REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
QUEZON CITY

EIGHTEENTH CONGRESS
First Regular Session

4795

HOUSE BILL NO.

Introduced by REPRESENTATIVES ENRICO A. PINEDA and
MICHAEL ODYLON L. ROMERO, PhD.

EXPLANATORY NOTE

Republic Act No. 9593, also known as The Tourism Act of 2009, was enacted to
ensure that development of Philippine tourism is for and by the Filipino people; for
conservation and promotion of our heritage, national identity, and sense of unity.
Likewise, the said law sought to encourage competition in the tourism industry and to
maximize consumer choice by enhancing the continued viability of the retail travel and
independent tour operation industries. In view of such, the law created the Duty Free
Philippines Corporation (DFPC) - a body corporate to operate the duty - and tax - free
merchandising system in the Philippines; to augment service facilities for tourists and to
generate foreign exchange and revenue for the government. The law also gave the DEPC
all the general powers of a corporation, established under the Corporation Code and shall
have the exclusive authority to operate or franchise out stores and shops that offer, among
others, duty- and tax-free merchandise in international airports, seaports, TEZs and other
ports of entry throughout the country.

Duty-free shops established by the DEPC has always been at the top of the mind
of Filipino travelers, most especially our balikbayans. Whenever somebody arrives from
abroad, shopping in duty-free shops is always a delightful treat. A decade after the
enactment of the Tourism Act of 2009, the patronage to these shops has dwindled to a
critical level. DFPC has resorted to all sorts of promos to improve the patronage of our
fellow Filipinos but unfortunately such efforts have not been success. Given the market
competition, with malls selling the same products being offered by the duty-free shops
at a much cheaper price, a particular effect of trade liberalization, it may be logical and
imperative to revisit R.A. No. 9593.

This bill seeks to abolish the DFPC, while giving the Department of Tourism (DOT)
a free hand on DFPC’s assets, in terms of considering the best path that can be taken by
the government, in as far as the tourism industry and the travel retail industry is
concerned, and in consonance with the essence of the tourism law.

Immediate passag@)of this measure is earnestly prayed for.

A. PINEDA MI ODYLON L. ROMERO, PhD
1PACMAN, 1PACMAN


REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
QUEZON CITY

EIGHTEENTH CONGRESS
First Regular Session

4795
HOUSE BILL NO.

Introduced by REPRESENTATIVES ENRICO A. PINEDA and
MICHAEL ODYLON L. ROMERO, PhD.

AN ACT REPEALING SECTION 4(c) AND 4(d),
AND CHAPTER IV SECTIONS 89 TO 95 OF REPUBLIC ACT NO. 9593,
ALSO KNOWN AS THE TOURISM ACT OF 2009,
ABOLISHING FOR THE PURPOSE
THE DUTY FREE PHILIPPINES CORPORATION,

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section 4(c) and 4(d) of Republic Act No. 9593, also known as the Tourism
Act of 2009, is hereby amended as follows:

[(©) Duty Free Philippines (DFP) refers to the government agency
created pursuant to Executive Order No. 46 (1986).

(A) Duty Free Philippines Corporations (DFPC) refers to the
corporate entity created out of DFP pursuant to this Act]

x x x

SECTION 2. Abolition of the Duty Free Philippines Corporation (DFPC). The Duty
Free Philippines Corporation (DFPC), created under Chapter IV, Sections 89, 90, 91, 92,
93, 94 and 95 of RA No. 9593, is hereby abolished.

SECTION 3. All assets, real and personal properties are hereby transferred to the
Department of Tourism (DOT) for proper disposition as prescribed under Section 4 of
this Act. All contracts, records and documents relating to the powers and functions of
the abolished agency, its offices and branches are likewise transferred to the DOT.

SECTION 4. Privatization of Duty Free Philippines Corporation’s Assets. The
Department of Tourism (DOT) is hereby mandated to dispose, manage or lease all assets,
real and personal properties of the DFPC in accordance with existing laws, as soon as
practicable. The DOT, in coordination with the Commission on Audit (COA) shall
conduct a complete accounting and inventory of such assets to determine and ascertain
their nature, description, amount and value, as well as other rights and obligations

pertaining thereto, if any.


The Secretary of DOT is empowered to enter into sales through public bidding,
negotiated sale, lease or any form of divestment or transmission of rights over assets of
the DFPC and the monies produced by such shalll be remitted to the Bureau of Treasury
(BTz): Provided, That any and all sales and other modes of privatization or disposition or
any form of divestment or transmission of rights over these assets shall not be considered
final unless approved by the President of the Republic of the Philippines: Provided,
further, That operations of these assets in partnership with a private sector in the
management of operation thereof prior to actual sale or disposition, royalty fees shall be
collected and shall likewise be remitted to the BTr.

The monies remitted to the BTr shall then form part of funds that shall be used for
tourism promotion and tourism infrastructure projects which shall be included and
reserved for the yearly fiscal budget of the DOT under its expenditure programs.

SECTION 5. Separation and Retirement Benefits. Officials and employees of the DFPC
who chose to separate from government service or who shall choose to retire, if eligible,
shall be given a Severance Mitigation Package (SMP) in addition to other separation and
retirement benefits to which they may be entitled under existing laws and regulations,
and based on the recommendations of the Governance Commission for Government
Owned and Controlled Corporations (GCG) created under R.A. No. 10019, in
coordination with the Department of Budget and Management (DBM), subject to the
approval of the President. The needed fund for the SMP may be taken from the
remittances made to the BTr on the sale or lease of the assets of the DFPC.

SECTION 6. Implementing Rules and Regulations. Within ninety (90) days from the
date of effectivity of this Act, the DOT, the Department of Finance (DOF), the Social
Security System (SSS), and the DBM, shall formulate the rules and regulations for the
proper implementation of this Act.

SECTION 7. Separability Clause. If any part or provision of this Act shall be declared
unconstitutional, the other parts or provisions hereof which are not affected thereby, shall
continue in full force and effect.

SECTION 8. Repealing Clause. Section 4(c) and 4(d) of Republic Act No. 9593, also
known as the Tourism Act of 2009, are hereby amended and Chapter IV, Sections 89, 90,
91, 92, 93, 94 and 95 of RA No. 9593 is hereby repealed accordingly.

All laws, executive issuance, orders, and rules and regulations contrary to or
inconsistent with the provisions of this Act or any part thereof are hereby repealed,
amended, and modified accordingly.

SECTION 9. Effectivity. This Act shall take effect sixty (60) days after its complete
publication in the Official Gazette or in a newspaper of general circulation.

Approved.