Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
EIGHTEENTH CONGRESS 
Third Regular Session 
HOUSE BILL NO. ______ 
Introduced by Representative Stella Luz A. Quimbo 
AN ACT STRENGTHENING THE PHILIPPINE FOOTWEAR, LEATHER GOODS AND 
TANNERY INDUSTRIES, PROVIDING INCENTIVES AND FUNDS THEREFOR, AND 
FOR OTHER PURPOSES 
EXPLANATORY NOTE 
Our industries in footwear, leather goods and tannery remain among the most enduring 
manufacturing sectors in the country. For instance, the shoe industry in the Philippines 
began as early as 1887 in the City of Marikina. When the Americans came, the US 
colonial government provided business owners with resources such as imported 
leather, copper nails, and modern sewing machines, as well as opening trade schools.  
The Philippine joined the World Trade Organization (WTO) in the 1980s, which 
liberalized many industries, including the footwear sector. Though the influx of foreign 
products brought greater competition, better product quality and lower prices, the lack of 
proper incentives and a supportive business environment led to a drastic shift in local 
industry and massive displacements. By the 2000’s, 80 percent of the local supply of 
shoes in the country came from China, and the share of local brands in the footwear 
market significantly decreased. 
The Board of Investments (BOI) states that the shoe industry is concentrated in the NCR, 
Central Luzon and CALABARZON. Most shoe manufacturers are considered as micro or 
small enterprises. The footwear industry continues to show economic potential. The gross 
value-added share of the sector was 3.75 million pesos in 2014, and rose to 5.024 million 
in 2017. 
It is essential that the government is able to promote a policy environment that dually 
strengthens competition in the market, while at the same time providing the proper 
business conditions and incentives for local industries to flourish and be able to compete. 
In 2004, Republic Act No. 9290 or the “Footwear, Leather Goods and Tannery Industries 
Development Act” was enacted. The goal of the law was to bolster the covered industries 
so that it could generate employment, create quality and affordable products, and develop 
further SMEs in these sectors. However, it has been 20 years since the passage of this 
January 31, 2022
2:34 pm
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law, thus requiring the need for urgent updating. For example, the development incentives 
stated under RA 9290 have already long passed its 10-year effectivity. These incentives 
included zero duty on imported capital equipment, gross income deductions for training 
expenses, and tax credits on domestically purchased supplies and materials. 
This measure aims to establish a new law that would reinvigorate the footwear, leather 
goods and tannery industries. The bill shall reestablish development incentives for these 
sectors. These include providing industry players with support for marketing and 
promotional campaigns, green lane servicing in transactions with the government, and 
assistance in accessing foreign markets. Rebates will also be given for those who 
subcontract MSMEs or source raw materials from them that incorporates small 
businesses into the supply chain. 
The bill also aims to provide industry players with preferential access to credit through 
low-interest package loans from the Landbank of the Philippines (LBP), the Development 
Bank of the Philippines (DBP), and the Small Business (SB) Corporation. It shall also 
create a Competitiveness Enhancement Fund, which would direct import duties of 
products from the foreign counterparts of these industries into incentives so that our local 
businesses may flourish. 
Finally, the bill established an Industry Roadmap for the footwear, leather and tannery 
industries. This Roadmap shall be made in consultation between the government, 
industry players, and other important stakeholders to ensure that there is a clear and 
coherent framework with regards to developing these local industries.  
By providing the proper support and incentives for our footwear, leather goods and 
tannery industries, businesses will be empowered to further create world-class products 
that can easily compete with the rest of the world. This would lead to more business, 
higher quality of products, and better opportunities for the industries and for the people. 
In view of the foregoing, the passage of this bill is earnestly sought. 
STELLA LUZ A. QUIMBO 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
EIGHTEENTH CONGRESS 
Third Regular Session 
HOUSE BILL NO. ______ 
Introduced by Representative Stella Luz A. Quimbo 
AN ACT STRENGTHENING THE PHILIPPINE FOOTWEAR, LEATHER GOODS AND 
TANNERY INDUSTRIES, PROVIDING INCENTIVES AND FUNDS THEREFOR, AND 
FOR OTHER PURPOSES 
SEC 1. Short Title. – This Act shall be known as the "Philippine Footwear, Leather Goods 
and Tannery Industries Development Act of 2022.” 
SEC 2. Declaration of Policy. – Recognizing that the footwear, leather goods and 
tannery industries have the potential to generate employment through their integrated 
development, and increase the country’s foreign exchange earnings through exports and 
import substitutes, it shall be the policy of the State to support, promote and encourage 
the growth and development of these local industries including their supply chain.  To this 
end, the State shall develop these industries by: 
a) establishing an adequate support structure to assist the viability of the footwear,
leather goods and tannery industries and make them competitive;
b) providing appropriate and time-bound incentives and programs to accelerate
the growth of these industries;
c) ensuring a ready domestic market by requiring government agencies to
purchase products made by these industries and encouraging the private sector
to do the same;
d) encouraging the institutionalization of industry associations, organizations and
cooperatives of footwear, leather goods and tannery, to promote improvement
and advancement of skills and craftsmanship of Filipino workers therein; and
e) creating a business environment to encourage local micro, small and medium
enterprises in said industries to join the formal sector.
SEC 3. Developmental Incentives. – The following incentives shall be available to 
qualified enterprises of the footwear, leather goods, and tannery industries herein referred 
to as “covered industries” and their supply chain for a maximum period of ten (10) years 
from the date of registration: 
a) preferential access to financing at flexible loan terms;
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b) rebate for investments in modern machineries and equipment and new 
technologies;     
c) rebate for subcontracting to micro, small and medium enterprises (MSMEs) or 
sourcing of raw materials or services from MSMEs; 
d) support for marketing, promotional campaigns, fairs, exhibitions and 
conferences including distribution; 
e) discounted lease rates in government duty-free shops, and other establishments 
for promotion and sales of the Department of Trade and Industry (DTI), 
Department of Tourism (DOT), Local Government Units (LGUs), and other 
government agencies; 
f) access to customs bonded manufacturing warehouse;  
g) green lane servicing in business processes with government; and 
h) assistance on accessing foreign markets, matching with possible foreign 
partners, market intelligence and other similar support. 
 
SEC. 4. Eligibility for Incentives. – To qualify for developmental incentives under 
Section 4 of this Act, enterprises belonging to covered industries including their supply 
chain must be at least 60 percent Filipino-owned, duly registered with the Board of 
Investments (BOI), and possess internationally comparable quality, including sizing of 
footwear, which shall be in accordance with, at least, the Philippine National Standards.  
 
Manufacturing companies with foreign ownership higher than 40 percent cannot 
avail of the developmental incentives under this Act, but may avail of the incentives under 
RA 11534 or the CREATE Law. 
 
SEC 5.  Covered Industries Development and Competitiveness Enhancement Fund. 
– To implement the policy enunciated in this Act, there is hereby created the Covered 
Industries Development and Competitiveness Enhancement Fund herein referred to as 
the "the Fund". The Fund shall consist of 20% duties and Value-Added Tax (VAT) 
collected from the importations of covered industries, including interests, if any. The Fund 
shall be automatically credited to a Special Account in the General Fund of the National 
Treasury which shall be in place within ninety (90) days upon the effectivity of this Act: 
Provided, that fund releases shall not be subject to any ceiling by the Department of 
Budget and Management (DBM).  
                                                                                   
Subject to the usual accounting and auditing rules and regulations, the Fund shall be 
allocated and disbursed for developmental and competitiveness enhancement activities 
and support, such as, but not limited to, the following:   
 
a) access to preferential credit for modernization of plant machineries & equipment 
and technologies;    
b) subsidy for marketing, promotional campaigns, and participation to fairs, 
exhibitions and conferences;                                                                                               
c) subsidy for distribution;  


 
 
 
 
d) subsidy for lease rates in government duty-free shops, and other establishments 
for promotion and sales of DTI, DOT, LGUs, and other government agencies; 
and 
e) assistance in accessing quality raw materials (e.g., establishment of 
consolidating office abroad).   
 
The respective Heads of all implementing agencies that have been provided with the 
Fund as provided under this Act shall be accountable and responsible in ensuring that 
the said Funds are fully utilized in accordance with the provisions of this Act. The 
Secretary of the Department of Trade and Industry (DTI) shall coordinate with other 
implementing agencies on the determination, adoption and implementation of the 
programs based on this law for the development of the covered industries. 
 
The Fund shall be released directly to the implementing agencies based on allowable 
developmental activities and interventions as provided for in this Act: Provided, That the 
unutilized portion of the Fund allocated to the implementing agencies shall not revert to 
the General Fund but shall continue to be used for the purpose for which it was set aside.  
 
Any program undertaken in accordance with this Act shall only be deemed 
complementary and supplementary to and shall not be a replacement of any existing 
programs for the covered industries already implemented by the DTI and other agencies 
concerned.   
                                                                          
Provided, That the implementing agencies and other identified agencies shall, whenever 
feasible, procure from accredited local manufacturers to assist in the promotion of locally 
manufactured machineries, equipment and technology. 
 
Subject to the usual accounting and auditing rules and regulations, the Fund shall be 
allocated and disbursed as follows:  
 
a) Shared Service Facilities – Twenty percent (20%) of the Fund shall be released 
to the implementing agencies and other identified agencies in this Act as grant 
in kind for the establishment, upgrading, and maintenance of shared service 
facilities and modernization thereof  by equipping it with new and tested 
technology such as but not limited to needed hardware and software for 
manufacturing operation, training, R&D, testing and design including  tapping of 
solar power and other similar innovative technology to ensure sufficient supply 
of reliable and low-cost energy and other innovation on utilizing, conserving and 
optimizing usage of resources with the inclusion of sustainable waste 
management., in providing developmental support for the covered industries 
and their supply chain, such as, but not limited to, training facilities or institutions,  
R&D, innovation centers, promotion facilities, testing laboratories, stockpiling, 
consolidation of importation of raw materials, consolidation of outputs for public 
tender, shared retail outlets, and similar structures. 
 
 


 
 
 
 
b) Credit Assistance – Twenty percent (20%) of the Fund shall be released to and 
implemented by the SB Corporation, Landbank of the Philippines (LBP) and 
Development Bank of the Philippines (DBP). It shall be made available with 
minimal interest rates and with minimum collateral requirements to 
manufacturers of the covered industries and cooperatives thereof for acquisition 
of machineries and equipment, software and technology, and/or raw materials 
and supplies, working capital, R&D, and other operational costs; Provided, That 
the industries, whenever feasible, shall procure from local manufacturers to 
assist in the promotion of locally manufactured raw materials, supplies, 
machineries, equipment, software and other innovative technology. 
 
c) Creation and Strengthening of Linkages to Local Supply Chain Players - Fifteen 
percent (15%) of the Fund shall be released to and implemented by the 
implementing agencies and other identified agencies to enhance subsidies to 
qualified enterprises that exhibit good performance, including creation of 
linkages to local supply chain players in the covered industries, such as, but not 
limited to, outsourcing, subcontracting to MSMEs by larger enterprises. 
 
d) Marketing and Promotions - Fifteen percent (15%) of the Fund shall be released 
to and implemented by the implementing agencies and other identified agencies 
to subsidize marketing and promotional campaigns and participation to fairs, 
exhibitions and conferences of covered industries. 
 
e) Sales and Distribution - Fifteen percent (15%) of the Fund shall be released to 
and implemented by the implementing agencies and other identified agencies 
to subsidize distribution expenses of covered industries, including subsidy for 
lease rates in government duty-free shops, and other establishments for 
promotion and sales of DTI, DOT, LGUs, and other government agencies. 
 
f) Access to Quality Raw Materials - Fifteen percent (15%) of the Fund shall be 
released to and implemented by the implementing agencies and other identified 
agencies to assist covered industries in accessing quality raw materials, which 
may include the establishment of linkages with local manufacturers in the supply 
chain, especially MSMEs; and operation of a supply consolidation office abroad. 
 
The Congressional Oversight Committee shall conduct a periodic review of the use of the 
Footwear Fund. At the end of the sixth (6th) year, a mandatory review shall be conducted 
by the Congressional Oversight Committee to determine whether the Footwear Fund and 
its use as provided for under this Act shall be continued, amended, or terminated. 
 
SEC 6.  Access to Credit, Loans and Official Development Assistance Funds for the 
covered industries. –The SB Corporation, LBP and DBP are hereby mandated to 
formulate Modernization Credit and Loan Package Facility for the covered industries 
under this Act, which shall provide low interest loans to manufacturers seeking to improve 
and modernize their production facilities. Similarly, LBP and DBP shall make available to 


 
 
 
 
manufacturers of covered industries the official development assistance channeled 
through them. 
 
The SB Corporation, LBP and DBP shall allot a part of such credit and loan package 
facility, including the official development assistance, to the MSMEs of the covered 
industries. 
 
SEC 7. Industry Roadmap for Covered Industries. - Upon the effectivity of this Act, the 
DTI, in consultation with the National Economic and Development Authority (NEDA). 
Department of Finance (DOF), DBM, Department of Science and Technology (DOST), 
Technical Education and Skills Development Authority (TESDA), Department of the 
Interior and Local Government (DILG), Department of Education (DepEd), Commission 
on Higher Education (CHED), Armed Forces of the Philippines (AFP), Philippine National 
Police (PNP), Investment Promotion Agencies (IPAs), and industry associations of 
covered industries and other relevant agencies thereto, shall be given a maximum of one 
hundred eighty (180) days to formulate and adopt industry roadmaps of the covered 
industries to restructure the government’s delivery of support services. 
 
SEC  8. Government Procurement. –  All government agencies, offices, bureaus, LGUs, 
state universities and colleges, government-owned and controlled corporations, 
government financial institutions and its subsidiaries, and all other government 
instrumentalities, with procurement requirements from the covered industries and  directly 
sourcing footwear, leather goods and tannery products, are mandated to source their 
procurement requirements that are being manufactured or can be manufactured by local 
producers and manufacturers. Proactive posting and publication requirements relevant to 
public biddings, public tenders and other information that would ensure compliance and 
transparency in policies and implementation hereof shall be adopted.  
 
The procedures under Republic Act No. 9184, otherwise known as the “Government 
Procurement Reform Act”, on competitive bidding shall apply when there are more than 
one (1) local manufacturer or producer; Provided, that the procurement shall be done in 
the most judicious, economical, and expeditious manner. Otherwise, the procedures for 
the alternative methods of procurement shall be applied."  
 
Government procuring entities shall give preference to manufacturing enterprises of 
covered industries participating in their bidding and procurement which are not registered 
in and enjoying incentives from any Investment Promotion Agency.  The award shall be 
made to the lowest domestic non-IPA registered bidder, provided his bid is not more than 
fifteen percent (15%) in excess of the lowest bid of IPA-registered enterprises.  
 
Ecozone locators that establish  linkages with domestic MSMEs may be provided 
additional preference when participating in bids. 
 
The implementing rules and regulations (IRR) shall provide the necessary requirements 
and procedures on this Act. 
 


 
 
 
 
SEC 9. Inclusive Business – It is hereby encouraged that government procuring entities 
shall provide preference to participating enterprises belonging to covered industries that 
will bid for goods and are able to show proof of substantial linkage integration with MSMEs 
in their supply or value chain. 
 
 SEC 10. Lead Implementing Agency. – The DTI shall monitor, oversee and supervise 
the implementation of this Act, and shall submit a yearly report thereof to the President 
and to Congress. 
 
SEC 11. Product Development. – The DTI, DOST, Philippine International Trading 
Corporation (PITC), and other relevant government agencies and offices shall be 
responsible for product development training and support for appropriate technology and 
capital equipment acquisition geared towards global competition and the export market. 
In coordination with the host LGU, the DTI, with the assistance of the aforementioned 
agencies, shall develop initiatives and programs for the covered industries. 
 
SEC 12. Support Programs from Government Agencies. – Government agencies, 
such as but not limited to, DTI, DOST, and TESDA shall develop support programs for 
the development and enhancement of competitiveness of the covered industries and shall 
prioritize them in providing relevant grants, trainings and support programs.   
 
SEC 13. Support Services from DTI - FTSC. Within the premises and under the 
jurisdiction of the Commercial Posts of the Department of Trade and Industry (DTI), the 
Foreign Trade Service Corps (FTSC) shall provide regular relevant information and 
market intelligence on covered industries as to trends, emerging policies and regulations, 
emerging opportunities, among others. They shall also support the covered industries in 
accessing foreign markets, matching with possible foreign partners, buyers, suppliers, 
distributors and may likewise act as consolidators of orders and/or quality raw material 
supplies. Related operational expenses may be eligible for allocation from the Fund. 
 
SEC 14. Creation of a Unit in BOI for the implementation of this Act's provisions for 
the covered industries. – A separate unit in the BOI, attached agency of DTI, is hereby 
established to ensure the implementation of the provisions of this Act. For this purpose, 
the operating expenses of the new unit, including the creation, maintenance of four (4) 
plantilla positions for the new unit, and one (1) plantilla position for a local hire in a foreign 
office that will function as a marketer/consolidator of raw materials and supplies in that 
country, shall be appropriated additional funds under the BOI's annual budget. 
 
SEC 15. Penalties. – The following prohibited acts shall be imposed with the penalties 
provided herein: 
 
a) False or Fraudulent Information. Any person or enterprise that knowingly 
presents or submits to government offices any false or fraudulent declaration, 
application, value-add, or other information shall be penalized by a fine ranging 
from Two Hundred Thousand Pesos (P200,000.00) to Five Hundred Thousand 
Pesos (P500,000.00). It will be blacklisted frhencefoth from the Program. 


 
 
 
 
 
b) Goods Not Locally Made. Any person or enterprise that falsely characterizes 
goods as locally made shall be penalized by a fine ranging from Five Hundred 
Thousand Pesos (P500,000.00) to One Million Pesos (P1,000,000.00). 
 
c) Violation of Section 8. Any employee of government procurement entities 
violating Section 8 of this Act shall be penalized by a fine equivalent to ten 
percent (10%) of the approved budget for the contract. 
 
d) Other Violations. Any other violation of this Act and its implementing rules and 
regulations shall be penalized by a fine equivalent to One Hundred Thousand 
Pesos (P100,000.00). 
In the case of enterprises, the penalty shall be imposed on the chief operating 
officer, chief executive officer, directors or officers responsible for the violation. 
 
e) Blacklisting  
 
The penalties under this Act shall be without prejudice to the filing of cases punishable 
under other existing laws, rules or regulations. 
 
SEC 16. Implementing Rules and Regulations. – Within ninety (90) days from the 
approval of this Act, the DTI shall, upon consultation with relevant government agencies, 
promulgate the rules and regulations implementing the provisions of this Act. 
 
SEC 17. Separability Clause. – If any provision or part of this Act is declared 
unconstitutional, the remaining provisions thereof not otherwise affected shall remain in 
full force and effect. 
 
SEC 18. Repealing Clause. – Republic Act No. 9290 otherwise known as Footwear, 
Leather Goods and Tannery Industries Development Act, is hereby repealed.  
 
All other laws, decrees and executive orders inconsistent with this Act are hereby 
repealed or modified accordingly. 
 
SEC 19. Effectivity. – This Act shall take effect fifteen (15) days from the date of its 
publication in the Official Gazette or in at least one (1) newspaper of general circulation. 
 
Approved,