required for a specific 
27 
activity shall be subject to a periodic review every three (3) years taking into 
28 
consideration international standards and other indicators. 
29 
30 
c. The activity must comply with the specific qualification requirements and/or conditions 
31 
for a particular sector or industry as set by the appropriate government agency and such 
32 
other conditions as may be determined. 
33 
34 
SECTION. 15. Amendments. -
Subject to publication requirements and the criteria for 
35 
investment priority determination, the Board may, at any time, include additional areas in the 
36 
IPP, alter any of the terms of the declaration of an investment area, and temporarily or 
37 
permanently suspend activities on the IPP if it considers that such activity is no longer a priority. 
38 
In no case, however, shall any amendment of the IPP impair the incentives conferred on a 
, 
12 


1 
registered enterprise. The Board shall not accept appliciltions in an area of investment prior to 
2 
the approval of the same as a preferred area or after approval of its deletion as a preferred area of 
3 
investment in the IPP. 
4 
5 
SECTION. 16. Publication. - Upon approval of the IPP, in whole or in part, or upon approval of 
6 
an amendment thereof, the IPP or the amendment, ~pecifying and declaring the areas of 
7 
investment shall be published in at least one (1) newspaper of general circulation and all such 
8 
areas shall be open for application until publication of an amendment or deletion thereof. 
9 
10 
SECTION. 17. Strategic Projects. - The President, upon recommendation of the Board, may 
II 
allow registration of a strategic project that may not be listed in the IPP, but will locate in the 
12 
country as a result of stiff competition with other countries. 
13 
14 
A strategic project is a project that exhibits high social economic returns and requires large 
15 
investments that will significantly contribute to the country's economic development. In the 
16 
exercise of this authority, any three (3) of the following criteria shall be taken into account: (1) 
17 
large capital investments; (2) generate sizeable employment; (3) use of new and internationally 
18 
accepted high level of technology; and (4) creation of value-added. 
19 
20 
Notwithstanding the preceding paragraphs of this Section or any law to the contrary, a project 
21 
which shall lead to significant improvements in productivity and value added and that will (a) 
22 
produce or manufacture new, emerging and technologically advanced product, or (b) involve 
23 
breakthrough process innovation, or (c) involve new and innovative service, shall also be 
24 
deemed as "strategic project". 
25 
26 
CHAPTER II ' 
27 
INCENTIVES TO REGISTERED,ENTERPRISES 
28 
SECTION 18. General Incentive Provision.- The incentives provided in this Act may be availed 
29 
of by the registered enterprise to the extent of their registered activity to be reckoned from the 
30 
start of commercial operation; Provided that, the election of income tax-based incentives shall be 
31 
at the time of application for registration; Provided further, that such election, once made, shall 
32 
be final; Provided finally, that the incentives may be limited based on the project's net value-
33 
added, job generation, multiplier effect and measured capacity as determined by the Board or 
34 
IPAs. 
35 
SECTION. j 9. Incentives to Registered Export Enterprises. - Registered Export Enterprises 
36 
shall have the following incentives; Provided that, they meet the minimum export requirement: 
37 
13 


a. Income tax-based incentive options for registered export enterprises located inside or 
2 
outside ecozones or free ports. -
3 
I) Income Tax Holiday (ITH) for a period of six years (6) years and thereafter, five 
4 
percent (5%) tax on Gross Income Earned (GIE), in lieu of all national and local taxes 
5 
except real property tax (RPT) on land owned by private developers, for a period of 
6 
nineteen (19) years; or 
7 
2) Five Percent (5%) Tax on GIE, in lieu of all national and local taxes except RPT on 
8 
land owned by private developers, for a period of twenty five years (25) years; or 
9 
3) Fifty Percent (50%) reduction from corporatr income tax for a period of twenty-five 
10 
(25) years. 
II 
12 
b. Value-added Tax (VAT) and Customs Duty treatment on Importation of Capital 
13 
Equipment and Raw Materials. -
14 
1) 
Located Inside an Economic Zone and/or Freeport Zone 
15 
16 
17 
18 
19 
20 
• 
i. 
Exemption from VAT and customs duty on importation of capital equipment, 
including consignment thereof subject to Section 29 of this Act; 
ii. Exemption from V AT and customs duty on importation of raw materials, 
supplies, spare parts and semi-finished products used exclusively by the 
registered export enterprise in its registered activity; 
21 
2) 
Located Outside Economic and/or Freeport ipnes 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
i. 
Exemption from V AT and customs duty on importation of capital equipment, 
including consignment thereof subject to Section 29 of this Act. 
ii. Exemption from V AT and customs duty on importation of raw materials, 
supplies, spare parts and semi-finished products used exclusively by the 
registered export enterprise in its registered activity provided that such 
registered export enterprise is operating a Customs Bonded Manufacturing 
Warehouse (CBMW) or an accredited user of a Customs Common Bonded 
Manufacturing Warehouse (CCBMW). 
iii. Refund of VAT and customs duty on importation of raw materials, supplies, 
spare parts and semi-finished products used exclusively by the registered export 
enterprise in its registered activity if the registered export enterprise is not 
operating a CBMW or an accredited user of a CCBMW. 
c. Tax and Duty Free Importation of Source Documents. - The importation of source 
• 
documents by registered export enterprises shall. be eligible for V AT and customs duty 
exemption. The tax incentive may be granted to the registered export enterprise for a 
period often (10) years. 
14 


1 
2 
d Zero Percent (0%) Rate of VAT on the Sale by a Domestic Enterprise to a Registered 
3 
Export Enterprise. - The provisions of law to the, contrary notwithstanding, the sale by a 
4 
domestic enterprise of goods and/or services to a registered export enterprise, regardless 
5 
of the latter's location and whether enjoying the ITH, the Reduced Income Tax or the five 
, 
6 
percent (5%) tax on OlE shall be subject to zero percent (0%) VAT rate: Provided, That 
7 
such goods and/or services are required by registered export enterprise's activity. 
8 
9 
e. Exemptionfrom Wharfage Dues. - The provisions oflaw to the contrary notwithstanding, 
10 
exports by a registered export enterprise shall ,be exempted from wharfage dues and 
11 
export taxes. 
12 
13 
f 
Employment of Foreign Nationals. - Subject to the provisions of Commonwealth Act No. 
14 
613, as amended, a registered export enterprise may employ foreign nationals in 
15 
managerial, technical or advisory positions. 
16 
17 
Foreign nationals under employment contract within the purview of this incentive, their 
18 
spouses and unmarried children uuder twenty-one (21) years of age, who are not 
19 
excluded by Section 29 of Commonwealth Act No. 613, as amended, shall be permitted 
20 
to enter and reside in the Philippines during the period of employment of such foreign 
21 
nationals. 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
A registered enterprise shall train Filipinos as uuderstudies of foreign nationals in 
administrative, supervisory and technical skills <\nd shall submit armual reports on such 
training to the Board. 
Notwithstanding any provision of the law to the contrary, the practice of profession by 
foreign nationals shall be allowed inside an Ecozone or Freeport, subject to the following 
conditions: 
, 
1) The foreign national shall secure the required permit from the Professional 
Regulatory Commission to practice his profession; 
2) The law of the country of that foreign national allows genuine reciprocity for 
Filipinos to practice their profession thereto; 
3) There is no competent, able and willing at the time of application to perform the 
profession for which the foreign national is desired; 
4) 
The foreign national shall train two Filipino understudies; 
15 


I 
5) The ratio of foreign nationals viz-a-viz Filipinos practicing the same profession in a 
2 
registered enterprise shall not exceed 1:5 and shall not in any case exceed 5% of the 
3 
total workforce of the said registered enterprise; 
4 
6) 
The foreign national meets the conditions set forth under Section 25 (b), (c) and (d); 
5 
and 
6 
7) 
The practice of profession of the foreign national in the Philippines shall not exceed 
7 
a total of five years extendible for a limited period as determined by the Board. 
8 
SECTION. 20. Tax Treatment and Other Incentives for Registered Enterprises in Ecozones and 
9 
Freeport Zones. - In addition to the applicable incentives provided under the preceding section 
lOon export incentives, registered enterprises locating in the Special Economic Zones and Freeport 
II 
Zones shall be entitled to the following incentives: 
12 
13 
a. 
Tax Treatment of Merchandise in Ecozones or Freeports. -
14 
IS 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
I) Except as otherwise provided in this Act, foreign and domestic merchandise, raw 
materials, supplies, articles, equipment, machineries, spare parts and wares of every 
description, except those prohibited by law, brought into the ecozones or freeports 
to be sold, stored, broken up, repacked, assembled, installed, sorted, cleaned, 
graded, or otherwise processed, manufactmed, mixed with foreign or domestic 
merchandise whether directly or indirectly. related in such activity, shall not be 
subject to customs and internal revenue laws and regulations nor to local tax 
ordinances, the provisions of law to the contrary notwithstanding. 
2) 
Merchandise purchased by a registered enterprise located in the ecozones or 
freeports from the customs territory, and subsequently brought into the ecozones or 
freeports, shall be considered as export ~ales and exportation thereof shall be 
entitled to the benefits allowed by law for such transaction. 
3) Merchandise sent from the ecozones or freeports to the customs territory shall, 
whether or not combined with or made part of other articles likewise of local origin 
or manufactured in the Philippines while in the ecozones or freeports, be subj ect to 
internal revenue and customs laws of the Philippines as domestic goods sold, 
transferred or disposed of for local consumption. If the finished goods have 
imported components, the duties shall be based on the value of said imported 
materials, except when the final product is exempt. 
4) Qualified merchandise or articles manufactured by registered ecozone or freeport 
locators, which are made available for sale in the domestic market shall be imposed 
the applicable ASEAN Common Effective Preferential Tariff (CEPT) rate, if 
qualified, or applicable tariff rates under bilateral or regional trade agreements, if 
qualified, or Most Favoured Nation (MFN) rate on imported raw materials and 
16 


I 
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 
MFN rates on non-qualified raw materials used in the manufacture of the qualified 
merchandise or articles. In case of bilateral 'agreements, the applicable rate shall be 
the agreed rate. 
5) 
Domestic merchandise on which all internal revenue taxes have been paid, if subject 
thereto, and foreign merchandise previously .imported on which duty or tax has been 
paid, or which have been admitted free of duty and tax, may be taken into the 
ecozones or freeports from the customs terrHory of the Philippines and be brought 
back thereto free of quotas, duty or tax. 
6) 
Subject to such regulations respecting idenfity and safeguarding of the revenue as 
the concerned IP A may deem necessary when the identity of an article entered into 
the ecozones or freeports under the immediately preceding paragraph has been lost, 
such article when removed from the ecozones or freeports and taken to the customs 
territory shall be treated as foreign merchandise entering the country for the first 
time, under the provisions of the Tariff and Customs Code of the Philippines, as 
amended. 
7) 
Articles produced or manufactured in the ecozones or freeports and exported 
therefrom shall, on subsequent importation into the customs territory, be subject to 
the import laws applicable to like articles manufactured in a foreign country. 
8) 
Articles regulated by law for sale to the domestic market shall only be allowed to be 
used or consumed within the ecozones or freeports. 
9) Unless the contrary is shown, merchandise' taken out of the ecozones or freeports 
shall be considered, for tax purposes, to have been sent to customs territory. 
Special Economic Zones declared by presidential proclamations or created by law may 
avail of the incentives provided herein as conferred by the appropriate IPA subject to 
such terms and conditions as may be provided by law. 
28 
b. 
Tax Treatment o/Services in the Ecozones or Freeports. -
29 
I) Sale of service by an entity from the customs territory to a registered ecozone or 
30 
31 
32 
33 
34 
35 
• 
freeport enterprise or by a registered ecozone or freeport enterprise to another 
ecozone or freeport enterprise shall be treated as indirect export, and hence, shall not 
be subjected to internal revenue taxes for such transaction. 
2) 
Sale of service by a registered ecozone or fr"eport enterprise to the customs territory 
shall be subject to the applicable internal revenue laws and regulations. 
36 
c. 
Exemptionji"om Local Taxes and Licenses. -
Notwithstanding the provisions of law to 
37 
38 
the contrary, zone and freeport registered enterprises shall, to the extent of their 
construction, operation or production inside the zone or freeport be exempt from the 
17 


I 
payment of any and all local government imposts, fees, licenses or taxes except real 
2 
estate taxes which shall be collected by the Province/City/Municipality responsible for 
3 
the collection thereof under the provisions of the Real Property Tax Code: Provided, 
4 
That machineries owned by zone and freeport registered enterprises which are actually 
5 
installed and operated in the Zone for manufacturing, processing or for industrial 
6 
purposes shall not bc subject to the payment of real estate taxes for the first three (3) 
7 
years of operation of such machineries: Provided, further, That fifty percent (50%) of the 
8 
proceeds of the real estate taxes collected from all real properties located in the Zone and 
9 
such other areas owned or administered by the Authority shall be remitted to the 
10 
Authority by the province/city/municipality responsible for the collection of such taxes 
II 
under the provisions of the Real Property Tax Code. All real estate taxes accruing to the 
12 
Authority as herein provided shall be expended for such community facilities, utilities 
13 
andlor services as the Authority may determine. 
14 
15 
SECTION. 21. Incentives for Registered Domestic Enterprises. -
Registered domestic 
16 
enterprises shall be qualified to the following incentives to the extent of their registered activity: 
17 
18 
a. Income tax-based incentive options 
19 
1) ITH for a period off our (4) years; or 
20 
2) 
Fifty Percent (50%) reduction from corporate income tax for a period of fifteen (15) 
21 
years. 
22 
23 
b. VAT and Customs Duty Treatment on Importation of Capital Equipment 
• 
24 
1) Exemption from customs duty on importation of capital equipment, including 
25 
consignment subject to Section 29 of this Act; and 
26 
2) 
Refund of VAT on importation of capital equipment. 
27 
28 
c. 
Preferential Access to Financing and Acceptable Form of Collaterals. - Registered 
29 
SMEs shall be accorded access to financing from government financial institutions at 
30 
preferential rates below the market rates. Further, capital goods acquired from loans 
31 
secured from government financial institutions shall be an acceptable form of collateral 
32 
for the same loan. 
33 
34 
d. Assistance in the Preparation of Project StUdy. - Registered SMEs may be provided 
35 
assistance in the preparation of project study for purposes of registration under this Act. 
36 
18 


2 
3 
4 
5 
6 
7 
8 
9 
10 
e. Employment of Foreign Nationals. -
Subject to the provisions of Section 25 of 
Commonwealth Act No. 613, as amended, a registered domestic "strategic" enterprise 
may employ foreign nationals in managerial, technical or advisory positions. 
Foreign nationals under employment contract within the purview of this incentive, their 
spouses and unmarried children under twenty-one (21) years of age, who are not 
excluded by Section 29 of Commonwealth Act 1)[0. 613, as amended, shall be permitted 
to enter and reside in the Philippines during the period of employment of such foreign 
nationals. 
11 
A registered enterprise shall train Filipinos as understudies of foreign nationals in 
12 
administrative, supervisory and technical skills and shall submit annual reports on such 
, 
13 
training to the Board. 
14 
SECTION. 22. Incentives for Domestic "Strategic" Enterprises. -
Registered domestic 
15 
enterprises engaged in strategic projects, as defined under Section 17 of this Act may avail of the 
16 
following incentives, whenever applicable, to the extent of their registered activity: 
17 
18 
a. 
Income based incentive. -
19 
20 
21 
ITH for a period of eight (8) years and then fifty percent (50%) reduction from corporate 
income tax for a period of seventeen (17) years. 
22 
b. 
VAT and Customs Duty Treatment on Importation of Capital Equipment. -
23 
24 
I) Exemption from customs duty on importation of capital equipment, including 
consignment thereof subject to Section 31 of this Act; and 
25 
2) 
Refund of V AT on importation of capital equipment. 
26 
27 
Notwithstanding (a) above, the President, upon recommendation of the Board, may grant to 
28 
highly strategic projects ITH for a period up to fifteen (15) years and thereafter, five percent 
29 
(5%) tax on GIE, in lieu of all national and local taxes except RPT on land owned by private 
30 
developers and such other incentives as may be determined; Provided that, such projects meets 
31 
all the following criteria: 
32 
33 
a. 
Large capital investments of at least two billion T)S dollars (USD2 billion); 
34 
b. 
Generate sizeable employment of at least ten thousand (10,000) direct employees; 
35 
c. 
Use of new and internationally accepted high level of technology; and 
36 
d. 
Creation of value-added. 
37 
19 


I 
The amount of capital investment and employment genyration shall be reviewed every five (5) 
2 
years. In no case shall the requirements prescribed above be reduced. 
3 
SECTION. 23.1ncentives for Registered Domestic Enterprises in Less Developed Areas (LDAs). 
4 
- Registered domestic enterprises located in LDAs shall have the following incentives: 
5 
a. Income based incentive options.-
6 
1) 
ITH for a period of six (6) years; then ten percent (10%) Corporate Income Tax 
7 
(CIT) rate for ten (10) years if located in 1st to 3rd class municipalities; twelve 12 
8 
years iflocated in 4th to 6th class municipalities; or 
9 
2) 
Five Percent (5%) Tax on GIE in lieu of all national and local taxes, except RPT on 
10 
land owned by private developers, for a period of twenty five (25) years; 
11 
12 
b. 
VAT and Customs Duty Treatment on Importation of Capital Equipment.-
13 
I) Exemption from V A T and customs duty on importation of capital equipment, 
14 
including consignment thereof subject to Section 29 of this Act; and 
15 
2) 
Refund of V AT on importation of capital equipment 
16 
17 
c. Special Realty Tax Rates on Equipment and Machinery.- Realty and other taxes on civil 
18 
works, equipment, machinery, and other improvements by a registered enterprises 
19 
actually and exclusively used shall not exceed,one and a half percent (1.5%) of their 
20 
original cost less accumulated normal depreciatio!1 or net book value. 
21 
22 
SECTION. 24. Non-jiscal Incentives. - Registered enterprises shall be entitled to the following 
23 
non-fiscal incentives: 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
• 
a. 
Time-bound Processing of Requirement for Doing Business. - All application for 
permits, licenses, authorization and other requirements necessary for doing business 
including application for renewals thereof shall be acted upon by the government agency 
concerned within ten (10) working days from official acceptance thereof, otherwise, the 
same shall be considered automatically approved. For this purpose, all government 
agencies shall be mandated to post in their respective offices, the procedural process, 
documentation requirements and the imposable fees to be paid to facilitate the 
processing of the application. 
34 
b. 
Simplification of Customs and Internal Revenue Procedures. - Customs procedures for 
35 
36 
37 
the importation of equipment, spare parts, raw materials and supplies, exports of 
processed products by registered enterprises shall be simplified by the BOC. 
20 


1 
2 
3 
The BIR shaH simplify internal revenue procedures for the availment of incentives 
provided herein for registered enterprises. 
4 
c. 
Reduction and Harmonization of Documentary Requirements Submitted to Government 
5 
6 
7 
Agencies. - The Board shall formulate guidelines for the reduction and harmonization of 
related documentary requirements submitted to government agencies. 
8 
d. 
Employment of Foreign Nationals. -
Subject to the prOVlSlons of Section 25 of 
9 
Commonwealth Act No. 613, as amended, a registered domestic "strategic" enterprise 
• 
10 
II 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
may employ foreign nationals in managerial, technical or advisory positions. 
Foreign nationals under employment contract within the purview of this incentive, their 
spouses and unmarried children under twenty-one (21) years of age, who are not 
excluded by Section 29 of Commonwealth Act No. 613, as amended, shall be permitted 
to enter and reside in the Philippines during the" period of employment of such foreign 
nationals. 
A registered enterprise shall train Filipinos as understudies of foreign nationals in 
administrative, supervisory and technical skills and shall submit annual reports on such 
training to the Board. 
22 
SECTION. 25. Entitlement to Investor's Visa by a Foreign National. - A foreign national who 
23 
invests an amount of at least US$150,000, either in cash and/or equipment, in a registered 
24 
enterprise shaH be entitled to an Investor's Visa: Provided, That: 
25 
26 
a. He is at least eighteen (18) years of age; 
27 
b. He has not been convicted of a crime involving moral turpitude; 
28 
c. He is not afflicted with any loathsome, dangerous or contagious disease; and 
29 
d. He has not been institutionalized for any mental disorder or disability: 
30 
31 
Provided, further, That as a holder of the Investor's Visa, an alien shall be entitled to reside in 
32 
the Philippines while his investment subsists. For this purpose, he should submit an annual 
33 
report, in the form duly prescribed for the purpose, to prove that he has maintained his 
34 
investments in the country. Should said alien withdraw his investments from the Philippines, 
35 
then the Investor's Visa issued to him shall automatically expire . 
• 
36 
21 
'. 


I 
The minimum amount for investment provided for under this Act shall be made applicable to 
2 
visas granted to investors by the BOl, the PEZA, the SBMA, the CDC, the JHMC, the PPMC, 
3 
and other IPAs that may be created under the law. 
4 
5 
The investment amount heretofore stated shall be subject to a periodic review every three (3) 
6 
years by the BOr. 
7 
8 
CHAPTER III 
9 
A V AILMENT OF INCENTIVES 
10 
SECTION. 26. Income Tax-Based Incentives. - On availing the income tax-related incentives, 
11 
the BIR shall require a registered enterprise to secure a Certificate of Eligibility from the 
12 
appropriate IPA and attach the same to its Income Tax Return (ITR) or Annual Information 
13 
Return (AIR), whichever is applicable. Thereafter, the registered enterprise shall file its claim 
14 
with the appropriate IP A for validation. The IP A shall endorse the result of its validation to the 
15 
BIR after one year from the filing of a claim for ITH by the registered enterprise. 
16 
Failure to secure and attach the certification to the ITR or AIR, and/or file the ITH availment for 
17 
validation by the appropriate IP A shall cause the forfeiture of the ITH availment for the taxable 
18 
period. 
19 
Within six (6) months from the effectivity of this law, the BIR shall review its regulations on the 
20 
computation of GIE to ensure that only direct costs, or cost of goods sold and/or services 
21 
rendered, shall be deductible from gross revenues, and recommend stricter rules to the Secretary 
22 
of Finance if warranted. 
23 
SECTION 27. Fifty Percent (50%) Reduction/rom Corporate Income Tax. - In computing the 
24 
net taxable income for this incentive, the enterprise may be entitled to deduct the following 
25 
expenses, in addition to ordinary and necessary business expenses allowed under the NIRC of 
26 
1997, as amended: 
27 
a. 
Enhanced Net Operating Loss Carry-over (NOLCO) - The net operating loss of the 
28 
registered activity during the first five (5) years:from the start of commercial operation 
29 
which had not been previously offset as deduction from gross income may be carried 
30 
over as deduction from gross income for the next five (5) consecutive taxable years 
31 
immediately following the year of such loss. 
32 
33 
b. 
Accelerated Depreciation - Plant, machinery, arid equipment that are reasonably needed 
34 
and actually used for the production and transport of goods and services may be 
35 
depreciated using a rate not exceeding twice the rate which would have been used had 
22 


I 
2 
3 
4 
the annual allowance been computed in accordance with the rules and regulations 
prescribed by the Secretary of Finance and the provisions of the NIRC of 1997, as 
amended. 
5 
c. 
Double Deduction for Training Expenses - Expenses incurred for local training given to 
6 
employees for the development of skills, identified as necessary by the appropriate 
7 
8 
9 
10 
11 
12 
13 
government agencies and approved by the concerned IP A, may be claimed as deduction 
from gross income to the extent of two hundred (200%) percent of the actual amount of 
expenses incurred: Provided, that the training expense shall be deductible on the taxable 
year the said training expenses were incurred: Provided further, that the concerned IP A 
shall issue the corresponding certificate of entitlement for its incentive upon filling of an 
application, otherwise, the training incentive shall be deemed waived. 
14 
d. 
Double Deduction for Research and DevelopmelJt- Expenses incurred for research and 
15 
development conducted in the Philippines relating to the business shall entitle the 
16 
registered enterprise to a special deduction from taxable income equivalent to two 
17 
htmdred (200%) percent of the total expenses over and above the allowable ordinary and 
18 
business deductions for said expenses tmder the NIRC of 1997, as amended, Provided, 
19 
that the expenses for research and development shall be deductible from gross income on 
20 
the taxable year the said research and development expenses were incurred, Provided 
21 
further, that the concerned IP A shall issue the corresponding certificate of entitlement 
22 
for this incentive upon filing of an application, otherwise, the research and development 
23 
incentive shall be deemed waived. 
24 
SECTION. 28. VAT and Customs Duties Exemption on Capital Equipment.- Importation of 
25 
capital equipment, including consignment thereof, by registered enterprises may be exempted to 
26 
the extent of one hundred percent (100%) of the VAT and customs duties provided that the 
27 
following conditions are complied with: 
28 
a. The capital equipment is directly andlor reasonably needed and will be used exclusively 
29 
in the registered activity of the registered enterprise unless prior approval of the IP A is 
30 
secured for the part time utilization of said equipment in a non-registered activity to 
31 
maximize usage thereof or the proportionate taxes and duties are paid on a specific 
32 
equipment and machinery being permanently used for non-registered activities; They are 
33 
not manufactured domestically in sufficient quantity, of comparable quality and at 
34 
reasonable prices; and 
35 
36 
b. The approval of the IPA was obtained by the registered enterprise for the importation of 
37 
such machinery, equipment and spare parts. 
23 


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 
Approval of the IPA must be secured before any sale, transfer or disposition of the 
imported capital equipment is made: Provided, 'That if such sale, transfer or disposition 
is made within the first five (5) years from date of importation, any of the following 
conditions must be present: 
1) If made to another enterprise enjoying tax and duty exemption on imported capital 
equipment; 
, 
2) If made to another enterprise, upon payment of any taxes and duties due on the net 
book value of the capital equipment to be sold; 
3) 
Exportation of capital equipment, machine~y, spare parts or source documents or 
those required for pollution abatement and control; or 
4) 
For reasons of proven technical obsolescence. 
When the aforementioned sale, transfer or disposition is made under any of the 
conditions provided for in the foregoing par~graphs other than paragraph (ii), the 
registered expOlt enterprise shall not pay the taxes and duties waived on such items: 
Provided further, That if the registered enterprise sells, transfers or disposes the 
aforementioned imported items without prior approval within five (5) years from the 
date of importation, the registered enterprise and the vendee, transferee, or assignee shall 
be solidarily liable to pay twice the amount of the tax and duty exemption given it: 
Provided finally, That even if the sale, transfer 0: disposition of the capital equipment is 
approved after five (5) years from the date of importation, the registered enterprise is 
still liable to pay the taxes and duties based on the net book value of the capital 
equipment if it has violated any of its registration terms and conditions. Otherwise, it 
shall no longer be subject to the payment of the taxes and duties waived thereon. 
SECTION. 29. VAT Refund Mechanism on Importation of Capital Equipment and/or raw 
materials. -
The V AT paid on imported capital equipment and/or raw materials may be 
refunded provided that the imported items are used exclusively by the registered enterprise 
pursuant to its registered activity. 
In order to facilitate the immediate processing, clearance and release of VAT refund as provided 
in this Act, a Trust Liability Account (TLA) is hereby authorized to be established in the Bureau 
of Treasury (BTr). All V AT payments pertaining to the importation of registered enterprises of 
, 
capital equipment or raw materials shall be deposited in the TLA for the purpose of funding valid 
V AT refund claims. The claims for V AT refund shall be.made by the registered enterprise to the 
DOF - One Stop Shop Tax Credit and Duty Drawback 'Center (DOF-OSS) which, in turn, will 
process, approve and release the VAT refund. 
24 


I 
A registered enterprise shall file a claim for VAT refund within one (1) year from the date of 
2 
actual exportation. All amounts paid but no longer allowed for refund shall immediately accrue 
3 
to the general fund of the National Government. 
4 
All applications for V AT refund shall be processed and acted upon within thirty (30) days after 
5 
submission of complete documents. The refund shall be in a form of cash or managers/cashiers 
6 
check payable to the registered export enterprise. 
7 
In cases of dispute under the VAT refund mechanism provided in this section, the pertinent 
8 
provisions of the National Internal Revenue Code of 1997, as amended, and the Tariff and 
9 
Customs Code of the Philippines, as amended, shall apply. 
10 
SECTION. 30. Allocation of the Five Percent (5%) tax on GIE. - The 5% tax on GIE shall be 
11 
paid and remitted by registered enterprises located inside the ecozone or freeport in accordance 
12 
with the existing sharing allocations provided in the IPAs respective charters. For registered 
13 
enterprises located outside the ecozones or free ports, the tax on GIE shall be paid and remitted 
14 
as follows: 
15 
2% to the National Government 
16 
2% to the Province or City where the project is located 
17 
1 % to the Municipality or City where the project is located 
18 
19 
20 
21 
CHAPTER IV 
REGISTRATION OF ENTERPRISES 
, 
22 
SECTION. 31. Qualifications of a Registered Enterprise. - To qualify for registration and be 
23 
entitled to avail of incentives, an applicant must satisfy the following conditions: 
24 
25 
a. He is a citizen of the Philippines. In case the applicant is a natural person, or in case of a 
26 
corporation or partnership or any other association, regardless of nationality, it must be 
27 
organized and/or registered and existing under Philippine laws and that it must comply 
28 
with all the qualifications provided under this Act: Provided, however, That for purposes 
29 
of this Act and any law to the contrary notwithstanding, a natural-born ASEAN citizen or 
30 
a corporation effectively controlled by ASEAN citizens, or a corporation organized in 
31 
any ASEAN country shall be considered as a Philippine investor: Provided, further, That 
32 
the investment is made in an activity where the Constitution does not specifically require 
33 
Filipino participation; 
34 
b. The activity it will engage in is not within the activities reserved by the Constitution to 
35 
Philippine citizens or corporations owned and controlled by Philippine citizens; 
25 


1 
c. It will engage in an activity included in the IPP or in an export activity; 
2 
d. It will infuse new investments. For this purpose "new investments" shall mean a new 
3 
enterprise infusing new investments and undertaking new activity. 
However, an 
4 
enterprise with an existing operation may be qualified for registration if it will undertake 
5 
new activity. Further, an existing enterprise undertaking the same activity that shall 
6 
infuse additional investments of at least fifty percent (50%) of its present actual 
7 
investments shall be deemed to be "new inves~ments" but only to the extent of such 
8 
additional investments; and 
9 
e. If the applicant is engaged or proposes to engage in undertakings or activities other than 
10 
the registered projects, it shall install an accounting system adequate to identify the 
11 
investments, revenues, costs, and profits or losses of each registered proj ect undertaken 
12 
by the enterprise separately from the aggregate investment, revenues, costs and profits or 
, 
13 
losses of the whole enterprise, or to establish a ,separate corporation for each registered 
14 
project if the IPAs should so require to facilitate proper implementation of this Act. 
15 
16 
CHAPTER V 
17 
BASIC RIGHTS AND GUARANTEES OF REGISTERED ENTERPRISES 
18 
19 
SECTION. 32. Protection of Investments. - All investors and registered enterprises are entitled 
20 
to the basic rights and guarantees provided in the Constitution. Among other rights recognized 
21 
by the Government of the Philippines are the following: . 
22 
23 
a. Repatriation of Investments. - In the case of foreign investments, the right to repatriate 
24 
the entire proceeds of the liquidation of the investment in the currency in which the 
25 
investment was originally made and at the exchange rate prevailing at the time of 
26 
repatriation, subject to the provisions of Section 74 of Republic Act No. 265, otherwise 
27 
known as the "Central Bank Act", as amended. 
28 
29 
30 
31 
32 
33 
For investments made pursuant to Executive Order No. 32, senes of 1986, entitled 
"Directing the Establishment of a Program for the Conversion of Philippine External 
Debt into Equity Investments", and its implementing rules and regulations, the 
repatriation of investments shall be as provided tnerein. 
34 
b. Remittance of Earnings. - In the case of foreign investments, the right to remit earnings 
35 
from the investment in the currency in which the investment was originally made and at 
36 
the exchange rate prevailing at the time of remittance, subject to the provisions of Section 
37 
74 of Republic Act No. 265, as amended. 
38 
26 


1 
2 
3 
4 
For investments made pursuant to Executive Order No. 32, series of 1986, and its 
implementing rules and regulations, the remittance of earnings shall be as provided 
therein. 
5 
c. Foreign Loans and Contracts. - The right to remit at the prevailing rate at the time of-
6 
remittance such sums as may be necessary to meet the payments of interest and principal 
7 
on foreign loans and foreign obligations arising from technological assistance contracts at 
8 
the exchange rate prevailing at the time of remittance, subject to the provisions of Section 
9 
74 of Republic Act No. 265, as amended. 
10 
II 
d. Freedom from Expropriation. - There shall be no expropriation by the government of the 
12 
property represented by investments or of the property of the enterprise except for public 
13 
use, public interest, lawful purpose, or in the interest of national welfare or defense and 
14 
upon payment of just compensation. In such cases, foreign investors or enterprises shall 
15 
have the right to remit sums received as compensation for the expropriated property in 
16 
the currency in which the investment was originally made and at the exchange rate at the 
17 
time of remittance, subject to the provisions of Section 74 of Republic Act No. 265, as 
18 
amended. 
19 
20 
e. Requisition of Investment. - There shall be no requisition of the property represented by 
21 
the investment or of the property of enterprises: except in the event of war or national 
22 
emergency and only for the duration thereof. Just compensation shall be determined and 
23 
paid either at the time of requisition or immediately after cessation of the state of war or 
24 
national emergency. Payments received as compensation for the requisitioned property 
25 
may be remitted in the currency in which the investment was originally made and at the 
26 
exchange rate prevailing at the time of remittance', subject to the provisions of Section 74 
27 
of Republic Act No. 265, as amended. 
28 
29 
30 
31 
CHAPTER V 
ADMINISTRATION OF INCENTIVES 
32 
SECTION 33. Application for Registration. - Applications shall be filed with an IP A or any 
33 
other government office authorized by the BOI to accept applications, recorded in a registration 
34 
book and the date appearing therein and stamped on the application shall be considered the date 
35 
of official acceptance. 
36 
27 


1 
All applications and their supporting documents filed under this Act shall be confidential and 
2 
shall not be disclosed to any person except with the consent of the applicant or upon an order of 
3 
a court of competent jurisdiction. 
4 
5 
SECTION 34. No Double Registration of Enterprises. - Export or domestic enterprises shall not 
6 
be allowed to register their export or domestic activity in more than one (1) IP A. In the event that 
7 
an enterprise shall transfer to another IPA, only the remaining unutilized incentives shall be 
8 
granted to the enterprise or the transferee. 
9 
• 
10 
SECTION 35. Criteria for Evaluation of Application -
The following criteria shall be 
11 
considered in the evaluation of applications for registration under a preferred Act area: 
12 
a. Impact ofthe project on the overall economy; 
13 
b. Overall viability of the project; 
14 
c. The extent of employment generation; 
15 
d. The extent to which technological advances are applied and adopted to local conditions; 
16 
and 
17 
e. Such other criteria as the Board may determine. 
18 
19 
SECTION 36. Environmental Protection and Corporate Social Responsibility. -
Every 
20 
registered enterprise shall prepare a Program for Environmental Protection and Corporate Social 
21 
Responsibility (CSR) covering the period for its entitlement to fiscal incentives. Such Program 
22 
shall be undertaken on a per registration basis and shall be submitted as an accompanying 
23 
document to the application for registration to be submitted to the appropriate IP A. 
24 
25 
The environmental program shall include activities such as, but not limited to, requiring 
26 
regis1 ered firms to plant trees. 
27 
28 
For the CSR activities, the registered enterprise shall align such activities with the priority 
29 
programs and projects of the National Anti-Poverty Commission and other special laws such as 
'30 
Republic Act No. 7942 or the Philippine Mining Act of 1995, as amended arid DOE Energy 
31 
Regulation 1-94. 
32 
33 
The amount spent for the CSR activities shall be reflected in the Notes to the Audited Financial 
34 
Statements. 
35 
• 
36 
SECTION 37. Approval and Registration Procedures. - The IPA is authorized to adopt rules and 
37 
regulations to facilitate action on applications filed with it; prescribe criteria for the evaluation of 
38 
applications; devise standard forms for the use of applicants and delegate to the regional offices 
28 


1 
of the DTI the authority to receive and process applications for enterprises located in their 
2 
respective regions. 
3 
4 
Applications filed shall be considered automatically approved if not acted upon by the IP A 
5 
within ten (10) working days from official acceptance thereof. Deferment by the IP A shall be 
6 
considered as an official action: Provided, however, That the IPA may defer action to a specific 
7 
application not more than twice: Provided, finally, That the IPA shall act upon the application 
8 
within ten (10) working days from compliance with the cause of the last deferment. 
9 
10 
SECTION 38. Certificate a/Registration. - A registere~ enterprise under this Act shall be issued 
11 
a Certificate of Registration under the seal of the IP A and the signature of its Chairman and/or 
12 
such other official or officer of the IPA as it may empower and designate for the purpose. The 
13 
certificate shall be in such form and style as the IP A may determine and shall state, among other 
14 
matters: 
15 
a. The name of the registered enterprise; 
16 
b. The activity in which the registered enterprise is proposing to engage; and 
17 
c. The terms and conditions to be observed by the registered enterprise by virtue of the 
18 
registration. 
19 
20 
SECTION 39. Extension 0/ Period 0/ Availment 0/ Incentives. - The availment period of the 
21 
incentives provided herein may be extended by the concerned IPA in the event that the registered 
22 
enterprise has suffered operational/orce majeure or losses that have impaired the viability of the 
23 
registered activity. 
24 
25 
SECTION 40. Administration 0/ Incentives. - The BOI and the other IPAs shall be responsible 
26 
for the administration of incentives granted to their respective registered enterprises. 
27 
28 
29 
30 
31 
33 
34 
35 
36 
37 
38 
TITLE IV 
FINAL PROVISIONS 
SECTION 41. Vested Right. - Registration of enterpris,es under existing investment laws shall 
continue to be legally binding in accordance with tlie terms and conditions stated in their 
respective certificates of registration. The registered enterprise may opt to be governed by the 
provisions of this Act, provided that, only the remaining unutilized incentives shall be granted to 
the said enterprise. In such case, said enterprise shall be required to surrender its certificate of 
registration, which shall be deemed as an express waive,r of their privilege to apply for and avail 
of incentives under the incentives law under which they were previously registered. 
29 


1 
SECTION 42. Authority to Retain Funds. - Registered enterprises availing of fiscal incentives, 
2 
except those located in LDAs, shall be assessed with a maximum fee of one percent (1 %) of the 
3 
amount of incentives granted. Said amount shall automatically accrue to the BOl to be allotted 
4 
for investment promotions activities and other special projects to achieve the objectives of this 
5 
Act, subject to the usual accounting and auditing rules and procedures. 
6 
7 
SECTION 43. Protection of the Environment. - The IPAs, in coordination with the appropriate 
8 
agencies, shall take appropriate steps to enact the proper measures for the protection of the 
9 
environment, and shall coordinate with the Environmental Management Bureau of the 
10 
Department of Environment and Natural Resources (EMB-DENR) to avoid undue delay in the 
11 
issuance of the required Environmental Compliance Certificate (ECC): Provided, however, That 
12 
applications for environmental clearances, permits, and/or licenses of registered enterprises shall 
13 
be acted upon by the appropriate government agency within thirty (30) days from date of official 
• 
14 
acceptance. 
In the. event that the appropriate gover~ent agency failed to act within the 
15 
aforementioned date, the application for the said environmental requirement shall be deemed 
16 
complied with for purposes of operation of the registered activity. 
17 
18 
SECTION 44. Appeals. - All orders or decisions of the IPA in cases involving the provisions of 
• 
19 
this Act shall immediately be executory. No appeal from the order or decision of the IP A by the 
20 
party adversely affected shall stay such order or decision, unless a supersedeas bond equivalent 
21 
to the amount stated in the order or decision is posted by'the appellant. 
22 
23 
All appeals involving cases decided by the IP A, except as provided in the next succeeding 
24 
paragraph, shall be filed with the Court of Appeals within fifteen (15) days from receipt of notice 
25 
of the order or decision or of the denial of the appellant'~ motion for new trial or reconsideration. 
26 
Within the same period, the aggrieved party may file a motion for reinvestigation or 
27 
reconsideration. Only one (I) motion for reconsideration shall be allowed, subject to the posting 
28 
of the aforementioned supersedeas bond which shall be limited to cash and/or surety bond from 
29 
a BOl-accredited bonding company. 
30 
31 
In cases involving the denial of an application for registration, the party adversely affected by 
32 
such denial may appeal the same to the Office of the 'President within thirty (30) days from 
33 
receipt of notice of the order denying the application for registration. Where an appeal has been 
34 
filed, said order or decision shall be final and executory ninety (90) days after the perfection of 
35 
the appeal, unless reversed. 
36 
37 
SECTION 45. Suspension and Forfeiture of Incentives of Registered Enterprises, Refund and 
38 
Penalties. - When there is probable cause to believe that the registered enterprise has violated its 
30 


I 
registration terms and conditions, the BOI or the IPA may suspend its availment of incentives, 
2 
until proven otherwise. 
3 
4 
The BOloI' the IPA may impose fines and penalties an'd/or forfeit the incentives granted to its 
5 
registered enterprises whenever there are violations of the registration terms and conditions by 
6 
the latter, without prejudice to the cancellation of the registration of said enterprise. 
7 
8 
In case of cancellation of the Certificate of Registration granted under this Act, the BOI or the 
9 
IP A may, in appropriate cases, require the refund of incentives availed of and impose 
10 
corresponding fines and penalties. 
11 
12 
Any enterprise which violates any provision of this Act, its implementing rules and regulations, 
13 
the terms and conditions of its registration, or of any lawful directive of the BOI or the IP A, shall 
14 
be subject to a fine not to exceed One million pesos (£1,000,000.00), without prejudice to the 
15 
disapproval of its application for registration or cancellation of its registration: Provided, That 
16 
any willful commission of fraudulent misrepresentation in its application for registration or 
17 
submission of reports or gross violation of this Act and its implementing rules and regulations, a 
18 
fine of at least One million pesos (Pl,OOO,OOO.OO) 
but not to exceed Ten million pesos 
19 
(PIO,OOO,OOO.OO) shall be imposed, in addition to other penalties that may be imposed by the 
20 
BOI or the IP A. 
21 
22 
The IP As shall prepare a schedule of fines and penalties to be imposed on erring registered 
23 
enterprises depending on the violation incurred, which may be reduced in exceptional cases. 
24 
25 
Responsible officers of such enterprises, including duly appointed external consultants-agents 
26 
who knowingly commit, aid or abet the commission of any of the acts mentioned above, shall be 
27 
subject to a fine of not less than One hundred thousand pesos (PlOO,OOO.OO) but not more than 
28 
Three hundred thousand pesos (P300,000.OO) withQut prejudice to disqualification from 
29 
appearing or doing business with the BOI or any IP A. 
30 
31 
Government officers and employees who participate directly or indirectly in the commission of 
32 
the foregoing acts shall likewise be liable to a fine of not less than One hundred thousand pesos 
33 
(PlOO,OOO.OO) but not more than Three hundred thousan~ pesos (P300,000.00), in addition to any 
34 
criminal and administrative penalties imposable under the Civil Service Law, Revised Penal 
35 
Code, Republic Act No. 3019, otherwise known as the "Anti-Graft And Corrupt Practices Act", 
36 
Republic Act No. 6713, otherwise known as the "Code Of Conduct And Ethical Standards For 
37 
Public Officials", and other applicable laws. 
38 
31 


1 
If the offender is a foreign national, in addition to the imposable fines and penalties above, the 
2 
foregoing acts shall be grounds for his summary deportation. 
3 
4 
SECTION 46. Disposition o/Savingsfrom the Implementation o/this Act. - The total amount of 
5 
savings to be generated from the implementation of this Act shall be allocated annually and used 
6 
exclusively for the provision of scholarships under the CRED. 
7 
8 
Such allocations shall be segregated as separate trust funds by the National Treasury and shall be 
9 
over and above the annual appropriations for similar purposes. 
10 
11 
The earmarking provided under this provision shall be observed for ten (10) years starting from 
12 
the effectivity ofthis Act. 
13 
14 
SECTION 47. implementing Rules and Regulations (IRR). - The BOl, in coordination with 
15 
DOF, NEDA, the DBM, PEZA, other IPAs and other concerned government agencies, shall 
16 
promulgate rules and regulations to implement the intent and provisions of this Act within one 
17 
htllidred twenty (120) days from the effectivity of this Act. Such rules and regulations shall take 
18 
effect fifteen (15) days following its publication in a newspaper of general circulation in the 
19 
Philippines. 
20 
21 
SECTION 48. Transitory Provision. - Until the IRR of this Act take effect, the present rules and 
22 
regulations under the old investments laws shall apply to, the extent that they are not inconsistent 
23 
with the provisions of this Act. 
24 
25 
SECTION 49. Separability Clause. - The provisions of this Act are hereby declared to be 
26 
separable and, in the event any of such provisions is declared unconstitutional, the other 
27 
provisions which are not affected thereby, shall remain in force and effect. 
28 
29 
SECTION 50. Repealing Clause. - The following provisions are hereby repealed: 
30 
31 
a. Books I, V and VI of Executive Order No. 226, series of 1987, otherwise known as "The 
32 
Omnibus Investments Code of 1987"; 
33 
b. Sections 23 and 24 of Republic Act No. 7916, otherwise known as "An Act Providing for 
34 
the Legal Framework and Mechanisms for the Creation, Operation, Administration and 
35 
Coordination of Special Economic Zones in the Philippines, Creating for the Purpose the 
36 
Philippine Economic Zone Authority (PEZA), and for other Purposes (Special Economic 
37 
Zone Act of 1995)"; 
32 


c. Sections 17 and 18 of Presidential Decree No. 66, otherwise known as "Creating the 
2 
Export Processing Zone Authority and Revising Republic Act No. 5490"; 
3 
d. Fourth paragraph of Presidential Decree No. 529 (restored by FIRB Resolution 19-87), 
4 
otherwise known as "Granting to Petroleum Exploration Concessionaires under the 
5 
Petroleum Act of 1949 Exemption from Customs Duty and Compensating Tax on 
6 
Importations of Machinery and Equipment, Spare Parts and Materials Required for Their 
7 
Exploration Operations"; 
, 
8 
e. Section 36(e) and (f) (1) and (2) of Presidential Decree No. 705, otherwise known as the 
9 
"Revised Forestry Code"; 
10 
f. 
Section 16 (c) and (d), and Section 17 of Republic Act No. 7844, otherwise known as 
11 
"An Act to Develop Exports as a Key Towards "the Achievement of the National Goals 
12 
Towards the Year 2000 (Export Development Act of 1994)"; 
13 
g. Chapter XVI, Sections 90, 92, 93(a) and (b) of Republic Act No. 7492, otherwise known 
, 
14 
as the "Philippine Mining Act of 1995"; 
15 
h. Section 9 of Republic Act No. 8479, otherwise known as the "Downstream Oil 
16 
Deregulation Act of 1998"; 
17 
i. Chapter II, Article II, Section 35(b), (c) and (d) of Republic Act No. 8550, otherwise 
18 
known as "The Philippine Fisheries Code of 1998"; 
19 
j. Section 5 of Proclamation No. 216, otherwise known as "Creating and Designating the 
20 
Area Covered by the Former Wallace Air Station and Contiguous Areas in Poro Point as 
21 
the Poro Point Special Economic and Freeport Zone and Transferring Lands to the Bases 
22 
Conversion Development Authority pursuant to Republic Act No. 7227"; 
23 
k. Section 6 of Proclamation No. 984, otherwise known as "Creating and Designating the 
24 
Municipality of Morong, Province of Bataan, including the Area of Philippine Refugee 
25 
Processing Center Complex (PRPCC) as the Morang Special Economic Zone pursuant to 
26 
Republic Act No. 7227 and transferring the laI,ld comprising the PRPCC to the Bases 
27 
Conversion Development Authority (BCDA)"; 
28 
1. 
Executive Order No. 528, series of 2006, Amending Executive Order No. 31, series of 
29 
2004, "Reducing the Rates of Duty on Capital Equipment, Spare Parts and Accessories 
30 
Imported by BOI-registered new and Expanding Enterprises"; 
31 
m. Section 1 of Executive Order No. 619, otherwise known as "Creating and Designating 
32 
Special Economic Zones Pursuant to Republic Act No. 7916, as Amended by Republic 
33 
Act No. 8784, in Relation to Republic Act No. 7227, as Amended by Republic Act No. 
34 
9400, Inside the Clark Freeport Zone". 
35 
n. All other laws, acts, decrees, orders and issuances or provisions thereof inconsistent with 
36 
any of the provisions of this Act are hereby repealed or modified accordingly. 
37 
33 


1 
SECTION 51. Survivor Clause. - (a) The provisions of this Act to the contrary notwithstanding, 
2 
the following laws, decrees and orders shall continue to have full force and effect: 
3 
4 
a. Section 1 of Republic Act No. 9281 entitled, "An Act to Strengthen Agriculture and 
5 
Fisheries Modernization in the Philippines by Extending the Effectivity of Tax Incentives 
6 
and its Mandated Funding Support, Amending for this Purpose Sections 109 and 112 of 
7 
Republic Act No. 8435"; 
8 
b. The provisions of this Act and Republic Act No. 9337 to the contrary notwithstanding, 
9 
the following laws, decrees and orders shall continue to have full force and effect: 
10 
c. Section 10(1) to (6) of Republic Act No. 7156, otherwise known as "An Act Granting 
11 
Incentives to Mini-Hydro Electric Power Developers and for other Purposes (Mini-
12 
Hydroelectric Incentive Act)"; 
13 
d. Sections 10, 16(a), (b) and (c) and Section 17(a) to (e) of Presidential Decree No. 972, as 
14 
amended by Presidential Decree No. 1174, otherwise known as "Promulgating an Act to 
15 
Promote an Accelerated Exploration, Development, Exploitation, Production and 
16 
Utilization of Coal"; 
17 
e. Section 12 of Presidential Decree No. 87, otherwise known as "An Act to Promote the 
18 
Discovery and Production ofIndigenous Petroleum, and Appropriating Funds Therefor"; 
19 
f. 
Section 4(a) and (d) of Presidential Decree No. 1442, as restored by FIRB Resolution 19-
20 
87, otherwise known as "An Act to Promote the Exploration and Development of 
21 
Geothermal Resources"; and 
22 
g. Chapter II, Section 4(A), (B), (C) and (D); and ~hapter VIII, Section 19(A), (B) and (C) 
23 
of Repuhlic Act No. 9295, Entitled "An Act Promoting the Development of Philippine 
24 
Domestic Shipping, Shipbuilding, Shiprepair and Ship Breaking, Ordaining Reforms in 
25 
Government Policies Towards Shipping in the Philippines and for other Purposes": 
26 
27 
Provided, That grantees or operators under their respective laws, decrees and orders shall have 
• 
28 
the option to avail of the incentives provided under this Act. 
29 
30 
SECTION 52. Effectivity. - This Act shall take effect fifteen (15) days following its publication 
31 
in the Official Gazette or in a newspaper of general circulation, whichever is earlier. 
32 
33 
Approved, 
34