Executive Order No. 226
THE OMNIBUS INVESTMENTS CODE OF 1987
WHEReAS, the Government is committed to encourage investments in
desirable areas of activities;
WHEReAS, to facilitate investment, there
is a need to adopt a cohesive and consolidated investments incentives law;
WHEReAS, it is imperative to integrate basic laws on investment, to
clarify and harmonize their provisions for the guidance of domestic and foreign
investors.
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the
Philippines, do hereby order and ordain the following:
PRELIMINARY TITLE
CHAPTER I
TITLE AND DECLARATION OF POLICY
ARTICLE 1.
Short Title. - This order shall be known as the "Omnibus Investments Code" of
1987.
ARTICLE 2. Declaration of Investment Policies. - To accelerate the
sound development of the national economy in consonance with the principles and
objectives of economic nationalism and in pursuance of a planned economically
feasible and practical dispersal of industries and the promotion of small and
medium scale industries, under conditions which will encourage competition and
discourage monopolies, the following are declared policies of the State:
(1) The State shall encourage private Filipino and foreign investments
in industry, agriculture, forestry, mining, tourism and other sectors of the
economy which shall: provide significant employment opportunities relative to
the amount of the capital being invested; increase productivity of the land,
minerals, forestry, aquatic and other resources of the country, and improve
utilization of the products thereof; improve technical skills of the people
employed in the enterprise; provide a foundation for the future development of
the economy; meet the tests of international competitiveness; accelerate
development of less developed regions of the country; and result in increased
volume and value of exports for the economy.
(2) The State shall ensure
holistic development by safeguarding the well-being of the social, cultural and
ecological life of the people. For this purpose, consultation with affected
communities will be conducted whenever necessary.
(3) The State shall
extend to projects which will significantly contribute to the attainment of
these objectives, fiscal incentives without which said projects may not be
established in the locales, number and/or pace required for optimum national
economic development. Fiscal incentive system shall be devised to compensate for
market imperfections, to reward performance contributing to economic
development, be cost-efficient and be simple to administer.
(4) The
State considers the private sector as the prime mover for economic growth. In
this regard, private initiative is to be encouraged, with deregulation and
self-regulation of business activities to be generally adopted where dictated by
urgent social concerns.
(5) The State shall principally play a
supportive role, rather than a competitive one, providing the framework, the
climate and the incentives within which business activity is to take place.
(6) The State recognizes that there are appropriate roles for local and
foreign capital to play in the development of the Philippine economy and that it
is the responsibility of Government to define these roles and provide the
climate for their entry and growth.
(7) The State recognizes that
industrial peace is an essential element of economic growth and that it is a
principal responsibility of the State to ensure that such a condition prevails.
(8) Fiscal incentives shall be extended to stimulate the establishment
and assist initial operations of the enterprise, and shall terminate after a
period of not more than 10 years from registration or start-up of operation
unless a specific period is otherwise stated.
The foregoing declaration
of investment policies shall apply to all investment incentive schemes.
CHAPTER II
BOARD OF INVESTMENTS
ARTICLE 3. The Board of
Investments. - The Board of Investments shall implement the provisions of Books
One to Five of this Code.
ARTICLE 4. Composition of the Board. - The
Board of Investments shall be composed of seven (7) governors: The Secretary of
Trade and Industry, three (3) Undersecretaries of Trade and Industry to be
chosen by the President, and three (3) representatives from other government
agencies and the private sector. The Secretary of Trade and Industry shall be
concurrently Chairman of the Board and the Undersecretary of the Department of
Trade and Industry for Industry and Investments shall be concurrently the
Vice-Chairman of the Board and its Managing Head. The three (3) representatives
from other government agencies and the private sector appointed by the President
for a term of four (4) years: Provided, That upon the expiration of his term, a
governor shall serve as such until his successor shall have been appointed and
qualified: Provided, further, That no vacancy shall be filled except for the
unexpired portion of any term, and that no one may be designated to be a
governor of the Board in an acting capacity but all appointments shall be ad
interim or permanent.
ARTICLE 5. Qualifications of Governors of the
Board. - The governors of the Board shall be citizens of the Philippines, at
least thirty (30) years old, of good moral character and of recognized
competence in the fields of economics, finance, banking, commerce, industry,
agriculture, engineering, law, management or labor.
ARTICLE 6.
Appointment of Board Personnel. - The Board shall appoint its technical staff
and other personnel subject to Civil Service Law, rules and regulations.
ARTICLE 7. Powers and Duties of the Board. - The Board shall be
responsible for the regulation and promotion of investments in the Philippines.
It shall meet as often as may be necessary generally once a week on such day as
it may fix. Notice of regular and special meetings shall be given all members of
the Board. The presence of four (4) governors shall constitute a quorum and the
affirmative vote of four (4) governors in a meeting validly held shall be
necessary to exercise its powers and perform its duties, which shall be as
follows:
(1) Prepare annually the Investment Priorities Plan as defined
in Article 26, which shall contain a listing of specific activities that can
qualify for incentives under Book I of this Code, duly supported by the studies
of existing and prospective demands for such products and services in the light
of the level and structure of income, production,
trade, prices and
relevant economic and technical factors of the regions as well as existing
facilities;
(2) Promulgate such rules and regulations as may be
necessary to implement the intent and provisions of this Code relevant to the
Board;
(3) Process and approve applications for registration with the
Board, imposing such terms and conditions as it may deem necessary to promote
the objectives of this Code, including refund of incentives when appropriate,
restricting availment of certain incentives not needed by the project in the
determination of the Board, requiring performance bonds and other guarantees,
and payment of application, registration, publication and other necessary fees
and when warranted may limit the availment of the tax holiday incentive to the
extent that the investor's country law or treaties with the Philippines allows a
credit for taxes paid in the Philippines;
(4) After due hearing, decide
controversies concerning the implementation of the relevant books of this Code
that may arise between registered enterprises or investors therein and
government agencies, within thirty (30) days after the controversy has been
submitted for decision: Provided, That the investor or the registered enterprise
may appeal the decision of the Board within thirty (30) days from receipt
thereof to the President;
(5) Recommend to the Commissioner of
Immigration and Deportation the entry into the Philippines for employment of
foreign nationals under this Code;
(6) Periodically check and verify,
either by inspection of the books or by requiring regular reports, the
proportion of the participation of the Philippine nationals in a registered
enterprise to ascertain compliance with its qualification to retain registration
under this Code;
(7) Periodically check and verify the compliance by
registered enterprises with the relevant provisions of this Code, with the rules
and regulations promulgated under this Code and with the terms and conditions of
registration;
(8) After due notice, cancel the registration or suspend
the enjoyment of incentives benefits of any registered enterprise and/or require
refund of incentives enjoyed by such enterprise including interests and monetary
penalties, for (a) failure to maintain the qualifications required by this Code
for registration with the Board or (b) for violations of this Code, of the rules
and regulations issued under this Code, of the terms and conditions of
registration, or of laws for the protection of labor or of the consuming public:
Provided, That the registration of an enterprise whose project timetable, as set
by the Board is delayed by one year, shall be considered automatically cancelled
unless otherwise reinstalled as a registered enterprise by the Board;
(9) Determine the organizational structure taking into account Article 6
of this Code; appoint, discipline and remove its personnel consistent with the
provisions of the Civil Service Law and Rules;
(10) Prepare or contract
for the preparation of feasibility and other pre-investment studies for pioneer
areas either upon its own initiative; or upon the request of Philippine
nationals who commit themselves to invest therein and show the capability of
doing so; Provided, That if the venture is implemented, then the amount advanced
by the Board shall be repaid within five (5) years from the date the commercial
operation of said enterprise starts;
(11) When feasible and considered
desirable by the Board, require registered enterprises to list their shares of
stock in any accredited stock exchange or directly offer a portion of their
capital stock to the public and/or their employees;
(12) Formulate and
implement rationalization programs for certain industries whose operation may
result in dislocation, overcrowding or inefficient use of resources, thus
impeding economic growth. For this purpose, the Board may formulate guidelines
for progressive manufacturing programs, local content programs, mandatory
sourcing requirements and dispersal of industries. In appropriate cases and upon
approval of the President, the Board may restrict, either totally or partially,
the importation of any equipment or raw materials or finished products involved
in the rationalization program;
(13) To the extent that such activities
are allowed by the Constitution and relevant laws, to recommend to the President
of the Philippines, the suspension of the nationality requirement provided in
this Code in cases of ASEAN projects, or investments by ASEAN nationals,
regional ASEAN or multinational financial institutions including their
subsidiaries in preferred projects and/or projects allowed through either
financial or technical assistance agreements entered into by the President, and
in the case of regional complementation for the manufacture of a particular
product which seeks to take advantage of economies of scale. For the purpose of
this Act, a multilateral financial institution shall refer to a financial agency
or entity, and its affiliates which satisfy the following qualifications:
?1) The institution is either owned or controlled by member countries
but does not possess any national identity;
?2) The institution sources
its funds from capital stock subscriptions and contributions by member
countries; and
?3) The primary responsibility of the institution is to
provide funds for development purposes and international economic
stability.?
(14) Extend the period of availment of incentives by any
registered enterprise; Provided, That the total period of availment shall not
exceed ten (10) years, subject to any of the following criteria:
(a) The
registered enterprise has suffered operational force majeure that has impaired
its viability.
(b) The registered enterprise has not fully enjoyed the
incentives granted to it for reasons beyond its control;
(c) The project
of the registered enterprise has a gestation period which goes beyond the period
of availment of needed incentives; and
(d) The operation of the
registered enterprise has been subjected to unforeseen changes in government
policies, particularly, protectionalism policies of importing countries, and
such other supervening factors which would affect the competitiveness of the
registered firm;
(15) Regulate the making of investments and the doing
of business within the Philippines by foreigners or business organizations owned
in whole or in part by foreigners;
(16) Prepare or contract for the
preparation of industry and sectoral development programs and gather and compile
statistical, technical, marketing, financial and other data required for the
effective implementation of this Code;
(17) Within four (4) months after
the close of the fiscal year, submit annual reports to the President which shall
cover its activities in the administration of this Code, including
recommendations on investment policies;
(18) Provide, directly or
through Philippine Diplomatic Missions, such information as may be of interest
to prospective foreign investors;
(19) Collate, analyze and compile
pertinent information and studies concerning areas that have been or may be
declared preferred areas of investments; and
(20) Enter into agreements
with other agencies or government for the simplification and facilitation of
systems and procedures involved in the promotion of investments, operation of
registered enterprises and other activities necessary for the effective
implementation of this Code;
(21) Generally, exercise all the powers
necessary or incidental to attain the purpose of this Code and other laws
vesting additional functions on the Board.
ARTICLE 8. Powers and Duties
of the Chairman. - The Chairman shall have the following powers and duties:
(1) To preside over the meetings of the Board;
(2) To render
annual reports to the President and such special reports as may be requested;
(3) To act as liaison between investors seeking joint venture
arrangements in particular areas of investment;
(4) Recommend to the
Board such policies and measures he may deem necessary to carry out the
objectives of this Code; and
(5) Generally, to exercise such other
powers and perform such other duties as may be directed by the Board of
Governors from time to time.
ARTICLE 9. Powers and Duties of the
Vice-Chairman. - The Vice-Chairman shall have the following powers and duties:
(1) To act as Managing Head of the Board;
(2) To preside over
the meetings of the Board in the absence of the Chairman;
(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 Code;
(4) Assist registered
enterprises and prospective investors to have their papers processed with
dispatch by all government offices, agencies, instrumentalities and financial
institutions; and
(5) Perform the other duties of the Chairman in the
absence of the latter, and such other duties as may be assigned to him by the
Board of Governors.
BOOK I
INVESTMENTS WITH INCENTIVES
TITLE I
PREFERRED AREAS OF INVESTMENTS
CHAPTER I
DEFINITION OF TERMS
ARTICLE 10. "Board" shall mean the Board of
Investments created under this Code.
ARTICLE 11. "Registered Enterprise"
shall mean any individual, partnership, cooperative, corporation or other entity
incorporated and/or organized and existing under Philippine laws; and registered
with the Board in accordance with this Book: 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 of fiduciary functions.
ARTICLE 12.
"Technological assistance contracts" shall mean contracts for: (1) the transfer,
by license otherwise, of patents, processes, formulas or other technological
rights of foreign origin; and/or (2) foreign assistance concerning technical and
factory management, design, planning, construction, operation and similar
matters.
ARTICLE 13. "Foreign loans" shall mean any credit facility or
financial assistance other than equity investment denominated and payable in
foreign currency or where the creditor has the option to demand payment in
foreign exchange and registered with the Central Bank and the Board.
ARTICLE 14. "Foreign Investments" shall mean equity investments owned by
a non-Philippine national made in the form of foreign exchange or other assets
actually transferred to the Philippines and registered with the Central Bank and
the Board, which shall assess and appraise the value of such assets other than
foreign exchange.
ARTICLE 15. "Philippine national" shall mean a citizen
of the Philippines or a diplomatic partnership or association wholly-owned by
citizens of the Philippines; or a corporation organized under the laws of the
Philippines of which at least sixty per cent (60%) of the capital stock
outstanding and entitled to vote is owned and held by citizens of the
Philippines; or a trustee of funds for pension or other employee retirement or
separation benefits, where the trustee is a Philippine national and at least
sixty per cent (60%) of the fund will accrue to the benefit of Philippine
nationals: Provided, That where a registered and its non-Filipino stockholders
own stock in a registered enterprise, at least sixty per cent (60%) of the
capital stock outstanding and entitled to vote of both corporations must be
owned and held by the citizens of the Philippines and at least sixty per cent
(60%) of the members of the Board of Directors of both corporations must be
citizens of the Philippines in order that the corporation shall be considered a
Philippine national.
ARTICLE 16. "Preferred areas of investments" shall
mean the economic activities that the Board shall have declared as such in
accordance with Article 28 which shall be either non-pioneer or pioneer.
ARTICLE 17. "Pioneer enterprise" shall mean a registered enterprise (1)
engaged in the manufacture, processing or production, and not merely in the
assembly or packaging of goods, products, commodities or raw materials that have
not been or are not being produced in the Philippines on a commercial scale or
(2) which uses a design, formula, scheme, method, process or system of
production or transformation of any element, substance or raw materials into
another raw material or finished goods which is new and untried in the
Philippines or (3) engaged in the pursuit of agricultural, forestry and mining
activities and/or services including the industrial aspects of food processing
whenever appropriate, pre-determined by the Board, in consultation with the
appropriate Department, to be feasible and highly essential to the attainment of
the national goal in relation to a declared specific national food and
agricultural program for self-sufficiency and other social benefits of the
project or (4) which produces non-conventional fuels or manufactures equipment
which utilize non-conventional sources of energy or uses or converts to coal or
other non-conventional fuels or sources of energy in its production,
manufacturing or processing operations. Provided, That the final product in any
of the foregoing instances, involves or will involve substantial use and
processing of domestic raw materials, whenever available; taking into account
the risks and magnitude of investment: Provided, further, That the foregoing
definitions shall not in any way limit the rights and incentives granted to
less-developed-area enterprises provided under Title V, Book I, hereof.
ARTICLE 18. "Non-pioneer enterprise" shall include all registered
producer enterprises other than pioneer enterprises.
ARTICLE 19.
"Expansion" shall include modernization and rehabilitation and shall mean
increase of existing volume or value of production or upgrading the quality of
the registered product or utilization of inefficient or idle equipment under
such guidelines as the Board may adopt.
ARTICLE 20. "Measured capacity"
shall mean the estimated additional volume of production or service which the
Board determines to be desirable in each preferred area of investment in order
to supply the needs of the economy at reasonable prices, taking into account the
export potential of the product, including economies of scale which would render
such product competitive in the world market. Measured capacity shall not be
less than the amount by which the measurable domestic and country's potential
export market demand exceeds the existing productive capacity in said preferred
areas. For export market industries, when warranted, the Board shall base
measured capacity on the availability of domestic raw materials after deducting
the needs of the domestic market therefore.
.
ARTICLE 21. "Tax
credit" shall mean any of the credits against taxes and/or duties equal to those
actually paid or would have been paid to evidence which a tax credit certificate
shall be issued by the Secretary of Finance or his representative, or the Board,
if so delegated by the Secretary of Finance. The tax credit certificates
including those issued by the Board pursuant to laws repealed by this Code but
without in any way diminishing the scope of negotiability under their laws of
issue are transferable under such conditions as may be determined by the Board
after consultation with the Department of Finance. The tax credit certificate
shall be used to pay taxes, duties, charges and fees due to the National
Government: Provided, That the tax credits issued under this Code shall not form
part of the gross income of the grantee/transferee for income tax purposes under
Section 29 of the National Internal Revenue Code and are therefore not taxable:
Provided, further, That such tax credits shall be valid only for a period of ten
(10) years from date of issuance.
ARTICLE 22. "Export products" shall
mean manufactured or processed products the total F.O.B. Philippine port value
of the exports of which did not exceed five million dollars in the United States
currency in the calendar year 1968 and which meet the local content requirement,
if any,
set by the Board, and standards of quality set by the Bureau of
Product Standards, or, in default of such standards, by the Board or by such
public or private organization, chamber, group or body as the Board may
designate. The above definition notwithstanding, the Investment Priorities Plan
may include other products for export subjects to such conditions and limited
incentives as may be determined by the Board.
ARTICLE 23. "Export sales"
shall mean the Philippine port F.O.B. value, determined from invoices, bills of
lading, inward letters of credit, landing certificates, and other commercial
documents, of exports products exported directly by a registered export producer
or the net selling price of export product sold by a registered export producer
to another export producer, or to an export trader that subsequently exports the
same: Provided, That sales of export products to another producer or to an
export trader shall only be deemed export sales when actually exported by the
latter, as evidenced by landing certificates or similar commercial documents:
Provided, further, That without actual exportation the following shall be
considered constructively exported for purposes of this provision: (1) sales to
bonded manufacturing warehouses of export-oriented manufacturers; (2) sales to
export processing zones; (3) sales to registered export-traders operating bonded
trading warehouses supplying raw materials used in the manufacture of export
products under guidelines to be set by the Board in consultation with the Bureau
of Internal Revenue and the Bureau of Customs; (4) sales to foreign military
bases, diplomatic missions and other agencies and/or instrumentalities granted
tax immunities, of locally manufactured, assembled or repacked products whether
paid for in foreign currency or not: Provided, further, That export sales of
registered export trader may include commission income: and Provided, finally,
That exportation of goods on consignment shall not be deemed export sales until
the export products consigned are in fact sold by the consignee.
Sales
of locally manufactured or assembled goods for household and personal use to
Filipinos abroad and other non-residents of the Philippines as well as returning
Overseas Filipinos under the Internal Export Program of the government and paid
for in convertible foreign currency inwardly remitted through the Philippine
banking systems shall also be considered export sales.
ARTICLE 24.
"Production cost" shall mean the total of the cost of direct labor, raw
materials, and manufacturing overhead, determined in accordance with generally
accepted accounting principles, which are incurred in manufacturing or
processing the products of a registered enterprise.
ARTICLE 25.
"Processing" shall mean converting of 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. Merely packing or packaging shall
not constitute processing.
ARTICLE 26. "Investment Priorities Plan"
shall mean the over all plan prepared by the Board which includes and contains:
(a) The specific activities and generic categories of economic activity
wherein investments are to be encouraged and the corresponding products and
commodities to be grown, processed or manufactured pursuant thereto for the
domestic or export market;
(b) Specific public utilities which can
qualify for incentives under this Code and which shall be supported by studies
of existing and prospective regional demands for the services of such public
utilities in the light of the level and structure of income, production, trade,
prices and relevant economic and technical factors of the regions as well as the
existing facilities to produce such services;
(c) Specific activities
where the potential for utilization of indigenous no-petroleum based fuels or
sources of energy can be best promoted; and
(d) Such other information,
analyzes, data, guidelines or criteria as the Board may deem appropriate.
The specific and generic activities to be included in the Investment
Priorities Plan with their status as pioneer or non-pioneer shall be determined
by the Board in accordance with the criteria set forth in this Book.
CHAPTER II
INVESTMENT PRIORITIES PLAN
ARTICLE 27.
Investment Priorities Plan. - Not later than the end of March of every year, the
Board of Investments, after consultation with the appropriate government
agencies and the private sector, shall submit to the President an Investment
Priorities Plan: Provided, however, That the deadline for submission may be
extended by the President.
ARTICLE 28. Criteria in Investment Priority
Determination. - No economic activity shall be included in the Investment
Priorities Plan unless it is shown to be economically, technically and
financially sound after thorough investigation and analysis by the Board.
The determination of preferred areas of investment to be listed in the
Investment Priorities Plan shall be based on long-run comparative advantage,
taking into account the value of social objectives and employing economic
criteria along with market, technical, and financial analyses.
The Board
shall take into account the following:
(a) Primarily, the economic
soundness of the specific activity as shown by its economic internal rate of
return;
(b) The extent of contribution of an activity to a specific
developmental goal;
(c) Other indicators or comparative advantage;
(d) Measured capacity as defined in Article 20; and
(e) The
market and technical aspects and considerations of the activity proposed to be
included.
In any of the declared preferred areas of investment, the
Board may designate as pioneer areas the specific products and commodities that
meet the requirements of Article 17 of this Code and review yearly whether such
activity, as determined by the Board, shall continue as pioneer, otherwise, it
shall be considered as non-pioneer and accordingly listed as such in the
Investment Priorities Plan or removed from the Investment Priorities Plan.
ARTICLE 29. Approval of the Investment Priorities Plan. - The President
shall proclaim the whole or part of such plan as in effect; or alternatively,
return the whole or part of the plan to the Board of Investments for revision.
Upon the effectivity of the plan or portions thereof, the President
shall issue all necessary directives to all departments, bureaus, agencies or
instrumentalities of the government to ensure the implementation of the plan by
the agencies concerned in a synchronized and integrated manner. No government
body shall adopt any policy or take any course of action contrary to or
inconsistent with the plan.
ARTICLE 30. Amendments. - Subject to
publication requirements and the criteria for investment priority determination,
the Board of Investments may, at any time, add additional areas in the plan,
alter any of the terms of the declaration of an investment area or the
designation of
measured capacities, or terminate the status of
preference. In no case, however, shall any amendment of the plan impair whatever
rights may have already been legally vested in qualified enterprises which shall
continue to enjoy such rights to the full extent allowed under this Code. The
Board shall not accept applications in an area of investment prior to the
approval of the same as a preferred area nor after approval of its deletion as a
preferred area of investment.
ARTICLE 31. Publication. - Upon approval
of the plan, in whole or in part, or upon approval of an amendment thereof, the
plan or the amendment, specifying and declaring the preferred areas of
investment and their corresponding measured capacity shall be published in at
least one (1) newspaper of general circulation and all such areas shall be open
for application until publication of an amendment or deletion thereof, or until
the Board approves registration of enterprises which fill the measured capacity.
CHAPTER III
REGISTRATION OF ENTERPRISES
ARTICLE 32.
Qualifications of a Registered Enterprise. - To be entitled to registration
under the Investment Priorities Plan, an applicant must satisfy the Board that:
(1) He is a citizen of the Philippines, in case the applicant is a
natural person, or in case of a partnership or any other association, it is
organized under Philippine laws and that at least sixty percent (60%) of its
capital is owned and controlled by citizens of the Philippines; or in case of a
corporation or a cooperative, it is organized under Philippine laws and that at
least sixty per cent (60%) of the capital stock outstanding and entitled to vote
is owned and held by Philippine nationals as defined under Article 15 of this
Code, and at least sixty per cent (60%) of the members of the Board of Directors
are citizens of the Philippines. If it does not possess the required degree of
ownership as mentioned above by Philippine nationals, the following
circumstances must be satisfactorily established:
(a) That it proposes
to engage in a pioneer projects as defined in Article 17 of this Code, which,
considering the nature and extent of capital requirements, processes, technical
skills and relative business risks involved, is in the opinion of the Board of
such a nature that the available measured capacity thereof cannot be readily and
adequately filled by Philippine nationals; or, if the applicant is exporting at
least seventy per cent (70%) of the total production, the export requirement
herein provided may be reduced in meritorious cases under such conditions and/or
limited incentives as the Board may determine;
(b) That it obligates
itself to attain the status of a Philippine national, as defined in Article 15,
within thirty (30) years from the date of registration or with such longer
period as the Board may require taking into account the export potential of the
project: Provided, That a registered enterprise which exports one hundred
percent (100%) of its total production need not comply with this requirement;
(c) That the pioneer area it will engage in is one that is not within
the activities reserved by the Constitution or other laws of the Philippines to
the Philippine citizens or corporations owned and controlled by Philippine
citizens;
(2) The applicant is proposing to engage in a preferred
project listed or authorized in the current Investment Priorities Plan within a
reasonable time to be fixed by the Board or, if not so listed, at least fifty
percent (50%) of its total production is for export or it is an existing
producer which will export part of production under such conditions and/or
limited incentives as the Board may determine; or that the enterprise is engaged
or proposing to engage in the sale abroad of export products bought by it from
one or more export producers; or the enterprise in engaged or proposing to
engage in
rendering technical, professional or other services or in
exporting television and motion pictures and musical recordings made or produced
in the Philippines, either directly or through a registered trader.
(3)
The applicant is capable of operating on a sound and efficient basis of
contributing to the national development of the preferred area in particular and
of the national economy in general; and
(4) If the applicant is engaged
or proposes to engage in undertaking or activities other than preferred
projects, it has installed or undertakes to install an accounting system
adequate to identify the investments, revenues, costs, and profits or losses of
each preferred project 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 preferred project if
the Board should so require to facilitate proper implementation of this Code.
ARTICLE 33. Application. - Applications shall be filed with the Board,
recorded in a registration book and the date appearing therein and stamped on
the application shall be considered the date of official acceptance.
Whenever necessary, the Board, through the People's Economic Councils,
shall consult the communities affected on the acceptability of locating the
registered enterprise within their community.
ARTICLE 34. Approval and
Registration Procedures. - The Board is authorized to adopt rules and
regulations to facilitate action on applications filed with it; prescribe
criteria for the evaluation of several applications filed in one preferred area;
devise standard forms for the use of applicants and delegate to the regional
offices of the Department of Trade and Industry 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 twenty (20) working days from official acceptance
thereof.
ARTICLE 35. Criteria for evaluation of Application. - The
following criteria will be considered in the evaluation of applications for
registration under a preferred area:
(a) The extent of ownership and
control by Philippine citizens of the enterprises;
(b) The economic
rates of return;
(c) The measured capacity: Provided, That estimates of
measured capacities shall be regularly reviewed and updated to reflect changes
in market supply and demand conditions; Provided, Further, That measured
capacity shall not result in a monopoly in any preferred area of investment
which would unduly restrict trade and fair competition nor shall it be used to
deny the entry of any enterprise in any field of endeavor or activity;
(d) The amount of foreign exchange earned, used or saved in their
operations;
(e) The extent to which labor, materials and other resources
obtained from indigenous sources are utilized;
(f) The extent to which
technological advances are applied and adopted to local conditions;
(g)
The amount of equity and degree to which the ownership of such equity spread out
and diversified; and
(h) Such other criteria as the Board may determine.
ARTICLE 36. Appeal from Board's Decision. - Any order or decision of the
Board shall be final and executory after thirty (30) days from its promulgation.
Within the said period of thirty (30) days, said order or decision may be
appealed to the Office of the President. Where an appeal has been filed, said
order or decision shall be final and executory ninety (90) days after the
perfection of the appeal, unless reversed.
ARTICLE 37. Certificate of
Registration. - A registered enterprise under this Code shall be issued a
certificate of registration under the seal of the Board of Investments and the
signature of its Chairman and/or such other officer or employee of the Board as
it may empower and designate for the purpose. The certificate shall be in such
form and style as the Board may determine and shall state, among other matters:
(a) The name of the registered enterprise;
(b) The preferred
area of investment in which the registered enterprise is proposing to engage;
(c) The nature of the activity it is undertaking or proposing to
undertake, whether pioneer or non-pioneer, and the registered capacity of the
enterprise; and
(d) The other terms and conditions to be observed by the
registered enterprise by virtue of the registration.
TITLE II
BASIC RIGHTS AND GUARANTEES
ARTICLE 38. 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 and its implementing rules and regulations, remittability
shall be as provided therein.
(b) 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;
(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
III
INCENTIVES TO REGISTERED ENTERPRISES
Amended by Republic Act
No. 7918
ARTICLE 39. Incentives to Registered Enterprises. - All
registered enterprises shall be granted the following incentives to the extent
engaged in a preferred area of investment;
(a) Income Tax Holiday. -
(1) For six (6) years from commercial operation for pioneer firms and
four (4) years for non-pioneer firms, new registered firms shall be fully exempt
from income taxes levied by the National Government. Subject to such guidelines
as may be prescribed by the Board, the income tax exemption will be extended for
another year in each of the following cases:
i. the project meets the
prescribed ratio of capital equipment to number of workers set by the Board;
ii. utilization of indigenous raw materials at rates set by the Board;
iii. the net foreign exchange savings or earnings amount to at least
US$500,000.00 annually during the first three (3) years of operation.
The preceding paragraph notwithstanding, no registered pioneer firm may
avail of this incentive for a period exceeding eight (8) years.
(2) For
a period of three (3) years from commercial operation, registered expanding
firms shall be entitled to an exemption from income taxes levied by the National
Government proportionate to their expansion under such terms and conditions as
the Board may determine; Provided, however, That during the period within which
this incentive is availed of by the expanding firm it shall not be entitled to
additional deduction for incremental labor expense.
(3) The provision of
Article 7 (14) notwithstanding, registered firms shall not be entitled to any
extension of this incentive.
(b) Additional Deduction for Labor Expense.
- For the first five (5) years from registration, a registered enterprise shall
be allowed an additional deduction from the taxable income of fifty percent
(50%) of the wages corresponding to the increment in the number of direct labor
for skilled and unskilled workers if the project meets the prescribed ratio of
capital equipment to number of workers set by the Board: Provided, That this
additional
deduction shall be doubled if the activity is located in less
developed areas as defined in Art. 40.
(c) Tax and Duty Exemption on
imported Capital Equipment. - Within five (5) years from the effectivity of this
Code, importations of machinery and equipment and accompanying spare parts of
new and expanding registered enterprise shall be exempt to the extent of one
hundred percent (100%) of the customs duties and national internal revenue tax
payable thereon: Provided, That the importation of machinery and equipment and
accompanying spare parts shall comply with the following conditions:
(1)They are not manufactured domestically in sufficient quantity, of
comparable quality and at reasonable prices;
(2)They are reasonably
needed and will be used exclusively by the registered enterprise in the
manufacture of its products, unless prior approval of the Board is secured for
the part-time utilization of said equipment in a non-registered activity to
maximize usage thereof or the proportionate taxes and duties are paid on the
specific equipment and machinery being permanently used for non-registered
activities; and
(3)The approval of the Board was obtained by the
registered enterprise for the importation of such machinery, equipment and spare
parts.
In granting the approval of the importations under this
paragraph, the Board may require international canvassing but if the total cost
of the capital equipment or industrial plant exceeds US$5,000,000, the Board
shall apply or adopt the provisions of Presidential Decree Numbered 1764 on
International Competitive Bidding.
If the registered enterprise sells,
transfers or disposes of these machinery, equipment and spare parts without
prior approval of the Board within five (5) years from date of acquisition, the
registered enterprise and the vendee, transferee, or assignee shall be
solidarily liable to pay twice the amount of the tax exemption given it.
The Board shall allow and approve the sale, transfer or disposition of
the said items within the said period of five (5) years if made:
(aa) to
another registered enterprise or registered domestic producer enjoying similar
incentives;
(bb) for reasons of proven technical obsolescence; or
(cc) for purposes of replacement to improve and/or expand the operations
of the registered enterprise.
(d) Tax Credit on Domestic Capital
Equipment. - A tax credit equivalent to one hundred percent (100%) of the value
of the national internal revenue taxes and customs duties that would have been
waived on the machinery, equipment and spare parts, had these items been
imported shall be given to the new and expanding registered enterprise which
purchases machinery, equipment and spare parts from a domestic manufacturer:
Provided, That (1) That the said equipment, machinery and spare parts are
reasonably needed and will be used exclusively by the registered enterprise in
the manufacture of its products, unless prior approval of the Board is secured
for the part-time utilization of said equipment in a non-registered activity to
maximize usage thereof; (2) that the equipment would have qualified for tax and
duty-free importation under paragraph (c) hereof; (3) that the approval of the
Board was obtained by the registered enterprise; and (4) that the purchase is
made within five (5) years from the date of effectivity of the Code. If the
registered enterprise sells, transfers or disposes of these machinery, equipment
and spare parts, the provisions in the preceding paragraph for such disposition
shall apply.
(e) Exemption from Contractor's Tax. - The registered
enterprise shall be exempt from the payment of contractor's tax, whether
national or local.
(f) Simplification of Customs Procedure. - Customs
procedures for the importation of equipment, spare parts, raw materials and
supplies, and exports of processed products by registered enterprises shall be
simplified by the Bureau of Customs.
(g) Unrestricted Use of Consigned
Equipment. - Provisions of existing laws notwithstanding, machinery, equipment
and spare part consigned to any registered enterprises shall not be subject to
restrictions as to period of use of such machinery, equipment and spare parts:
Provided, that the appropriate re-export bond is posted unless the importation
is otherwise covered under subsections (c) and (m) of this Article. Provided,
further, that such consigned equipment shall be for the exclusive use of the
registered enterprise.
If such equipment is sold, transferred or
otherwise disposed of by the registered enterprise the related provision of
Article 39 (c) (3) shall apply. Outward remittance of foreign exchange covering
the proceeds of such sale, transfer or disposition shall be allowed only upon
prior Central Bank approval.
(h) Employment of Foreign Nationals. -
Subject to the provisions of Section 29 of Commonwealth Act Number 613, as
amended, a registered 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 position of president, treasurer
and general manager or their equivalents may be retained by foreign nationals
beyond the period set forth herein.
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 Numbered 613, as amended, shall be permitted to enter and
reside in the Philippines during the period of employment of such foreign
nationals.
A registered 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.
(i) Exemption
on Breeding Stocks and Genetic Materials. - The importation of breeding stocks
and genetic materials within ten (10) years from the date of registration or
commercial operation of the enterprise shall be exempt from all taxes and
duties: Provided, That such breeding stocks and genetic materials are (1) not
locally available and/or obtainable locally in comparable quality at reasonable
prices; (2) reasonably needed in the registered activity; and (3) approved by
the Board.
(j) Tax Credit on Domestic Breeding Stocks and Genetic
Materials. - A tax credit equivalent to one hundred percent (100%) of the value
of national internal revenue taxes and customs duties that would have been
waived on the breeding stocks and genetic materials had these items been
imported shall be given to the registered enterprise which purchases breeding
stocks and generic materials from a domestic producer: Provided, 1) That said
breeding stocks and generic materials would have qualified for tax and duty free
importation under the preceding paragraph; 2) that the breeding stocks and
genetic materials are reasonably needed in the registered activity; 3) that the
approval of the board has been obtained by the registered enterprise; and 4)
that the purchase is made within ten (10) years from date of registration or
commercial operation of the registered enterprise.
(k) Tax Credit for
Taxes and Duties on Raw Materials. - Every registered enterprise shall enjoy a
tax credit equivalent to the National Internal Revenue taxes and Customs duties
paid on the supplies, raw materials and semi-manufactured products used in the
manufacture, processing or production of its export products and forming parts
thereof: Provided, however, that the taxes on the supplies, raw materials and
semi- manufactured products domestically purchased are indicated as a separate
item in the sales invoice.
Nothing herein shall be construed as to
preclude the Board from setting a fixed percentage of export sales as the
approximate tax credit for taxes and duties of raw materials based on an average
or standard usage for such materials in the industry.
(l) Access to
Bonded Manufacturing/Trading Warehouse System. - Registered export oriented
enterprises shall have access to the utilization of the bonded warehousing
system in all areas required by the project subject to such guidelines as may be
issued by the Board upon prior consultation with the Bureau of Customs.
(m) Exemption from Taxes and Duties on imported Spare Parts. -
importation of required supplies and spare parts for consigned equipment or
those imported tax and duty free by a registered enterprise with a bonded
manufacturing warehouse shall be exempt from customs duties and national
internal revenue taxes payable thereon, Provided, However, That at least seventy
percent (70%) of production is exported; Provided, further, That such spare
parts and supplies are not locally available at reasonable prices, sufficient
quantity and comparable quality; Provided, finally, That all such spare parts
and supplies shall be used only in the bonded manufacturing warehouse of the
registered enterprise under such requirements as the Bureau of Customs may
impose.
(n) Exemption from Wharfage Dues and any Export Tax, Duty,
Impost and Fee. - The provisions of law to the contrary notwithstanding, exports
by a registered enterprise of its non- traditional export products shall be
exempted of its non-traditional export products shall be exempted from any
wharfage dues, and any export tax, duty, impost and fee.
TITLE IV
INCENTIVES TO LESS-DEVELOPED-AREA REGISTERED ENTERPRISE
ARTICLE
40. A registered enterprise regardless of nationality located in a
less-developed-area included in the list prepared by the Board of Investments
after consultation with the National Economic & Development Authority and
other appropriate government agencies, taking into consideration the following
criteria: low per capita gross domestic product; low level of investments; high
rate of unemployment and low level of infrastructure development including its
accessibility to developed urban centers, shall be entitled to the following
incentives in addition to those provided in the preceding article:
(a)
Pioneer incentives. - An enterprise in a less-developed-area registered with the
Board under Book I of this Code, whether proposed, or an expansion of an
existing venture, shall be entitled to the incentives provided for a pioneer
registered enterprise under its law of registration.
(b) Incentives for
necessary and Major Infrastructure and Public Utilities. - Registered enterprise
establishing their production, processing or manufacturing plants in an area
that the Board designates as necessary for the proper dispersal of industry or
in area which the Board finds deficient in infrastructure, public utilities,
such as irrigation, drainage or other similar waterworks infrastructure may
deduct from taxable income an amount equivalent to one hundred percent (100%) of
necessary and major infrastructure works it may have undertaken with the prior
approval of the Board in consultation with other government agencies concerned;
Provided, That the title to all such infrastructure
works shall upon
completion, be transferred to the Philippine Government: Provided, further, That
any amount not deducted for a particular year may be carried over for deduction
for subsequent years not exceeding ten (10) years from commercial operation.
TITLE V
GENERAL PROVISIONS
ARTICLE 41. Power of the
President to Rationalize Incentives. - The President may, upon recommendation of
the Board and in the interest of national development, rationalize the
incentives scheme herein provided; extend the period of availment of incentives
or increase rates of tax exemption of any project whose viability or
profitability require such modification.
ARTICLE 42. Refund and
Penalties. - In case of cancellation of the certificate granted under this Code,
the Board may, in appropriate cases, require the refund of incentives availed of
and impose corresponding fines and penalties.
ARTICLE 43. Benefits of
Multiple Area Enterprises. - When a registered enterprise engages in activities
or endeavors that have not been declared preferred areas of investments, the
benefits and incentives accruing under this Code to registered enterprises and
investors therein shall be limited to the portion of the activities of such
registered enterprise as is a preferred area of investment.
BOOK II
FOREIGN INVESTMENTS WITHOUT INCENTIVES
Book II of the Omnibus
Investments Code of 1987 has been repealed by the Foreign Investment Act of 1991
(R.A. 7042)
BOOK III
?NCENTIVES TO MULTINATIonAL COMPANIES
ESTABLISHING REGIonAL OR AREA HEADQUARTERS AND REGIonAL OPERATING HEADQUARTERS
IN THE PHILIPPINES?
Definition of Terms. Purpose of this Act, the term:
(1) Multinational Company shall mean a foreign company or a group of
foreign companies with business establishments in two or more countries:
(2) Regional or Area Headquarters (RHQ) shall mean an office whose
purpose is to act as an administrative branch of a multinational company engaged
in international trade which principally serves as a supervision, communication
and coordination center for its subsidiaries, branches or affiliates in the
Asia-Pacific Region and other foreign markets and which does not earn or derive
income in the Philippines: and
(3) Regional Operating Headquarters
(ROHQ) shall mean a foreign business entity which is allowed to derive income in
the Philippines by performing qualifying services to its affiliates,
subsidiaries or branches in the Philippines, in the Asia-Pacific Region and in
other foreign markets.
CHAPTER I
LICENSING OF REGIonAL OR AREA
HEADQUARTERS
ARTICLE 58. Qualifications of Regional of Area
Headquarters. - Any foreign business entity formed, organized and existing under
any laws other than those of the Philippines whose purpose, as expressed in its
organizational documents or by resolution of its Board of Directors or its
equivalent, is to supervise, superintend, inspect or coordinate, its own
affiliates, subsidiaries, or branches in the Asia-Pacific Region may establish a
regional or area headquarters in the Philippines, after securing a license
therefore from the Securities and Exchange Commission, upon the favorable
recommendation of the Board of Investments.
The Securities and Exchange
Commission shall, within thirty (30) days from the effectivity of this Code,
issue the implementing rules and regulations. The following minimum requirements
shall, however, be complied with by the said foreign entity.
(a) A
certification from the Philippine Consulate/Embassy or a duly authenticated
certification from the Department of Trade and Industry or its equivalent in the
foreign firm's home country that said foreign firm is an entity engaged in
international trade with affiliates, subsidiaries or branch offices in the
Asia-Pacific Region and other foreign markets.
(b) A duly authenticated
certification from the principal officer of the foreign entity to the effect
that the said foreign entity has been authorized by its Board of Directors or
governing body establish its regional or area headquarters in the Philippines,
specifying that:
1. The activities of the regional headquarters or area
headquarters shall be limited to acting as a supervisory, communications and
coordinating center for its subsidiaries, affiliates and branches in the region;
2. The regional or area headquarters will not derive any income from
sources within the Philippines and will not participate in any manner in the
management of any subsidiary or branch office it might have in the Philippines
nor shall it solicit or market goods and services whether on behalf of its
mother company or its branches, affiliates subsidiaries or any other company;
and
3. The regional or area headquarters shall notify the Board of
Investments and the Securities and Exchange Commission of any decision to close
down or suspend operations of its headquarters at least fifteen (15) days before
the same is effected.
(c) Any undertaking that the multinational company
will remit into the country such amount as may be necessary to cover its
operations in the Philippines but which amount will not be less than Fifty
thousand United States dollars or its equivalent in other foreign currencies
annually. Within thirty (30) days from receipt of Certificate of Registration
from the Securities and Exchange Commission, the multinational company will
submit to the Securities and Exchange Commission a certificate of inward
remittance from a local bank showing that it has remitted to the Philippines the
amount of at least Fifty thousand United States dollars or its equivalent in
other foreign currencies and converted the same to Philippine currency.
Annually, within thirty (30) days from the anniversary date of the multinational
company's registration as a regional or area headquarters with the Securities
and Exchange Commission, it will submit proof to the Securities and Exchange
Commission of inward remittance amounting to at least Fifty thousand United
States dollars or its equivalent in other foreign currencies during the past
year.
(d) Any violation by the regional or area headquarters of a
multinational company of any of the provisions of this Code, or its implementing
rules and regulations, or other terms and
conditions of its
registration, or any provision of existing laws, shall constitute a sufficient
cause for the cancellation of its license or registration.
CHAPTER II
Licensing of Regional Operating Headquarters
ARTICLE 59.
Qualification of Regional Operating Headquarters (ROHQs). ?Any foreign business
entity formed, organized and existing under any laws other than those of the
Philippines to service its own affiliates, subsidiaries or branches in the
Philippines, in the Asia-Pacific Regional and other foreign markets. ROHQs will
be allowed to derive income by performing the qualifying services enumerated
under paragraph (b) 1 hereunder. ROHQs of non-banking and non-financial
institutions are required to secure a license from the Securities and Exchange
Commission, upon the favorable recommendation of the Board of Investments. ROHQ
of banking and financial institutions, on the other hand, are required to secure
licenses from the Securities and Exchange Commission and the Bangko Sentral ng
Pilipinas, upon the favorable recommendation of the Board of Investments.
The Securities and Exchange Commission and the Bangko Sentral ng
Pilipinas shall, within thirty (30) days from the effectivity of this Code,
issue the implementing rules and regulations.
?he following minimum
requirements shall be complied with by the said foreign entity:
(a) A
certification from the Philippine Consulate/Embassy, or a duly authenticated
certification from the Department of Trade and Industry or its equivalent in the
foreign firm? home country that said foreign firm is an entity engaged in
international trade with affiliates, subsidiaries or branch offices in the
Asia-Pacific Region and other foreign markets.
(b) A duly authenticate
certification from the principal officer of the foreign entity to the effect
that the said foreign entity has been authorized by its Board of Directors of
governing body to establish its regional operating headquarters in the
Philippines, specifying that:
(1) The regional operating headquarters
may engage in any of the following qualifying services:
?General
administration and planning;
?Business planning and coordination;
?Sourcing/procurement of raw materials and components;
?Corporate finance advisory services
?Marketing control and
sales promotion
?Training and personnel management
?Logistics
services
?Research and development services, and product development
?Technical support and maintenance
?Data processing and
communications; and
?Business development
ROHQs are prohibited
from offering qualifying services to entities other than their affiliates,
branches or subsidiaries, as declared in their registration with the Securities
and Exchange Commission nor shall they be allowed to directly and indirectly
solicit or market goods and services whether on behalf of their mother company,
branches, affiliates, subsidiaries or any other company.
(2) The
regional operating headquarters shall notify the Board of Investments, the
Securities and Exchange Commission and the Bangko Sentral ng Pilipinas, as the
case maybe, of any decision to close down or suspend operations of its
headquarters at least fifteen (15) days before the same is effected.
(c)
An undertaking that the multinational company will initially remit into the
country such amount as may be necessary to cover its operations in the
Philippines but which amount will not be less than Two Hundred Thousand States
Dollars ($200,000.00) or its equivalent in other foreign currencies and
converted the same to Philippine currency.
Within thirty (30) days from
receipt of certificate of registration, the multinational company will submit to
the Securities and Exchange Commission a certificate of inward remittance from a
local bank showing that it has remitted to the Philippines the amount of at
least Two Hundred Thousand United States Dollars ($200,000.00) or its equivalent
in other foreign currencies and converted the same to Philippine currency.
(d) Any violation by the regional operating headquarters of a
multinational company of the provisions of this code, or its implementing rules
and regulations, or other terms and condition of its registration, or any
provisions of existing laws, shall constitute a sufficient cause for the
cancellation of its license or registration.
Chapter III
Incentives to Expatriates
ARTICLE 60. Multiple Entry Visa.
?Foreign personnel of regional or area headquarters and regional operating
headquarters of multinational companies, their respective spouses and unmarried
children under twenty one (21) years of age, if accompanying them or if
following to join them after their admission into the Philippines as
non-immigrant shall be issued a multiple entry special visa within seventy two
hours upon submission of all required documents and which shall be valid for a
period of three (3) years to enter the Philippines; Provided, That a responsible
officer of the applicant company submits a duly authenticated certificate to the
effect that the person who seeks entry into the Philippines is an executive of
the applicant company and will work exclusively for applicant? regional or area
headquarters which is duly licensed to operate in the Philippines and that he
will receive a salary that will be paid by the headquarters in the Philippines
an amount equivalent to at least twelve thousand United States dollar
($12,000.00) or the equivalent in other foreign currencies per annum.
The admission and stay shall be coterminus with the validity of the
multiple entry special visa. The stay, however, is extendible to three years
upon submission to the Bureau of Immigration of a sworn certification by a
responsible officer of the regional or area headquarters or regional operating
headquarters; that its license to operate remains valid and subsisting and that
the regional or area headquarters has withheld tax due on compensation and the
same has been to the Bureau of Internal Revenue.
Non-immigrants who have
been admitted under the multiple entry special visa, as well as their respective
spouses and independents, shall be exempt from; the payment of all fees under
the immigration and alien registration laws; securing alien certificates of
registration; and obtaining immigration clearance certificates, and all types of
clearance required by the government department or agency except that upon final
departure from the Philippines the employer of the said non-immigrants shall so
advise in writing the Bureau of Immigration at least (5) working days prior to
the non-immigrant? departure, and the finally departing non-immigrant employee
shall be required to submit to the said office a tax clearance from the Bureau
of Internal Revenue.
ARTICLE 61. Witholding Tax of 15% on Compensation
Income. - Aliens employed by the regional or area headquarters and regional
operating headquarters of multinational companies
shall be subject for
each taxable year upon their gross income received as salaries, wages,
annuities, compensations, remuneration and emolument to tax equal to fifteen
percentum (15%) of such gross income. The same tax treatment is applicable to
Filipinos employed and occupying the positions as those aliens employed by the
multinational companies. Provided, That said Filipinos shall have the option to
be taxed at either 15% of gross income or at the regular tax rate on their
taxable income in accordance with the National Internal Revenue Code as amended
by Republic Act No, 8424.
ARTICLE 62. Tax and Duty Free importation. ?An
Alien executive of the regional or area headquarters and regional operating
headquarters of a multinational company shall enjoy tax and duty free
importation of personal and household effects as provided for under Section
105(h) of the tariff and Customs Code, as amended, and Section 109(I) of the
national Internal Revenue Code, as amended: Provided, that the personal and
household effects shall arrive in the Philippines within ninety (90) days before
or after conversion of the alien executive? admission category to multiple entry
visa issued under this act.
ARTICLE 63. Travel Tax Exempt. ?Personnel of
regional or area headquarters and regional operating headquarters of
multinational companies and the dependent of such foreign personnel if joining
them during the period of their assignment in the Philippines, as certified by
the Board of Investments shall be exempted from the payment of travel tax
imposed under section 1 of Presidential Decree No. 1183, as amended.
CHAPTER IV
INCENTIVES TO REGIonAL OR AREA HEADQUARTERS
AND REGIonAL OPERATING HEADQUARTERS
ARTICLE 64. Corporate Income
tax incentive to Regional or Area Headquarters and Regional Operating
Headquarters. - Regional or area headquarters established in the Philippines by
Multinational Companies and which headquarters do not earn or derive income from
the Philippines and which act as supervisory, communications and coordinating
centers for their affiliates, subsidiaries or branches in the Asia-Pacific
Region and other foreign markets shall not be subject to income tax. Regional
Operating headquarters shall be subject to a tax rate of ten percent (10%) in
their taxable income as provided for under Internal Revenue Code, as amended by
Republic Act No. 8424: Provided: That any income derived from the Philippine
sources by the ROHQ when remitted to the parent company shall be subject to the
tax on branch profit remittances as provided for the section 28(a)(5) to the
National Internal Revenue Code.
ARTICLE 65. Value-Added Tax. ?The
Regional or Area Headquarters established in the Phlippines by Multinational
companies shall be exempted to the value added tax. In addition, the sale or
lease of goods and property and the rendition of services to Regional or Area
headquarters shall be subject to zero percent (0%) VAT rate as provided for in
the National Internal Revenue Code, as amended.
Regional operating
headquarters shall be subject to ten percent (10%) value added tax as provided
for under the national Internal Revenue Code, as amended.
ARTICLE 66.
Exemption from All Kinds of Local Taxes, Fees or Charges. - The regional or area
headquarters and regional operating headquarters of multinational companies
shall be exempted from all kinds of local taxes, fees or charges imposed by a
local government unit except real property tax on land improvements and
equipment.
ARTICLE 67. Tax and Duty Free importation of Training
Materials and Equipment; importation of Motor Vehicles ?Regional or area
headquarters and regional operating headquarters shall enjoy tax and duty free
importation of equipment and materials for training and conferences which are
needed and used solely for their functions as regional or area headquarters or
regional operating headquarters and which are not locally available subject to
the prior approval of the Board of Investments.
The sale or disposition
of equipment within two (2) years after importation, entered tax and duty free,
shall require prior approval of the Board of Investments and prior payment of
applicable taxes and duties waived in favor of RHQ/ROHQ.
Regional or
area headquarters and regional operating headquarters shall be entitled to the
importation of new motor vehicles subject to the payment of the corresponding
taxes and duties.
BOOK IV
INCENTIVES TO MULTINATIonAL COMPANIES
ESTABLISHING REGIonAL WAREHOUSES TO SUPPLY SPARE PARTS, COMPONENTS,
SEMI-FINISHED PRODUCTS AND RAW MATERIALS TO THE ASIA-PACIFIC REGIonAL AND OTHER
FOREIGN MARKETS
ARTICLE 68. Qualifications. - A multinational company
organized and existing under any laws other than those of the Philippines which
is engaged in international trade and supplies spare parts, components,
semi-finished products and raw materials to its distributors or markets in the
Asia-Pacific area and other foreign areas and which has established or will
simultaneously establish a regional or area headquarters and/or regional
operating headquarters in the Philippines in accordance with the provisions of
Book III of this Code and the rules and regulations implementing the same may
also establish regional warehouse or warehouses in ecozones in the Philippine
Economic Zone Authority (PEZA). With respect to regional warehouse located or
will locate in ecozones with special charters, such license shall be secured
from the concerned ecozone authorities. For existing regional warehouses, said
license shall be secured from the Board of Investments unless they choose to
relocate inside ecozones; Provided, that:
(1) The activities of the
regional warehouse shall be limited to serving as a supply depot for the
storage, deposit, safekeeping of its spare parts, components, semi-finished
products and raw materials including the packing, covering, putting up, marking,
labeling and cutting or altering to customer? specification, mounting and/or
packaging into kits or marketable lots thereof, to fill up transactions and
sales made by its head offices or parent companies and to serving as a storage
or warehouse of goods purchased locally by the home office of the multinational
for export abroad. The regional warehouse shall not directly engage in trade nor
directly solicit business, promote any sale, nor enter into any contract for the
sale or disposition of goods in the Philippines: Provided, That a regional
warehouse may be allowed to withdraw imported goods from said warehouse/s for
delivery to an authorized distributor in the Philippines: Provided, however,
That the corresponding taxes, customs duties and charges under the Tariff and
Customs Code have been paid by the headquarters of the said multinational upon
arrival of such goods: Provided, further, That the delivery of said goods to the
aforesaid distributor in the Philippines shall be treated as a sale made by the
headquarters rather than that of its head office, and shall be reflected in a
separated book of accounts, any representation as to who is the seller to the
contrary notwithstanding: Provided, furthermore, That the aforementioned sale
shall be governed by the provisions on value-added tax in accordance with the
National Internal Revenue Code, as amended by Republic Act No. 8424: Provided,
finally, That the income from the aforementioned sale to said headquarters from
sources within the Philippines and shall be subject to the corporate income tax
of a resident foreign corporation under the National Internal Revenue Code, as
amended, the provision of any law to the contrary notwithstanding.
(2)
The personnel of a regional warehouse will not participate in any manner in the
management of any subsidiary, affiliate or branch office it might have in the
Philippines other than the activities allowed under this Act.
(3) The
personnel of a regional or area headquarters or regional operating headquarters
shall be responsible for the operation of the regional warehouse subject to the
provision of this Code.
(4) The multinational company shall pay the
Board of Investments, the PEZA or concerned ecozone authorities, as the case may
be, and the appropriate Collector of Customs concerned the corresponding license
fees and storage fees to be determined by said offices.
(5) An
application for the establishment of a regional warehouse located outside an
ecozone shall be made in writing to the Board of Investments, to the PEZA, or to
concerned ecozone authorities in the case of regional warehouse located in
ecozones. The application shall describe the premises, the located and capacity
of the regional warehouse and the purpose for which the building is to be used.
The jurisdiction and responsibility of supervising the regional
warehouses located outside ecozones shall be vested on the Bureau of Customs,
and the Board of Investments, or the PEZA or concerned ecozone authorities for
warehouse within ecozones.
The Board of Investments, the PEZA or
concerned ecozone authorities, in consultation with the Regional Director of
Customs of the district where the warehouse will be situated shall cause an
examination of the premises to be made and if found satisfactory, it may
authorize its establishment without complying with the requirements of any other
government body, subject to the following conditions:
(1) That the
articles to be stored in the warehouse are spare parts, components,
semi-finished products and raw materials of the multinational company operator
for distribution and supply to its Asia-Pacific and other foreign markets
including packaging, coverings, brands, label and warehouse equipment as
provided in Article 69 (a) hereof;
(2) That the entry or importation,
storage or reexport of the goods destined for or to be stored in the regional
warehouse will not involve any dollar from Philippine sources;
(3) That
they are of such character as to be readily identifiable for reexport; and in
case of local distribution they shall be subject to Article 68(1), Article 69
paragraph (b) and the guidelines implementing Book IV of this Code;
(4)
That it shall file an ordinary warehouse bond in an amount equal to one hundred
percent (100%) of the ascertained customs duties on the articles imported
without prejudice to its filing a general warehousing bond in lieu of the
ordinary warehousing bond;
(5) The percentage of annual allowable
withdrawal from warehouses located outside ecozone for domestic use shall be
subject to the approval of the Board of Investments, or of the PEZA or concerned
ecozone of their jurisdiction; Provide, however, That in the case of existing
warehouse, in no case shall their withdrawals exceed thirty percent (30%) of the
value of goods they have brought in for any given year and the payment of the
corresponding taxes and duties shall have been made upon the arrival of such
goods imported; Provide, further, That the PEZA or concerned ecozone authorities
may allow withdrawal exceeding thirty percent (30%) of the value of goods under
such terms and conditions the PEZA or concerned ecozone authorities may impose.
Art. 69. Tax Treatment of imported Articles in the Regional Warehouse.
?(a) Tax Incentives for Qualified Goods Destined for Reexportation to the
Asia-Pacific and Other Foreign Markets. ?
Except as otherwise provided in
this Code, imported spare parts, components, semi-finished products, raw
materials and other items including any packages, coverings, brands and labels
and warehouses equipment as may be allowed by the Board of Investments, the PEZA
or concerned ecozone authorized, as the case may be, for use exclusively on the
goods stored, except those prohibited by law, brought into the regional
warehouse from abroad to be kept, stored and/or deposited or used therein
reported directly therefrom under the supervision of the Collector of Customs
concerned for distribution to its Asia-Pacific and other foreign markets in
accordance with the guidelines implementing Book IV of this Code including to a
bonded manufacturing warehouse in the Philippines and eventually reexported
shall not be subject to customs duty, internal revenue tax, export tax nor to
local taxes, the provisions of law to the contrary notwithstanding.
(b)
Payment of Applicable Duties and Taxes on Qualified Goods Subject to Laws and
Regulations Covering imported Merchandise if destined for the Local Market. ?Any
spare parts, components, semi-finished products, raw materials and other items
sent, delivered, released or taken from the regional warehouse to the local
market in accordance with the guidelines implementing Book IV of this Code shall
be subject to the payment of income taxes, customs duties, taxes and other
charges provided for under Section 68 hereof and for which purpose, the proper
commercial invoice of the head offices or parent companies shall be submitted to
the Collector of Customs concerned; and shall be subject to laws and regulations
governing imported merchandise; Provided, That in case any of the foregoing
items are sold, batered, hired or used for purposes other than they were
intended for without prior compliance with the guidelines implementing Book IV
of this Code and without prior payment of the duty, tax or other charges which
would have been due and payable at the time of entry if the articles had been
entered without the benefit of this Order, shall be subject to forfeiture and
the importation shall constitute a fraudulent practice against customs revenue
punishable under Section 3602, as amended, of the Tariff and Customs Code of the
Philippines: Provided, further, That a sale pursuant to a judicial order shall
not be subject to the preceding proviso without prejudice to the payment of
duties, taxes and other charges.
Art. 70. Exemption from the Maximum
Storage Period Under the Tariff and Customs Code; Period of Storage in the
Regional Warehouse. - The provision of the law in Section 1908 of Tariff and
Customs Code of the Philippines, as amended, to the contrary notwithstanding,
articles duly entered for warehousing may remain in the regional warehouses for
period of two (2) years from the time of their transfer to the regional
warehouse, which period may be extended with the approval of the Board of
Investments for an additional period of one (1) year upon payment of the
corresponding storage fee on the unexported articles, as provided for under
Article 68 (4) for each extension until they are reexported in accordance with
the guidelines implementing Book IV of this Code. Any articles withdrawn,
released or removed contrary to the provisions of said guidelines shall be
forfeited pursuant to the provisions of Article 69, paragraph (b) hereof.
Art 71. Rules and Regulations on the Jurisdiction, Operation and Control
over Qualified Goods in Regional Warehouse. The Board of Investments, the PEZA,
concerned ecozone authorities and the Bureau of Customs shall jointly issue
special rules and regulations on the receiving, handling, custody, entry,
examination, classifications, delivery, storage, warehousing, manipulation and
packaging, release for reexportation or for importation and delivery to a
Philippine distributor and for the safekeeping, recording, inventory and
liquidation of said qualified goods, any existing law notwithstanding. Such
rules and regulations shall be formulated in consultation with the
applicants/operators of regional warehouse.
ART. 72. Cancellation of
License or Registration. ?Any willful violation by the regional or area
headquarters or regional operating headquarters of a multinational company which
has established a regional warehouse or warehouses contrary to or in violation
of the provisions of existing laws and the implementing guidelines of Book IV of
this Code shall constitute a sufficient cause for the cancellation of its
license or registration in addition to the penalties herein above provided in
Article 69, paragraph (b) hereof.
The Board, the PEZA or concerned
ecozone authorities, as the case may be, shall have the authority to impose such
fines in amounts that are just and reasonable in cases of late submission or
noncompliance on the part of registered enterprises, with reporting and other
requirements under this Code and its implementing rules and regulations.
ART. 73. Implementing Rules and Regulations. ?To implement the
provisions of Books III and IV of this Code, the Department of Trade and
Industry, in coordination with the Department of Foreign Affairs, the Board of
Investments, the Philippines Economic Zone Authority, the ecozone authorities
with special charters, the Securities and Exchange Commission, the Bureau of
Internal Revenue, the Bureau of Customs, Bangko Sentral ng Pilipinas, Philippine
Tourism Authority, and the Bureau of Immigration shall jointly promulgate such
rules and regulations which shall take effect thirty (30) days after their
publication in at least two (2) national newpapers of general circulation in the
Philippines.
BOOK V
SPECIAL INVESTORS RESIDENT VISA
ARTICLE 74. Qualifications. - Any alien who possesses the following
qualifications may be issued a Special Investors Resident Visa.
1. He
had not been convicted of a crime involving moral turpitude;
2. He is
not afflicted with any loathsome, dangerous or contagious disease;
3. He
has not been institutionalized for any mental disorder or disability;
4.
He is willing and able to invest the amount of at least US$75,000.00 in the
Philippines; Provided, That the foregoing invested amount shall be lowered to
US$50,000 for aliens availing of Executive Order No. 63 and Executive Order No.
1037 subject to the conditions imposed by said legislations: Provided, further,
That for purposes of compliance with this particular condition, the
alien-applicant should prove that he has remitted such amount in acceptable
foreign currency to the Philippines.
ARTICLE 75. Reportorial
Requirements. - As a holder of the Special Investors Resident 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
for the purpose, to prove that he has maintained his investment in the country.
Should said alien withdraw his said investment from the Philippines, then the
Special Investors Resident Visa issued to him will automatically expire.
BOOK VI
INCENTIVES OF EXPORT PROCESSING ZONE ENTERPRISES
ARTICLE 76. Employment of Foreign Nationals. - The provisions of law to
the contrary notwithstanding, Export Processing Zone Authority, hereinafter
referred to as the "Authority" may authorize an alien or an association,
partnership, corporation or any other form of business organization formed,
organized, chartered or existing under any law other than those of the
Philippines, or which is not a Philippine national, or the working capital of
which is fully owned or controlled by aliens to do business or engage in an
industry inside the export processing zone.
Subject to the provisions of
Section 29 of Commonwealth Act No. 613, as amended, a zone registered 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 Authority: Provided,
however, That when the majority of the capital stock of a zone registered
enterprise is owned by foreign nationals, the positions of president, treasurer,
and general manager or their equivalents may be retained by foreign nationals
beyond the period set forth herein.
Foreign nationals employed within
the purview of this Book, their spouses, and unmarried children under twenty-one
years of age who are not excluded by Sec. 29 of C.A. No. 613, as amended, shall
be permitted to enter and reside in the Philippines during the period of
employment of such foreign nationals. They shall be issued a multiple entry
visa, valid for a period of three years, to enter and leave the Philippines
without further documentary requirements other than valid passports or other
travel documents in the nature of passports. The validity of the multiple entry
special visa shall be extendible yearly. Foreign Nationals who have been issued
multiple entry special visas under this provision, as well as their respective
spouses and dependents, shall be exempt from obtaining alien certificates of
registration and emigration clearance certificates and all types of clearances
required by any government department or agency. For this purpose, the
Commission on Immigration and Deportation and the Authority shall jointly issue
the necessary implementing rules and regulations.
A registered
enterprise shall train Filipinos as understudies of foreign nationals in
administrative, supervisory and technical skills and shall submit annual reports
of such training to the Board.
ARTICLE 77. Tax Treatment of Merchandise
in the Zone. ?
(1) Except as otherwise provided in this Code, foreign and
domestic merchandise, raw materials, supplies, articles, equipment, machineries,
spare parts and wares of every description, except those prohibited by law,
brought into the zone to be sold, stored, broken up, repacked, assembled,
installed, sorted, cleaned, graded, or otherwise processed, manipulated,
manufactured, mixed with foreign or domestic merchandise whether directly or
indirectly related in such activity, shall not be subject to customs and
internal revenue laws and regulations nor to local tax ordinances, the
provisions of law to the contrary notwithstanding.
(2) Merchandise
purchased by a registered zone enterprise from the customs territory and
subsequently brought into the zone, shall be considered as export sales and the
exporter thereof shall be entitled to the benefits allowed by law for such
transaction.
(3) Domestic merchandise from the zone to the customs
territory shall, whether or not combined with or made part of other articles
likewise of local origin or manufactured in the Philippines while in the export
processing zone, be subject to internal revenue laws of the Philippines as
domestic goods sold, transferred or disposed of for local consumption.
(4) Merchandise sent from the export processing zone to the customs
territory shall, whether or not combined with or made part of other articles
while in the zone, be subject to rules and regulations governing imported
merchandise. The duties and taxes shall be assessed on the value of imported
materials (except when the final product is exempt) and the internal revenue
taxes on the values added.
(5) Domestic merchandise on which all
internal revenue taxes have been paid, if subject thereto, and foreign
merchandise previously imported on which duty or tax has been paid, or which
have been admitted free of duty and tax, may be taken into the zone from the
customs territory of the Philippines and be brought back thereto free of quotas,
duty or tax.
(6) Subject to such regulations respecting identity and
safeguarding of the revenue as the Authority may deem necessary when the
identity of an article entered into the export processing zone under the
immediately preceding paragraph has been lost, such article when removed from
the zone and taken to the customs territory shall be treated as foreign
merchandise entering the country for the first time, under the provisions of the
Tariff and Customs Code.
(7) Articles produced or manufactured in the
zone and exported therefrom shall, on subsequent importation into the customs
territory, be subject to the import laws applicable to like articles
manufactured in a foreign country;
(8) Unless the contrary is shown,
merchandise taken out of the zone shall be considered for tax purposes to have
been sent to customs territory.
ARTICLE 78. Additional Incentives. - A
zone registered enterprise shall also enjoy all the incentive benefits provided
in Article 39 hereof under the same terms and conditions stated therein. In
addition zone registered enterprises shall also be entitled to the following:
(a) Exemption from Local Taxes and Licenses. - Notwithstanding the
provisions of law to the contrary, zone registered enterprises shall, to the
extent of their construction, operation or production inside the zone be exempt
from the payment of any and all local government imposts, fees, licenses or
taxes except real estate taxes which shall be collected by the
Province/City/Municipality responsible for the collection thereof under the
provisions of the Real Property Tax Code: Provided, That machineries owned by
zone registered enterprises which are actually installed and operated in the
Zone for manufacturing, processing or for industrial purposes shall not be
subject to the payment of real estate taxes for the first three (3) years of
operation of such machineries: Provided, further, That fifty percent (50%) of
the proceeds of the real estate taxes collected from all real properties located
in the Zone and such other areas owned or administered by the Authority shall be
remitted to the Authority by the province/city/municipality responsible for the
collection of such taxes under the provisions of the Real Property Tax Code. All
real estate taxes accruing to the Authority as herein provided shall be expanded
for such community facilities, utilities and/or services as the Authority may
determine.
(b) Production equipment or machineries, not attached to real
estate, used directly or indirectly, in the production, assembly or manufacture
of the registered product of the zone registered enterprise shall be exempt from
real property taxes.
FINAL PROVISIONS
ARTICLE 79.
Interpretation. - All doubts concerning the benefits and incentives granted
enterprises and investors by this Code shall be resolved in favor of investors
and registered enterprises.
ARTICLE 80. Vested Rights. - Existing
registered enterprises which are enjoying the incentives under the laws repealed
by Books One and Six of this Code shall continue to enjoy such incentives for
the period therein stated: Provided, however, That firms which made investments
in new or expansion projects approved or registered by the Board or the
Authority on or after December 1, 1986 but before the effectivity of this Code
may opt to be governed by the provisions of this Code.
ARTICLE 81.
Confidentiality of Applications. - All applications and their supporting
documents filed under this Code shall be confidential and shall not be disclosed
to any person, except with the consent of the application or on orders of a
court of competent jurisdiction.
ARTICLE 82. Judicial Relief . - All
orders or decisions of the Board in cases involving the provisions of this Code
shall immediately be executory. No appeal from the order or decision of the
Board by the party adversely affected shall stay such order or decision:
Provided, That all appeals shall be filed directly with the Supreme Court within
thirty (30) days from receipt of the order or decision.
ARTICLE 83.
Effectivity of Implementing Rules and Regulations. - The Board shall promulgate
rules and regulations to implement the intent and provisions of this Code and
shall have the authority to impose such fines in amounts that are just and
reasonable in cases of late submission or non-compliance on the part of
registered enterprises, with reporting and other requirements under this Code
and its implementing rules and regulations. Such rules and regulations shall
take effect fifteen (15) days following its publication in newspaper of general
circulation in the Philippines.
ARTICLE 84. Separability Clause. - The
provisions of this Code are hereby declared to be separable and, in the event
any such provisions is declared unconstitutional, the other provisions which are
not affected thereby shall remain in force and effect.
ARTICLE 85.
Repealing Clause. - The following provisions or laws are hereby repealed:
(1) Batas Pambansa 44
(2) Batas Pambansa 391 (1983)
(3)
Presidential Decree 218
(4) Presidential Decree 1419
(5)
Presidential Decree 1623, as amended
(6) Presidential Decree No. 1789
(1981)
(7) Presidential Decree 2032
(8) Executive Order 815
(9) Executive Order 1945 (1985)
All other laws, decrees,
executive orders, administrative orders, rules and regulations or parts thereof
which are inconsistent with the provisions of this Code are hereby repealed,
amended or modified accordingly.
ARTICLE 86. Effectivity. - This Code
shall take effect immediately upon approval.
Done in the City of Manila,
this 17th day of July, in the year of Our Lord, nineteen hundred and
eighty-seven.
