FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. - 
40 
INTRODUCED BY HON. MANNY VILLAR 
EXPLANATORY NOTE 
This bill is designed to harmonize and simplify the government's 
administration of programs and policies on the grant of fiscal and non-fiscal 
incentives to promote foreign and domestic investments in the Philippines. 
Under the present situation, the administration, implementation and 
issuance of policies relative thereto, as well as the grant of fiscal and non-fiscal 
incentives to both foreign and domestic investors are being handled by various 
government agencies, such as the Board of Investments, the Philippine 
Economic Zone Authority, the Subic Bay Metropolitan Authority, the Clark 
Development Corporation and several other agencies mandated under various 
laws to establish, maintain and manage special economiclFreeport zones 
throughout the Philippines. 
Among the incentives to be given to export and domestic enterprises to be 
given as specified in this legislation include the following: 
1. Reduced tax rates; 
2. Duty free importation of raw materials used in the manufacture, 
processing and the production of export products; 
3. Exemption from payment of wharfage dues and similar fees; 
4. Capital equipment incentives; 
5. Assistance to expatriates in securing diplomatic issuances, visas and 
others. 
Early enactment of this bill is earnestly sought 
MANNYVILL R 
\ 


FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
Senate Bill No. 
INTRODUCED BY HON. MANNY VILLAR 
AN ACT 
ORDAINING A CONSOLIDATED INVESTMENTS 
AND INCENTIVES CODE OF THE PHILIPPINES 
Be if enacted by the Senate and House of Represenfafives of fhe 
Philippines in Congress assembled. 
SECTION 1. Title. - This Act shall be known as "The Consolidated 
Investments and Incentives Code of the Philippines of 2007". 
SEC. 2. Declaration of lnvesfmenf Policies. - The national economy shall 
be developed so as to enhance its competitiveness in the global economy and 
encourage investments that promote countrywide development, generate 
employment and foreign exchange. Accordingly, the following are declared 
policies of the State: 
(1) The State shall pursue a market responsive investment regime and to 
that end shall ensure that the incentives shall promote substantial social and 
economic spillovers, equitable development across income classes and across 
provinces, are fiscally sustainable, financially and economically justifiable, and 
are consistent with international treaties. The State shall therefore provide the 
means for ascertaining that these objectives are being attained. 


(2) The State shall grant the necessary incentives that encourage long- 
term and recurrent investment, are simple to administer, are time-bound and 
whose performance and outcomes are easily verifiable. 
(3) The State shall devote resources to monitoring enterprises benefiting 
from incentives, and shall vigorously prosecute abuses. The State shall also 
closely monitor the level of tax expenditures arising from the provision of 
incentives and shall ensure that concerned government agencies are well- 
informed of these developments. 
(4) In the granting of fiscal incentives, the State will make efforts to 
ascertain that the incentives are not redundant: that the investments they benefit 
require and are truly motivated by the incentives or that the incentives, as much 
as possible, are not given to investors who would have made the investments 
even in the absence of incentives. 
(5) The State shall vigorously promote investments in basic infrastructure 
such as, but not limited to power, roads, airports, water ports and housing. 
(6) The State recognizes that industrial peace is essential to attracting 
investments. 
(7) The State shall undertake investment promotion activities. 
TITLE I 
DEFINITION OF TERMS 
SEC. 3. Definition of Terms. -As used herein, the following shall mean: 
(a) “PIPA is the Philippine Investment Promotion Administration created under 
this Act. 
(b) “Investment Promotion Agencies (IPAs)” shall include the Philippine 
Investment 
Promotion Administration (PIPA), Bases Conversion and 
Development Authority (BCDA), Subic Bay Metropolitan Authority (SBMA), 
Clark 
Development Corporation (CDC), 
John 
Hay 
Management 
Corporation (JHMC), Poro Point Management Corporation (PPMC), 


Bataan Technology Park Inc. (BTPI), Cagayan Economic Zone Authority 
(CEZA), Zamboanga City Special Economic Zone Authority (ZCSEZA), 
and PHlVlDEC Industrial Authority (PIA). 
(c) "Registered enterprise" is any individual, partnership, corporation, Philippine 
branch of a foreign corporation or other entity incorporated andlor 
organized and existing under Philippine laws and registered with any of 
the IPAs, in accordance with this Act: Provided, however, That the term 
"registered enterprise" shall not include commercial banks, savings and 
mortgage banks, rural banks, savings and loan associations, building and 
loan associations, developmental banks, trust companies, investment 
banks, finance companies, brokers and dealers in securities, consumers 
cooperatives and credit unions, and other business organizations whose 
principal purpose or principal source of income is to receive deposits, lend 
or borrow money, buy and sell or otherwise deal, trade or invest in 
common or preferred stocks, debentures, bonds or other marketable 
instruments generally recognized as securities, or discharge other similar 
intermediary, trust or fiduciary functions. 
(d) "Gross income earned" is the gross sales or gross revenues derived by the 
registered enterprise from its registered business activity net of sales 
discounts, sales returns and allowances minus cost of sales or direct costs 
but before any deductions for administrative, marketing, selling, operating 
expenses or incidental losses during a given taxable year. 
(e) "Export sales" is the sales values andlor revenues paid for in freely 
convertible foreign currency, determined from invoices, bills of lading, 
inward letters of credit, landing certificates, or other commercial 
documents, by a registered enterprise of its (1) products shipped out of 
the country and sold in the territory of another country or (2) services 
rendered to clients abroad such as but not limited to information 
technology (IT) activities, application and/or installation of technology and 


systems in the project sites, including but not limited to the fields of 
engineering and construction design and other similar activities which may 
be approved by the Board, excluding mere deployment of people or 
individual practice of profession abroad; or (3) logistics, repair and 
maintenance, and other similar services rendered to international 
airlineslshipping lineslmilitary aircraft or seacraft even if rendered locally, 
(9 "Tax refund" is any refund against taxes andlor duties equal to those actually 
paid by a registered export enterprise and to be released by PlPA as 
provided for under Section 17 of this Act. 
"Information Technology Activities" are activities which involve the use of 
any IT software andlor system for value addition, IT, being the collective 
term for various technologies involved in processing and transmitting 
information which include computing, multimedia, telecommunications, 
microelectronics and their interdependencies, including the convergence 
of various information-based, broadcast and mass media communication 
technologies. 
(9) 
(h) An "export enterprise" is a registered enterprise which is a manufacturer, 
processor or service provider and whose export sale of its products or 
services is at least seventy percent (70%) of its output. 
(i) A "domestic enterprise" is a registered enterprise whose export sales is less 
than seventy percent (70%) of its output, and is located in the thirty (30) 
poorest provinces as determined by the Department of Finance (DOF): 
Provided, That such domestic enterprise has a minimum investment of 
Five hundred million pesos (P500,000,000) or can provide a minimum 
employment of two hundred (200) jobs: Provided, further, That existing 
enterprises already located in the thirty (30) poorest provinces 
as 
determined by the DOF before the effectivity of this Act and have satisfied 
the minimum investment of Five hundred million pesos (P500,000,000) or 


minimum employment of two hundred (200) jobs are qualified to register 
and avail of the incentives provided in this Act. 
(j) "Capital Equipment" refers to machinery, spare parts, tools and dies, or those 
required for pollution abatement and control, cleaner production and water 
reduction. 
(k) "Source documents" are input materials and documents reasonably needed 
by IT and IT-enabled industries such as, but not limited to, books, 
directories, magazines, newspapers, brochures, pamphlets, medical 
recordslfiles, 
legal 
recordslfiles, 
instruction 
materials, 
drawingslblueprintsloutlines. 
(I) "Processing" is converting raw materials into marketable form through 
physical, mechanical, chemical, electrical, biochemical, biological or other 
means, or by a special treatment or a series of actions, such as 
slaughtering, milling, pasteurizing, drying or desiccating, quick freezing, 
that results in a change in the nature or state of the products. Mere 
packing or packaging shall not constitute processing. 
(m) "Industrial Estate (IE)" refers to a tract of land subdivided and developed 
according to a comprehensive plan under a unified continuous 
management and with provisions for basic infrastructure and utilities, with 
or without pre-built standard factory buildings and community facilities for 
the use of a community of industries. 
(n) "Export Processing Zone (EPZ)" refers to a specialized industrial estate and 
predominantly oriented to export production. 
(0) "Special Economic Zones (SEZ)" hereinafter referred to as ecozones, are 
selected areas with highly developed or which have the potential to be 
developed 
into 
agro-industrial, industrial, information 
technology, 
touristlrecreational centers. An ecozone may contain any or all of the 
following: 
industrial estates (IEs), export processing zones (EPZs), IT 
parks and centers, and tourism estates. 


(p) 
"Tourism Estate" is a tract of land with defined boundaries, suitable for 
development into an integrated resort complex, with prescribed carrying 
capacities, of tourist facilities and activities, such as, but not limited to, 
sport and recreation centers, accommodations, convention and cultural 
facilities, food and beverage outlets, commercial establishments and other 
special interest and attraction activities/establishments, and provided with 
roads, water supply facilities, power distribution facilities, drainage and 
sewage systems, and other necessary infrastructures and facilities. A 
tourism estate shall be under unified and continuous management, and 
can either be a component of an ecozone or the whole ecozone itself. 
(4) "Freeport" is an isolated and policed area adjacent to a port of entry as 
defined by Section 3519 of the Tariff and Customs Code, which shall be 
operated and managed as a separate customs territory to ensure free flow 
or movement of goods, except those expressly prohibited by law, within, 
into and exported out in the freeport zone where imported goods may be 
unloaded for immediate transshipment or stored, repacked, sorted, mixed, 
or otherwise manipulated without being subject to import duties. However, 
movement of these imported goods from the free-trade area to a non-free- 
trade area in the country shall be subject to import duties and taxes. 
TITLE II 
CREATION OF THE PHILIPPINE INVESTMENT PROMOTION 
ADMINISTRATION (PIPA) 
SEC. 4. Creation of The Philippine Investment Promotion Administration 
(PIPA) The Board of Investments (601) created under Executive Order No. 226, 
Series of 1987, as amended, and the Philippine Economic Zone Authority 
(PEZA) created under Republic Act No. 7916, as amended, are hereby merged, 
renamed, 
and 
reorganized 
as 
the 
Philippine 
Investment 
Promotion 
Administration (PIPA), attached to the Department of Trade and Industry (DTI), 


and which shall implement the provisions of this Act except as otherwise 
provided herein. The unexpended appropriations, assets and properties of 501 
and the assets and properties of PEZA are hereby transferred to PIPA. 
The personnel of PEZA and 601 shall be absorbed by PlPA or DTI. For this 
purpose, the Board shall determine the personnel to be absorbed by PIPA. 
Those who will not be absorbed due to either the inability to meet the 
qualification standards and selection criteria or the non-existence of a suitable 
position in PlPA or DTI shall be deemed separated from the service: Provided, 
That those who will not be absorbed by PlPA or DTI, including those who will opt 
to retire from government service shall be entitled to all gratuities and benefits 
under existing laws. 
Existing Conventions or Agreements for the Avoidance of Double Taxation 
and the Prevention of Fiscal Evasion with Respect to Taxes on Income (income 
tax treaties) that grant reduced income tax rates on dividends, interests and 
royalties paid by BOI-registered enterprises to foreign persons shall, after the 
merger of BO1 and PEZA by virtue of this Act, continue to grant the reduced rates 
to foreign persons until the expiration of the enterprises’ registration certificates 
with BO1 and after such enterprises registered with PIPA. 
SEC. 5. General Powers and Functions of the Administration. - 
PlPA 
shall have the following powers and functions: 
1. To establish, operate, administer, manage and develop the ecozones and 
freeports according to the principles and provisions set forth in this Act; 
2. To register, regulate and supervise the enterprises in the ecozones and 
freeports in an efficient and decentralized manner; 
3. To register, regulate and supervise qualified enterprises outside the 
ecozones and freeports; 
4. To coordinate with local government units and exercise general 
supervision over the development, plans, activities and operations of 


ecozones, industrial estates, export processing zones, free trade zones, 
and the like; 
5. To regulate and undertake the establishment, operation and maintenance 
of utilities, other services and infrastructure in the ecozones, such as heat, 
light and power, water supply, telecommunications, transport, toll roads 
and bridges, port services, and others, and to fix just, reasonable and 
competitive rates, charges, and fees therefor: Provided, That the 
appropriate government regulatory agencies shall regulate the operation, 
maintenance and services of utilities such as heat, light, power, water 
supply, telecommunications, transport, toll roads and bridges, port 
services, and others based inside the ecozones insofar as such services 
are rendered outside the ecozones. 
6. To construct, acquire, own, lease, operate and maintain on its own or 
through contract, franchise, license, bulk purchase from the private sector 
and build-operate-transfer scheme or joint venture, adequate facilities and 
infrastructure, such as light and power systems, water supply and 
distribution systems, telecommunication and transportation, buildings, 
structures, warehouses, roads, bridges, ports and other facilities for the 
operation and development of the ecozones and freeports, in coordination 
with the local government units concerned and appropriate agencies,; 
7. To create, operate and/or contract to operate such agencies and 
functional units or offices and or subsidiaries of PIPA on its own or jointly 
with any private individual or entity as it may deem necessary and provide 
funds therefor; 
8. To adopt, alter and use a corporate seal; make contracts, lease, own or 
otherwise dispose of personal and real property; sue and be sued; and 
otherwise carry out its duties and functions as provided for in this Act; 
9. To coordinate the formulation and preparation of the development plans of 
the qualified enterprises; 


10. To formulate and implement industrial development plans and programs; 
11. To formulate and coordinate investments promotion activities; 
12. To establish an investments one-stop-action-center; 
13. To formulate positions and strategies on bilateral, regional or multilateral 
investments agreements or arrangements; 
14. To coordinate with the National Economic and Development Authority, 
Department of Trade and Industry, Department of Science and 
Technology, and the local government units and appropriate government 
agencies for policy and program formulation and implementation; and 
15. To monitor and evaluate the development and requirements of registered 
enterprises and recommend 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 enterprises. 
SEC. 6. The Board. - PlPA shall be governed by a Board created under 
this Act, hereinafter referred to as the “Board”. 
SEC. 7. Composition of the Board. - The Board shall be composed of 
thirteen (13) members as follows: the Secretary of the Department of Trade and 
Industry (DTI) as Chairman; the Director-General of PlPA as Vice-chairman; an 
undersecretary of the Department of Finance (DOF), Department of Labor and 
Employment (DOLE), Department of Environment and Natural Resources 
(DENR), Department of Public Works and Highways (DPWH), Department of 
Science and Technology (DOST), and Department of Energy (DOE); the Deputy 
Director-General of the National Economic and Development Authority (NEDA); 
the Commissioner of Bureau of Internal Revenue (BIR); the Commissioner of 
Bureau of Customs (BOC); one (I) 
representative from the labor sector; and one 
(1) representative from the investorslbusiness sector. The representatives from 
the labor and investors/business sectors shall be appointed by the President 
from the nominees of their respective sectors and from among the enterprises 
registered with PIPA. In case of the unavailability of the Secretary of DTI to 


attend a particular Board meeting, the Director-General of PlPA shall act as 
chairman. 
SEC. 8. Powers and Duties of the Board. - The Board shall be 
responsible for the regulation and promotion of investments. It shall meet as 
often as necessary. Notice of regular and special meetings shall be given to all 
members of the Board. The presence of seven (7) members of the Board shall 
constitute a quorum and the affirmative vote of seven (7) members of the Board 
in a meeting validly held shall be necessary to exercise its powers and perform 
its duties, which shall include but not be limited to the following: 
(1) Set the general policies on the establishment and operations of the 
ecozones, industrial estates, export processing zones, free trade zones, 
and the like; 
(2) Promulgate rules and regulations to implement the purposes of this Act 
and such other laws as the Board is mandated to implement; 
(3) Formulate investment promotion policies under a 'one country approach'; 
(4) Approve, deny, suspend, revoke applications for registration with the 
Board, imposing terms and conditions as it may deem necessary to 
promote the purposes of this Act, including the refund and forfeiture of 
incentives when appropriate, restricting availment of incentives not 
needed by the project as determined by the Board, requiring performance 
bonds from PIPA-accredited bonding companies, and payment of 
application, registration, publication and other fees when warranted; 
(5) Decide controversies arising from the implementation of this Act that may 
arise, within thirty (30) days after the controversy has been submitted for 
decision: Provided, That the investor or the registered enterprise may 
appeal the decision for registration by the Board within thirty (30) days 
from receipt thereof to the President. The Board shall have the power to 
subpoena witnesses, administer oaths, and compel the production of 


books, papers, and other evidence, and to cite for contempt any 
personlorganization that fails to comply with the aforestated processes: 
Provided, further, That the Board may grant immunity from prosecution to 
any person whose testimony or documents or other evidence is necessary 
or relevant to the case; 
(6) Cancel the registration or suspend the incentives of a registered 
enterprise andlor require refund of incentives as well as interests and 
monetary penalties. The Board shall recommend to the appropriate 
bureau of DOF to levy properties of the registered enterprise for grave 
failure to comply with the substantive terms and conditions of registration: 
Provided, That the registration of an enterprise whose project timetable for 
implementation, as approved by the Board, shall be considered 
automatically cancelled if it is delayed by one year, unless otherwise 
reinstated as a registered enterprise by the Board; 
(7) Determine the organizational structure of PlPA taking into account Section 
12 of this Act; appoint, discipline or remove its personnel consistent with 
the provisions of civil service laws, rules and regulations; 
(8) Monitor and coordinate investment promotion activities of all IPAs; 
(9) Formulate position for bilateral, regional or multilateral investments and 
investment-related trade agreements andlor arrangements; 
(1 0) Formulate industrial programs on economic development including those 
relating to the implementation of international trade, investments and 
trade, and investment-related environmental agreements and protocols; 
(1 1) Formulate industry and sectoral development programs, the National 
Plan for Investment Promotions (NPIP) and gather and compile data 
required for the effective implementation of this act; 
(12) Recommend to the President, subject to constitutional limitations and 
other nationalization laws, the suspension of the nationality requirement 


provided for in this Act in cases involving bilateral or regional investments 
or trading agreements of the Philippines with other countries or when the 
existing laws of another country where the investor comes from provides 
no nationality restrictions for Filipino investors or provides for reciprocal 
nationality accommodations; 
(13) Establish offices in the Philippines and abroad, as needed; 
(14) Within four (4) months after the close of the fiscal year, submit an annual 
report to the President and Congress on the Board's administration of this 
Act, including recommendations on investment policies; 
(15) Formulate policies that will stimulate investments in the most poverty- 
stricken areas of the country, and reduce regional and social inequality; 
(16) Enter into agreements with other agencies for the simplification of 
systems and procedures involved in the promotion of investments, 
operation of economic zones and registered enterprises, and other 
activities necessary for the effective implementation of this Act; and 
(17) In general, exercise all powers necessary or incidental to attain the 
purposes of this Act and other laws vesting additional functions on the 
Board. 
SEC. 9. Powers and Duties of the Chairman. - The Chairman shall have 
the following powers and duties: 
(1) Preside over the meetings of the Board; 
(2) Sign annual and special reports to the President and Congress; 
(3) Act as liaison between investors seeking joint venture arrangements; 
(4) Recommend to the Board policies and measures necessary to carry out 
the objectives of this Act; and 
(5) Generally exercise other powers and perform other duties as may be 
directed by the Board. 
SEC. 10. The Director-General. - PlPA shall have a Director-General 
with the rank of a department undersecretary who shall be appointed by the 


President. The Director-General shall be at least forty (40) years of age, of 
proven probity and integrity, and a degree holder in any of the following fields: 
economics, business, public administration, law, management or their equivalent, 
and with at least ten (IO) years of relevant working experience preferably in the 
field of management or public administration. 
The Director-General shall be assisted by six (6) Deputy Directors-General 
each for policy and planning, administration, operations, investment promotion, 
industry development, and Investments One-Stop-Action-Center (OSAC), who 
shall be appointed by the Board, upon the recommendation of the Director- 
General. The Deputy Directors-General shall be at least thirty-five (35) years 
old, with proven probity and integrity, and a degree holder in any of the following 
fields: economics, business, public administration, law, management or their 
equivalent. 
SEC. 11. Powers and Duties of the Director-General - The Director- 
General shall have the following powers and duties: 
(1) Execute all acts of administration; 
(2) Prepare and recommend to the Board the staffing pattern and personnel 
complement of PlPA and establish regional offices, when necessary, 
subject to the approval of the Board. 
(3) Prepare the agenda for the meetings of the Board and submit for its 
consideration and approval the policies and measures which the 
Chairman deems necessary and proper to carry out the provisions of this 
Act: 
(4) Preside over the meetings of the Board in the absence of the Chairman; 
(5) Assist registered enterprises and prospective investors to expedite 
processing of papers required by all government offices, agencies, 
instrumentalities and financial institutions; and in addition he shall have 
the following specific powers and responsibilities: 


(A) To safeguard all the lands, buildings, records, monies, credits 
and other properties and rights of the ecozones under their jurisdictions; 
(8) 
To ensure that all revenues of the ecozones are collected and 
applied in accordance with its budget; 
(C) To ensure that the investordfirms and employees of the 
ecozones are properly discharging their respective duties; 
(D) To give such information and recommend such measures to the 
Board, as he shall deem advantageous to the ecozone; 
(E) To submit to the Board the ongoing and proposed projects, 
work and financial program, annual budget of receipts, and expenditures 
of the ecozones; 
(F) To represent the administration in all its business matters and 
sign on its behalf after approval of the Board, all its bonds, borrowings, 
contracts, agreements and obligations made in accordance with this Act; 
(G) To acquire jurisdiction, as he may deem proper, over the 
protests, complaints, and claims of the residents and enterprises in the 
ecozone concerning administrative matters; 
(H) To recommend to the Board the grant, approval, refusal, 
amendment or termination of franchises, licenses, permits, contracts, and 
agreements within the ecozones in accordance with the policies set by the 
Board; 
(I) To 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 houses, building or structure within said period. The 
Director-General or his authorized representative may summarily cause 
their 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; 
(J) To take such emergency measures as may be necessary to 
avoid fires, floods, and mitigate the effects of storms and other natural or 
public calamities; 
(K) To prepare and make out plans for the physical and economic 
development of the economic zone, including zoning and land subdivision, 
and issue such rules and regulations which shall be submitted to the 
Board for its approval; and 
(L) To perform such other duties and exercise such powers as 
may be prescribed by the Board, and to implement policies, rules and 
regulations set by the Board. 
SEC. 12. Appointment of Personnel. - The Board shall provide for an 
organization of officers and employees of PIPA, and upon recommendation of 
the Director-General, appoint and fix the remunerations and other emoluments: 
Provided, That the Board shall have exclusive and final authority to promote, 
transfer, assign or reassign officers and other personnel subject to civil service 
laws, rules and regulations. 
All positions in PlPA shall be governed by a compensation and position 
classification system and qualification standards approved by the Board based 
on a comprehensive job analysis and audit of actual duties and responsibilities. 
The compensation plan shall be comparable with the prevailing compensation 
plans in the SBMA, CDC, BCDA and the private sector, and shall be subject to 
periodic review by the Board no more than once every two (2) years without 
prejudice to yearly merit reviews or increases based on productivity and 
profitability. PlPA shall therefore be exempt from existing laws, rules and 
regulations on compensation and position classification standards. It shall 
endeavor to make its system conform as closely as possible with the principles 


under Republic Act No. 6758, otherwise known as the Salary Standardization 
Law. 
TITLE 111 
INCENTIVES TO REGISTERED ENTERPRISES 
SEC. 13. Qualified Enterprises. - The following may register with PlPA to 
avail of the incentives provided in this Act: 
(a) export enterprises; or 
(b) domestic enterprises 
SEC. 34. lncentives to Registered Export Enterprises. - PlPA shall make 
the following incentives available to registered export enterprises: 
(a) Reduced Tax Rates. - Imposition of a preferential tax rate of fifteen percent 
(15%) of taxable income as defined under Section 31 of the National 
Internal Revenue Code of 1997, as amended. 
(b) Net Operating Loss Carryover (NOLCO) - The net operating loss of the 
registered export enterprise during the first five (5) years from start of 
commercial operation which had not been previously offset as deduction 
from gross income shall be carried over as a deduction from gross income 
for the next ten (10) years immediately following the year of such loss: 
Provided, That after the availment of NOLCO of registered export 
enterprises under this provision, the pertinent provisions under the 
National Internal Revenue Code of 1997, as amended, shall apply. 
(c) Accelerated Depreciation. - Accelerated depreciation of plant, machinery, and 
equipment that are reasonably needed and actually used for the 
production and transport of goods and services may be depreciated using 
a rate not exceeding twice the rate which would have been used had the 
annual allowance been computed in accordance with the rules and 
regulations prescribed by the Secretary of Finance and the provisions of 
the National Internal Revenue Code of 1997, as amended. 


(d) Capital Equipment Incentives. - Importations of capital equipment, including 
consignment thereof by registered export enterprises upon the effectivity 
of this Act, shall be exempt from customs duties: Provided, That the 
importation thereof, shall be used exclusively by the registered export 
enterprise in its registered activity. If the capital equipment shall be used 
by the registered export enterprise other than for its registered activity, the 
availment of incentives under this paragraph shall be subject to the rules 
and regulations to be promulgated by PIPA: Provided, further, That for 
export enterprises, value-added tax paid on imported capital equipment 
shall be refunded upon proof of exportation of their products under the 
mechanism and guidelines provided in Section 17 of this Act. 
(e) Raw Material Incentives. - Every registered export enterprise shall be entitled 
to duty-free importation of raw materials which are used in the 
manufacture, processing as defined in Section 3 of this Act, or production 
of its export products: Provided, That value-added tax shall be refunded 
upon presentation of proof of exportation of their products under the 
mechanism provided in Section 17 of this Act. 
(f) Duty-free importation of source documents by IT registered export 
enterprises. 
(9) Exemption from Wharfage Dues. - The provisions of law to the contrary 
notwithstanding, exports by a registered export enterprise shall be 
exempted from wharfage dues. 
(h) Registered export enterprises shall have an option between the preferential 
tax rate of fifteen percent (15%) as provided in Section 14 (a) of this Act, 
or the five percent (5%) of the gross income earned in lieu of all national 
and local taxes, except value-added tax (VAT) and real property tax on 
land, Once a registered export enterprise has made an option provided in 
this paragraph, such option shall be irrevocable for the duration of its 
registration. 


The five percent (5%) of the gross income earned by registered 
export enterprises shall be paid and remitted as follows: 
1. Sixty percent (60%) to the National Government; and 
2. Forty percent (40%) to the treasurer's office of the municipality or city 
where the enterprise is located. 
(i) Employment of Foreign Nationals. - Subject to the provisions of Section 29 of 
Commonwealth Act No. 613, as amended, a registered export enterprise 
may employ foreign nationals in supervisory, technical or advisory 
positions for a period not exceeding five (5) years from its registration, 
extendible for limited periods at the discretion of the Board: Provided, 
however, That when the majority of the capital stock of a registered 
enterprise is owned by foreign investors, the positions of president, 
treasurer and general manager of their equivalents may be retained by 
foreign nationals beyond the period set forth within. 
Foreign nationals under employment contract within the purview of 
this incentive, their spouses and unmarried children under twenty-one 
(21) years of age, who are not excluded by Section 29 of Commonwealth 
Act No. 613, as amended, shall be permitted to enter and reside in the 
Philippines during the period of employment of such foreign nationals. 
A registered export enterprise shall train Filipinos as understudies 
of foreign nationals in administrative, supervisory and technical skills and 
shall submit annual reports on such training to the Board: Provided, That 
employment of foreign nationals hired by registered export enterprises in a 
supervisory, technical or advisory capacity shall not exceed five percent 
(5%) of its workforce without the express authorization of the Secretary of 
DOLE. 


SEC. 15. lncentives to Registered Domestic Enterprises. 
(a) Reduced Tax Rates. - Imposition of a preferential tax rate of fifteen percent 
(15%) of taxable income as defined under Section 31 of the National 
Internal Revenue Code of 1997, as amended. 
(b) Net Operating Loss Carryover (NOLCO) - The net operating loss of the 
registered domestic enterprise during the first five (5) years from start of 
commercial operation which had not been previously offset as deduction 
from gross income shall be carried over as a deduction from gross income 
for the next five (5) years immediately following the year of such loss: 
Provided, That after the availment of NOLCO of registered domestic 
enterprises under this provision, the pertinent provisions under the 
National Internal Revenue Code of 1997, as amended, shall apply. 
(c) Accelerated Depreciation. - Accelerated depreciation of plant, machinery, 
and equipment that are reasonably needed and actually used for the 
production and transport of goods and services may be depreciated using 
a rate not exceeding twice the rate which would have been used had the 
annual allowance been computed in accordance with the rules and 
regulations prescribed by the Secretary of Finance and the provisions of 
the National Internal Revenue Code of 1997, as amended. 
Except as otherwise provided in Sections 14 and 15 of this Act, no other 
fiscal incentives shall be granted by PIPA. PIPA shall equip itself with sufficient 
personnel to ensure that: (I) 
investments acquiring incentives under this Act 
abide by the strict investment location or employment conditions stipulated in 
Section 3(i) of this Act; and (2) violators will be meted appropriate penalties. 
SEC. 16. Incentives to lnvestors. 
(a) A foreign national who invests an amount of at least US$150,000 
either in cash and/or equipment, in a registered enterprise shall be entitled to an 
Investor's Visa: Provided, That: 
(1) He is at least eighteen (1 8) years of age; 


(2) He has not been convicted of a crime involving moral turpitude; 
(3) He is not afflicted with any loathsome, dangerous or contagious 
disease; 
(4) He has not been institutionalized for any mental disorder or disability; 
Provided, further, That as a holder of the Investor's Visa, an alien shall be 
entitled to reside in the Philippines while his investment subsists. For this 
purpose, he should submit an annual report, in the form duly prescribed by the 
Board for the purpose, to prove that he has maintained his investment in the 
country. Should said alien withdraw his investments from the Philippines, then 
the Investor's Visa issued to him shall automatically expire. 
(b) Foreign persons receiving dividends, interests and royalties from BOI- 
registered enterprises subject to reduced income tax rates under existing income 
tax treaties, shall after the merger of BO1 and PEZA by this Act, be entitled to the 
reduced rates until the expiration of the enterprises' registration certificates with 
the BO1 and after such enterprises registered with PIPA: Provided, That a 
favorable ruling is secured from the BIR for this purpose. 
SEC. 17. Refund of Value Added Tax (VAT) Paid on Importation of 
Goods. - In order to facilitate the immediate processing, clearance and release of 
VAT refunds as provided in this Act, a Trust Liability Account (TLA) is hereby 
authorized to be established in the Bureau of Treasury (BTr). All VAT payments 
on the importation of registered export enterprises of capital equipment and raw 
materials shall be deposited in the TLA for the purpose of funding valid VAT 
refund claims. The claims for VAT refunds shall be made by the registered 
export enterprise to PIPA which, in turn, will process, approve and release the 
VAT refund. 
The VAT paid on imported capital equipment may be refunded provided 
that the capital equipment is being used by the registered export enterprise 
pursuant to its registered activity. 


The amount of VAT refund on a particular shipment of raw materials shall 
be equivalent to the proportion of raw materials used in the production of the 
exported goods to the total raw materials imported multiplied by the amount of 
VAT paid on such importation. No claim for refund shall be allowed on VAT paid 
on raw materials which are not or no longer intended to be used in the registered 
export activity. 
A registered export enterprise shall file a claim for VAT refund within two 
(2) years after the payment was made. All amounts paid but no longer allowed 
for refund shall immediately accrue to the general fund of the National 
Government. 
All applications for VAT refund shall be processed and acted upon within 
thirty (30) days after submission of complete documents. The refund shall be in 
a form of cash or managerslcashiers check payable to the registered export 
enterprise. 
In cases of dispute under the VAT refund mechanism provided in this 
section, the pertinent provisions of the National Internal Revenue Code of 1997, 
as amended, shall apply. 
The Implementing Rules and Regulations for this Section shall be 
formulated by PlPA DOF, BIR, BOC, BTr and the Department of Budget and 
Management (DBM), subject to the approval of the Board. 
TITLE IV 
REGISTRATION OF ENTERPRISES 
SEC. 18. Qualifications of a Registered Enterprise. - Other than the 
qualifications specified under Section 3(h) and (i) of this Act, an applicant must 
also satisfy the following conditions to be registered and avail of the incentives 
provided in this Act: 
(a) He is a citizen of the Philippines, in case the applicant is a natural person, or 
in case of a corporation or partnership or any other association, regardless 


of nationality, organized and/or registered and existing under Philippine 
laws or Philippine branch of a foreign corporation and it must comply with 
all the qualifications provided under this Act: Provided, however, That for 
purposes of this Act and any law to the contrary notwithstanding, a 
natural-born ASEAN citizen or a corporation effectively controlled by 
ASEAN citizens shall be considered as a Philippine investor; Provided, 
further, That the investment is made in an activity where the Constitution 
does not specifically require Filipino participation; 
(b) That the activity it will engage in is not within the activities reserved by the 
Constitution to Philippine citizens or corporations owned and controlled by 
Philippine citizens; and 
(c) That if the applicant is engaged or proposes to engage in undertakings or 
activities other than the registered activities, it shall install an accounting 
system adequate to identify the investments, revenues, costs, and profits 
or losses of each registered activity undertaken by the enterprise 
separately from the aggregate investment, revenues, costs and profits or 
losses of the whole enterprise, or to establish a separate corporation for 
each registered activity if PlPA should so require to facilitate proper 
implementation of this Act. 
(d) That if the applicant is already registered in any other IPAs, such registration 
shall ipso facto be cancelled upon registration with PIPA. 
SEC. 19. Application. -Applications shall be filed with PlPA and recorded 
in a registration book. The date appearing therein and stamped on the 
application shall be considered the date of official acceptance. In the event that 
an enterprise shall transfer to another IPA or government assets enjoying 
incentives will be privatized, only the remaining unutilized incentives shall be 
enjoyed by the enterprise or the transferee, vendee or assignee of the 
government corporation. All applications and their supporting documents filed 
under this Act shall be confidential and shall not be disclosed to any person 


except with the consent of the applicant or upon an order of a court of competent 
jurisdiction. 
SEC. 20. Criteria Evaluation of Application. - The following criteria will be 
considered in the evaluation of applications for registration: 
(a) Impact of the activity on the overall economy and fiscal sustainability; 
(b) Overall viability of the activity; 
(c) Extent to which investment incentives are redundant; 
(d) The extent of employment and skills and foreign exchange generation; 
(e) The extent to which technological advances are applied and adapted 
to local conditions; 
(9 Extent to which the output of the applicant supports national export 
objectives; 
(9) Extent to which incentives contribute to the reduction of poverty and 
inequality; and 
(h) The extent to which incentives promote investments that help improve 
the quality of the environment. 
SEC. 21. Approval and Registration Procedures. - The Board shall adopt 
rules and regulations to facilitate action on applications filed with it; prescribe 
other criteria it may deem necessary for the evaluation of applications; devise 
standard forms for the use of applicants and delegate to the regional offices of 
the PlPA the authority to receive and process applications for enterprises to be 
located in their respective regions. Applications filed shall be considered 
automatically approved if not acted upon by the Board within fifteen (15) working 
days from official acceptance thereof. Deferment by the Board shall be 
considered as an official action: Provided, however, That the Board may defer 
action on a specific application not more than twice and: Provided, fir?al/y, That 
the Board shall act upon the application within ten (IO) working days from 
compliance with the cause of the last deferment. 


TITLE V 
BASIC RIGHTS AND GUARANTEES OF REGISTERED ENTERPRISES 
SEC. 22. Protection of Investments. - All investors and registered 
enterprises are entitled to the basic rights and guarantees provided in the 
Constitution. Among other rights recognized by the Government of the 
Philippines are the following: 
(a) Repatriation of Investments. - In the case of foreign investments, the 
right to repatriate the entire proceeds of the liquidation of the investment in the 
currency in which the investment was originally made and at the exchange rate 
prevailing at the time of repatriation, subject to the provisions of Section 74 of 
Republic Act No. 265, as amended. For investments made pursuant to Executive 
Order No. 32, series of 1986 and its implementing rules and regulations, 
remittability shall be as provided therein; 
(6) Remittance of Earnings. - In the case of foreign investments, the right 
to remit earnings from the investment in the currency in which the investment 
was originally made and at the exchange rate prevailing at the time of remittance, 
subject to the provisions of Section 74 of Republic Act No. 265, as amended; 
(c) Foreign Loans and Contracts. -The right to remit at the exchange rate 
prevailing at the time of remittance such sums as may be necessary to meet the 
payments of interest and principal on foreign loans and foreign obligations arising 
from technological assistance contracts, subject to the provisions of Section 74 of 
Republic Act No. 265, as amended; 
(d) Freedom from Expropriation. - There shall be no expropriation by the 
government of the property represented by investments or of the property of the 
enterprise except for public use or in the interest of national welfare or defense 
and upon payment of just compensation. In such cases, foreign investors or 
enterprises shall have the right to remit sums received as compensation for the 
expropriated property in the currency in which the investment was originally 


made and at the exchange rate at the time of remittance, subject to the 
provisions of Section 74 of Republic Act No. 265, as amended; and 
(e) Requisition of Investment. - There shall be no requisition of the 
property represented by the investment or of the property of enterprises, except 
in the event of war or national emergency and only for the duration thereof. Just 
compensation shall be determined and paid either at the time of requisition or 
immediately after cessation of the state of war or national emergency. Payments 
received as compensation for the requisitioned property may be remitted in the 
currency in which the investment was originally made and at the exchange rate 
prevailing at the time of remittance, subject to the provisions of Section 74 of 
Republic Act No. 265, as amended. 
TITLE VI 
ADMINISTRATION OF INCENTIVES 
SEC. 23. Certificate of Registration. - A PIPA-registered enterprise shall 
be issued a certificate of registration under the seal of PlPA and the signature of 
its Director-General and/or such other officer or employee of PlPA as the Board 
may designate and empower for the purpose. The certificate shall be in such 
form and style as the Board may determine. 
SEC. 24. Validity of Registration, - The certificate of registration issued 
under this Act shall be valid for a period of twenty (20) years from the start of 
commercial operation. 
SEC. 25. Extension of Period of Availmenf. - The availment period of the 
incentives provided herein may be extended by PIPA, in the event that the 
registered enterprise has suffered operational force majeure that has impaired its 
viability, equivalent for the period thereto. 
SEC. 26. Duties and Responsibilities of Other PAS. - The following are 
the duties and responsibilities of the other IPAs under this Act: 


(a) Adopt uniform and consistent procedures of administering incentives, 
monitoring the recipients and to coordinate efforts in this regard; 
(b) Adopt and implement systems and procedures affecting trade and 
customs policies in accordance with the requirements established by the DOF; 
(c) Submit data and information to PlPA and DOF as required by any of 
these agencies to ascertain consistency of investments policies and incentives, 
including their implementation as provided in paragraph (a), and to ensure the 
proper implementation of systems and procedures affecting trade and customs 
policies as provided in paragraph (b); and 
(d) Perform all other duties and responsibilities as may be required by the 
President. 
SEC. 27. Administration, Implementation and Monitoring of Incentives. - 
The IPAs shall be responsible for the administration and implementation of the 
incentives granted to their respective registered enterprises. The IPAs shall 
submit to PlPA and DOF their respective annual tax expenditures based on the 
computed costs in terms of revenue foregone on the tax incentives granted to 
their registered enterprises. For proper monitoring, PlPA shall create a single 
database of all incentives provided by all IPAs and all information thereto. Double 
entry accounting shall be done in recording all incentives granted by the 
government for transparency purposes. The DTI, DOF, NEDA and IPAs shall 
meet regularly to monitor and review the investments and incentives granted and 
submit an annual report to the President and Congress. 
SEC. 28. Payment in Philippine Peso or Foreign Currencies. - PIPA may 
receive Philippine peso or freely convertible foreign currencies as payment of 
application fees, fines and penalties. 


TITLE VI1 
SPECIAL ECONOMIC ZONES (ECOZONES) 
SEC. 29. Establishment of €cozones. - The metes and bounds of each 
ecozone are to be delineated and more particularly described in a proclamation 
to be issued by the President of the Philippines, upon the recommendation of the 
Board in coordination with municipal and/or city council, the National Land Use 
Coordinating Committee andlor the Regional Land Use Committee. 
The ecozones shall be developed through any of the following schemes: 
1) 
Private initiative; 
2) 
Local government 
initiative with the assistance of the national 
government; and 
3) 
National Government initiative. 
Areas to be established as ecozones shall be subject to the evaluation 
and recommendation of the Board, based on a detailed feasibility and 
engineering study which must conform with the following criteria: 
(a) 
The proposed area must be identified as a regional growth center in 
the Medium-Term Philippine Development Plan (MTPDP) or by the Regional 
Development Council; 
(b) 
The existence of required infrastructure in the proposed ecozone, 
such as roads, railways, telephones, ports, airports, etc., and the suitability and 
capacity of the proposed site to absorb such improvements; 
(c) 
The availability of water source and electric power supply for use of 
the ecozone; 
(d) 
the extent of vacant lands available for industrial and commercial 
development and future expansion of the ecozone as well as of lands adjacent to 
the ecozone available for development of residential areas for the ecozone 
employees; 
(e) 
The availability of skilled, semi-skilled and non-skilled trainable 
labor force in and around the ecozone; 


(9 
The area must have a significant incremental advantage over the 
existing economic zones and its potential profitability can be established; 
(9) 
(h) 
The area must be strategically located; and 
The area must be situated where controls can easily be established 
to curtail smuggling activities. 
Other areas which do not meet the foregoing criteria may be established 
as ecozones: Provided, That the said area shall be developed only through local 
government andlor private sector initiative, and without any financial exposure on 
the part of the National Government: Provided, further, That the area can be 
easily secured to curtail smuggling activities: Provided, finally, That after five (5) 
years, the area must have attained a substantial degree of development, the 
indicators of which shall be formulated by PIPA. 
SEC. 30. Ecozone to be a Decentralized Agro-Industrial, Industrial, 
Commercialflrading, Tourist, Investment and Financial Community. - Within the 
framework of the constitution, the interest of national sovereignty and territorial 
integrity of the Republic, the ecozone shall be developed, as much as possible, 
into 
a 
decentralized, 
self-reliant 
and 
self-sustaining 
industrial, 
commercial/trading, agro-industrial, tourist center with minimum government 
intervention. 
Each ecozone 
shall 
be provided with 
transportation, 
telecommunications, and other facilities needed to generate linkage with 
industries and employment opportunities for its own inhabitants and those of 
nearby towns and cities. 
SEC. 31, Defense and Security. - The defense of the ecozone and the 
security of its perimeter shall be the responsibility of the National Government in 
coordination with PIPA. Military forces sent by the National Government for the 
purpose of defense shall not interfere in the internal affairs in any of the ecozone 
and expenditure for these military forces shall be borne by the National 
Government. 
The PIPA may provide and establish the ecozones’ internal 
security and firefighting forces. 


SEC. 32. Relationship of PlPA to Privately-Owned Industrial Estates. - 
Privately-owned industrial estates shall retain their autonomy and independence 
and shall be monitored by PlPA for the implementation of incentives. 
SEC. 33. 
Administrafion of fhe Nafional Building Code Inside fhe 
Ecozones. 
The administration and enforcement of the provisons of PD No. 1096, the 
National Building Code of the Philippines (NBCP) in all ecozones and areas 
owned and administered by PlPA shall be vested in the Director-General or his 
duly authorized representative. He shall appoint such qualified personnel as may 
be necessary to act as building official who shall be charged with the duty of 
issuing building permits in the different zones. All fees and dues collected by the 
building official under the NBCP shall accrue to PIPA. 
TITLE VI I I 
FINAL PROVISIONS 
SEC. 34. Protection of the Environment. - PIPA, in coordination with the 
appropriate agencies, shall take concrete and appropriate steps to enact the 
proper measures for the protection of the environment, and shall coordinate with 
the Environmental Management Bureau of DENR to avoid undue delay in the 
issuance of the required Environmental Compliance Certificate (ECC): Provided, 
however, That applications for environmental clearances, permits, and/or 
licenses of registered enterprises shall be acted upon by the appropriate 
government agency within one hundred twenty (120) days from date of official 
acceptance. In the event that the appropriate government agency failed to act 
within the aforementioned date, the application for the said environmental 
requirement shall be deemed complied with for purposes of operation of the 
registered enterprise: Provided, finally, That the Board may withdraw the 
certificate of registration issued to the enterprise should the appropriate 
government agency eventually deny the application. 


SEC. 35. Suspension and Forfeiture of Incentives of Registered 
Enterprises, Refund and Penalties. - When there is probable cause to believe 
that the registered enterprise has violated its registration terms and conditions, 
the Board may suspend its availment of incentives after due notice and hearing. 
The Board may impose fines and penalties and/or forfeit the incentives granted 
to the registered enterprise whenever there are violations of the registration 
terms and conditions by the latter, without prejudice to the cancellation of the 
registration of said enterprise: Provided, however, That the Board may cancel or 
abate only the imposition of fines. In case of cancellation of the certificate of 
registration granted under this Act, the Board may, in appropriate cases, require 
the refund of incentives availed of and impose corresponding fines and penalties. 
Any enterprise which violates any provision of this Act, its implementing 
rules and regulations, the terms and conditions of its registration or any lawful 
directive of the Board, or in the availment of incentives, including all official 
reports required to be submitted to the Board, shall be subject to a fine not to 
exceed One million pesos (PI ,000,000) but without prejudice to the cancellation 
of its registration: Provided, That any willful commission of fraudulent 
misrepresentation in its application for registration or submission of reports or 
gross violation of this Act and its implementing rules and regulations, a fine of at 
least One million pesos (Pl,OOO,OOO) 
but not to exceed Ten million pesos 
(PlO,OOO,OOO) shall be imposed, in addition to other penalties that may be 
imposed by the Board. 
The Board shall prepare a schedule of fines and penalties to be imposed 
on erring registered enterprises depending on the violation incurred, which may 
be reduced in exceptional cases. Responsible officers of such enterprises, 
including duly appointed external consultants-agents who knowingly commit, aid 
or abet the commission of any of the acts mentioned above, shall be subject to a 
fine of not less than One hundred thousand pesos (P100,OOO) but not more than 
Three hundred thousand pesos (P300,OOO). Government officers and employees 


who participate directly or indirectly in the commission of the foregoing acts shall 
likewise be liable to a fine of not less than One hundred thousand pesos 
(P100,OOO) but not more than Three hundred thousand pesos (P300,000), in 
addition to any criminal and administrative penalties imposable under the Civil 
Service Law, Revised Penal Code, Republic Act No. 3019 (Anti-Graft And 
Corrupt Practices Act), Republic Act No. 6713 (Code Of Conduct And Ethical 
Standards For Public Officials) and other applicable laws. If the offender is a 
foreign national, the foregoing acts shall be grounds for his summary deportation 
in addition to the imposable fines and penalties above. 
SEC. 36. Implementing Rules and Regulations (IRR). - The DTI, PIPA, 
DOF, NEDA, BIR and BOC shall promulgate the implementing rules and 
regulations (IRR) within two (2) months from the effectivity of this Act. 
SEC. 37. Transitory Provisions. - The incentives already granted to 
enterprises registered with BOI, PEW, other IPAs and under existing investment 
laws shall continue to be legally binding in accordance with the terms and 
conditions stated in their respective registration certificates. Existing enterprises 
registered with BOI, PEZA and other IPAs may opt to register with PIPA and be 
governed by the provisions of this Act prior to the expiration of their existing 
contracts. For activities or entities, whether government or private, whose tax 
and/or duty exemptions or preferential treatment under special laws are 
withdrawn or repealed by this Act, the pertinent provisions of the National Internal 
Revenue Code of 1997, as amended; the Tariff and Customs Code, as 
amended; and the Local Government Code of 1991, shall apply. 
In addition, dividends, interests and royalties subject to reduced income 
tax rates under existing income tax treaties paid by BOI-registered enterprises to 
foreign persons shall, after the merger of BO1 and PEZA by virtue of this Act, be 
subject to the reduced rates until the expiration of the enterprises' registration 
certificates with the BO1 and after such enterprises registered with PIPA: 
Provided, That a favorable ruling is secured from the BIR for this purpose. 


SEC. 38. Revenue Gains or Savings from the Rationalization of Fiscal 
Incentives. - Revenue gains or savings from the implementation of this Act shall 
be utilized exclusively for the following purposes: fifty percent (50%) for 
infrastructure and fifty percent (50%) for education purposes. 
Such allocations shall be segregated as separate trust funds by the 
National Treasury and shall be over and above the annual appropriations for 
similar purposes. 
SEC. 39. Separability Clause. - If any provision of this Act is declared 
invalid and unconstitutional, the other provisions which are not affected thereby 
shall remain in force and effect. 
SEC. 40. Repealing Clauses. - The following laws or provisions of laws 
are hereby repealed: 
(1) Executive Order No. 226, series of 1987 - “The Omnibus Investments Code of 
1987”; 
(2) Republic Act No. 7888 - “An Act to Amend Article 7(13) of Executive Order 
No. 226, otherwise known as the Omnibus Investment Code of 1987; 
(3) Republic Act No. 7916, otherwise known as the “Special Economic Zone Act 
of 1995”; 
(4) Republic Act No. 8748, otherwise known as “An Act Amending Republic Act 
No. 7916”; 
(5) Presidential Decree No. 66 - ”Creating the Export Processing Zone Authority 
and Revising Republic Act No. 5490; 
(6) Presidential Decree No. 529 - “Granting to Petroleum Exploration 
Concessionaires under the Petroleum Act of 1949 Exemption from Customs 
Duty and Compensating Tax on Importations of Machinery and Equipment, 
Spare Parts and Materials Required for their Exploration Operations”; 
(7) Section 8(d) of Republic Act No. 5487, entitled “An Act to Regulate the 
Organization and Operation of Private Detective, Watchmen or Security 
Guard Agencies (The Private Security Agency Law)”; 


(8) Subparagraph (a)(2) and last sentence of subparagraph (b) of Section 8 and 
Section 14 of Presidential Decree No. 269, entitled ‘Creating the National 
Electrification Administration as a Corporation, Prescribing its Powers and 
Activities, Appropriating the Necessary Funds Therefore and Declaring a 
National Policy Objective for the Total Electrification of the Philippines on an 
Area Coverage Service Basis, the Organization, Promotion and Development 
of Electric Cooperatives to Attain the Said Objective, Prescribing Terms and 
Conditions for Their Operations, The Repeal of Republic Act No. 6038, and 
for Other Purposes; 
(9) Sections 8, 9 and 10 of Presidential Decree No. 538, entitled “Creating and 
Establishing the PHlVlDEC Industrial Authority and Making its Subsidiary 
Agency of the Philippine Veterans Investment Development Corporation 
Defining Its Powers, Functions and Responsibilities and for Other Purposes”; 
(IO) Section 36(f) of Presidential Decree No. 705, otherwise known as the 
“Revised Forestry Code”; 
(11) Section 25 of Presidential Decree No. 857, entitled “Providing for the 
Reorganization of Port Administration and Operation Functions in the 
Philippines, Revising Presidential Decree No. 505 Dated July 11, 1974, 
Creating the Philippine Port Authority, by Substitution, and for Other 
Purposes”; 
(12) Section 16 (a), (b), and (c), and Section 17 (a), (b), (c), (d) and (e) of 
Presidential Decree No. 972, as amended, entitled “Promulgating an Act to 
Promote an Accelerated Exploration, Development, Exploitation, Production 
and Utilization of Coal”; 
(13) First sentence of the second paragraph of Section 10 of Presidential Decree 
No. 972, as amended by Presidential Decree No. 1174, entitled “Amending 
PD No. 972, Otherwise Known as the Coal Development Act of 1976”; 
(14) Sections 2 and 3 of Presidential Decree No. 1362, entitled “Allowing Radio 
Broadcasting and Television Stations to Import Radio or Television 


Equipment, Spare Parts and Allied Technical and Program Materials to be 
Used Exclusively in their Broadcast Operations Subject to Certain 
Conditions"; 
(15) Section 4 of Presidential Decree No. 1442, entitled "An Act to Promote the 
Exploration and Development of Geothermal Resources"; 
(16) Sections 18, 19, 20 and 21 of Republic Act No. 6847, entitled "An Act 
Creating and Establishing the Philippine Sports Commission, Defining its 
Powers, Functions and Responsibilities Appropriating Funds Therefor, and for 
Other Purposes"; 
(17) Section I O  (I), (2), (3), (4), (5), and (6) of Republic Act No. 7156, entitled 
"An Act Granting Incentives to Mini-Hydro Electric Power Developers and For 
Other Purposes"; 
(18) Title 9, Section 21 of Republic Act No. 7306, entitled "An Act Providing for 
the Establishment of the People's Television Network, Inc., Defining Its 
Powers and Functions, Providing for Its Sources of Funding and For Other 
Purposes"; 
(19) Section 14 of Republic Act No. 7354, entitled "An Act Creating the Philippine 
Postal Corporation, Defining Its Powers, Functions and Responsibilities, 
Providing for Regulation"; 
(20) Last sentence of Section 17 of Republic Act No. 7820, entitled "An Act 
Creating the Partido Development Administration, Defining Its Powers and 
Functions, Providing Funds Therefor, and for Other Purposes"; 
(21) Section 16 (a), (b), (c), (d), (e) and Section 17 of Republic Act No. 7844, 
otherwise known as the "Export Development Act of 1994"; 
(22) Sections 83, 90, 91, 92 and 93 of Republic Act No. 7942, otherwise known 
as the "Philippine Mining Act of 1995"; 
(23) Section 18 of Republic Act No, 8044, entitled "An Act Creating the National 
Youth Commission, Establishing a National Comprehensive and Youth 
Development, Appropriating Funds Therefor, and for Other Purposes"; 


(24) Section 8 of Republic Act No. 8436, entitled "An Act Authorizing the 
Commission on Elections to Use an Automated Election System in the May 
11, 1998 National or Local Elections and in Subsequent National or Local 
Electoral Exercises, Providing Funds Therefor and for Other Purposes"; 
(25) Section 9 of Republic Act No. 8479, otherwise known as the "Downstream 
Oil Deregulation Act of 1998"; 
(26) Section 3 a), b), c), d), and h) of Republic Act No. 8502, entitled "An Act to 
Promote the Development of the Jewelry Manufacturing Industry, Providing 
Incentives Therefor and For Other Purposes"; 
(27) Section 35 (b), (c) and (d) of Republic Act No. 8550, otherwise known as the 
"Philippine Fisheries Code of 1998"; 
(28) Section 26 (A.1, A.I.1, A.1.2) of Republic Act No. 9275, entitled "The 
Philippine Clean Water Act of 2004"; 
(29) Section 1 of Republic Act No. 9281, entitled "An Act to Strengthen 
Agriculture and Fisheries Modernization in the Philippines by Extending the 
Effectivity of Tax Incentives and its Mandated Funding Support, Amending for 
this Purpose Sections 109 and 112 of Republic Act No. 8435"; 
(30) Section 3 of Republic Act No. 9290, entitled "An Act Promoting the 
Development of the Footwear, Leather Goods and Tannery Industries, 
Providing Incentives Therefor and for Other Purposes" 
(31) Section 5 of Executive Order No. 80, Series of 1993 - "Authorizing the 
Establishment of the Clark Development Corporation as the Implementing 
Arm of the Bases Conversion and Development Authority for the Clark 
Special Economic Zone, and Directing All Heads of Departments, Bureaus, 
Offices, Agencies and Instrumentalities of Government to Support the 
Program"; 
(32) Section 5 of Proclamation 216, Series of 1993 - "Creating the Poro Point 
Special Economic Zone Pursuant to Republic Act No. 7227"; 


(33) Section 3 of Proclamation No. 420, Series of 1994 - "Creating and 
Designating a Portion of the Area Covered by the Former Camp John Hay 
Special Economic Zone Pursuant to Republic Act No. 7227"; 
(34) Section 6 of Proclamation 984, Series of 1997 - "Creating the Morong 
Special Economic Zone Pursuant to Republic Act No. 7227"; 
(35) Executive Order No. 313, series of 2004, as amended by Executive Order 
528, Series of 2006 - "Modifying the Rates of Duty on Capital Equipment, 
Spare Parts and Accessories 
Imported by BOI-Registered New and 
Expanding Enterprises"; and 
(36) Section 7 of Republic Act No 9282, entitled "An Act Expanding the 
Jurisdiction of the Court of Tax Appeals (CTA), Elevating Its Rank to the Level 
of A Collegiate Court With Special Jurisdiction and Enlarging Its Membership, 
Amending for the Purpose Certain Sections of Republic Act No. 1125, as 
amended, Otherwise Known as the Law Creating the Court of Tax Appeals, 
and for Other Purposes" is modified accordingly to include in its jurisdiction 
cases involving the decisions or actions of PlPA in its VAT refund 
mechanism; 
All other laws, acts, decrees, orders and issuances or provisions thereof 
inconsistent with any of the provisions of this Act are hereby repealed or 
modified accordingly. 
SEC. 41, Effectivity. - This Act shall take effect fifteen (15) days following 
its publication in a newspaper of general circulation in the Philippines. 
Approved,