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THIRTEENTH CONGRESS 
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First Regular Session 
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OF THE REPUBLIC OF THE PHILIPPINES ) 
OCT 26 P4 29 
SENATE 
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Senate Bill No. 
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Introduced by Senator Richard J. Gordon 
EXPLANATORY 
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NOTE 
The 'Philippines is wealthy beyond imagining, in the richness of its history, culture 
and naturai environment. But what have we done to fully utilize such capital in the 
development of our nation? Tourism is the only industry that can use such capital 
assets in a sustainable manner. Tourism is the fastest and most efficient way of 
generating foreign exchange, investments ,and employment: Tourism is an engine of 
growth that .can empower our economy to alleviate the poverty of the Filipino people. 
Yet we have done too little to make tourism the centerpiece of the Philippine economy. 
We have lagged far behind our neighbors in tourism. In 2001, Thaihnd and 
Malaysia had visitors in excess of 10 million, while Indonesia and Singapore had more 
than 5 million. Even Vietnam, a country ravaged by war and held back by'a communist 
economy, surpassed the 2 million mark. Our nation, on the other hand, did not even 
break 2 million visitors that year. If one were to simply think of each tourist spending 
US$1000'in our country, how much foreign exchange can be generated if we increase 
our tourist arrivals from 2 million to 10 million? How' much cash will be generated, 
capital liberated, money invested and jobs created? How many Filipinos can be lifted 
up out of poverty? We do so much to encourage foreign investment in industry. But 
most if not all the money these investors make is sent back out to their countries. With 
tourism, however, we will be bringing the money in, and it will stay in. 
Tourism is the largest industry in the world, with 700 million tourists a year, 
collectively spending hundreds of billions of dollars. We have been blessed by the 
accidents of fortune with resources to make us competitive in that market. For us to 
share and succeed in that market, all it takes for us is the will to do so. 
Government must have the political will to devote its resources in pursuit of that 
goal, and must declare that tourism is an industry of national interest, and that it is our 
primary engine of growth and development. We must find our future in the Philippines. 
This bill seeks to change the philosophy of government toward tourism, and to 
create the necessary political and legal structures to make tourism development 
happen. Tourism is not some mere token industry. Rather, tourism is the key to lifting 
our people out from their poverty, giving them jobs and opportunities, and allowing them 
to live in pride and dignity. No longer will we need to send our people abroad, expose 
them to the dangers of war and the oppressions of alien cultures, in order to put food on 
our tables. This bill, if quickly passed into law, will be a key step in attaining the 
President's goals of ten million jobs for 


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SENATE 
OFFICE OF THE SECR~TARY 
THIRTEENTH CONGRESS 
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OF THE REPUBLIC OF THE PHILIPPINES 
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OCT 26 P4Q9 
First Regular Session 
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SENATE 
Senate Bill No. 
, lntloduced by the Honorable Senator Richard J. Gordon 
AN ACT DECLARING AND IMPLEMENTING A NATIONAL 
POh2Y FOR TOURISM AS THE PRIMARY ENGINE OF 
' I NATIONAL DEVELOPMENT, AND PROVIDING 
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NECESSARY INCENTIVES THEREFOR 
i INVESTMENT, EMPLOYMENT, GROWTH AND 
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SECTION I. 
Shod Title. This act shall be known as the Tourism Act of 2004. 
indispensable eledent of the national economy and an industry of national interest and 
importance, such that it must be harnessed as an engine of socio-economic and cultural 
growth to provide /investment, foreign exchange and employment, and an enhanced 
sense of national bride, for all Filipinos. The Department of Tourism may call upon all 
government depakments, agencies and offices to coordinate their efforts in the 
implementation of1 this policy. 
This can be achieved by providing the necessary 
infrastructure, creating an atmosphere of peace, order and security, and inculcating 
within the people a culture of sustainable tourism, whereby the benefits of tourism will 
spread to the great'er population and significantly alleviate the poverty of Filipinos. 
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THE DEPARTMENT OF TOURISM 
SECTION 2. Dealaration 
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 of Policy. It is the policy of the State that tourism is an 
SECTION 3. Maddate. There shall be a Department of Tourism (the "Department") 
which shall be the primary government agency charged with the responsibility to 
determine tourism olicy, develop, promote and regulate tourism, instill in the Filipino its 
fundamental imp0 R ance in the generation of employment,, investment and foreign 
exchange. 
SECTION 4. Powers and Functions. The Department shall have the following powers 
and functions: 
a. Formulate policies, plans, programs;and 
projects for tourism as an engine of 
soclo-economic and cultural growth. 
b. Oversee and coordinate the implementation of tourism policy, plans and projects. 
c. Delegate to regional offices in coordination with local governments specific 
powers and functions in the implementation of tourism policy, plans and projects, 
d. Call upon all agencies to properly carry out their programs in relation to and in 
coordination with the policies, plans and projects of the Department, and to assist 
in the implementation of tourism policy, plans and projects. 
e. Represent the government in all conferences and meetings concerning tourism 
and discharge such responsibilities of the government arising from treaties and 
international agreements to which it is signatory. 
f. Request the President for representation on all government agencies, offices, 
boards, commissions or committees that may, directly or indirectly, affect 
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tourism, including but not limited to, transportation and travel, peace and order, 
national emergencies and disaster coordination, public utilities and other public 
infrastructure, foreign relations and immigration, 
g. Protect, maintain and preserve historical, cultural and natural endowments with 
the cooperation of appropriate government agencies and the private sector. 
h. Require relevant private or public entities to provide increased access to 
Philippine airports and seaports for tourists, and adopt measures to attract and 
assure them of their safety. 
i. Call upon relevant government departments, agencies and offices to remove 
barriers to travel, facilitate the process of obtaining and extending visas, and 
integrate and simplify of travel regulations and immigration procedures. 
j. Monitor conditions of any community in the Philippines and issue 'advisories on 
the safety or viability of travel to such communities, 
k. Formulate and promulgate rules and regulations for tourism prescribing minimum 
levels of operating quality and efficiency to ensure that facilities, personnel and 
services are maintained in accordance with the highest local and international 
standards. 
I. Regulate tourism establishments and services, issue licenses therefor, and 
prohibit the operation of establishments and services that fail to meet minimum 
operating standards; 
m. Accredit tourism establishments and services that comply with prescribed 
standards, and create incentives for compliance. 
n. Approve and enforce, through local government units, construction, safety and 
fire standards, among others, of accredited tourism industry establishments and 
services. 
0. Approve tourism development plans of local government units. 
p. Develop programs for training and education in standards and regulatory 
enforcement to support local government units in the performance of their 
accreditation; regulation, and enforcement functions. 
SECTION 5. 
The Department shall consist of the 
Deoartment Prooer. Deoartment Services. Bureaus and Offices and the Deoartment's 
Structure of the DeDartment. 
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Regional Office;. 
The Department Prope; shall consist of the Offices of the'~Secretary 
and Undersecretaries. 
SECTION 6. Office of the Secretary. The Office of the Secretary shall consist of the 
Secretary and his immediate staff. 
SECTION 7. Undersecretaries. 
The Secretary shall be assisted by three (3) 
Undersecretaries, namely: 
a. Undersecretary for Tourism Development, who shall be responsible for the Office 
of Tourism Development Planning, and Office of Tourism Coordination. 
b. Undersecretary for Tourism Regulation, who shall be responsible for the Office of 
Tourism Standards and Training, and all Regional Offices. 
c. Undersecretary for Internal Services. 
SECTION 8. 
Office of Tourism Development Planning. The Office of Tourism 
Development Planning shall, in coordination with Tourism Philippines, have the 
following functions: 
a. Formulate policies, programs and plans for national tourism development, and 
approve local government tourism development plans; 
b. Monitor and evaluate the implernehtation of plans and programs of the 
Department; 
c. Analyze specific geographical areas with potential tourism value leading to the 
preparation of a national tourism development plan; and 


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d. Formulate, in coordination with the Tourism Enterprise Zone Authority, other 
government agencies and local government units exercising political jurisdiction 
over the area, development plans for tourism enterprise zones integrating such 
plans with other sectoral plans for the area. 
SECTION 9. Office of Tourism Coordination. The Office of Tourism Coordination shall 
have the following functions: 
a. Coordinate with government agencies, local government units, non-governmental 
organizations, and other private entities for the development and implementation 
of the national tourism plans and policies; 
b. Call upon the assistance and support of any or all of the government agencies in 
the implementation of the policies of the Department; and 
c. Support the private sector in all tourism. activities requiring governmental 
assistance. 
SECTION 10. 
Standards and Training shall have the following functions: 
Office of Tourism Standards and Training. The Office of Tourism 
a. Formulate and enforce standards for tourism establishments and services 
prescribing minimum levels of operating quality and efficiency in order to ensure 
that facilities, personnel and services are maintained in accordance with 
acceptable local and international standards; 
b. License and accredit tourism establishments and services that comply with 
prescribed standards, and create incentives for compliance; 
c. Coordinate with the Tourism Enterprise Zone Authority, government agencies, 
local government units, non-governmental organizations, and private entities in 
the formulation of rules and regulations for the preservation such historical, 
cultural or natural assets or relics giving the zone its tourism value and 
significance; and assure adherence to approved zone development plans; and 
d. Provide training and education programs to improve the quality of tourism 
services; 
SECTION 11. Reqional Offices. The Department shall establish, operate and maintain 
a Regional Office in each of the administrative regions of the country. A Regional Office 
shall be headed by a Regional Director and shall, within its administrative region, have 
the following functions: 
a. Implement laws, policies, plans, programs, rules and regulations of the 
Department, particularly those relating to compliance and accreditation of tourism 
establishments and services promulgated by the Department; and 
b. Coordinate with regional offices of other departments, bureaus, and agencies, 
local government units, non-governmental organizations, and the regional offices 
of the Department's attached agencies in the implementation of such laws, 
policies, plans programs and rules and regulations. 
SECTION 12. Abolished Offices. The Bureaus for Domestic and International Tourism 
Promotion, and the Offices of Tourism Information and Product Development are 
hereby abolished. Resources for and personnel performing relevant functions within 
these bureaus and offices shall, insofar as possible, be integrated within the Tourism 
Enterprise Zone Authority and Tourism Philippines. 
SECTION 13, Nature of Internal Services and their Heads. The Internal Services shall 
be essentially staff in character, each of which shall be headed by a Service Chief. 
SECTION 14. Financial and Manaaement Service. The Financial and Management 
Service shall provide the Department with staff advice and assistance on budgetary, 


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financial and management matters and shall perform such other related functions as 
may be assigned or delegated to it by the Secretary. 
SECTION 15. Administrative Service. The Administrative Service shall provide the 
Department with staff advice and assistance on personnel information, records, 
communications, supplies, equipment, collection, disbursements, security, other 
custodial work and such other related duties and responsibilities as may be assigned or 
delegated to it by the Secretary. 
SECTION 16. Leaal Service. The Legal Service shall provide the Department with staff 
advice and assistance on all legal matters affecting the Department and perfom such 
other related functions as may be assigned or delegated to it by the Secretary. 
ATTACHED AGENCIES 
Tourism Enterprise Zone Authority 
SECTION 17. The Tourism Enterprise Zone Authority. Under the supervision of the 
Secretary shall be a body corporate known as the Tourism Enterprise Zone Authority 
(TEZA), which shall own, manage, or supervise the Tourism Enterprise Zones (TEZ) 
established under this Act, and its principal office shall be located in Metro Manila. 
SECTION ?8. Tourism Enterprise Zones. Every geographic area capable of being 
defined into one contiguous territory; with areas of historical'and cultural significance, 
environmental beauty, or existing or potential integrated leisure facilities within its 
bounds, adjacent to it, or within reasonable distance from it; having, or parentially 
having, strategic access through highways, seaports or airports, and reasonable 
connection with power, water and sewage systems; while possessing sufficient area to 
be further utilized for the establishment of tourism enterprises, may be designated, or 
interested parties from the private sector or local government may apply for an area's 
designation as, a TEZ. 
In connection with and in implementation of this Act, the areas under or covered by 
lntramuros Administration created under Presidential Decree No. 1616, the Taal Lake 
Trust Zone created under Republic Act No. 7623, and the Presidential Commission for 
the Restoration, Conservation and Preservation of The Vigan Heritage Village created 
under Executive Order No. 358 of 1996 are hereby reorganized as TEZS in accordance 
with this Act. 
Any other area specifically defined as a tourism area or zone under any special or 
general law, decree, or presidential issuance shall, as soon as possible, be organized 
into a TEZ under the provisions of this Act. 
The National Parks Development Committee created under Executive Order No. 30 of 
1963, as amended, is hereby abolished, and TEZs shall then be created under the 
provisions of this Act for each and every national park whenever and wherever 
practicable. 
The Tourism Enterprise Zone Authority shall coordinate with the Protected Areas and 
Wildlife Bureau for the development of policies, plans and programs for the conversion 
of certain areas or portions of national parks under the National Integrated Protected 
'Areas System into TEZs. 
The Tourism Enterprise Zone Authority shall coordinate with Tourism Philippines forthe 
transfer of assets of the Philippine Tourism Authority that may be organized as TEZs. 
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SECTION 19. Development Strateav of TEZs. The strategy and priority of development 
of each TEZ established pursuant to this Act shall be formulated by the Department 
through TEZA. 
TEZs may be established on the initiative of the national government, local government 
with the assistance of the national government, or private initiative with the approval of 
the national government. 
It shall be the policy of the government to encourage and provide incentives and 
facilitate private sector participation in the construction and operation of the public 
utilities and infrastructure in TEZs, using any of the schemes allowed under the Build 
Operate and Transfer Law (Republic Act No. 6957, as amended). 
Lands identified as part of a TEZ shall be exempt from the coverage of the Urban 
Development and Housing Program Act of 1992 (Republic Act No. 7279) and the 
Comprehensive Agrarian Reform Law (Republic Act No. 6657). 
SECTION 20. Administration. The TEZA shall be governed by a Board of Directors 
(the "TEZA Board"), composed as follows: 
a. The Department Secretary, as chairperson 
b. The Undersecretary for Tourism Development 
c. The Administrator of the Tourism Enterprise Zone Authority 
d. A representative each from the Departments of Public Works and Highways, 
Transport and Communications, Interior and Local Governments, and Trade and 
Industry 
e. Four directors appointed by the President 
The TEZAs powers, business and property shall be exercised, conducted and held by 
the TEZA Board. The TEZA Administrator shall implement the actions required by the 
TEZA Board. 
SECTION 21. The TEZA Administrator. The TEZA shall have and Administrator who 
must be a Filipino, have a postgraduate degree in business, law, tourism, or public 
administration, and have demonstrated expertise in any of those fields. He must have 
been engaged in a managerial capacity for at least five (5) years prior to his 
appointment. 
SECTION 22. Directors bv Appointment of the President (Representative Dirxtors). 
The Tourism Related Industries Congress shall recommend at least eight persons, from 
which the President shall appoint four to serve as Representative Directors to represent 
the tourism industry, specifically the following sectors: air, sea and land transportation; 
hotel and resort sectors; tour operators; and real estate development. A Representative 
Director must be a Filipino engaged in the management of business in the sectors they 
represent for at least ten ( I O )  years, and have demonstrable expertise in their 
respective industries or sectors. 
These directors shall serve terms of three years. The first three directors appointed 
under this provision shall serve three, two and one years respectively. 
SECTJON 23. Meetinas of the Board. The TEZA Board shall meet at least once a 
month at the TEZA's principal office unless the TEZA Board had previously agreed in 
writing to meet at another location. 
SECTION 24. General Powers and Functions of the TEZA. The TEZA Board shall have 
the general powers of a body corporate, which includes the power of succession, to sue 
and be sued in such corporate name, to acquire, hold and dispose of real and personal 


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property, to adopt, amend and repeal its bylaws, and to enter into contracts of every 
kind. In relation to its functions, it shall also specifically have the power to: 
a. Enter intoj make, perform and carry out contracts of every class, kind and 
descriptioq which are necessary or incidental to the realization of its purposes 
with any /person, firm or corporation, private or public, and with foreign 
government entities; 
b. Contract I ans, indebtedness and credit, issue commercial papers and bonds, in 
any local or convertible foreign currency from any international financial 
banks or s h a r  institutions under terms and conditions prescribed by law, rules 
and reguldtions; 
c. Execute a y deed of guarantee, mortgage, pledge, trust or assignment of any 
the early kttainment of its goals and objectives, subject to the provisions of 
Article VII. Section 20, and Article XII, Section 2, paragraphs (4) and (5) of the 
d. Construct, own, lease, operate and maintain public utilities 'as well as 
e. Reclaim 0 '  undertake reclamation projects as it may deem necessary in areas 
either by litself or in collaboration with the Public Estates Authority (PEA) 
established under Presidential Decree No. 1084 as amended; 
f. 
Receive dbnations, grants, bequests and assistance of all kinds from local and 
foreign godernments and private sectors and utilize the same; 
g. Exercise eminent domain; 
h. Develop policies, plans and programs in coordination with the Department for 
the development and operation of TEZs, recommending to the local government 
units or other appropriate authorities the location, incentives, basic services, 
utilities and infrastructure required or to be made available for said entities; 
i. 
Register, regulate and monitor enterprises in TEZs; 
j. 
Coordinate with local government units and exercise general supervision over 
the development, plans, activities and operations of the TEZs; 
k. Review proposals for the establishment of TEZs based on criteria provided 
hereunder as further defined by rules and regulations, and facilitate and assist in 
the organization of said entities. 
institutions, 1 foreign government entities, and local or foreign private commercial 
property f Jl r the purpose of financing the programs and projects deemed vital for 
Constitution, 
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infrastruct d re facilities; 
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contiguous to the T E N S  lands described in Section 7 of this Act 
The TEZA shall be deemed a government infrastructure corporation under the 
provisions of the Administrative Code of 1987 (Executive Order No. 292, Book IV, 
Chapter 13, Section 58). 
SECTION 25. Powers and Functions of the TEZA Administrator. The TEZA 
Administrator shall coordinate the policies, plans and programs concerning TEZs. As 
such, he shall provide overall supervision over and general direction to the development 
of TEZs. 
He shall determine the structure and the staffing pattern and personnel 
complement of the TEZA and establish offices when necessary, all subject to the 
approval of the TEZA Board. 
In addition, he shall have the following specific powers and responsibilities: 
a. Coordinate with the Philippine National Police in safeguarding all the lands, 
buildings, records, monies, credits and other properties and rights of. investors 
within TEZs; 
b. Ensure that all revenues of the TEZs are collected and applied in accordance 
with law; 
c. Submit to the Board the ongoing and proposed projects, work and financial 
programs, annual budget of receipts, and expenditures of the TEZs; 


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Acquire jurisdiction, as he may deem proper, over the protests, complaints, and 
claims of the residents and enterprises in a TEZ concerning administrative 
matters; 
Recommend to the Department Secretary the grant, approval, refusal, 
amendment or termination of the TEZ franchises, licenses, permits, contracts, 
and agreements in accordance with the policies set by the Department 
Secretary; 
Require owners of houses, buildings or other structures constructed without the 
necessary permit whether constructed on public or private lands, to remove or 
demolish such houses, buildings, structures within sixty (60) days after notice 
and upon failure of such owner to remove or demolish such house, building or 
structure within said period, the TEZA Administrator or his authorized 
representative may summarily cause its removal or demolition at the expense of 
the owner, any existing law, decree, executive order and other issuances or part 
thereof to the contrary notwithstanding; 
Take such emergency measures as may be necessary to avoid fires, floods and 
mitigate the effects of storms and other natural or public calamities; and 
Subject to the approval of the Department Secretary, issue rules and regulations 
to implement the provisions of this Act. 
SECTION 26. Capitalization. The national government shall appropriate the sum of 
five hundred million pesos for the capitalization of TEZA. 
SECTION 27. Survey of Resources. The TEZA shall, in coordination with appropriate 
authorities and neighboring cities and municipalities, conduct a survey of the physical, 
natural assets and potentialities of TEZ areas under their jurisdiction. 
SECTION 28. Reaistration. Business enterprises within a TEZ shall register with the 
TEZA to avail of all incentives and benefits provided for in this Act. 
SECTION 29. 
Civil Dispute 'Resolution. The TEZA shall establish a civil dispute 
mediation office, to assist in the resolution of civil disputes within a TEZ where one of the 
parties to the dispute is a non-resident alien. No civil dispute in a TEZ involvirig a non- 
resident alien may be filed in court without having undergone mediation proceedings 
under this section. The TEZA shall charge reasonable fees for civil dispute mediation. 
SECTION 30. Labor Dispute Resolution. To resolve disputes between workers and 
employers for any violation of the Labor Code (Presidential Decree No. 442, as 
amended), the TEZA shall establish a labor dispute resolution office to mediate between 
workers and employers. The TEZA shall charge reasonable fees for labor dispute 
resolution. 
In order to promote a stable investment climate, and realizing the critical role tourism 
plays in the Philippine economy, employees operating enterprises operating within the 
Zone shall be prohibited from engaging in strikes or strike-related activity within five 
years from the establishment of the enterprise. 
The Department of Labor and Employment and the National Labor Relations 
Commission shall not acquire jurisdiction over any complaints arising from a violation of 
the Labor Code or its rules and regulations from an enterprise located and operating 
within a TEZ unless such a complaint has undergone labor dispute resolution with the 
TEZA. 
SECTION 31. 
Compensation of Employees. Recognizing the critical employment 
condition of the Philippines, employers operating establishments within a Zone are 
hereby authorized, subject to rules jointly promulgated by the TEZA and the DOLE, to 
comply with minimum wage laws and regulations by crediting the fair value of 


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supplements and facilities provided the worker, such as but not limited to housing, 
meals, transportation, health care and other benefits, in the computation of minimum 
wages paid. 
SECTION 32. lnvestiqation and Inquiries. Upon a written formal complaint made under 
oath, which on its face provides reasonable basis to believe that some anomaly or 
irregularity might have been committed within the TEZ, the TEZA Administrator shall 
have the power to inquire into the conduct of firms or employees in the TEZ and to 
conduct investigations. For that purpose, he may subpoena witnesses, administer 
oaths, and compel the production of books, papers, and other evidence. The TEZA 
Administrator may also grant immunity from prosecution to any person whose testimony 
or whose possessions of documents or other evidence is necessary or convenient to 
determine the truth in any investigation conducted by him or under his authority. 
SECTION 33. One-stop Shop Processinq. At the national TEZA office and within every 
TEZ, the T E D  shall establish an office where a TEZ investor or enterprise can obtain 
all necessary permits and licenses from all national and local government offices. All 
government agencies shall assign representatives to TEZs to coordinate with the TEZA 
for the issuance of such permits and licenses. 
SECTION 34. Subsidiaw Corporat/ons. In the fulfillment of its mandate, TEZA is 
hereby authorized to create wholly or partially owned subsidiary corporations for the 
ownership, operation or management of enterprises within TEZs. 
SECTION 35. Administration of TEZs. Each TEZ shall be administered by a zone 
administrator appointed by the TEZA Board on recommendation of the TEZA 
Administrator. No person shall be appointed zone administrator unless he is a Filipino, 
with a postgraduate degree in business, law, tourism, or public administration, and 
demonstrated expertise in any of those fields. He must have been engaged in a 
managerial capacity for at least five (5) years prior to his appointment. 
SECTION. 36. 
Consultative Committees. To assist the zone administrator in the 
performance of his functions, a. consultative committee shall be formed of all the local 
government chief executives of the local government units whose territories overlap, are 
part of, or are included. in the TEZ, as well as one representative each from the TEZs 
investors and registered labor unions. The TEZA Board may, in view of specific 
relevant interests other groups or sectors may have in the operation of a TEZ, allow 
representation on the consultative committee from other concerned groups or sectors, 
such as but not limited to religious groups, indigenous cultural communities, and non- 
governmental organizations. 
SECTION 37. 
Privatelv-owned TEZs. 
Privately owned TEZs shall operate 
autonomously and independently of the. TEZA, but shall nevertheless be monitored by 
the TEZA for the implementation of incentives. 
Tourism Philippines 
SECTION 38. Tourism Philippines. The Philippine Tourism Authority (PTA) and the 
Philippine Convention and Visitors Corporation (PCVC) are hereby absorbed into a 
corporate entity known as Tourism Philippines. All the assets of the PTA and the PCVC 
are hereby transferred to Tourism Philippines. Tourism Philippines shall be under the 
supervision of the Secretary, and its principal office shall be located in Metro Manila. 
SECTION 39. 
Mandate. 
Consistent with policies defined and provided by the 
Department, Tourism Philippines shall be a body corporate primarily responsible for 
marketing and promotion of the Philippines as a tourism destination and its tourism 
products, and secondarily, in the planning, research, and development of tourism 


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products, as well as the construction, operation and management of necessary 
infrastructure for tourism development. 
SECTION 40. Administration. Tourism Philippines shall be governed by a Board of 
Directors (the Tourism Board), composed as follows: 
a. The Department Secretary, as chairperson 
b. The Tourism Philippines Chief Operating Officer 
c. Four directors appointed by the President 
d. Three directors appointed by the Department Secretary 
The Tourism Board shall exercise all of Tourism Philippines's powers, conduct its 
business, and control and hold its property. The Chief Operating Officer, in coordination 
with the Executive Directors, shall implement the actions required by the Tourism 
Board. 
SECTION 41. The Chief Operatinq Officer. 
The Chief Operating Officer shall be 
appointed by the Department Secretary. The Chief Operating Officer must be a Filipino, 
have a postgraduate degree in business, law, tourism, or public administration, and 
have demonstrated expertise in any of those fields. He must have been engaged in the 
managerial capacity for at least five (5) years prior to his appointment. 
SECTION 42. Directors by Appointment of the President (Representative Directors). 
The Tourism Related Industries Congress shall recommend at least eight persons, from 
which the President shall appoint four to serve as Representative Directors to represent 
the tourism industry, specifically the following sectors: air, sea and land transportation; 
hotel and resort sectors; tour operators; and other leisure activity enterprises. A 
Representative Director must be a Filipino engaged in the management of business in 
the sectors they represent for at least ten (IO) years, and have demonstrable expertise 
in their respective industries or sectors. 
These directors shall serve terms of three years. The first three directors appointed 
under this provision shall serve three, two and one years respectively. 
SECTION 43. 
Directors bv Appointment of the Department Secretary (Executive 
Directors). The Secretary shall appoint three persons to serve as Executive Directors to 
manage the primary and secondary functions of Tourism Philippines. An Executive 
Director must be a Filipino, having a postgraduate degree in a field relevant to the 
function to which he has been assigned to perform, and must have been engaged in a 
managerial capacity for at least five (5) years prior to his appointment, performing 
functions relevant to the tasks of his office. 
SECTION 44. Powers of the Tourism Philippines. The Tourism Philippines, as a body 
corporate, shall have a corporate name and a corporate seal, the power of succession, 
to sue and be sued in its own name. 
It shall also have the power to enter into contracts in the performance of its functions, 
and to hold, possess, lease, own, dispose or alienate real and personal property as it 
deems necessary for the conduct of its business. in relation thereto, it may: 
a. Enter into contracts as provided under the Build-operate-transfer Law (Republic 
Act No. 6957, as amended); 
b. Contract loans, indebtedness, credit and issue commercial papers and bonds, in 
any local or convertible foreign currency from any international financial 
institutions, foreign government entities, and local or foreign private commercial 
banks or similar institutions under terms and conditions prescribed by law, rules 
and regulations; 


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C. Execute any deed of guarantee, mortgage, pledge, trust or assignment of any 
property for the purpose of financing the programs and projects deemed vital for 
the early attainment of its goals and objectives, subject to the provisions of the 
Constitution (Article VI], Section 20, and Article XII, Section 2, paragraphs (4) 
and (5)); and 
d. Receive donations, grants, bequests and assistance of all kinds from local and 
foreign governments and private sectors and utilize the same. 
SECTION 45. Meetinqs of the Board. The Tourism Board shall meet at least once a 
month at the Tourism Philippines's principal office unless the Board had previously 
agreed in writing to meet at another location. 
A quorum for the holding of a meeting shall consist of four voting members, and two 
non-voting members. The voting members of the Board are the Chairman, the TEZA 
Administrator, the Chief Operating Officer and the Representative ,Directors. The 
Executive Directors shall be present at and participate, in Tourism Board meetings, but 
shall not vote. 
Section 46. Structure and Functions of the Tourism Philippines. The Tourism Board 
shall, upon the recommendation of the Chief Operating Officer, have the power to 
organize the Tourism Philippines in a manner most efficient and economical for the 
conduct of its business. 
The Chief Operating Officer shall carry out administrative and financial functions, as well 
as oversee the operations of foreign and domestic offices. 
The Executive Directors shall respectively be appointed to carry out the following 
functions: 
a. Primary function: Marketing and Promotions, which involves the promotion and 
advertising of tourism products, both domestically and internationally, public 
relations and advertising, and the coordinating with the private sector for the 
conduct of conventions and other tourism events; 
b. Secondary functions: 
i. 
ii. 
Planning and Development, which involves the development of tourism 
products, market research and statistics, and education and training; 
Business and Investments Management, which involves the assessment 
of the assets of the PTA and PCVC, determining how these assets may 
best be utilized, and maximizing the value of such assets by their 
disposition or operation. The operations of Duty Free Philippines shall be 
the responsibility of the Executive Director for Business and Investments 
Mana,gement. 
Tourism Philippines may also establish and operate 
tourism establishments or services when and where necessary. 
The Tourism Board is hereby encouraged to enter into contractual arrangements to 
outsource the performance of Tourism Philippines's functions but under the full control 
and supervision of the Board through'the responsible Executive Director, subject to the 
provisions of relevant laws, in order to minimize the cost of Tourism Philippines's 
operations. 
SECTION 47. Capitalization. 
The capital of Tourism Philippines shall consist of the 
combined assets of the PTA and the PCVC. Immediately after the effectivity of this Act, 
an audit shall be conducted to determine the tru'e extent and value of the assets of the 
PTA and PCVC. 
The national government shall further appropriate an amount of two hundred million 


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pesos to capitalize the operations of Tourism Philippines. 
SECTION 48, Funding. Tourism Philippines shall obtain the funds for its operations 
through the following: 
a. The National Government shall, for the first five years from the effectivity of this 
Act, appropriate an amount for the Tourism Philippines equivalent to at least the 
Department's 2004 allocation for marketing and promotions and product 
development, as well as any appropriations in 2004 for the PTA and the PCVC; 
b. The full amount collected from travel taxes; 
c. Income from the operations of Duty Free Philippines, Tourism Enterprise Zones 
as hereinafter provided, and Tourism Philippines investments and subsidiaries; 
d. A reasonable percentage to be determined by the President but not less than 
25% of the revenues of the Philippine Amusements and Gaming Corporation; 
and 
e. A reasonable percentage to be determined by the President but not less than 
25% of all collections on fees imposed upon the travel of persons by airports and 
seaports 
The Department shall collect a fee of one to two percent (1% to 2%) of the gross 
receipts of tourism industry establishments and services not located within tourism 
enterprise zones, of which 40% shall be remitted to the Tourism Philippines, and 60% 
for the national government. The appropriate rate to be imposed shall be deterrhed on 
,the nature of the establishment's business, and the establishment's compliance with 
Department's prescribed standards for accreditation. 
At least half of all Tourism Philippines funding shall be devoted to the marketing and 
promotions function of Tourism Philippines. 
SECTION 49. Personnel and Compensation. The Chief Operating Officer shall, with 
the approval of the Board of Directors, create a reasonable system of employee 
compensation, position qualification and qualification standards. 
The employees, Executive Directors, and Chief Operating Officer of the Tourism 
Philippines shall be exempt from the salary standardization law. Their compensation 
shall be determined by the financial condition of the Tourism Philippines, the need to 
maintain a fund for its operations, and prevailing market rates for employees in similar 
positions. 
The Department Secretary and the Representative Directors shall not be entitled to 
compensation, but may receive reasonable per diems for attendance at regular and 
special Board meetings. 
Within one year from the effectivity of this Act, Tourism Philippines shall rationalize its 
manpower and staffing requirements. Employees separated from the service as a 
result of such rationalization shall be entitled to benefits provided by law. 
SECTION 50. 
In the fulfillment of its mandate, Tourism 
Philippines is hereby authorized to create wholly or partially owned subsidiary 
corporations for the ownership, operation or management of tourism related enterprises. 
Subsidiaw Corporations. 
TEZA INVESTMENT INCENTIVES 
SECTION 51. Fiscal and Non-fiscal Incentives. Importations of capital goods into a 
TEZ for use by a TEZA registered enterprises within a TEZ shall be imported without 
duties. The Department in conjunction with the Bureau of Internal Revenue and the 


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Bureau of Customs shall promulgate rules and regulations for the implementation of this 
provision, provided that no importations of foreign capital goods shall be'allowed where 
competitive products with significant Philippine component are available in the domestic 
market. 
Purchases of local goods and services by TEZA registered enterprises for use within 
the TEZ shall be value-added tax zero-rated. 
TEZA registered enterprises shall be entitled to an income tax holiday for five years 
from the start of its operations. Such an income tax holiday may be extended for up to 
an additional five years i f  the TEZA registered enterprise undertakes a major expansion 
or upgrade of its facilities. The additional period shall computed in proportion of the cost 
of the expansion or upgrade in'relation to the total assets of the enterprise. 
After the expiration of the income tax holiday, TEZA registered enterprises shall also be 
entitled, in lieu of all national and local taxes, a tax on gross income at a rate of two 
percent to three percent (2 to 3%), depending on the amount of investment and the 
number of persons employed. The Department, together with the BIR, will promulgate 
the necessary rules for the implementation of this provision. 
One-third of the proceeds of such a tax shall be remitted to the affected local 
governments, communities one-sixth to Tourism Philippines, one-sixth to TEZA, and 
one-sixth shall be remitted to the national government. The remaining one-sixth shall 
be placed in a special fund to be used specifically for the preservation of the local 
culture, heritage sites and the environment in or around the TEZ. 
TEZ registered enterprises shall be entitled to avail of preferential rates for power, water 
and other public ut 
SECTION 52. Remittance of Foreign Exchanqe. Without prior Bangko Sentral approval, 
after tax profits and other earnings of foreign investments in enterprises in the Zone 
may be remitted outward in the equivalent foreign exchange through any of the banks 
licensed by the Bangko Sentral ng Pilipinas in the TEZ provided such foreign 
investments in said enterprises have been previously registered with the Bangko 
Sentral. 
SECTION 53. Lease of Land. Consistent with the provisions.of the Investor's Lease Act 
(Republic Act No. 7652), lands and buildings in each TEZ may be leased to foreign 
investors for a period not exceeding fifty (50) years, renewable once for a period of not 
more than twenty-five (25) years. 
The leasehold right acquired under long-term 
contracts may be sold, transferred or assigned, subject to the conditions set forth under 
the Investor's Lease Act. 
SECTION 54. Restoration of Cultural Heritaqe. The cost of restoring material cultural 
heritage within a TEZ in accordance with rules and regulations issued by the National 
Historical Institute shall be a fully deductible expense. Likewise, income derived by 
construction enterprises from such restoration activities shall be tax-exempt. 
SECTION 55. Visa Privileges. Any investor within the a TEZ whose initial investment 
shall not be less than one hundred thousand dollars, and hidher spouse and dependent 
children under twenty-one years of age shall be granted permanent resident status. 
The TEZA shall issue working visas renewable every two years to foreign executives 
and other aliens, possessing highly-technical skills which no Filipino within the TEZ 
possesses, as certified by the Department of Labor and Employment. The names of 
aliens granted permanent resident status and working visas by the TEZ shall be 
reported to the Bureau of Immigration within thirty days after issuance thereof. 
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MISCELLANEOUS PROVISIONS 
SECTION 56. Tourism Coordinatinq Council. A council shall be formed consisting of 
the Department Secretary, as chairman, his undersecretaries, the TEZA Administrator, 
the Chief Operating Officer of Tourism Philippines, the Tourism Industries Congress 
representatives on the Boards of Tourism Philippines and TEZA, the heads of other 
attached agencies, the Secretaries of the Departments of Transportation and 
Communication (DOTC), Public Works and Highways (DPWH), Foreign Affairs (DFA), 
Environment and Natural Resources (DENR), Education (DepEd), Interior and Local 
Government (DILG), Labor and Employment (DOLE) and the heads of the Philippine 
National Police (PNP), Bureau of Immigration (BI); National Historical Institute (NHI), 
National Center for Culture and the Arts (NCCA), Philippine Sports Commission (PSC), 
Philippine Retirement Authority (PRA) and such other government agencies that the 
, President may designate, that shall serve as a coordinating body for national tourism 
development efforts. 
SECTION 57. The Tourism Industries Conqress. Tourism related industries, and such 
other service providers as the Department Secretary may define and designate, shall 
form a Tourism Industries Congress (TRICON) under such terms and conditions as they 
may agree upon, that shall serve as the private sector consultative body to assist the 
government in the development, implementation and coordination of Philippine tourism 
policy. 
Tourism related industries consist of, but are not limited to, the following establishments 
or service providers: tour operators, tourist transport operators, whether of land, sea or 
air transportation, tour guides, mountainlcave guides, professional convention 
organizers; hotels, resorts, apartelles, tourist inns, motels, pension houses, restaurants, 
shops & department stores, sports & recreational centers, spas, museums & galleries, 
foreign exchange dealers, homestay sites, theme parks, convention centers and zoos. 
The Department Secretary may designate other industries, establishments or service 
providers as part of the TRICON: 
SECTION 58. Civil Aeronautics Board. Realizing the critical importance aviation plays 
in the tourism industry, the Department Secretary shall be designated as ex-officio vice- 
chairman of the Civil Aeronautics Board. 
SECTION 59. Manila International Airport Authority. Realizing the critical importance 
international airports play in increasing fast and friendly access by international tourists, 
the Department Secretary shall be designated ex-officio vice-chairman of the Manila 
International Airport Authority. 
SECTION 60. Incentives for Accredited Non-TEZ Tourism Industry Enterprises and 
Services. Accredited tourism industry enterprises and services not registered with the 
TEZA shall be entitled to avail of preferential rates for power, water and other public 
utilities for industrial consumers. 
Accommodation establishments shall be entitled, for purposes of taxation, to fully 
deduct the cost of major expansions, renovations and upgrading of facilities. 
SECTION 61. Education. The Department shall work closely with the DepEd for the 
development of educational programs for the primary and secondary educational levels 
that assist in the creation of a culture of tourism, specifically through the enhancement 
of education in languages, history and culture. 
The Department shall also work closely with the Commission for Higher Education in 
the regulation of colleges and, universities that grant undergraduate and postgraduate 


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degrees in tourism 
The Technology and Skills Manpower Development Administration is hereby mandated 
to develop programs, in conjunction with the Department, for the training of tourism 
entrepreneurs by providing programs for languages, history and cultural appreciation, 
and small business management. 
SECTION 62. Government Banks and Financial Institutions. Insofar as allowed by 
applicable laws and their respective charters, government owned and controlled banks 
and financial institutions should provide microfinance schemes for the assistance and 
development of entrepreneurial enterprises in the tourism industry. 
SECTION 63. Visa Privilecles for Tourists. In view of the urgent need to make the 
Philippines a more tourist-friendly destination, the. Department and the DFA are hereby 
directed to. jointly promulgate rules creating a liberalized system for granting tourist 
visas within six months from the effectivity of this Act, taking into particular consideration 
the fees charged, the periods granted, and the procedures undertaken. 
SECTION 64. No lniunctions Clause. No temporary restraining order or preliminary 
injunction shall be issued or be effective against the TEZA unless the same is issued by 
the Supreme Court of the Republic of the Philippines. 
SECTION 65. Local Governments. In view of the urgent need to develop a national 
strategy for tourism development within a framework for decentralized governance, the 
Department and local governments shall work closely for tourism development. 
The Department shall regulate and prescribe standards for the operation of tourism 
industry enterprises and services. No local government unit shall allow the operation of 
a tourism industry enterprise or service within its territory unless such operation is 
consistent with the local government's tourism development plans, and that such 
enterprise or service has obtained a certification from the Department that such 
enterprise or service is reasonably needed in the context of the national tourism 
developmental plans. 
The Department may require that every tourism industry 
enterprise or service post a bond for the performance of functions in accordance with 
prescribed standards. 
Each and every province and city shall have a tourism officer who shall coordinate with 
the proper Department regional office for the preparation of strategic tourism 
development plans. Municipalities seeking to develop tourism in their areas may have 
a tourism officer who shall coordinate with the provincial tourism officer in the 
preparation of strategic tourism development plans. Local government tourism officers 
shall work closely with the Department regional office in the enforcement of tourism 
laws, rules and regulations. 
The Department shall develop support and training programs to enhance the chpacities 
and capabilities of local governments to monitor and administer tourism activities, and 
enforce tourism laws, rules and regulations in their respective jurisdictions. 
Except as herein provided, local government units the territorial jurisdictions of which 
comprise, overlap, embrace or include a TEZ shall retain their basic autonomy and 
identity. The cities shall be governed by their respective charters and the municipalities 
shall operate and function in accordance with Republic Act No. 7160, otherwise known 
as the Local Government Code of 1991. 
SECTION 66. Relationship with Economic Zones. The Department and the DTI shall 
promulgate rules and regulations to govern the relationship between TEZs created 
under this Act, and economic zones created under Republic Acts No. 7227 or 7916, as 


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amended, where the area comprising a TEZ overlaps, falls within or encompasses that 
of an economic zone, provided, that such rules and regulations shall consider the 
special nature and requirements of tourism in relation to other industries, 
establishments and operations in economic zones. 
SECTION 67. Other Investment Incentives. The investment incentives offered under 
this Act shall be without prejudice to the availment of other incentives provided under 
other laws, decrees, presidential issuances. However, where such other laws, decrees 
or issuances provide for similar or identical benefits, the beneficiary may only elect to 
avail of the benefit provided under one particular law, decree or issuance. 
SECTION 68. lmplementinq Rules and Reaulations. The Secretary of Tourism shall 
have the power to issue rules and regulations to implement this Act. He shall submit 
such Implementing Rules and Regulations to the Congressional Oversight Committee 
for its approval within thirty days from the effectivity of this Act. 
SECTION 69. Conclressional Oversiqht. An oversight committee consisting of five 
members each from both houses of Congress shall constitute a Joint Congressional 
Oversight Committee responsible for overseeing the implementation of this Act. 
SECTION 70. Repealinq Clause. Presidential Decree No. 189, as amended, creating 
the Philippine Tourism Authority, Presidential Decree No. 1448, as amended, creating 
the Philippine Convention and Visitors Corporation, and Presidential Decree No. 161 6, 
as amended, creating the lntramuros Administration, are hereby repealed. 
The 
provisions of Executive Orders No. 292 (The Administrative Code of 1987, as 
amended), the Labor Code (Presidential Decree No. 442, as amended), tlte Local 
Government Code (Republic Act No. 7160), Executive Order No. 30 of 1963 and 
Executive Order No. 358 of 1996, and all other laws, presidential decrees, executive 
orders, proclamations and administrative regulations inconsistent with the provisions of 
this Act are hereby amended, modified, superseded or repealed accordingly. 
SECTION 71. Separabilitv Clause. In the event that any provision of this Act or parts 
thereof be declared unconstitutional, such declaration shall not affect the validity of the 
other provisions. 
SECTION 72. 
Effectivitv Clause. This Act shall take effect one month after the 
completion of its publication in a newspaper of general circulation. 
Approved,