i r ,  
, 
13th Congress of the Republic) 
of the Philippines 
1 
EXPLANATORY NOTE 
The Philippine Constitution declares in Article I I ,  Section ,20: "The State 
recognizes the indispensable role of the private sector, encourages private 
enterprise, and provides incentives to needed investments." 
It is sad to note that the Philippines continues to lag behind its neighbors in 
attracting investors both local and foreign. For valid reasons, the country is not perceived 
to have a business-friendly investment climate, and therefore, investor confidence in the 
Philippines is not as strong as it is in other ASEAN countries. Basic to this weakness is 
the perception that our system of laws and public governance do not work. 
The general view is that the country may have good laws but these are not 
properly implemented. Legal loopholes abound and these are exploited by the 
unscrupulous. White-collar crooks are able to avoid being jailed. For instance, thus far, 
nobody has been jailed for violations of the Revised Securities Act or the General 
Banking Act, which have time and again been blatantly violated. 
Investors come in and invest under a seemingly firm set of rules. But, down the 
road, the perception is that the rules are changed without prior notice and consultations. 
Because personal .connections are perceived to count heavily, people in business 
perceive that the playing field is not even at all. Finally, the courts seem to take forever 
to arbitrate disputes and occasionally have interfered in business decisions, which 
should probably be left to management sound discretion. 
In the light of the foregoing, there is an need to clarify roles that the government 
performs and that business plays so that the economic development of the country may 
be hastened. There is also a need for government to regain the confidence of business, 
so that business can, in turn, be induced to expand their operations or to invest in new 
ventures and contribute to nation-building. 
The Magna Carta hopes to respond to these concerns by clearly spelling out the 
rights and obligations of business and the kind of protection that Government will accord 
it. The Magna Carta is envisioned to be the social compact between Government and 
business. 
To oversee the implementation of the Magna Carta for Business, a Presidential 
Commission for Business Concerns (PCBC) is proposed to be created under the Office 
of the President. 
#QUlrLINO Q. PlMENTEl JR. 


1 3‘h Congress of the Republic 
) 
Of the Philippines 
1 
First Regular Session 
S E N A T E  
W 
S. No. 
AN ACT 
DEFINING THE RIGHTS AND DUTIES OF ENTREPRENEURS, 
THE COMMITMENTS OF THE STATE IN PROVIDING A 
CREATING THE PRESIDENTIAL COMMISSION FOR BUSINESS CONCERNS 
AND FOR OTHER PURPOSES 
B U SI NESS -F RI EN D LY E NV I RON M E N TI 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Tifle. - This Act shall be known as the “Magna Carta 
for Philippine Business”. 
SECTION 2. Declaration of State Policy. - It is hereby declared the 
policy of the State to recognize private business enterprise as the engine for 
economic growth. The State also commits itself to providing the necessary policy 
framework and effective operational systeqs and structures to encourage 
business initiatives and activities and promote their productivity and viability. 
SECTION 3. Definition of Business. - Business refers to any natural or 
juridical person, duly registered and organized under applicable laws, that legally 
provides goods and services. 
SECTION 4. Definifion of Governrnenf 
- “Government” means the 
national government and the local government and all their departments, 
instrumentalities, agencies and services. 
SECTION 5. Main Purposes. - The purposes of this Act are: (a) to define 
the expectations and commitments of Business and Government to each other; 
and (b) to provide the mechanism and structure for monitoring fulfillment of these 
expectations and commitments. The ultimate purpose of this Act is to promote 
and foster a climate of trust, transparency, and cooperation between Government 


and Business so that both parties can work productively together for the 
attainment of economic growth and national development. 
SECTION 6. Rights of Business - Business shall have the following rights: 
a. Business has the right to expect a level playing field from Government. 
A level playing field is characterized by equal and fair application of all 
laws, and by transparency at all levels of policy-formulation and public 
governance. 
b. Business has the right to expect a reasonable rate of profit from their 
business operations, commensurate to the amounts of risk and capital 
that are involved, and consistent with law, prevailing market conditions 
and market structures. 
c. Business has the right to decide on and to establish all lawful operating 
parameters of its activities, including but not limited to, such issues as 
the location of their factories and operating headquarters, the sourcing 
of their raw material, labor, power, water and other utility requirements, 
and other similar issues, free from undue interference from dictation by 
government regulators. No impositions on these operating business 
decisions may be made by Government unless in pursuance of law, 
public interest or welfare. 
d. Business has the right to a speedy disposition of its cases before all 
judicial, quasi-judicial and administrative bodies, specifically those 
which may have an effect on the continuity and viability of its 
operations. Towards this end, the enforcement of the continuous trial 
system, the use of alternative modes of dispute resolution such as 
conciliation, mediation and arbitration; the shortening of the 
reglementary period for filing pleadings and the prescribed period for 
decision-making; the close monitoring of the performance of members 
of the judiciary, the swift imposition of administrative penalties upon 
corrupt, lazy, incompetent and inefficient judges; and such other 
measures which have for their purpose the speedy disposition of cases 
shall be strictly and rigidly observed. 
e. Business has the right to expect productivity from its workers and 
employees at output levels and quality standards consistent with 
industry standards. 


f. 
g. 
h. 
I. 
j. 
Business has the right to consult and be consulted in the formulation of 
all laws and regulations through open consultative processes with 
legislators and regulators at both local and national' levels. To this end, 
Congress shall create joint or separate committees to hear the 
suggestions, petitions, grievances, and the like, of Business relative to 
the business and investment climate in which it operates. Local 
Government Units are likewise encouraged to do so. 
Business has the right to complete and accurate information from 
Government concerning the implementation, interpretation, revision 
and arbitration processes of all laws, rules and regulations, and 
ordinances. 
Business has the right to seek protection from all forms of harassment, 
intimidation, coercion, interference and unnecessary vexation by 
government regulators and from 
unfair competition by their 
competitors, including those that are fully or partially capitalized by the 
State. Once a business has been authorized to operate by the 
appropriate government bodies and agencies, it shall be allowed to 
continue to operate under the same terms and conditions for as long 
as it possesses the same qualifications and none of the 
disqualifications and none of the disqualifications as when it was 
originally allowed to operate except only as may be provided by law. 
Business has the right to expect consistency in government rules and 
regulations affecting it, regardless of a change in administration at the 
national or local levels of government. Any change in the said rules 
and regulations may be made to the demands of public interest and 
welfare only in accordance with law. 
Business has the right to manage and operate its organizations freely 
and in the manner as it may deem fit and proper, subject only to the 
legal and rightful demands of labor, and to obligations set forth in this 
Act and other laws. Business shall be protected at all times against 
illegal strikes even as it may not engage in illegal acts against its 
employees. 


k. Business has the right to security in its operations and properties 
against all forms of criminality and harassment. 
1. 
Business has the right to expect and to demand prompt, efficient, 
courteous, and competent service and full assistance and cooperation 
from all levels of government in the pursuit of their legitimate business 
objectives. 
SECTION 7. Duties of Business. - Business shall have the following duties: 
a. Business has the duty to run its operations in a manner consistent with 
existing local and national laws, such as, but not limited to, laws on 
taxes, labor and minimum wage, anti-bribery and anti-corruption, 
product quality and safety standards, environmental protection and 
pollution control, truth in advertising, full product information and 
labeling requirements, consumer welfare, land zoning, the filing of 
complete and accurate reports with the pertinent government 
regulators. 
b. Business has the duty to run and manage its affairs and operations in 
the most efficient and effective manner consistent with the country’s 
economic needs and priorities. It shall seek to integrate the best 
business practices obtaining in the world into their operations. 
c. Business has the duty within the limits of conventional business 
prudence and ethics, to deal with its employees, customers, suppliers, 
investors, competitors, and society as a whole in a fair, honest, 
transparent and even-handed manner. Any and all information it 
shares with these parties and with government regulators must be 
accurate, complete, coherent and up-to-date. Entrepreneurs shall not 
distort, hide, camouflage nor misrepresent the reJevant facts of their 
business operations. st shall present only truthful and consistent 
information, 
including 
corporate 
reports, 
brochures, 
financial 
statements and the like to all parties entitled to the same and to the 
public. 
d. Business has the duty to pay its employees a level of compensation 
commensurate to their productivity levels and contribution to the 


profitability of the business. At the very least, Business shall comply 
with minimum wage and child labor laws. 
e. Business has the duty to afford its employees every opportunity for 
developing their full potential as human beings through appropriate 
and effective promotion and incentive schemes, on-the-job training, 
values formation and productivity enhancement seminars, alternative 
income and livelihood workshops for its workers and dependents, and 
human resource development programs. Business shall be required to 
set aside every year at least three (3%) percent of its net profit after tax 
to be spent in the following year for human resource development 
programs. 
f. Business has the duty to treat all their workers with dignity and respect 
befitting their human nature. It shall provide its workers with safe, 
healthy and pleasant working conditions consistent with the best 
practices obtaining within their particular industries, as well as 
prevailing standards on safety of the workplace. 
g. Business has the duty to promote the welfare of communities within 
which it operates their factory sites, plantations, and manufacturing 
facilities. It shall set aside at least one-half (X) 
of one (1) percent 
(1/2%) of its annual net sales as a fund for community development 
projects, such as, but not limited to, assistance to public elementary 
and secondary schools, construction of artesian wells and village water 
and sewerage systems and other community-based facilities, and 
environmental protection, income and livelihood projects, and 
cooperatives. 
h. Business has the duty to deal with civil servants in a professional 
manner and to protect, reinforce and enhance the latter’s integrity, 
honesty, efficiency and productivity. 
Business shall not bribe or 
pressure, in any manner whatsoever, civil servants into committing 
acts, which are violate existing laws or which distort the level playing 
field to their advantage over the rights of consumers, workers, 
business competitors, and the public in general. To this end, Business 
shall report all forms inefficiency, dishonesty, and graft and corruption 
within the government bureaucracy and the perpetrators thereof to the 
proper government agency. Business shall have the duty to actively 


cooperate in all investigative and judicial processes aimed at 
eradicating corruption and other obstacles to the creation of a 
wholesome business environment. 
i. Business has the duty to minimized any damage on the environment 
caused or aggravated by its business operations and to assure that the 
ecology of the area is restored to its original or pristine state prior to 
the business venture’s entry into the locality. It may be held liable for 
the damage to the ecology of the area to the extent of the actual costs 
incurred by the government to repair such damage and to restore the 
environment to an acceptable level. Business may negotiate with the 
government agency concerned to arrive at a compromise on its 
liability. No adverse implications may be derived from any offer of 
compromise by the Business concerned on this matter. Such 
recompense is without prejudice to other penalties and fines, as 
provided for by law. To include Business to enhance and improve the 
ecology of the area, the national and the local governments may 
extend to it appropriate packages of tax credits, financial rewards and 
other incentives commensurate with the actual and opportunity costs 
incurred by the business entity for protecting and improving the 
environment. 
j. Business has the duty within the limits imposed by technology, 
economies of scale, and other relevant factors, of promoting free and 
open competition. To this end, business shall refrain from resorting to 
monopolist activities, price manipulation and connivance, false or 
misleading advertising, and other unfair trade practices. 
SECTION 8. Government Main Obligafions to Business. - The 
Government shall: 
a. Provide an efficient and level playing field for Business characterized 
by the equal application of law on all players without bias for or against 
any member of the business community or any business group. To this 
end, any memoranda of agreement, or understanding and contracts 
entered into by Business and Government shall be enforced as valid 
and binding or the parties thereof unless retrained by the Supreme 
court. 


Any 
case 
involving 
the 
validity 
of 
business 
agreements, 
understandings or contracts shall be resolved by the concerned 
administrative agencies of the government within three (3) months 
from the start or filling of the proceedings. As a matter of government 
policy, the Supreme Court may direct all courts before which such 
agreements, understandings or contracts are have been filed to 
terminate such proceedings within six (6) months from the submission 
the reof. 
6. Enforce the highest standards of ethical behavior on all business 
operations. 
c. Compel free and open competition among all, businesses, industries 
and enterprises within the limits of law as the norm of business 
activities. 
d. Make government officials, employees and the Bureaucracy render 
courteous, prompt, efficient, competent, and honest professional 
services demanded by Business and by the people. 
e. Prohibit and all forms of graft and corruption, dishonesty and 
Incompetence 
among 
government 
officials 
and 
employees 
expeditiously and without delay. To this end the time for preliminary 
investigations at the level of Ombudsman, the Department of Justice 
and the courts may be shortened accordingly. Investigations at the 
level of the police, the NBI and other agencies under the executive 
departmept shall be terminated or forwarded to other offices concerned 
foe filling with the prosecutors or the courts within two (2) weeks from 
the filling thereof with the investigator. Failure to comply with these 
provisions shall be punished in accordance with the rules and 
regulations of the National Police Commission, the National Police or 
the Civil Service Commission. 
f. Maintain law and order efficiently so that business may safely operate 
and the people may feel secure. 
g. Conduct at all levels of government public consultations in the drafting 
of laws, ordinance, rules and regulations, which directly bear on 
business with duly recognized Business representatives and with 
concerned non-government organizations. 
h. Allow through the Presidential Commission for Business concerns that 
is created under Section 8 of this act adjustments or changes in the 
original package of business incentives and privileges granted by the 
government after due consultations with the business concerned and 
Concerned non-government organizations (NGO). 


i. Construct infrastructure, such as, but not limited to, roads, bridges, 
airports, seaports, and cost-effective power and communication 
facilities not only for Business but also for the community in which the 
Business is located. In the that the government does not have the 
necessary funds to undertake such investments, private enterprise 
may be invited to invest in these facilities under existing mechanisms, 
such as, but not limited to Build-Operate-Transfer (BOT) schemes and 
its variants. Local governments concerned may also provide the 
infrastructure above mentioned without any additional authority from 
the national government. 
Not compete, except in emergency situations or in the interest of 
national security, with Business by setting up new agencies or allowing 
existing ones to engage in parallel business activities which are 
already being adequately served by the private sector. Such market 
interventions shall be undertaken only for the duration of an 
emergency or a crisis. The Government may not invest in or grant 
favors to companies run by the political cronies, allies, accountants or 
lawyers of the President or other officials who have jurisdiction over 
the line of business activities engaged in by the companies concerned. 
k. Not enforce or implement temporary or restraining orders by courts 
other than the Supreme Court to stop, impede or delay the operations 
of Business unless such operations constitute a real and present 
danger to the national interest as may be recommended by, the 
Presidential Commission for Business Concerns. 
SECTION 9. Creation of the Presidential Commission for Business 
Concerns. - To enforce the intents and piirposes of this Act, there is hereby 
created an agency to be known as the Presidential Commission for Business 
Concerns (PCBC). The agency shall be attached for supervision purposes to the 
Office of the President. 
SECTION I O .  Composition of the Presidential Commission for Business 
Concerns. - The Commission shall have the following composition: 
a. PCBC Executive Director as PCBC Chairman 
b. Secretary of Trade and Industry 
c. Secretary of Labor and Employment 
d. Chairman of Senate Committee on Trade and Industry 


e. Chairman of House of Representatives Committee on Trade and 
Industry 
f. Four (4) nominees by and from private business groups duly registered 
with the Securities and Exchange Commission, such as, but not limited 
to the Philippine Chamber of Commerce, Inc., the Makati Business 
Club, and the Bishops-Businessmen’s Conference. 
g. One (!) nominee from foreign chambers of commerce and 
h. Three (3) nominees from labor groups 
The department secretaries concerned may designate one of their 
undersecretaries to represent them at the meetings of the commission, to vote, 
and to act on their behalf, as they may deem appropriate and proper. 
SECTION 11. 
Mission of the Commission. - 
The mission of the 
Commission is to help create a business-friendly environment for the purpose of 
attracting investments into the country, generating jobs and economic 
opportunities for the citizenry and promoting economic development. 
The 
mission shall: 
(a) Take all appropriate and necessary actions which will create, maintain, 
and promote the level of investor confidence in the country; 
(b) Promote better coordination among the different agencies of government, 
on both policy formulation and policy implementation levels; 
(c) Reduce the amount of bureaucratic red tape which hampers business 
operations and provides a fertile ground for graft and corruption; 
(d) Identify existing laws, ordinances, rules and regulations which are 
perceived as being anti-business or may impede business efficiency and 
viability, and working for their amendment or repeal; 
(e) identifying infrastructural, superstructural, and systemic bottlenecks which 
impede business efficiency and productivity; 
(9 Encourage and promote a business-friendly attitude in Philippine society, 
particularly in the civil service and among government regulators; 
(9) Undertake policy studies and developing appropriate recommendations 
for the resolution of specific business issues and for the improvement of 
investor confidence in the country; and 
(h) Receive and act on complaints, suggestions and recommendations from 
all sectors of society regarding the operation of business. 


SECTION 12. Commission Secretariat and policy Research Group. - The 
Commission shall establish a full-time working secretariat and a policy research 
group, to be headed by the Executive Director. 
SECTION 13. Commission Executive Director. - The Executive Director of 
the Commission shall be at least forty (40) years old; has a master's degree in 
business administration, business management, public administration, law, or 
economics and a proven track record either in public service or as a business 
professional. He/She shall be appointed by and shall serve for a term of six (6) 
years unless removed for cause pursuant to the rules of the Civil Service 
Commission. 
He/She shall receive an annual compensation of Five Hundred Thousand 
Pesos (PHP500,000.00) . 
The Executive Director shall also serve as the Commission Chairperson 
and shall preside over all its meetings. He/She shall not vote during the 
deliberations except in case of a tie. 
SECTION 14. Cornmission Vice-chairman - A Vice-Chairperson shall 
be elected from the private sector membership of the Commission. He/she shall 
preside over meetings of the Commission in the absence of the Chairman. When 
presiding in the absence of the Chairman, he/she shall also not vote during its 
deliberations, except in case of a tie. 
SECTION 15. Quorum - The Commission shall hold monthly meetings 
every third Monday of the month. A quorum is deemed to exist if at least 50% 
plus one (1) of the voting members of the Commission are physically present at 
the meeting. These regular monthly meetings shall be held at the Commission's 
main office in the Metro Manila area. The Commission may also hold special 
meetings not more than twice a month as it may deem necessary and at places it 
may deem convenient. 
SECTION 16. 
Honoraria and sahries - The Commission shall fix 
reasonable honoraria for the Vice-chairman and other members of the 
Commission. All other employees of the Commission shall receive salaries, 
emoluments and benefits as may be fixed by the Commissions subject to 
pertinent rules of the civil service 


SECTION 17. 
Funding. - 
Initial funding for the operations of the 
Commission shall be Fifty Million (50,000,000.00) Pesos which may be taken 
from the funds of the Office of the President. Every year thereafter, the Executive 
Director shall prepare a budget for the operating and capital expenditures of 
Commission and submit it to the Office of the President for inclusion in the 
Annual Appropriations Act. 
SECTION 18. lmplernenfing Rules and Regulafions. - Within sixty (60) 
days after the effectivity of this Act, the President shall appoint the Executive 
Director of the Commission. The Executive Director shall within fifteen (15) days 
from his or her appointment recommend to the President the appointment of the 
private sector representatives, mentioned in this Act. As soon as eight (8) private 
sector representatives shall have been appointed by the President, the Executive 
Director shall convene the organizational meeting of the Commission. The 
Commission shall draft and complete the Implementing Rules of this Act within’a 
period of ninety (90) days from its organization 
SECTION 19. Penalties. - Any individuals who violates the duties 
imposed by this Act upon Business and the Government shall be punished with 
imprisonment of not less than six (6) months or more than one (I) 
year and a fine 
of not less than One Hundred Thousand (100,000.00) Pesos. The fine may be 
imposed upon any juridical ,person who violates the provisions of this Act. 
SECTION 20. Effecfivify. - This Act shall take effect after one month 
following its approval and publication in a newspaper of national circulation. 
Approved ,