SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
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SENATE 
S.B. No . .-529 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
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Section 1, Article XlV of the 1987 Philippine Constitution provides that the 
State' shall protect and promote the right of all citizens to quality education at all 
levels and shall take appropriate steps to make. su.;:h education accessible to all. 
Furthermore, Section 24, Article II declares that the State recognizes the vital Tole of 
information· in nation-building. Pursuant to this, government launched various' 
.efforts to make education accessible to all, particularly to' children in the 
countryside . 
. Republic Act No. 8370, otherwise known as the "Children's Television Act of 
1997" was enacted to promote and encourage the production and broadcasting of 
developmentally-appropriate television programs for children through the 
administration of~ national endoWment fund for children's television. I 
'Despite this law, there are still less child-friendly programs dn. television 
with no law passed to encourage the production of films that especially cater to 
children in our country. This must be brought about by the heavy taxes imposed on 
mass media. 
It is therefore imperative that the State intervenes in the form of relevant 
legislation to encourage media entities to invest in our children's future through the 
production of educational programs that would make quality education accessible 
thru mass media. 
This bill aims to accomplish that by exempting equipment, tools for 
production and' transportation and communication facilities to be used actually, 
directly and. exclusively for educational purposes by media paying duty and internal 
revenue tax. 
Under this proposed measure, the net income derived from educational 
programs and publications shall be tax-exempl for 5 years from the start of its initial 
operation or until the producer and publisher shall have attained reasonable return 
of their investment. 
In view of the foregoing, the immediate passage of this bill is earnestly 
sought. 
-==L~f 
Senator 


SIXTEENTH CONGRESS OF THE 
) . 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
). 
SENA'TE 
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R(l;('IliIVEO BY: ::--' 
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Introduced by Senator Loren Legarda 
AN ACT 
GRANTING FISCAL INCENTIVES TO MEDIA ENTlT,IES DEVOTING AIR 
TIME AND SPACE TO EDUCATIONAL PROGRAMS FOR CHILDREN, AND 
TO ADVERTISERS OR SPONSORS SUPPORTING SUCH PROGRAMS, AND 
, 
FOR OTHER PURPOSES 
'Be it enacted by the' Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Declaration of Policy. - It is hereby declared the policy of the 
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State to recognize the vital roles of communication and information in nation 
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building, and shall take appropriate steps to make education accessible to all. 
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Pursuant to this policy, the State shall promote, support, and provide incentives to 
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mass media, as well as to sponsors or advertisers, who devote air time and space for 
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educational purposes. 
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SEC. 2. Coverage. - This Act shall apply to all kinds of mass media operating 
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within the Philippines. 
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SEC. 3. Definition of Terms. - For purposes of this Act, the following terms 
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shall mean as follows: 
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a.' Mass . media - refers to means of communication which infludes both 
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broad~a~t, film and print media that reach very large numbers of people; 
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b, Broadcast media - refers to radio, television, cable broadcast and the like; 
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c. Print media - refers to l1ewspapers, magazines, reviews, bulletins and other 
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publications appearing at regular interval, with fixed prices for subscriptions 
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appearing at regular interval, with fixed prices for subscription and sale and 
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published within the Philippines; 
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d, Commercials and advertisements - shan mean announcements, descriptions, 
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presentations, advertising or promoting of something, as in goods for sale, in 
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newspaper, magazine, television, radio, and the like; 
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e. Advertiser or sponsor - shall mean the owner or the principal of the thing or 
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product to be advertised or sponsored; 
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f. Educational purposes - includes, but is not limited to, educational programs, 
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publications, commercials and advertisements which: 
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1) Give positive influence on entertainment; 
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2) Promote social values; 
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3) Mobilize community support to, and wage information campaigns 
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directed at parents to promote the importance of hi sic education; 
4) Improve the. image of technical education and skills training and to . 
inculcate the necessary values needed for productive employment; 
5) Propagate culture, foster patriotism and nationalism and other values that 
serve as an instrument in the struggle for Filipino sovereignty, identity, 
national unity and integration; and 
6) Such other similar descriptions as the Secretary of Education rhay provide. 
pursuant to the implementation of this Act. 
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SEC. 4. Tax Exempt Importation. - The provisions of existing laws to the. 
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contrary notwithstanding, the machineries, equipment, tools for production, spare 
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parts, supplies, materials and transportation and communication facilities to be used 
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actually, directly and exclusively for educational purposes by media producers and 
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publishers are not subject to duty and internal revenue tax: Provided, That where the 
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National Economic and Development Authority certifies to the availability of the 
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abovementioned items in the local market of sufficient quantity, comparable quality,. 
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and price or such tax-exempt items brought or imported into the Philippines are 
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subsequently sold, transferred or exchanged in the Philippines to be devoted to non-
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educational purposes, the purchasers or recipients shall be considered the importer 
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thereof; and ·shall be liable for the duty and internal revenue tax due on such 
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importation· subject to depreciation allowance. The tax due on such items shall 
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cORstitute a lien ort the article itself, superior to all other charges or liens, irrespective 
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of the possessor thereof. 
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SEC. 5. Donations for Educational Purpose. - For purposes of this Act, any 
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amount paid and contributed for educational programs and publications by any 
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individual or corporation which shall not exceed ten percent (10% )of their respective 
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annual income computed without the benefit of any tax incentives under existing 
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law shall be tax deductible. 
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Properties donated other than cash shall be valued in accor,dance with:, the 
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rules alld regulations prescribed by the Secretary of Finance in consultation with 
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appropriate government agencies, 
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SEC. 6. Program and Publication, - The net income derived from educational 
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programs and publications shall be tax-exempt for (5), years from the start of its 
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initial operation or until the producer and publisher shall have attained reasonable 
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return' of their investment Thereafter, no part of the net income that inures to the 
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benefit of the producer or publisher in an amount not in excess of twenty-five 
11 ) percent (25%) of the taxable income derived from the program or pubiication shall 
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be allowed. The excess amount of the net income shall be devoted for the 
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enhancement of the educational program and publication and for other educational, 
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purposes. 
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SEC. 7. Commercials and Advertisements. - All expenses incurred in the 
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production of commercials and advertisement for educational purposes under 
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Section 3 paragraph f of this Act, and approved by the Secretary of Education, shall 
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enjoy tax deduction of not more than ten percent (10%) of the gross operating 
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expenses of the advertisers or sponsors: Provided, That these commercials and 
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advertisements are actually delivered to the general public. 
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SEC. 8. Airtime Rates and Cost of Space. - Broadcast media and print media 
shall receive ten ~ercent (10%) lower airtime rates and cost of space fOj every paid 
feature of production or, publication with educational content, as approved and 
certified by the,Secretary' of Education, or any equivalent government agency, The 
difference from the regular rate shall be chargeable to the value-added taxaccruable, 
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SEC. 9. Government Cooperation. - Every department, bureau, office agency 
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or instrumentality of the government, including government-owned or controlled 
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corporations, are enjoined to cooperate with the private sector in order to achieve 
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the objectives of this Act 
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SEC. 10. Separability Clause. - If any part or provision of this Act is held 
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invalid, other parts or provisions hereof not affected thereby shall remain in full 
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force and effect. 
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SEC. 11. Repealing Clause. - All laws, decrees, orders, rules and regulation, 
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or portions thereof inco~sistent with this Act are .hereby repealed, amended or 
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modified accordingly. 
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SEC. 12. Effectivity Clause. - This Act shall take effect fifteen (15) days after . 
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its publication in at least two (2) newspapers of general circulation.' 
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Approved, 
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