TABLE OF CONTENTS

List Of Secretary
1
Department Of Tourism And Attached Agencies
3
Regional Director
4
Tourism Infrastructure And Enterprise Zone Authority Board of Directors
5
Tourism Promotion Board Of Directors
6
Duty Free Philippines Board Of Directors
8
Philippine Retirement Authority Board Of Directors
9
Nayong Filipino Foundation Board Of Directors
10
National Parks Development Board Of Directors
11
Intramuros Administration Board Of Directors
12
Philipinne Commission On Sports Scuba Diving Board Of Directors
13
REPUBLIC ACT NO. 9593 14
CHAPTER I. GENERAL PROVISIONS 14
Structure of the Department 19
Rationalization of Functions 26
Attached Agencies and Corporations 27
Control and Supervision of Areas with Overlapping Jurisdictions 28
Shared Responsibilities of National and Local Governments 29
Tourism Promotions Board 32
Tourism Promotions Funding 35
Tourism Enterprise Zones 37
Tourism Infrastructure and Enterprise Zone Authority 39
TEZ Administration 45
CHAPTER V. INCENTIVES 46
Incentives for TEZ Operators and Registered Tourism Enterprises 48
Tourism Enterprises Outside TEZs 51
CHAPTER VI. DUTY AND TAX-FREE MERCHANDISING SYSTEM FOR TOURISM
PURPOSES 53
CHAPTER VII. INCREASED TOURIST ACCESS 55
CHAPTER VIII. CREATING A CULTURE OF TOURISM 55
CHAPTER IX. MISCELLANEOUS PROVISIONS 57
Approved, 59
SIGNED 59

President of the Philippines 60

IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9593, OTHERWISE
KNOWN AS
THE TOURISM ACT OF 2009 61
RULE I. GENERAL PROVISIONS 61
CHAPTER I. The Department of Tourism 67
CHAPTER II. The Tourism Development Fund 92
CHAPTER III. Attached Agencies and Corporations 93 i) NPDC Executive Director
as Member; 95 j) NPF Executive Director as Member; 95 k) PCSSD Executive
Director as Member; and 95
CHAPTER I. The Tourism Promotions Board 96
CHAPTER II. The Tourism Board 98
CHAPTER III. The Chief Operating Officer 101
CHAPTER IV. Organization 102
CHAPTER V. Funding 103
CHAPTER I. The Tourism Infrastructure and Enterprise Zone Authority 105
CHAPTER II. The TIEZA Board 106
CHAPTER III. The Chief Operating Officer 110
CHAPTER IV. Funding 112
CHAPTER I. Designation of Tourism Enterprise Zones 114
CHAPTER II. Registration of Tourism Enterprises 116
CHAPTER III. TEZ Administration 117
RULE VI. TOURISM INCENTIVES 118 a) Income Tax Holiday 119 b) Gross Income
Taxation 120 e) Goods and Services 120 b) Special Investor’s Resident Visa
121 e) Lease and Ownership of Land 122
CHAPTER I. Mandate 124
CHAPTER II. Board of Directors 124
CHAPTER III. The Chief Operating Officer 128
CHAPTER IV. Capitalization and Remittance 129
CHAPTER V. Operations 130
CHAPTER VI. Tax and Duty Free Exemptions 132
CHAPTER I. Shared Responsibilities of National and Local Governments 133 a)
National Standard 135 b) Accreditation System 135
CHAPTER II. Control and Supervision of Areas with Overlapping Jurisdiction
138 b) Transfer of Control 138
CHAPTER III. Tourist Access 139
CHAPTER IV. Culture of Tourism 141 a) Department Secretary as Chairperson;
141 b) PTPB Chief Operating Officer as Member; 141 c) TIEZA Chief Operating
Officer as Member; 141 d) DFPC Chief Operating Officer as Member; 141 e) IA
Administrator as Member; 141 f) NPDC Executive Director as Member; 141 g)
NPF Executive Director as Member; 141 h) PRA General Manager as Member;
141 i) PCSSD Executive Director as Member; 141
RULE IX. TRANSITORY AND MISCELLANEOUS PROVISIONS 145
RULE X. FINAL PROVISIONS 148
JOSEPH H. DURANO Secretary 149
 LIST OF SECRETARIES OF TOURISM

Term
# Name Term Ended President
Began
1 Jose Aspiras May 11, February 25, Ferdinand
1973 1986 Marcos
2 February April 14, Corazon
Jose Antonio
26, 1989 Aquino
Gonzales
1986
April 15,
3 Narzalina Lim June 7, 1989
1989
4 Peter Garrucho June 8, January 8,
1989 1991
5 Rafael Alunan III January 9, February 16,
1991 1992
6 Narzalina Lim February September Fidel V. Ramos
17, 10,
1992 1992
7 Vicente Carlos September July 3, 1995
11, 1992
8 Eduardo Pilapil July 4, 1995 March 28,
1996
Act Evelyn B. Pantig March 29, April 7, 1996
1996
April 8, June 30,
9 Mina Gabor
1996 1998
10 Gemma Cruz- July 1, 1998 January 19, Joseph Ejercito
Araneta 2001 Estrada
11 Richard J. January 20, January 4, Gloria
Gordon 2001 2004 Macapagal
Arroyo
OIC Robert Dean January 5, February 25,
Barbers 2004 2004
12 Roberto February August 31,
Pagdanganan 26, 2004
2004
1
OIC Evelyn B. Pantig September November
1, 29,
2004 2004

13 Ace Durano November June 30,

30, 2004 2010
14 Alberto Lim June 30, August 12, Benigno S.
2010 2011 Aquino III
15 September June 30,
Ramon Jimenez
1, 2016
Jr.
2011
16 Wanda Tulfo Teo June 30, May 8, 2018 Rodrigo
2016 Duterte
17 Bernadette May 11, June 30,
Romulo-Puyat 2018 2022
18 Christina
June 30, Bongbong
Garcia-
2022 Marcos
Frasco

2
DEPARTMENT OF TOURISM ATTACHED AGENCIES

3
REGIONAL DIRECTOR

4
5
 DEPARTMENT OF
TOURISM ATTACHED AGENCIES
TOURISM INFRASTRUCTURE AND
ENTERPRISE
ZONE AUTHORITY

6
BOARD OF DIRECTORS

7
 TOURISM
PROMOTION
BOARD KEY
OFFICIALS

8
9
10
DUTY FREE PHILIPPINES

BOARD OF DIRECTORS

11
PHILIPPINE RETIREMENT AUTHORITY

BOARD OF DIRECTORS

NAYONG FILIPINO FOUNDATION

BOARD OF DIRECTORS

12
NATIONAL PARKS DEVELOPMENT

BOARD OF DIRECTORS

13
 INTRAMUROS
ADMINISTRATION

BOARD OF DIRECTORS

14
Philippine Commission on Sports
Scuba diving

15
BOARD OF DIRECTORS

REPUBLIC ACT NO. 9593

16
AN ACT DECLARING A NATIONAL POLICY FOR TOURISM AS AN ENGINE OF
INVESTMENT, EMPLOYMENT, GROWTH AND NATIONAL DEVELOPMENT, AND
STRENGTHENING THE DEPARTMENT OF TOURISM AND ITS ATTACHED AGENCIES
TO EFFECTIVELY AND EFFICIENTLY IMPLEMENT THAT POLICY, AND
APPROPRIATING FUNDS THEREFOR.

Be it enacted by the Senate and the House of Representatives of the Philippines

in Congress assembled:

CHAPTER I. GENERAL PROVISIONS

SECTION 1. Short Title.-This Act shall be known as “The Tourism Act of 2009.”

SECTION 2. Declaration of Policy. - The State declares tourism as an

indispensable element of the national economy and an industry of national
interest and importance, which must be harnessed as an engine of socio-
economic growth and cultural affirmation to generate investment, foreign
exchange, and employment, and to continue to mold an enhanced sense of
national pride for all Filipinos.

Towards this end, the State shall seek to:

a) Ensure the development of Philippine tourism that is for and by the

Filipino people, conserve and promote their heritage, national identity
and sense of unity;

b) Recognize sustainable tourism development as integral to the national

socio- economic development efforts to improve the quality of life of
the Filipino people, providing the appropriate attention and support for
the growth of this industry;

c) Promote a tourism industry that is ecologically sustainable,

responsible, participative, culturally sensitive, economically viable, and
ethically and socially equitable for local communities;

d) Create a favorable image of the Philippines within the international

community, thereby strengthening the country’s attraction as a
tourism destination and eventually paving the way for other benefits
that may result from a positive global view of the country;

e) Develop the country as a prime tourist hub in Asia, as well as a center

of world congresses and conventions, by promoting sustainable
tourism anchored principal on the country’s history, culture and natural
endowments, and ensuring the protection, preservation and promotion
of these resources; and

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 f) Encourage private sector participation and agri-tourism for countryside
development and preservation of rural life.

SECTION 3. Objectives. - Pursuant to the above declaration, the State shall

adopt the following objectives:

a) Develop a national tourism action plan and work for its adoption and
implementation by national and local governments;

b) Encourage activities and programs which promote tourism awareness,

preserve the country’s diverse cultures and heritage, and instill a
sense of history and a culture of tourism among the youth and the
populace;

c) All things being equal, grant preferential treatment to the employment

of Filipino nationals in tourism-related enterprises;

d) Provide full government assistance by way of competitive investment

incentives, long-term development fund, and other financing schemes
extended to tourism related investments;

e) Ensure that tourism development protects and promotes the general

well- being of the Filipino people, particularly in the area of investment,
to include the monitoring and prevention of any act of profiteering or
speculation to the detriment of local residents, as well as the
exploitation of women and children in tourism;

f) Encourage competition in the tourism industry and maximize

consumer choice by enhancing the continued viability of the retail
travel industry and independent tour operation industry;

g) Enhance the collection, analysis, and dissemination of data which

accurately measure the economic and social impact of tourism in the
country to facilitate planning in the public and private sectors;
h) Ensure the right of the people to a balanced and healthful ecology
through the promotion of activities geared towards environmental
protection, conservation, and restoration;

i) Develop responsible tourism as a strategy for environmentally sound

and community participatory tourism programs, enlisting the
participation of local communities, including indigenous peoples, in
conserving bio-physical and cultural diversity, promoting
environmental understanding and education, providing assistance in
the determination of ecotourism sites and ensuring full enjoyment of
the benefits of tourism by the concerned communities;

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 j) Strengthen the role of tourism councils and encourage the
participation of nongovernment organizations (NGOs), people’s
organizations (POs) and the private sector in initiating programs for
tourism development and environmental protection;

k) Promote the progressive development of existing civil aviation, land

and sea transportation policies as they relate to tourism, in
consonance with existing bilateral agreements and inter-agency
pronouncements;

l) Promote and ensure the convention-handling capability of the country

as a worldclass convention center;

m) Achieve a balance in tourism development between urban and rural

areas in order to spread the benefits of tourism and contribute to
poverty alleviation, better access to infrastructure and to a reduction in
regional imbalances;

n) Enhance capability-building of local government units (LGUs), in

partnership with the private sector, in the management of local
tourism projects and initiatives, thereby ensuring accessible and
affordable destinations throughout the country, especially in areas
which have shown strong comparative advantage;

o) Maintain international standards of excellence in all tourism facilities

and services, and promote the country as a safe and wholesome
tourist destination;

p) Enhance international business relations for the support of tourism

projects of the private sector, through partnerships, joint ventures, and
other cooperative undertakings involving local and foreign investors;

q) Support the establishment of Tourism Enterprise Zones (TEZs), which

will provide the necessary vehicle to coordinate actions of the public
and private sectors to address development barriers, attract and focus
investment on specific geographic areas and upgrade product and
service quality; and

r) Ensure a sustainable funding mechanism for the implementation of

tourism policies, plans, programs, projects and activities.

SECTION 4. Definition of Terms.– The following terms, as used in this Act,

are defined as follows:

a) “Department” refers to the Department of Tourism created pursuant to

Presidential Decree No. 189 (1973), as amended;
19
b) “Secretary” refers to the Secretary of Tourism;

c) “Duty Free Philippines” (DFP) refers to the government agency created

pursuant to Executive Order No. 46 (1986);

d) “Duty Free Philippines Corporation” (DFPC) refers to the corporate

created out of DFP pursuant to this Act;

e) “Philippine Conventions and Visitors Corporation” (PCVC) refers to the

Corporate entity created pursuant to Presidential Decree No. 867, as
amended;

f) “Intramuros Administration” (IA) refers to the government agency

created pursuant to Presidential Decree No. 1616 (1979), as amended;

g) “Philippine Retirement Authority” (PRA) refers to the government

agency created pursuant to executive Order No. 1037 (1985);

h) “Tourism Infrastructure and Enterprise Zone Authority” (TIEZA) refers to

the government agency created pursuant to this Act;

i) “Tourism Enterprise Zone” (TEZ) refers to tourism enterprise zones

created Pursuant to this Act;

j) “TEZ Overseer” refers to any person who shall be appointed by the

TIEZA in specific zones to perform such functions as may be delegated
by the TIEZA in accordance with law;

k) “TEZ Operator” refers to an entity duly incorporated under Batas

Pambansa Blg. 68, otherwise known as the Corporation Code of the
Philippines, and other relevant laws, whose capital may be provided by
LGUs and/or private entities, and which shall administer and supervise
each TEZ;
l) “TEZ Administrator” refers to the person appointed by the Board of
Directors of a TEZ Operator who shall be responsible for implementing
the policies, plans and projects of the TEZ Operator;

m) “Registered Enterprise” refers to an enterprise located within a TEZ that

is dulyregistered with the TIEZA;

n) “Philippine Tourism Authority” (PTA) refers to the existing

implementation arm of the Department of Tourism created pursuant to
Presidential Decree No. 189 (1973), as amended;

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o) “Tourism Promotions Board” (TPB) refers to the body corporate created
under this Act;

p) “Tourism Enterprises” refers to facilities, services and attractions

involved in tourism, such as, but not limited to: travel and tour services;
tourist transport services, whether for land, sea or air transportation;
tour guides; adventure sports services involving such sports as
mountaineering, spelunking, scuba diving, and other sports activities of
significant tourism potential; convention organizers; accommodation
establishments, including, but not limited to, hotels, resorts, apartelles,
tourist inns, motels, pension houses, and home stay operators; tourism
estate management services, restaurants, shops and department
stores, sports and recreational centers, spas, museums and galleries,
theme parks, convention centers and zoos;

q) “Primary Tourism Enterprises” refers to travel and tour services; land,

sea and air transport services exclusively for tourist use;
accommodation establishments; convention and exhibition organizers;
tourism estate management services; and such other enterprises as
may be identified by the Secretary, after due consultation with
concerned sectors;

r) “Secondary Tourism Enterprises” refers to all other tourism enterprises

not covered by the preceding subsection;

s) “Greenfield Tourism Zone” refers to a new or pioneer development, as

determined by the TIEZA;

t) “Brownfield Tourism Zone” refers to an area with existing infrastructure

or development as determined by the TIEZA;

u) “Foreign Visitors” refers to all passengers using foreign passports; and

v) “Sustainable Tourism Development” refers to the management of all

resources that meets the needs of tourists and host regions while
protecting the opportunities for the future, in such a way that
economic, social and aesthetic needs can be fulfilled while maintaining
cultural integrity, essential ecological processes, biological diversity
and life support systems.

CHAPTER II. TOURISM GOVERNANCE

SUBCHAPTER II-A.
Structure of the Department

21
SECTION 5. Mandate.-The Department of Tourism, hereinafter referred to as
the Department, shall be the primary planning, programming, coordinating,
implementing, and regulatory government agency in the development and
promotion of the tourism industry, both domestic and international, in
coordination with attached agencies and other government instrumentalities. It
shall instill in the Filipino the industry’s fundamental importance in the
generation of employment, investment and foreign exchange.

SECTION 6. Powers and Functions. - The Department shall have the

following powers and functions:

a) Formulate tourism policies, plans, and projects for the development of

tourism as an engine of socio-economic and cultural growth;

b) Supervise and coordinate the implementation of tourism policies,

plans, and project;

c) Call upon all agencies of government to properly carry out their

programs in relation to and in coordination with the policies, plans, and
projects of the Department and to assist in the implementation
thereof;

d) Communicate to the President, and the heads of departments,

agencies, and instrumentalities of the government, the impact upon
tourism and the economy of proposed governmental actions;

e) Provide an integrated market development program to attract people

to visit the Philippines and enhance the prestige of the country and the
Filipino people in the international community;

f) Represent the government in all domestic and international

conferences and fora, and in all multilateral or bilateral treaties and
international agreements concerning tourism, and ensure the
government’s implementation thereof and compliance with all
obligations arising therefrom;
g) Request the President for representation in all government agencies,
offices, boards, commissions, and committees that may affect tourism;

h) Call upon relevant government departments, agencies, and offices, in

consultation with the private sector, to provide access to travel, to
facilitate the process of obtaining and extending visas, to integrate and
simplify travel regulations and immigration procedures, and to ensure
their efficient, fair, and courteous enforcement to assure expeditious
and hospitable reception of all visitors;

22
i) Support, advance, and promote the protection, maintenance and
preservation of historical, cultural, and natural endowments, in
cooperation with appropriate government agencies and the private
sector, and take appropriate measures against acts and omissions
contrary to these objectives;

j) Monitor conditions of any community in the Philippines and, in

consultation with the LGUs and law enforcers, issue timely advisories
on the safety or viability of travel to particular places within the
Philippines and on patronage of entities engaged in tourism related
activities and of tourism products;

k) Evaluate tourism development projects for the issuance of permits and

the grant of incentives by appropriate government agencies, establish
a databank of tourism areas and projects for investment purposes, and
encourage private sector investment and participation in tourism
activities and projects;

l) Formulate and promulgate, in consultation with the LGUs, the private

sector industries and other tourism stakeholders, rules and regulations
governing the operation and activities of all tourism enterprises,
including but not limited to a national standard for licensing,
accreditation, and classification of tourism enterprises, prescribing
therein minimum levels of operating quality and efficiency for their
operation in accordance with recognized international standards,
impose reasonable penalties for violation of accreditation policies and
recommend to the LGUs concerned the suspension or prohibition of
operation of a tourism enterprise;

m) Monitor the LGUs’ compliance to national standards in the licensing of

tourism enterprises, receive and investigate complaints concerning
these enterprises, and act on such complaints to properly implement
the provisions of this Act;

n) Ensure the proper coordination, integration, prioritization, and

implementation of local tourism development plans with that of the
National Government;

o) Provide technical assistance to LGUs in destination development,

standard setting, and regulatory enforcement;

p) Undertake continuing research studies and survey to analyze economic

conditions and trends relating to tourism and travel, and compile and
integrate a statistical databank on the tourism industry;

23
 q) Delegate to regional offices, in coordination with LGUs, specific powers
and functions in the implementation of tourism policies, plans, and
projects;

r) Collect necessary fees and charges for the proper implementation of

tourism policies, plans, and projects; and

s) Exercise such other powers and functions as are necessary for the
implementation of this Act.

SECTION 7. Structure of the Department.– The Department shall consist

of the Department Proper, Department Offices, Services and Unit, and the
Regional and Foreign Offices.

SECTION 8. Department Proper.– The Department Proper shall consist of the

Offices of the Secretary, Undersecretaries, and Assistant Secretaries.

SECTION 9. Office of the Secretary.– The Office of the Secretary shall

consist of the Secretary and his or her immediate staff.

SECTION 10. Undersecretaries and Assistant Secretaries.– The

Secretary shall be assisted by at least three (3) Undersecretaries, namely:

a) Undersecretary for Tourism Development, who shall be responsible for

the Office of Product Development, the Office of Tourism Development
Planning, Research and Information Management and the Office of
Industry Manpower Development;

b) Undersecretary for Tourism Regulation, Coordination and Resource

Generation, who shall be responsible for the Office of Tourism
Standards and Regulations, the Office of Tourism Coordination, the
Office of Tourism Resource Generation and all Regional and Foreign
Offices; and

c) Undersecretary for Special Concerns and Administration, who shall be

responsible for the Office of Special Concerns, the Financial and
Management Service, Administrative Affairs Service, Legal Affairs
Service, Internal Audit Service and Legislative Liaison Unit.
Each Undersecretary shall be assisted by an Assistant Secretary.

SECTION 11. Office of Product Development.– The Office of Product

Development shall have the following functions:

a) Conceptualize and develop new products which will enhance tourism

sites and facilities;

24
 b) Undertake tests on the viability and acceptability of new tourism-
related products and programs; and

c) Encourage and promote joint undertakings with the private sector for
the development of new tourism-related products and programs.

SECTION 12. Office of Tourism Development Planning, Research, and

Information Management. – The Office of Tourism Development Planning,
Research, and Information Management shall have the following functions:

a) Prepare a National Tourism Development Plan identifying geographic

areas with potential tourism value and outlining approaches to
developing such areas;

b) Formulate policies and programs for global competitiveness and

national tourism development, and approve local government tourism
development plans;

c) Monitor and evaluate the implementation of policies, plans, and

programs of the Department;

d) Formulate an integrated marketing and promotions plan, identifying

strategic market areas and niches;

e) Formulate, in coordination with the Tourism Infrastructure and

Enterprise Zone Authority (TIEZA), other government agencies, and
LGUs exercising political jurisdiction over the area, development plans
for Tourism Enterprise Zones and integrating such plans with other
sector plans for the area;
f) Conduct researches and studies, disseminate all relevant data on
tourism, monitor and analyze socioeconomic impact of tourism upon
affected local communities and the nation to maximize the benefits of
tourism throughout affected local communities and to avoid or mitigate
possible negative impacts of the industry;

g) Provide technical assistance to the LGUs and the TIEZA in the

preparation of local tourism development plans to ensure adherence to
national policies and programs;

h) Coordinate with government agencies, LGUs, non-government

organizations, and other private entities for the development and
implementation of the national tourism plans and policies;

i) Source grants or loans from local and foreign funding institutions to

implement tourism policies, plans, and projects;

25
 j) Create and supervise management information systems for the entire
Department;

k) Formulate and coordinate the implementation of the Department’s

information system strategic plan; and

l) Pursue the Department’s interest in multilateral, international, and

regional tourism cooperation, agreements, and treaties.

SECTION 13. Office of Industry Manpower Development. – The Office of

Industry Manpower Development shall have the following functions:

a) Conduct seminars on Philippine history, culture, environment, and

related subjects, in coordination with appropriate government agencies
and the private sector, specifically educational institutions;

b) Develop training modules and conduct seminars and continuing

education program for the industry manpower, in coordination with
appropriate government agencies and tourism enterprises and
associations, thereby upgrading their quality, competence, and
excellence in tourism services;

c) Encourage the development of training courses and apprenticeship

programs for tourist guides and other similar workers jointly with
concerned tourism enterprises, appropriate government agencies, and
the private sector; and

d) Enlist the participation of experts for the provision of technical

assistance, training, and education programs to LGUs, tourism
enterprises, and other entities to improve the quality of tourism
services and issue certifications to the effect that these recipients of
assistance, training and education have passed the standards set by
the said experts, in accordance with this Act.

SECTION 14. Office of Tourism Standards and Regulations. –

Recognizing the need for internationally competitive standards of facilities and
services, the Office of Tourism Standards and Regulations shall have the
following functions:

a) Formulate and enforce standards for the operation and maintenance of

tourism enterprises prescribing minimum and progressive levels of
operating quality and efficiency consistent with local and international
standards;

26
 b) Coordinate with relevant tourism enterprise associations, including
adventure sports associations, in the formulation of rules and
regulations, accreditation, and enforcement;

c) Develop and enforce a comprehensive system of mandatory

accreditation for Primary Tourism Enterprises, and voluntary
accreditation for Secondary Tourism
Enterprises, in accordance with prescribed guidelines and standards;

d) Establish a system of registration, information, linkage, and mutual

assistance among accredited tourism enterprises to enhance the value
of accreditation and improve the quality of service rendered by such
enterprises; and

e) Evaluate tourism projects in accordance with standards and endorse

the same to appropriate government agency for an availment of
incentives, and provide technical assistance to incentive-giving
institutions in the formulation of tourism incentives and the
administration of their functions.

SECTION 15. Office of Tourism Coordination. – Recognizing that increased

linkages are necessary between various government offices and the private
sector and among the various entities in the private sector itself to properly
implement tourism policy, the Bureau of Tourism Coordination shall have the
following functions:

a) Maintain close coordination with National Government agencies, LGUs,

NGOs, and other private entities for the development and
implementation of national tourism plan and policies;

b) Call upon the assistance and support of any or all of the government
agencies in the implementation of the policies of the Department; and

c) Support the private sector in all tourism activities requiring

governmental coordination.

SECTION 16. Office of Tourism Resource Generation. – In line with the

objective of ensuring a sustainable funding mechanism for the implementation
of tourism policies, plans, programs, projects, and activities, the Office of
Tourism Resource Generation shall be tasked with the collection of necessary
fees and charges which shall be used by the Department in the promotion and
marketing efforts of the Tourism Promotions Board (TPB) and the development
of infrastructure facilities, utilities, and services of the TIEZA.
The proceeds of such collection shall accrue directly and automatically to the
Department. The guidelines for the collection and disbursement of these
proceeds shall be defined in the implementing rules and regulations of this Act.
27
There is hereby created a special fund, to be disbursed and administered by the
Department, called the Tourism Development Fund, which shall be used for the
development, promotion, and marketing of tourism and other projects of the
Department that will boost tourism in the country. The Fund shall be sourced
from the fees and charges which will be collected by the Department. A special
account shall be established for this Fund in the National Treasury.
Disbursements made from the Fund shall be subject to the usual accounting
and budgeting rules and regulations.

SECTION 17. Regional Offices.– The Department shall establish, operate,

and maintain a Regional Office in each administrative region in the country. A
Regional Office, headed by a Regional Director, shall have the following
functions:

a) Implement laws, policies, plans, programs, rules, and regulations of the

Department, particularly those relating to compliance therewith, and to
the accreditation of tourism enterprises promulgated by the
Department;

b) Coordinate with regional offices of other departments, bureaus, and

agencies, LGUs, NGOs, and the regional offices of the Department’s
attached agencies in the implementation of such laws, policies, plans,
programs, and rules and regulations;

c) Undertake research and data gathering on local tourism trends and

other relevant tourism information;

d) Together with LGUs, establish such tourist information and assistance

centers at strategic locations as are necessary to disseminate relevant
information pertaining to the tourist locations and products and to
assist tourists and tourism enterprises;

e) Conduct trainings and information campaigns, and assist the TPB in

domestic promotions in the pertinent region on subject matters such
as this Act, the functions of the Department, tourism traffic and new
tourism sites, among others; and

f) Make recommendations to the Secretary on all matters relating to

tourism in the region.

SECTION 18. Foreign Offices. – The creation, operation, and supervision of

foreign field offices of the Department shall be retained therein.

SECTION 19. Office of Special Concerns.– The Office of Special Concerns

shall be responsible in effectively coordinating and monitoring the various
28
directives, pronouncements and issuances of the President pertaining to the
priorities of the government and the Department.

SECTION 20. Financial and Management Service. – The Financial and

Management Service shall provide the Department with staff advice and
assistance on budgetary, financial, and management matters and shall perform
such other related functions as may be assigned on delegated to it by the
Secretary.

SECTION 21. Administrative Affairs Service. – The Administrative Affairs

Service shall provide the Department with staff advice and assistance on
personnel information, records, communications, supplies, equipment,
collection, disbursements, security, other custodial work and such other related
duties and responsibilities as may be assigned or delegated to it by the
Secretary.

SECTION 22. Legal Affairs Service. – The Legal Affairs Service shall provide
the Department with staff advice and assistance on all legal matters affecting
the Department and perform such other related functions as may be assigned
or delegated to it by the Secretary.

SECTION 23. Internal Audit Service. – The Internal Audit Service shall be
responsible for instituting and conducting an audit program for the Department
to ensure compliance with existing rules and regulations for an efficient and
effective fiscal administration and performance of department affairs.

SECTION 24. Legislative Liaison Unit. – The Legislative Liaison Unit shall
establish and maintain regular coordination and liaison with Congress, monitor
the passages of legislative measures that are in the Department’s agenda,
provide relevant information and technical support to Members of Congress,
and perform such other related functions as may be assigned or delegated by
the Secretary.

SUBCHAPTER II-B.
Rationalization of Functions

SECTION 25. Reorganization of Offices. – The Philippine Tourism Authority

(PTA) is hereby reorganized as the Tourism Infrastructure and Enterprise Zone
Authority (TIEZA), as hereinafter provided. The Philippine Conventions and
Visitors Corporation (PCVC) is hereby reorganized as the Tourism Promotions
Board (TPB), as hereinafter provided.

The Bureaus for Domestic and International Tourism Promotions, and the Office
of Tourism Information of the Department, are hereby absorbed into the Tourism
Promotions Board.

29
SECTION 26. Human Resources. – Where certain functions are declared
redundant on account of the reorganization, the Department, the TIEZA Board,
and the Tourism Board shall provide for the reassignment, insofar as
practicable, of affected employees to similar positions within the Department
and its attached agencies, taking into consideration their skills and experience,
without loss of seniority or other rights and privileges. In any case, all relevant
laws, decrees, executive orders, rules and regulations concerning the rights of
government employees in the reorganization of an office shall be respected.

SECTION 27. Optional Retirement and Compensation.– There shall be no

mandatory separation of any employee as a result of the reorganization of the
Department and its attached agencies and corporations.However, if any
employee elects to leave the service or retire, said employee shall be entitled to
claim separation or retirement benefits as may be provided under existing laws
governing the civil service or other laws and issuances, whichever may be
beneficial to the employee concerned.

SUBCHAPTER II-C.
Attached Agencies and Corporations

SECTION 28. Attached Agencies and Corporations. – The TPB, the

TIEZA, and the DFPC shall be attached to the Department and shall be under
the supervision of the Secretary for program and policy coordination.
Furthermore, the following agencies and corporations shall be attached to the
Department under the supervision of the Secretary for program and policy
coordination: the Intramuros Administration; the National Parks Development
Committee, created under Executive Order No. 30 (1963); the Nayong Pilipino
Foundation, created under Presidential Decree No. 37 (1972), as amended; the
Philippine Retirement Authority; and the Philippine Commission on Sports Scuba
Diving. Except as hereinafter provided, each of the attached agencies and
corporations shall continue to operate under their respective charters.

SECTION 29. Intramuros Administration, National Parks Development

Committee and Nayong Pilipino Foundation. – The Intramuros
Administration, the National Parks Development Committee and the Nayong
Pilipino Foundation shall continue to be attached to the Department and
operate under their respective charters. They may be authorized to operate
TEZs, under the supervision of the TIEZA, as provided under Chapters IV and V
of this Act, within their respective jurisdictions: Provided, that any restoration
activity undertaken by the IA, the NPDC, or the NPF may be entitled to a tax
deduction equivalent to the full cost of the restoration activity directly incurred
in accordance with the provisions of the National Internal Revenue Code, as
amended.

SECTION 30. Philippine Retirement Authority. – For purposes of policy

and program coordination, the Philippine Retirement Authority is hereby
30
attached to the Department and placed under the supervision of the Secretary.
The Secretary shall be the ex-officio Chairperson of its Board of Trustees;
Provided, that this provision shall apply after the expiration of the term of office
of the incumbent Chairperson.

SECTION 31. Philippine Commission on Sports Scuba Diving. – The

Philippine Commission on Sports Scuba Diving shall likewise be attached to the
Department and placed under the supervision of the Secretary, who shall be the
ex-officio Chairperson of its Board of Trustees. It shall undertake measures to
provide the standard basic dive rules to all levels or kinds of divers, regulate
scuba sports, and technical diving in the country and ensure the safety of the
sport through the formulation of policies pursuant thereto, in coordination with
the Office of Tourism Standards and Regulations, including the regulation of the
accredited scuba sports and technical diving establishments.

SUBCHAPTER II-D.
Control and Supervision of Areas with Overlapping Jurisdictions

SECTION 32. Rationalization of Tourism Areas, Zones and Spots. –

Any other area specifically defined as a tourism area, zone, or spot under any
special or general law, decree, or presidential issuance shall, as far as
practicable, be organized into a TEZ under the provisions of this Act. With
respect to tourism zones, areas, or spots not organized into TEZs, the
Department, through appropriate arrangements, may transfer control over the
same or portions thereof, to another agency or office of the government, or to a
LGU. This shall only be effected upon the submission by the latter, within a
reasonable time, of comprehensive development plans for the use,
preservation, and promotion of these zones, areas, or spots and upon the
approval thereof by the Department. Such transfer shall not have the effect of
diminishing the jurisdiction of the Department over these zones, areas or spots.

The Department shall exercise supervisory powers over such agency, office, or
LGU in accordance with the terms of the transfer or the development plan of
the zone, area, or spot. Where a government agency or office or a LGU fails to
implement the comprehensive plan approved by the Department, the
Department may rescind the arrangement transferring control over the tourism
zone, area, or spot and regain such control thereof.

SECTION 33. National Integrated Protected Areas System and the

National Ecotourism Policy – The Department, in coordination with the
DENR, shall identify areas covered by the National Integrated Protected Areas
System with ecotourism potentials and cultural heritage value, and prepare
policies, plans, and programs for their development, preservation, operation, or
conversion into TEZs. The designation of these areas as TEZs shall be subject to
the provisions of Subchapter IV-A of this Act.

31
The ecotourism sites in the National Ecotourism Strategy pursuant to Executive
Order No. 111 (1999) may also be developed into TEZs with the National
Ecotourism Steering Committee responsible for finding the appropriate TEZ
Operator for the sites.

SECTION 34. Tourism Infrastructure Program. – The Department, in

accordance with the National Tourism Development Plan and local government
initiatives, shall coordinate with the Department of Public Works and Highways,
and the Department of Transportation and Communications in the
establishment of a tourism infrastructure program in the respective work
programs of said agencies, identifying therein vital access roads, airports,
seaports, and other infrastructure requirement in identified tourism areas. The
said agencies and the DBM shall accord priority status to the funding of this
tourism infrastructure program.

SUBCHAPTER II-E.
Shared Responsibilities of National and Local Governments

SECTION 35. Coordination between National and Local

Governments. – In view of the urgent need to develop a national strategy for
tourism development while giving due regard to the principle of local autonomy,
the Department, the DILG, and LGUs shall integrate and coordinate local and
national plans for tourism development. The Department may provide financial
and technical assistance, training and other capacitybuilding measures to LGUs
for the preparation, implementation, and monitoring of their tourism
development plans, gathering of statistical data, and enforcement of tourism
laws and regulations, giving due priority to areas that have been identified as
strategic in the implementation of the national tourism development plan. LGUs
shall ensure the implementation of such plans. The Department, the TPB, and
the TIEZA shall prioritize promotion and development assistance for LGUs which
successfully adopt and implement their tourism development plans.

SECTION 36. National Tourism Development Planning. – The

Department, in coordination with its attached agencies, LGUs, and the private
sector, shall continuously update the existing national tourism development
plan in view of evolving needs and capabilities of LGUs and the domestic and
global tourism market.

SECTION 37. Local Tourism Development Planning. – LGUs, in

consultation with stakeholders, are encouraged to utilize their powers under
Republic Act No. 7160, otherwise known as the Local Government Code of 1991,
to ensure the preparation and implementation of a tourism development plan,
the enforcement of standards, and the collection of statistical data for tourism
purposes. They shall, insofar as practicable, prepare local tourism development
plans that integrate zoning, land use, infrastructure development, the national
system of standards for tourism enterprises, heritage, and environmental
32
protection imperatives in a manner that encourages sustainable tourism
development.

SECTION 38. Reports. – In order to monitor the resources of the Department

and to ascertain the economic and social impact of tourism, all LGUs shall
provide an inventory of all the resources available to the Department for use in
the implementation of this Act. They shall likewise periodically report to the
Department on the status of tourism plans and programs, tourist arrivals, and
tourism enterprises, among others, within their jurisdictions.

SECTION 39. Accreditation. – In order to encourage global competitiveness,

strengthen data gathering and research on tourism, and facilitate the promotion
of individual enterprises and the industry as a whole, the Department shall
prescribe and regulate standards for the operation of the tourism industry.
Primary Tourism Enterprises shall be periodically required to obtain
accreditation from the Department as to the quality of their facilities and
standard of services. Accreditation shall be voluntary for Secondary Tourism
Enterprises.

The Department shall evolve a system of standards for the accreditation of

these enterprises in accordance with the relevant tourism development plan.
These standards shall adhere, insofar as practicable, to those recognized
internationally. The Department and LGUs shall ensure strict compliance of
tourism enterprises with these standards.

The Department, through the Office of Tourism Standards and Regulations, shall
act on complaints regarding accredited tourism enterprises and after notice and
hearing, may impose fines, or downgrade, suspend, or revoke accreditation, for
violation of the terms thereof. The Department shall likewise have the power
and the duty to issue tourism advisories pertaining to tourism enterprises found
to have violated the terms of their accreditation. A tourism advisory shall
contain the following:

a) Complete identification of the pertinent tourism enterprise;

b) Location of this entity;
c) Its registered owner or proprietor and the business address thereof;
d) The specific term or terms of accreditation violated; and
e) The statement that the advisory shall only be lifted upon continued
compliance of the enterprise with the terms of accreditation.

Tourism enterprises registered with the TIEZA in accordance with the pertinent
provisions below and availing of the incentives under this Act shall further be
ordered to pay back taxes in the amount equivalent to the difference between
the taxes that they should have paid had they not availed of the incentives
under this Act and the actual amount of taxes being paid by them under the
same incentive scheme. The back taxes to be collected shall be computed up to
33
three (3) years directly preceding the date of promulgation of the decision or
order finding that the tourism enterprise violated the terms of its accreditation.
For this purpose, the Department shall enlist the assistance of the Bureau of
Internal Revenue in arriving at an accurate computation of back taxes to be
paid by the pertinent tourism enterprise. The proceeds of these back taxes shall
be distributed as follows:

a) One-third to the National Government;

b) One-third to the LGUs concerned, to be shared by them equally should
there be more than one such LGU; and
c) One-third to the TIEZA.

Nothing in this Section shall diminish the powers of the LGUs under the Local
Government Code, pertaining to the issuance of business permits, licenses, and
the like. When an enterprise fails to obtain or loses accreditation, the
Department shall notify the LGU concerned so that it may take appropriate
action in relation to an enterprise’s licenses and permits to operate.

The Department may, under such relevant terms and conditions stipulated,
delegate the enforcement of the system of accreditation to LGUs that have
adopted and successfully implemented their tourism development plans.
The Department shall promulgate the necessary implementing rules and
regulations to enforce the provisions of this Section pursuant to its powers and
functions as defined under Section 6 of this Act.

SECTION 40. Value of Accreditation. – The Department shall develop a

system to enhance the value of accreditation among Primary and Secondary
Tourism Enterprises. Only accredited enterprises shall be beneficiaries of
promotional, training, and other programs of the Department and its attached
agencies and corporations.

Accredited enterprises shall, insofar as practicable, give due preference to other

accredited enterprises in obtaining relevant services.

The Department shall develop an integrated system of accreditation in

coordination with concerned agencies and entities, in order to reduce the
regulatory and financial burden on tourism-related enterprises.

SECTION 41. Local Government Capabilities Enhancement. – The

Department shall develop support and training programs to enhance the
capability of LGUs to monitor and administer tourism activities and enforce
tourism laws, rules, and regulations in their respective jurisdictions. Funding for
such programs shall be shared equitably between the Department and the LGUs
concerned.

34
SECTION 42. Tourism Officers. – Every province, city, or municipality in
which tourism is a significant industry shall have a permanent position for a
tourism officer. He or she shall be responsible for preparing, implementing, and
updating local tourism development plans, and enforcing tourism laws, rules,
and regulations. In the performance of his or her functions, the tourism officer
shall coordinate with the Department and its attached agencies.

Prior to appointment, every tourism officer must have obtained a relevant

bachelor’s degree and at least five (5) years of substantial involvement in the
tourism industry. The Department may also impose other relevant qualifications
and require periodic completion of training programs. Such qualifications and
the powers and functions of tourism officers shall be defined in the
implementing rules and regulations of this Act.

SECTION 43. Tourism Assistance. – In coordination with the Department’s

regional offices, every province, city, or municipality in which tourism is a
significant industry shall establish a tourist information and assistance center to
assist tourists and tourism enterprises.

SECTION 44. Tourism Site Classification. – The tourism councils

established in the administrative regions of the country shall meet, on a regular
basis, to classify and evaluate tourism destinations, sites, and activities within
their respective regions. Such classifications and evaluations may be used by
the Department and its attached agencies, LGUs, and the private sector as
guide in the development and implementation of their respective programs.

CHAPTER III. TOURISM PROMOTIONS

SUBCHAPTER III-A.
Tourism Promotions Board

SECTION 45. Tourism Promotions Board. – Under the supervision of the

Secretary and attached to the Department for purposes of program and policy
coordination shall be a body corporate known as the Tourism Promotions Board
(TPB). The TPB shall formulate and implement an integrated domestic and
international promotions and marketing program for the Department.

SECTION 46. Mandate. – The TPB shall be responsible for marketing and
promoting the Philippines domestically and internationally as a major global
tourism destination, highlighting the uniqueness and assisting the development
of its tourism products and services, with the end in view of increasing tourist
arrivals and tourism investment. Specifically, it shall market the Philippines as a
major convention destination in Asia. To this end, it shall take charge of
attracting, promoting, facilitating, and servicing large-scale events,
international fairs and conventions, congresses, sports competitions,
expositions, and the like. It shall likewise ensure the regular advertisement
35
abroad of the country’s major tourism destinations and other tourism products,
not limited to TEZs. It may also provide incentives to travel agencies abroad
which are able to draw tourists and tourism investments to the country.

SECTION 47. Board of Directors. – The TPB shall be governed and its
powers exercised by a Board of Directors (“Tourism Board”), composed as
follows:

a) The Department Secretary, as Chairperson;

b) The TPB Chief Operating Officer, as Vice Chairperson;
c) The TIEZA Chief Operating Officer;
d) The DFA Secretary;
e) The DTI Secretary;
f) The DOTC Secretary; and
g) Five (5) representative directors, to be appointed by the President, upon
the recommendation of the Tourism Congress from a list of at least
three (3) nominees per group as enumerated in Section 49. They must
be Filipinos with recognized competence in business management,
marketing, finance, tourism and other related fields and shall serve a
term of office of three (3) years, which term may be extended for a
period not exceeding three (3) years.

The Secretaries of the DFA, the DTI, and the DOTC shall each designate a
permanent representative in the Board, who must possess relevant experience.
The permanent representative shall be duly authorized to act on behalf of the
Secretary in his or her absence.

The Chairperson of the Tourism Board shall have voting rights in case of a tie.

The Tourism Board shall appoint a corporate secretary whose functions shall
include the preparation of agenda for board meetings, in consultation with the
Chairperson.

SECTION 48. Chief Operating Officer. – The TPB shall have a Chief
Operating Officer who must be a Filipino, with a bachelor’s degree in any of the
following fields: business, law, tourism, public administration, or other relevant
fields and have demonstrated expertise therein. He or she must have been
engaged in a managerial capacity for at least five (5) years prior to his
appointment. He or she shall be elected by the Board from a list of qualified
applicants and appointed by the Secretary, and shall have a term of office of six
(6) years, unless removed for cause in accordance with law.

SECTION 49. Representative Directors. – In accordance with Section 47,

paragraph (g) of this Act, the Tourism Congress as created under Chapter VII,
Section 104 shall elect from among its members the directors to represent the
tourism industry in the Tourism Board, specifically the following groups:
36
 a) Accommodation enterprises;
b) Travel and tour services;
c) Land, air and sea tourist transport services;
d) Conventions and exhibitions services and suppliers; and
e) Other tourism enterprises.

If a representative director ceases to be connected with the sector, he or she

represents, a new representative director shall be appointed to serve the
unexpired term.

SECTION 50. Powers and Functions of the Tourism Promotions

Board. – The TPB shall have all the general powers of a corporation provided
under the Corporation Code. Furthermore, it shall have the following powers and
functions:

a) Organize the TPB in a manner most efficient and economical for the
conduct of its business and the implementation of its mandate;

b) Develop and implement a plan to market the Philippines as a premier

tourist destination;

c) Direct and coordinate the resources and efforts of the government and
private sector in the tourism and allied fields for the full realization of
the tourism plans and programs;

d) Develop and promote the Philippines as a center for international

meetings, incentives, conventions, exhibitions, sports, medical tourism,
and other special events;

e) Engage in the business of tourism and perform acts in consonance

therewith, such as, but not limited to, attending conventions and other
events abroad in representation of the country, encouraging sales
promotions and advertising, and implementing programs and projects
with the objective of promoting the country and enticing tourists to
visit its tourism destinations and to enjoy its tourism products;

f) Contract loans, indebtedness, and credit, and issue commercial papers

and bonds, in any local or convertible foreign currency from
international financial institutions, foreign government entities, and
local or foreign private commercial banks or similar institutions under
terms and conditions prescribed by law, rules and regulations;

g) Execute any deed of guarantee, mortgage, pledge, trust, or

assignment of any property for the purpose of financing the programs
and projects deemed vital for the early attainment of its goals and
37
 objectives, subject to the provisions of the Constitution (Article VII,
Section 20, and Article XII, Section 2, paragraphs (4) and (5));

h) Receive donations, grants, bequests, and assistance of all kinds from

local and foreign governments and private sectors and utilize the
same;

i) Extend loans through government banks and financial institutions,

provide grants and other forms of financial assistance for manpower
training, heritage preservation, infrastructure development, and other
programs of the Department;

j) Obtain the services of local and foreign consultants, and enter into
contracts locally and abroad in the performance of its functions; and

k) Perform all other powers and functions of a corporation.

SECTION 51. Meetings of the Board. – The Tourism Board shall meet at
least once a month at the principal office of the TPB, unless the Tourism Board
previously agrees in writing to meet at another location.

SECTION 52. Capitalization. – The TPB shall have an authorized capital of

Two Hundred Fifty Million Pesos (PhP 250,000,000) which shall be fully
subscribed by the National Government.

SECTION 53. Strategic Marketing Plan. – The TPB shall draft

comprehensive short-, medium-, and long-term marketing plans for the
Philippines as a destination for travel, business, and investment, particularly
tourism investment. It shall coordinate, insofar as practicable, with relevant
agencies of the government and the private sector in the preparation of such
plans.

Such plans shall be duly approved by the Tourism Board. The Chief Operating
Officer shall ensure that the marketing plans are duly implemented, and shall
periodically report to the Tourism Board the status of their implementation. He
or she shall also coordinate to ensure that the other agencies of the
government and the private sector which assisted in the preparation of
marketing plans perform their respective duties under the plans.

SUBCHAPTER III-B.
Tourism Promotions Funding

SECTION 54. Tourism Promotions Trust. – Within one hundred and twenty
(120) days from the effectivity of this Act, an audit shall be conducted by the
Commission on Audit to determine the true value of the assets and liabilities of
the PTA. After such audit, the TIEZA and the Department, in coordination with
38
the Privatization Council, shall determine which assets shall be put up for sale
or lease; Provided, that concerned LGUs interested to manage and operate said
assets shall have the right of first refusal. The
TIEZA and the Department shall take into consideration the importance of
maintaining and preserving the PTA assets which may already be considered
cultural treasures and heritage sites, such as the Banaue Hotel and similar
assets, which shall not be sold or in any way disposed of and shall be placed
under the ownership of the TIEZA for their continued maintenance.

The Tourism Promotions Trust shall hereby be established from the proceeds of
the sale or lease of the assets of the PTA. The Trust shall be managed by a
government-owned bank or financial institution selected by the Tourism Board.
Said bank or institution shall report the status and profitability of the trust on a
quarterly basis to the Tourism Board, the Secretary and the Joint Congressional
Tourism Oversight Committee created under this Act.

SECTION 55. Tourism Promotions Fund. – The proceeds of the following

shall be placed in a special Tourism Promotions Fund to finance the activities of
the TPB:

a) The investment earnings from the Tourism Promotions Trust;

b) An appropriation from the National Government of not less than Five

Hundred Million Pesos (PhP 500,000,000) annually for at least five (5)
years from the time of its constitution;
c) Seventy percent (70%) of the fifty percent (50%) net income of the
DFPC accruing to the Department, in lieu of its statutory remittance to
the National Government under Republic Act No. 7656, otherwise
known as the Dividends Law of 1994;

d) At least twenty-five percent (25%) of the fifty percent (50%) National

Government share remitted by the Philippine Amusement and Gaming
Corporation (PAGCOR) to the National Treasury pursuant to Republic Act No.
7656; and

e) At least twenty-five percent (25%) of the National Government share

remitted by the international airports and seaports to the National
Treasury pursuant to Republic Act No. 7656.

In no case shall promotions and marketing activities receive less than fifty
percent (50%) of the annual utilization of the fund. Not more than ten percent
(10%) of the Fund shall be used for all other administrative and operating
expenses of the TPB. The unallocated portion of the Fund shall be earmarked by
the TPB as follows:

a) For use by the TIEZA in the development of the TEZs;

39
 b) For the Department, to enhance its programs for development
planning, heritage preservations, and infrastructure development, and
manpower training including, but not limited to, scholarships for
trainings abroad, among others; or

c) For such other purposes as may contribute to the development of the

tourism industry.

Portions of the net income of government corporations and other enterprises

provided under this section due the TPB shall be remitted directly thereto on a
quarterly basis.

SECTION 56. Special Contingency Fund. – At the beginning of each year,

ten percent (10%) of the allocation for promotions and marketing shall be set
aside as a Special Contingency Fund of the TPB. This shall be used in the event
of emergencies to provide the TPB with sufficient resources to undertake
marketing and promotions activities that will encourage sustained tourism
interest in the Philippines and that will address the adverse effects of these
emergencies.

SECTION 57. Exemption from Payment of Corporate Income Tax. –

Notwithstanding any provision of existing laws, decrees, executive orders to the
contrary, the TPB shall be exempt from the payment of corporate income tax,
as provided under the National Internal Revenue Code (NIRC) of 1997, as
amended.

SECTION 58. Membership. – The TPB shall be open for membership to

entities, groups, and individuals with economic, social, or cultural interest in
travel trade, congresses and conventions.

CHAPTER IV. TOURISM ENTERPRISE ZONES

SUBCHAPTER IV-A.
Tourism Enterprise Zones

SECTION 59. Tourism Enterprise Zones. – Any geographic area with the
following characteristics may be designated as a Tourism Enterprise Zone:
a) The area is capable of being defined into one contiguous territory;

b) It has historical and cultural significance, environmental beauty, or

existing, or potential integrated leisure facilities within its bounds or
within reasonable distances from it;

40
 c) It has, or it may have, strategic access through transportation
infrastructure, and reasonable connection with utilities infrastructure
systems;

d) It is sufficient in size, such that it may be further utilized for bringing in

new investments in tourism establishments and services; and

e) It is in a strategic location such as to catalyze the socio-economic

development of neighboring communities

SECTION 60. Designation of TEZs. – The TIEZA shall designate TEZs, upon
the recommendation of any LGU or private entity, or through joint ventures
between the public and the private sectors. Such designation shall be subject to
the provisions of this Act and to minimum requirements which the TIEZA shall
subsequently promulgate.

TEZs shall not proliferate in a manner that diminishes their strategic economic
and developmental value to the national economy.
SECTION 61. Development Planning. – Each application for designation ad
TEZ shall be accompanied by a development plan which shall, consistent with
principles of economic, cultural and environmentally sustainable development,
specifically identify:

a) Tourism focal points and resources available within the proposed TEZ
and adjoining areas;

b) Features which satisfy the requisites for the designation of a TEZ

enumerated under Section 59 of this Act;

c) Areas for infrastructure development, for investment, and for

preservation, as well as the kind of development, nature of investment,
or sustainable activities allowed within preserved areas, respectively;

d) Medium and long-term studies on market trends, and corresponding

development strategies for the TEZ;

e) Studies on the economic impact of development within the TEZ and in

surrounding communities;

f) Studies on the environmental, cultural and social carrying capacity of

the TEZ and surrounding communities;

g) Design plans for structures which incorporate design and sustainability

principles from local architecture and the surrounding environment; and

h) Such other information that the TIEZA may require.

41
No TEZ shall be designated without a development plan duly approved by the
TIEZA and without the approval, by resolution, of the LGU concerned. Any
deviation or modification from the development plan shall require the prior
authorization of the TIEZA. The TIEZA may cause the suspension of granted
incentives and withdrawal of recognition as a TEZ Operator. It may likewise
impose reasonable fines and penalties upon TEZ Operators and responsible
persons for any failure to properly implement the approved development plan.

Lands identified as part of a TEZ shall qualify for exemption from the coverage
of Republic Act No. 7279, otherwise known as the Urban Development and
Housing Act of 1992, and Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law, subject to rules and regulations to be
crafted by the TIEZA, the Housing and Urban Development Coordinating Council
and the Department of Agrarian Reform.

SECTION 62. Operation of TEZs. – The TEZ proponent shall establish a

corporate entity, to be known as the TEZ Operator, which shall administer the
TEZ and supervise its activities. The designation of a TEZ does not vest
ownership of the resources therein upon the TEZ Operator. Where the TEZ
Operator possesses rights to land or other resources within the TEZ, the TEZ
Operator shall be entitled to exercise such rights as allowed by existing laws in
a manner consistent with the duly-approved development plan as provided
above.

Where rights to land and other resources within the TEZ are vested in a private
third party, the TEZ Operator shall encourage the private third party to
participate in policymaking, planning, and program development and
implementation by encouraging its registration as a tourism enterprise where
appropriate, and through the judicious administration of incentives and
provision of services.

Except as herein provided, the LGUs which comprise, overlap, embrace, or

include a TEZ in their territorial jurisdictions shall retain their basic autonomy
and identity in accordance with the Local Government Code.

The government shall encourage, facilitate, and provide incentives for private
sector participation in the construction and operation of public utilities and
infrastructure in the TEZs using any of the schemes allowed under Republic Act
No. 6957, as amended, otherwise known as the BuildOperate-and- Transfer Law.

SUBCHAPTER IV-B.
Tourism Infrastructure and Enterprise Zone Authority

SECTION 63. The Tourism Infrastructure and Enterprise Zone

Authority. – Under the supervision of the Secretary and attached to the
42
Department for purposes of program and policy coordination shall be the body
corporate known as the Tourism Infrastructure and Enterprise Zone Authority
(TIEZA).

SECTION 64. Mandate. – The TIEZA shall be a body corporate which shall
designate, regulate, and supervise the TEZs established under this Act, as well
as develop, manage, and supervise tourism infrastructure projects in the
country. It shall supervise and regulate the cultural, economic, and
environmentally sustainable development of TEZs toward the primary objective
of encouraging investments therein. It shall ensure strict compliance of the TEZ
operator with the approved development plan. Pursuant thereto, the TIEZA shall
have the power to impose penalties for failure or refusal of the tourism
enterprises to comply with the approved development plan, which shall also be
considered a violation of the terms of accreditation. Such power shall further be
defined under the implementing rules and regulations of this Act.

The TIEZA shall continue to exercise functions previously exercised by the PTA
under Presidential Decree No. 564, unless otherwise inconsistent with the other
provisions of this Act. It shall however cease to operate the DFP.

In addition to its mandate to regulate and supervise TEZs, the TIEZA shall
likewise be deemed a government infrastructure corporation under the
provisions of Executive Order No. 292, otherwise known as the Administrative
Code of 1987.

Tourism enterprises outside of TEZs and without accreditation shall be governed

by pertinent laws, rules and regulations.

SECTION 65. Board of Directors. – The TIEZA shall be governed and its
powers exercised by a Board of Directors (“TIEZA Board”), composed as follows:

a) The Department Secretary, as Chairperson;

b) The TIEZA Chief Operating Officer, as Vice Chairperson;
c) The TPB Chief Operating Officer;
d) The DPWH Secretary;
e) The DENR Secretary;
f) The DILG Secretary; and
g) Five (5) representative directors, to be appointed by the President, upon
the recommendation of the Tourism Congress from a list of at least
three (3) nominees per group as enumerated in Section 67. They must
be Filipinos with recognized competence in business management,
marketing, finance, tourism and other related fields and shall serve a
term of office of three (3) years, which term may be extended for a
period not exceeding three (3) years.

43
The Secretaries of the DPWH, the DENR and the DILG shall each designate a
permanent representative in the Board, who must possess relevant experience.
The permanent representative shall be duly authorized to act on behalf of the
Secretary in his or her absence.

The Chairperson of the TIEZA Board shall have voting rights in case of a tie.

The TIEZA Board shall appoint a corporate secretary whose functions shall
include the preparation of agenda for board meetings, in consultation with the
Chairperson.

SECTION 66. The Chief Operating Officer. – The TIEZA shall have a Chief
Operating Officer who must be a Filipino, with a bachelor’s degree in any of the
following fields: business, law, tourism, public administration, or other relevant
fields and have demonstrated expertise therein. He or she must have been
engaged in a managerial capacity for at least five (5) years prior to his
appointment. He or she shall be elected by the Board from a list of qualified
applicants and appointed by the Secretary, and shall have a term of office of six
(6) years, unless removed for cause in accordance with law.

SECTION 67. Representative Directors. – The five (5) representative

directors shall represent each of the following groups:

a) Tourism estate development and management services;

b) Accommodation enterprises;
c) Air, sea, and land tourism transport services;
d) Travel and tours enterprises; and
e) Other tourism enterprises.

If a representative director ceases to be connected with the sector he or she

represents, a new representative director shall be appointed to serve the
unexpired term.

SECTION 68. Meetings of the Board. – The TIEZA Board shall meet at least
once a month at the principal office of the TIEZA, unless the TIEZA Board
previously agreed in writing to meet at another location.

SECTION 69. General Powers and Functions of the TIEZA Board. – The
TIEZA Board shall have the general powers of a corporation as provided under
the Corporation Code. Furthermore, it shall also have the following powers:

a) Organize the TIEZA in a manner most efficient and economical for the
conduct of its business and the implementation of its mandate;

b) Develop policies, plans, and programs in coordination with the

Department for the development and operation of TEZs and adopt
44
 rules and regulations necessary for the implementation of the
provisions of this Act;

c) Enter into, make, perform, and carry out contracts of every class, kind,
and description which are necessary or incidental to the realization of
its purposes with any person, firm or corporation, private or public, and
with foreign government entities;

d) Contract loans, indebtedness, and credit, issue commercial papers and

bonds, in any local or convertible foreign currency from international
financial institutions, foreign government entities, and local or foreign
private commercial banks or similar institutions under such terms and
conditions prescribed by law, rules and regulations;

e) Execute any deed of guarantee, mortgage, pledge, trust, or

assignment of any property for the purpose of financing the programs
and projects deemed vital for the early attainment of its goals and
objectives, subject to the provisions of Article VII, Section 20, and
Article XII, Section 2, paragraphs (4) and (5) of the Constitution;

f) Construct, own or lease, operate, and maintain infrastructure facilities

or enter into joint ventures, and grant franchises for, and supervise the
operation of, public utilities within TEZs, in coordination with LGUs and
agencies concerned;

g) Undertake, or authorize the undertaking of, reclamation projects within

TEZs;

h) Preserve, restore or reconstruct all national cultural treasures and

shrines located within TEZs, in coordination with the National Museum
and other concerned agencies;

i) Receive donations, grants, bequests, and assistance of all kinds from

local and foreign governments and private sectors and utilize the
same;

j) Exercise eminent domain and police power, including, but not limited
to, the power to recommend to the Department the removal of
structures which may be considered nuisances per se or which impede
or impair the enjoyment of historical, cultural and natural
endowments;

k) Coordinate with LGUs and other government agencies for the provision
of basic services, utilities, and infrastructure required by TEZs;

45
 l) Review and approve proposals for the designation of TEZs based on
the criteria provided herein, and approve, facilitate, and assist in the
organization of TEZ Operators;

m) Regulate and supervise the operations of TEZ Operators, review and

ensure compliance with the development plans, and establish and
implement other policies, plans, and programs for the development
and operation of TEZs;

n) Register, monitor, and regulate enterprises seeking to invest and

operate within a TEZ, and approve and grant incentives to such
registered enterprises as provided under this Act; and

o) Exercise the general powers of a corporation.

SECTION 70. Powers and Functions of the Chief Operating Officer. – In

addition to those stated in Section 23 of Presidential Decree No. 564 on the
powers of the former General Manager of the PTA, which are hereby adopted
under this Act, the Chief Operating Officer shall implement the policies, plans,
and programs of the TIEZA.

He or she shall likewise exercise the following powers and functions:

a) Recommend to the TIEZA Board the designation of TEZs in accordance

with set policies and standards;

b) Coordinate with the Philippine National Police and other concerned

agencies of government for the maintenance of peace and order within
the TEZs;

c) Ensure that all revenues of the TEZs are collected and applied in
accordance with law;

d) Submit to the Board the ongoing and proposed projects, work and
financial programs, annual budget of receipts and expenditures of the
TEZs;

e) Receive protests, complaints, and claims concerning TEZ Operators,

enterprises and residents, and make recommendations to the TIEZA
Board for appropriate action;

f) Enforce all legal easements along seashores, lakeshores, riverbanks,

among others, as provided under existing laws, rules, and regulations,
to allow free and open access thereto and aid in the proper
development of the national patrimony;

46
 g) Take such emergency measures as may be necessary to avoid fires,
floods, and mitigate the effects of storms and other natural or public
calamities;
h) Recommend to the TIEZA Board all necessary acts to properly supervise
the operations of TEZ Operators;

i) Coordinate with the TPB for the promotion of tourism and the
encouragement of investments in TEZs; and

j) Exercise such other powers and functions as are necessary to the

implementation of this Act.

SECTION 71. Capitalization. – The TIEZA shall have an authorized capital of

Two Hundred Fifty Million Pesos (PhP250,000,000) which shall be fully
subscribed by the National Government.

SECTION 72. Funding. – The TIEZA shall obtain the funds for its operations
from the following:

a) Fifty percent (50%) of the proceeds from travel tax collections;

b) A reasonable share from the collections of the Office of Resource
Generation, to be determined by the Department;
c) Income from projects managed by the TIEZA; and
d) Subsidies or grants from local and foreign sources that may be received
by the TIEZA.

At least five percent (5%) from the travel tax collection which shall accrue to
the TIEZA shall be earmarked for the development of historic, cultural, religious
and heritage sites and prime tourist destinations. Another five percent (5%)
shall be earmarked for the development of ecotourism sites in depressed
provinces with strong tourism potentials.

SECTION 73. Collection and Allocation of Travel Taxes. – For purposes of

this Act, the TIEZA shall be the principal agency responsible for the timely
collection of travel taxes.

Amounts to be collected by the TIEZA shall be distributed in the manner

provided for under this Act; Provided, that the National Government shall look
for alternative funding sources for programs funded by the travel tax in the
event of a phase out of travel tax collection following international agreements.

Pursuant to Section 72 of this Act, fifty percent (50%) of the proceeds from travel
tax collections shall accrue to the TIEZA.

The government’s contribution to the Higher Education Development Fund,

equivalent to forty percent (40%) from the total gross collections of the travel
47
tax, shall be retained. Provided, that the Commission on Higher Education shall
give priority to tourism-related educational programs and courses. The ten
percent (10%) share of the National Commission for Culture and the Arts from
the total gross collections of the travel tax shall likewise be retained.

SECTION 74. Exemption from Payment of Corporate Income Tax. –

Notwithstanding any provision of existing laws, decrees, executive orders to the
contrary, the TIEZA shall be exempt from the payment of corporate income tax,
as provided under the NIRC.

SECTION 75. Survey of Resources. –The TIEZA shall, in coordination with

appropriate authorities and neighboring cities and municipalities, conduct a
survey of the physical and natural assets and potentials of the TEZ areas under
its jurisdiction.

SECTION 76. Registration. – Tourism enterprises within a TEZ shall register

with the TIEZA to avail of incentives and benefits provided for in this Act.

SECTION 77. One-Stop Shop Processing. – The TIEZA shall establish

offices where prospective TEZ investors can register to obtain the incentives
and benefits under this Act and all necessary permits and licenses from all
national and local government offices. All government agencies shall coordinate
with the TIEZA for the issuance of such permits and licenses. The TIEZA shall
collect fees necessary for the issuance of these permits and licenses.

SECTION 78. Investigation and Inquiries. – Upon a written formal

complaint made under oath, which on its face provides reasonable basis to
believe that some anomaly or irregularity may have been committed within
TEZs, the TIEZA Chief Operating Officer shall have the power to inquire into and
investigate the conduct of TEZ Operators, registered enterprises, and/or their
employees. For this purpose, he or she may subpoena witnesses, administer
oaths, and compel the production of books, papers, and other evidence. The
TIEZA Chief Operating Officer shall thereafter make a recommendation to the
TIEZA Board for appropriate action.

SUBCHAPTER IV-C.
TEZ Administration

SECTION 79. Administration of TEZ. – Each TEZ shall be administered and

supervised by a TEZ Operator. A TEZ Operator shall be an entity duly
incorporated under the Corporation Code and other relevant laws, unless the
TEZ Operator is a LGU or any other instrumentality of the government in the
pursuit of their mandates, where capital may be provided by LGUs, and/or
private entities.

48
SECTION 80. Articles of Incorporation and By-Laws of TEZ Operators.
– Except as provided herein and as may be provided by rules and regulations
duly promulgated by the TIEZA, each duly incorporated TEZ Operator shall draft
its articles of incorporation and bylaws in accordance with the Corporation
Code.

SECTION 81. Board of Directors and Consultative Bodies of TEZ

Operators. – The seats of the Board of Directors of a TEZ Operator shall be
allocated pro-rata according to the respective capital contributions of the TEZ
Operator’s shareholders.

TEZ Operators are encouraged to reserve seats on their Boards of Directors for
relevant interest groups, such as those representing environmental, religious,
cultural, TEZ investors’, TEZ residents’, and other interests. In any case, TEZ
Operators may form consultative bodies for such special interest groups to
assist them in the formulation and implementation of policies, plans, and
projects

SECTION 82. TEZ Administrator. – The Board of Directors of each TEZ

Operator shall appoint its TEZ Administrator, who shall be responsible for
implementing the policies, plans and projects of the TEZ Operator’s Board of
Directors. The TIEZA shall provide guidelines on the necessary educational and
practical qualifications required of a TEZ Administrator. In addition to such
qualifications, all TEZ Administrators must undergo and pass a training program
of the Department to provide TEZ Administrators with knowledge and skills
relevant to the operation of the TEZ.

SECTION 83. Civil Dispute Resolution. – The TIEZA shall establish a civil
dispute mediation office to effectively and efficiently resolve civil disputes
concerning tourism enterprises and/or tourism-related issues within a TEZ
where at least one (1) of the parties to the dispute was residing in the TEZ at
the time the dispute arose, and is still residing within the TEZ at the time the
complaint is filed with the mediation office. No civil dispute may be filed in court
without having undergone mediation proceedings as provided under this section
except in extraordinary cases where a party may suffer irreparable damage.

The TIEZA shall charge reasonable fees for civil dispute mediation. This
provision is without prejudice to the application of the rules pertaining to
Katarungang Pambarangay with respect to other matters.

SECTION 84. Labor Dispute Resolution. – To resolve disputes between

workers and employers for any violation of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code of the Philippines, the TIEZA
shall, in coordination with the Department of Labor and Employment (DOLE),
establish a labor dispute resolution office to mediate between workers and
employers.
49
 CHAPTER V. INCENTIVES

SECTION 85. General Principles on the Grant and Administration of

Incentives. –

a) Recognizing the strategic economic importance of tourism, the

necessity that investments within TEZs be properly coordinated with
environmental, cultural, and developmental imperatives, and the
fundamental differences between the export manufacturing and
tourism industries, the TIEZA shall have sole and exclusive jurisdiction
to grant the incentives hereinafter provided.

In the formulation of rules and regulations defining and implementing

these incentives, and without derogating therefrom, the TIEZA may
coordinate with the Board of Investments and other government
agencies or entities responsible for the grant and administration of
incentives to assist in the development of a rationalized national
investment incentive policy.

In the grant of incentives, it shall give equal preference to large

investments, those with great potential for employment generation
and those of local small and medium enterprises. Registered tourism
enterprises owned and operated by overseas Filipino investors shall
enjoy the same incentives granted to TEZ operators and registered
enterprises in general. The amount of required investments shall be
defined in the implementing rules and regulations of Republic Act No.
9593. The incentive schemes set forth in Sections 86, 87, and 88 shall
be in effect until December 31, 2029, subjectto review by the Joint
Congressional Oversight Committee.1

The TIEZA shall further coordinate with the Bureau of Customs and the
Bureau of Internal Revenue in the preparation and enforcement of
rules and regulations to prevent the abuse of these incentives.

The jurisdiction of the TIEZA in the grant and administration of incentives shall
not be

impliedly repealed or modified.

b) The Department and the DTI shall promulgate rules and regulations to
govern the relationship between TEZs created under this Act, and
economic zones created under Republic Act No. 7227, otherwise known
as the “Bases Conversion and Development Act of 1992”, and Republic
1 As amended by Republic Act No. 11262, An Act Amending Sections 85 and 103 of Republic Act No. 9593,
otherwise known as the “Tourism Act of 2009”.
50
 Act No. 7916, as amended, otherwise known as the “Special Economic
Zone Act of 1995”, where an area comprising a TEZ overlaps, falls
within or encompasses that of an economic zone; Provided, that such
rules and regulations shall consider the special nature and
requirements of tourism in relation to other industries, establishments
and operations in economic zones. TEZs proclaimed as such prior to
the passage of this Act shall be transferred to the supervision of the
TIEZA.

c) The investment incentives offered under this Act shall be without

prejudice to availing other incentives provided under other laws,
decrees, and presidential issuances. However, where such other laws,
decrees, or presidential issuances provide for similar or identical
incentive schemes, the investor may only elect to avail of the scheme
provided under one particular law, decree, or presidential issuance.

d) LGUs are likewise encouraged to provide incentives for tourism

enterprises through, among others, reductions in applicable real estate
taxes and waivers of fees and charges, among others. Should a LGU
grant such incentives, it shall report the same to the Department and
the TPB to assist in the marketing and promotions of investment in that
LGU.

SUBCHAPTER V-A.
Incentives for TEZ Operators and Registered Tourism
Enterprises

SECTION 86. Fiscal Incentives Available to TEZ Operators and

Registered Enterprises. – The following incentives may, in the discretion of
the TIEZA Board, be granted to registered tourism enterprises within TEZs:

a) Income Tax Holiday. New enterprises in Greenfield and Brownfield

Tourism Zones shall, from the start of business operations, be exempt
from tax on income for a period of six (6) years. This income tax
holiday may be extended if the enterprise undertakes a substantial
expansion or upgrade of its facilities prior to the expiration of the first
six years. This extension shall consider the cost of such expansion or
upgrade in relation to the original investment, but shall in no case
exceed an additional six (6) years. These enterprises shall likewise be
allowed to carryover as deduction from the gross income for the next
six (6) consecutive years immediately following the year of the loss,
their net operating losses for any taxable year immediately preceding
the current taxable year which had not been previously offset as
deduction from gross income.

51
 An existing enterprise in a Brownfield Tourism Zone shall likewise enjoy
the incentives extended to new enterprises in Greenfield and
Brownfield Tourism Zones mentioned in the preceding paragraph.

An existing enterprise in a Brownfield Tourism Zone shall be entitled to

avail of a nonextendible income tax holiday if it undertakes an
extensive expansion or upgrade of facilities. Such an income tax
holiday shall consider the cost of such expansion or upgrade in relation
to the original investment, but shall in no case exceed six (6) years to
be counted from the time of completion of the expansion or upgrade;
Provided, That capital expenditures subject to income tax holiday shall
be understood to mean money spent to acquire or upgrade physical
assets, such as buildings, machinery and equipment, intended to
extend the life of an asset or increase the capacity or efficiency of a
tourism enterprise that benefit the current and future periods; Provided
further, That in case of expansion involving the improvement of
existing structures or constructing new ones, such expansion shall
consider the substantial amount infused, the substantial number of
rooms added or constructed, and, where applicable, their change in
classification from three-star to five-star establishments.

The provisions of this subsection shall likewise apply to tourism

enterprises outside the zones.

b) Gross Income Taxation. In lieu of all other national and local taxes,
license fees, imposts and assessments, except real estate taxes and
such fees may be imposed by the TIEZA, a new enterprise shall pay a
tax of five percent (5%) on its gross income earned, which shall be
distributed as follows:

1) One-third to be proportionally allocated among affected local

government;
2) One-third to the National Government; and
3) One-third to the TIEZA for the funding of its operations and its
programs in the TEZs, which shall include the protection,
maintenance and enrichment of the environment, tangible
cultural and historical heritage, and the intangible cultural
heritage of communities within and surrounding the TEZs.

Gross income as used herein is defined under Section 27(A) of the

NIRC, and further defined under relevant rules and regulations.

c) Capital Investment and Equipment. Subject to rules and

regulations which properly define capital investments and equipment
necessary for various kinds of tourism enterprises, registered
enterprises shall be entitled to an exemption of one hundred percent
52
 (100%) of all taxes and customs duties on importations of capital
equipment.

d) Transportation and Spare Parts. Importation of transportation and

the accompanying spare parts of new and expanding registered
enterprises shall be exempt from customs duties and national taxes;
Provided, that they are not manufactured domestically in sufficient
quantity, of comparable quality and at reasonable prices, and that they
are reasonably needed and will be used exclusively by an accredited
tourism enterprise.

e) Goods and Services. Subject to rules and regulations which properly

define goods and services necessary for various kinds of tourism
enterprises, registered enterprises shall be entitled to the following:

1) Importation of goods actually consumed in the course of services

actually rendered by or through registered enterprises within a
TEZ shall enjoy one hundred percent (100%) exemption from all
taxes and customs duties; Provided however, that no goods shall
be imported for the purpose of operating a wholesale or retail
establishment in competition with the DFPC; and

2) A tax credit equivalent to all national internal revenue taxes paid

on all locallysourced goods and services directly or indirectly
used by the registered enterprise for services actually rendered
within the TEZ.

f) Social Responsibility Incentive. A registered enterprise shall be

entitled to a tax deduction equivalent to a reasonable percentage, not
exceeding fifty percent (50%), of the cost of environmental protection
or cultural heritage preservation activities, sustainable livelihood
programs for local communities, and other similar activities.

SECTION 87. Non-fiscal Incentives Available to TEZ Operators and

Registered
Tourism Enterprises. – The following incentives may, in the discretion of the
TIEZA Board, be granted to registered tourism enterprises within TEZs:

a) Employment of Foreign Nationals. A registered enterprise may

employ foreign nationals in executive, supervisory, technical, or
advisory positions for such reasonable periods and under such terms
as may be provided by the TIEZA Board, with due regard for the proper
protection and representation of foreign investments in registered
enterprises, and the need to ensure easy travel into and out of the
Philippines by such nationals and their immediate families.

53
b) Special Investor’s Resident Visa. Under such terms as may be
provided by the TIEZA Board, a foreign national who shall have made
an investment with a value of at least Two Hundred Thousand Dollars
(USD200,000) in a registered enterprise shall be entitled to a Special
Investor’s Resident Visa. With such Visa, the foreign national shall be
entitled to reside in the Philippines while his or her investment
subsists. Subject to regulations to be issued by the Bureau of
Immigration and Deportation, the TIEZA shall issue working visas
renewable every two (2) years to foreign personnel and other aliens,
possessing highlytechnical skills which no Filipino within the TEZ
possesses, after they have secured Alien Employment Permits (AEP)
from the DOLE. The names of aliens granted permanent resident
status and working visas by the TIEZA shall be reported to the BI
within thirty (30) days after issuance thereof.

c) Foreign Currency Transactions. Subject to the provisions of

Section 72 of Republic Act No. 7653, as amended, otherwise known as
the New Central Bank Act:

1) 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.

2) Remittance of Foreign Exchange. The right to remit

earnings from a foreign investment in the currency in which the
investment was originally made and at the exchange rate
prevailing at the time of remittance.

3) 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.

d) Requisition of Investment.There shall be no requisition of the

property of registered enterprises, except in the event of war or
national emergency, and only for the duration thereof. In any case, the
affected person shall be entitled to just compensation, and shall have
the right to repatriate such compensation as provided in paragraph (c)
above.

e) Lease and Ownership of Land. Without prejudice to existing laws

regulating the ownership of land by individuals and corporations, and
consistent with the provisions of Republic Act No. 7652, otherwise
54
 known as the Investor’s Lease Act, lands and buildings in each TEZ
may be leased to foreign investors for a period not exceeding fifty (50)
years, renewable once for a period of not more than twenty-five (25)
years. The leasehold right acquired under long-term contracts may be
sold, transferred or assigned, subject to the conditions set forth under
the Investor’s Lease Act.

SUBCHAPTER V-B.
Tourism Enterprises Outside TEZs

SECTION 88. Incentives Available to Tourism Enterprises Outside

TEZs. – The grant of fiscal and other incentives to tourism enterprises not
located within TEZs shall be governed by the following provisions:

a) Upon compliance with the requirements provided by law, they shall be

entitled to avail of any economic incentives found under existing laws,
such as Executive Order No. 226 (1987), otherwise known as the
Omnibus Investments Code, Republic Act No. 7042, as amended by
Republic Act No. 8179, otherwise known as the Foreign Investments
Act, the Special Economic Zone Act, and the Bases Conversion and
Development Act, among others, subject to the last paragraph of
Section 86 (a), at the option of the said enterprises.

b) Subject to rules and regulations jointly promulgated by the

Department and the TIEZA, an existing accommodation establishment
not located within a TEZ shall be entitled to claim an income tax
holiday for up to six (6) years for any significant expansion, renovation
or upgrade in its facilities in relation to the amount of the original
investment. They shall also be entitled to import capital equipment
free of taxes and duties when necessary for such expansion,
renovation or upgrade.

c) Tourism enterprises may avail incentives under the Omnibus

Investments Code, provided that:

1) Tourism activities shall always be included in the Investment

Priorities;

2) Rules and regulations concerning the grant of incentives to

tourism enterprises shall be jointly formulated by the Board of
Investments and the Department;

3) The income tax holiday provided under Section 39.1 of the

Omnibus Investments Code shall also apply to existing

55
 accommodation enterprises undergoing substantial capital
infusion for expansion or substantial upgrade of facilities; and

4) Accredited tourism enterprises shall be entitled to import

transportation and accompanying spare parts free of taxes and
duties; Provided, that such transportation shall be exclusively
used by the enterprise in its operations, and provided further,
that such are not manufactured domestically in sufficient
quantity, comparable quality and prices.

d) Tourism enterprises located in special economic zones created under

the Special Economic Zone Act or by special charter, shall continue to
be governed by the same.

e) The incentives offered under this Act shall be without prejudice to the
availment of other incentives provided under other laws, such as, but
not limited to, those concerning infrastructure, or micro-, small-, and
medium enterprises. However, where such laws provide for similar
incentive schemes as those contained herein, the investor may elect
to avail of the scheme provided only under one particular law, decree
or issuance.

CHAPTER VI. DUTY AND TAX-FREE MERCHANDISING SYSTEM FOR

TOURISM PURPOSES

SECTION 89. Duty Free Philippines Corporation. – The Duty Free

Philippines shall be reorganized to become the Duty Free Philippines
Corporation (DFPC), which shall be attached to the Department.

SECTION 90. Mandate. – The DFPC shall be a body corporate to operate the
duty and tax-free merchandising system in the Philippines to augment the
service facilities for tourists and to generate foreign exchange and revenue for
the government, as established by the Department under Executive Order No.
46.

In the performance of its functions, the DFPC shall have all the general powers of
a corporation established under the Corporation Code, in furtherance of its
Charter.

The DFPC shall have the exclusive authority to operate or franchise out stores
and shops that would sell, among others, duty and tax-free merchandise, goods
and articles, in international airports and seaports, and in TEZs and ports of
entry throughout the country in a manner that:

a) Is competitive with international standards;

56
 b) Effectively showcases Philippine culture, craftsmanship, and industry;
and
c) Efficiently and effectively generates foreign exchange.

Such merchandise, goods and articles shall only be sold to persons departing
for abroad, under such limitations, rules and regulations that may be provided
by the Department and in consultation with the DOF, such merchandise, goods
and articles may be sold to passengers arriving into the Philippines from
abroad, including those covered by the existing Balikbayan Program, under
Republic Act No. 6768, as amended.

The DFPC shall likewise be authorized to operate stores and shops within the
immediate vicinity of international airports and seaports to service the
requirements of the international duty-free market.

The DFPC shall operate without prejudice to any privatization in the future,
subject to existing laws on privatization and procedures on public bidding.

SECTION 91. The DFPC Board of Directors. –The DFPC shall be governed
by a Board of Directors, composed as follows:

a) The Department Secretary, as Chairperson;

b) The Chief Operating Officer of the DFPC, as Vice Chairperson;
c) The DOF Secretary;
d) The DTI Secretary;
e) Three (3) representative directors, to be appointed by the President,
upon the recommendation of the Tourism Congress, who must be
Filipinos with recognized competence in business management,
marketing, finance, tourism and other related fields and shall serve a
term of office of three (3) years, which term may be extended for a
period not exceeding three (3) years; Provided, that there shall be no
conflict of interest in any matter concerning the operations of the DFPC.

The Secretaries of the DOF and the DTI shall each designate a permanent
representative in the Board, who must possess relevant experience. The
permanent representative shall be duly authorized to act on behalf of the
Secretary in his or her absence.

The Chairperson of the DFPC Board shall have voting rights in case of a tie.

The DFPC Board shall appoint a corporate secretary whose functions shall
include the preparation of agenda for board meetings, in consultation with the
Chairperson.

SECTION 92. The Chief Operating Officer. – The DFPC shall have a Chief
Operating Officer who must be a Filipino, with a bachelor’s degree in any of the
57
following fields: business, law, tourism, public administration, or other relevant
fields and have demonstrated expertise therein. He or she must have been
engaged in a managerial capacity for at least five (5) years prior to his
appointment. He or she shall be elected by the Board from a list of qualified
applicants and appointed by the Secretary, and shall have a term of office of six
(6) years, unless removed for cause in accordance with law.

SECTION 93. Capitalization and Funding. – The DFPC shall have an

authorized capitalization of Five Hundred Million Pesos (PhP 500,000,000.00)
which shall be fully subscribed by the National Government. A minimum of fifty-
percent (50%) of the annual net profits of the DFPC shall be remitted
automatically to the Office of the Secretary to fund tourism programs and
projects, in lieu of its statutory remittance to the National Government under
Republic Act No. 7656, seventy-percent (70%) of which shall be given to the
TPB.

SECTION 94. General Powers and Functions of the DFPC. – The DFPC
Board shall have the power to sue and be sued; to contract and be contracted
with; to own and hold such real and personal property as shall be necessary for
corporate purposes; to receive real and personal property by gift, devise or
bequest; to adopt a seal and alter the same; to adopt by-laws, rules and
regulations; to exercise all the general powers of a corporation under the
Corporation Code; and to perform all such acts as may be necessary to carry
out this Section.

SECTION 95. Duty and Tax Exemptions. – Consistent with the nature of its
operations and primary function to operate as a tax and duty-free
merchandising system, and to enable it to compete in the international tax and
duty free market, DFPC shall be entitled to exemption from the following:

a) Duties and taxes, including excise and VAT, relative to the importation
of merchandise for sale;
b) Local taxes and fees imposed by the LGUs; and
c) Corporate income taxation.

CHAPTER VII. INCREASED TOURIST ACCESS

SECTION 96. International and Domestic Tourist Travel. – The

Department, through the development of an inter-modal international and
domestic land, sea, and air access system, and in coordination with relevant
government agencies, shall increase and improve the accessibility of the
Philippines to domestic and foreign tourists. Realizing the critical importance of
the progressive development of the civil aviation environment in the
advancement of the country’s international and domestic tourism sector:

58
 a) The Secretary shall be the ex officio Vice Chairperson of the Civil
Aviation Board;
b) The Secretary shall be the ex officio Vice Chairperson of the governing
boards of all international airports;
c) The Secretary shall be authorized to appoint a representative to the
board of directors of each international seaport of the Philippines; and
d) The Secretary shall be a member of the Civil Aviation Authority of the
Philippines Board.

To enhance the standards of transportation services of tourist use, the

Department and the relevant government agencies shall develop an integrated,
one-stop shop system for the speedy issuance of franchises and accreditation
for tourism transport operators.

SECTION 97. Visas. – The Department, the DFA and the Department of Justice
shall develop a system of granting visas that encourages the arrival and longer
stay of tourists in the Philippines.

CHAPTER VIII. CREATING A CULTURE OF TOURISM

SECTION 98. Tourism Coordinating Council. – A council that shall serve as

a coordinating body for national tourism development efforts shall be formed,
consisting of the Secretary, as Chairperson; the TPB Chief Operating Officer; the
TIEZA Chief Operating Officer; the heads of other agencies attached to the
Department; the Secretaries of the DOTC, the DPWH, the DFA, the DENR, the
DILG, the DOLE and the Department of Education (DepEd); and the heads of the
Philippine National Police, the BID, the National Historical Institute, the National
Commission for Culture and the Arts, the PAGCOR, the leagues of LGUs, and
such other government agencies that the President may designate; a
representative each from the Tourism Congress, an accredited NGO or PO
engaged in ecotourism, and a recognized indigenous people’s federation.

The Council shall prepare a five (5) year strategic plan to develop and enhance
a culture of tourism. It shall also approve an annual infrastructure development
plan that shall promote access to and from airports and seaports, and TEZ and
other tourism destinations which shall be accorded priority by the relevant
infrastructure agencies of the National Government.

SECTION 99. Education. – The Department shall work closely with the DepEd
for the development of basic education programs - formal, informal, and non-
formal learning systems and interventions for in-school and out-of-school youth
in the promotion of a culture of tourism through the development and
integration of tourism concepts and the enhancement of education in
languages, history and culture and the arts.

59
 The Department shall also work closely with the Commission for Higher
Education in the regulation of colleges and universities that grant
undergraduate and postgraduate degrees in tourism.

The Technical Education and Skills Development Authority is hereby mandated

to develop, in conjunction with the Department, programs for the training of
tourism entrepreneurs by providing programs for languages, history, and
cultural appreciation, and small business management.

SECTION 100. Peace and Order. – The Philippine National Police shall
establish a Tourism Security Force to assist in maintaining peace and order
within areas of high tourism traffic. A tourist police assistance desk office shall
likewise be established in such areas. The Department shall coordinate with the
DILG in training the members of the Force in cultural sensitivity, languages, and
relevant laws.

SECTION 101. Funding Grassroots Tourism Enterprises. – Insofar as

allowed by applicable laws and their respective charters, government-owned
and controlled banks, and financial institutions shall provide microfinance
schemes for the assistance and development of small and medium-scale
enterprises in the tourism industry.

SECTION 102. No Injunctions Clause. – No temporary restraining order or

preliminary injunction shall be issued or be effective against the TIEZA unless
the same is issued by the Supreme Court.

SECTION 103. Joint Congressional Oversight Committee on Tourism. –

A Joint
Congressional Oversight Committee, hereinafter referred to as the “Oversight
Committee”, is hereby constituted in accordance with this Act. The Oversight
Committee shall be composed of the Chairpersons of the Committee on Tourism
of both Houses of Congress, the Chairpersons ofthe Committees on Ways and
Means of both Houses of Congress,2 the Chairperson of the
Committee on Appropriations of the House of Representatives, the Chairperson
of the Committee

on Finance of the Senate, and three (3) additional members from each House to
be designated by the Senate President and the Speaker of the House of
Representatives.

The Secretary shall report to the Oversight Committee on a monthly basis the
latest statistics on tourist arrivals and other relevant data. He or she shall also
report, on a quarterly basis, the status of implementation of this Act based on

2 As amended by Republic Act No. 11262, An Act Amending Sections 85 and 103 of Republic Act No. 9593,
otherwise known as the “Tourism Act of 2009”.
60
the monthly report submitted thereto by all attached agencies of the
Department with respect to the implementation of their respective programs.

SECTION 104. The Tourism Congress. – Within thirty (30) days from the
publication of the implementing rules and regulations of this Act, the Secretary
shall convene a Tourism Congress of representatives of all accredited tourism
enterprises and former government officials involved in the tourism industry to
serve as the private sector consultative body to assist the government in the
development, implementation and coordination of Philippine tourism policy.

The Tourism Congress shall adopt and ratify its constitution, shall elect its
officers and shall establish a secretariat, both for the Tourism Congress as a
whole and for component sectors. It shall also nominate such representatives as
required under this Act. Finally, it shall endeavor to meet annually to carry out
its mandate.

CHAPTER IX. MISCELLANEOUS PROVISIONS

SECTION 105. Personnel and Compensation. – The employees and

management of the TIEZA, the TPB, and the DFPC shall be exempt from the
coverage of the Salary Standardization Law.

Subject to existing constitutional and legal prohibitions on double compensation

for Board members in an ex-officio capacity, the members of the TIEZA Board,
the Tourism Board and the DFPC Board shall not be entitled to compensation
but may receive reasonable per diems for attendance at regular and special
Board meetings.

SECTION 106. Budgetary Approval. – All attached agencies of the

Department shall submit their annual budgets to the Secretary for approval,
and shall furnish copies of the same to the Oversight Committee.

The budgets of the TPB, the TIEZA and the DFPC reported to the Oversight
Committee shall contain detailed information on the compensation and benefits
received by their employees.

SECTION 107. Implementing Rules and Regulations. – Upon consultation

with stakeholders, the Secretary shall promulgate the implementing rules and
regulations of this Act within ninety (90) days after its effectivity. The Oversight
Committee shall be furnished a copy thereof immediately after promulgation.

SECTION 108. Review. – This Act shall be subject to congressional review by

Congress three (3) years after its approval and every three (3) years thereafter.
61
SECTION 109. TransitoryProvisions. – The transfer of powers and functions
in the Department and agencies attached thereto, as herein provided for, shall
take effect within six (6) months after the effectivity of this Act. The foregoing
transfer of powers and functions shall include all applicable funds, personnel,
records, property and equipment, as may be necessary. The same shall apply to
agencies which have been attached to the Department by virtue of this Act.

As such, all offices under the Department and all attached agencies affected by
the provisions of this Act shall continue to function under their present
mandates until transition is effected as provided for under this Act.

All officers currently serving in the PCVC, the PTA and the DFP boards shall
continue to serve the unexpired portion of the term of the position in the Boards
of the TPB, the TIEZA and the DFPC, respectively.

The heads of the agencies shall continue to serve until replaced as provided for
under this Act.

SECTION 110. TransferofRightsandLiabilities. – The TPB, the TIEZA and

the DFPC shall, by virtue of this Act, be subrogated to all rights and assume all
liabilities of the PCVC, the PTA and the DFP, respectively, in accordance with
pertinent laws, rules and regulations.

SECTION 111. RepealingClause. – The provisions of Executive Order No. 120

(Reorganizing the Ministry of Tourism, Defining its Powers and Functions and for
Other Purposes), Executive Order No. 292, as amended (The Administrative
Code of 1987),
Presidential Decree No. 189, as amended, (Creating the Philippine Tourism
Authority), Presidential Decree No. 1448, as amended, (Creating the Philippine
Convention and Visitors Corporation), Executive Order No. 46 (Granting the
Department of Tourism, Through the Philippine Tourism Authority, Authority to
Establish and Operate a Duty and Tax Free Merchandising System), Executive
Order No. 30 (Creating an Executive Committee for the Development of Quezon
Memorial, Luneta and Other National Parks), Presidential Decree No. 37
(Creating the Nayong Pilipino Foundation), Presidential Decree No. 1616
(Creating the Intramuros Administration), Presidential Decree No. 442, as
amended (the Labor Code), Republic Act No. 7160 (the Local Government Code),
Republic Act No. 7722 (Creating the Commission on Higher Education), Republic
Act No. 9497 (Creating the Civil Aviation Authority of the Philippines) and all
other laws, presidential decrees, executive orders, proclamations and
administrative regulations inconsistent with the provisions of this Act are hereby
amended, modified, superseded or repealed accordingly.

62
SECTION 112. SeparabilityClause. – In the event that any provision of this
Act or parts thereof be declared unconstitutional, such declaration shall not
affect the validity of the other provisions.

SECTION 113. EffectivityClause. – This Act shall take effect thirty (30) days
after its publication in the Official Gazette or in at least two (2) newspapers of
national circulation.

Approved,

SIGNED SIGNED
PROSPERO C. NOGRALES JUAN PONCE ENRILE
Speaker of the House of Representatives President of the
Senate

The Act which is consolidation of Senate Bill No. 2213 and House Bill No. 5229
was finally passed by the Senate and the House of Representatives on March 5,
2009 and March 4, 2009, respectively.

SIGNED SIGNED
MARILYN B. BARUA-YAP EMMA LIRIO-REYES
Secretary General Secretary of the
House of Representatives Senate

APPROVED: 12 MAY 2009

SIGNED
GLORIA MACAPAGAL-ARROYO
President of the Philippines

63
 IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT
NO. 9593, OTHERWISE KNOWN AS THE TOURISM ACT OF
2009

Pursuant to the authority vested in the Secretary of the Department of

Tourism under Section 107 of this Act, otherwise known as the Tourism Act of
2009, the following Implementing Rules and Regulations (IRR) are hereby
promulgated:

RULE I. GENERAL PROVISIONS

SECTION 1. Declaration of Policy. - The State declares tourism as an

indispensable element of the national economy and an industry of national
interest and importance, which must be harnessed as an engine of socio-
economic growth and cultural affirmation to generate investment, foreign
exchange, and employment, and to continue to mold an enhanced sense of
national pride for all Filipinos. Towards this end, the State shall seek to:

a) Ensure the development of Philippine tourism that is for and by the

Filipino people, conserve and promote their heritage, national identity
and sense of unity;

b) Recognize sustainable tourism development as integral to the national

socio- economic development efforts to improve the quality of life of
the Filipino people, providing the appropriate attention and support for
the growth of this industry;

c) Promote a tourism industry that is ecologically sustainable, responsible,

participative, culturally sensitive, economically viable and ethically and
socially equitable for local communities;

d) Create a favorable image of the Philippines within the international

community, thereby strengthening the country’s attraction as a tourism
destination and eventually paving the way for other benefits that may
result from a positive global view of the country;

e) Develop the country as a prime tourist hub in Asia, as well as a center

of world congresses and conventions, by promoting sustainable tourism
anchored principally on the country’s history, culture and natural
endowments, and ensuring the protection, preservation and promotion
of these resources; and

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 f) Encourage private sector participation and agri-tourism for countryside
development and preservation of rural life.

SECTION 2. Objectives. - To pursue the above declaration, the following

objectives are hereby adopted:

a) Develop a national tourism action plan and work for its adoption and
implementation by national and local governments;

b) Encourage activities and programs which promote tourism awareness,

preserve the country’s diverse cultures and heritage, and instill a sense
of history and a culture of tourism among the youth and the populace;

c) All things being equal, grant preferential treatment to the employment

of Filipino nationals in tourism-related enterprises;

d) Provide full government assistance by way of competitive investment

incentives, longterm development fund and other financing schemes
extended to tourismrelated investments;

e) Ensure that tourism development protects and promotes the general

well-being of the Filipino people, particularly in the area of investment,
to include the monitoring and prevention of any act of profiteering or
speculation to the detriment of local residents, as well as the
exploitation of women and children in tourism;

f) Encourage competition in the tourism industry and maximize consumer

choice by enhancing the continued viability of the retail travel industry
and independent tour operation industry;

g) Enhance the collection, analysis and dissemination of data which

accurately measure the economic and social impact of tourism in the
country to facilitate planning in the public and private sectors;

h) Ensure the right of the people to a balanced and healthful ecology

through the promotion of activities geared towards environmental
protection, conservation and restoration;

i) Develop responsible tourism as a strategy for environmentally sound

and community participatory tourism programs, enlisting the
participation of local communities, including indigenous peoples, in
conserving bio-physical and cultural diversity, promoting environmental
understanding and education, providing assistance in the determination

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 of ecotourism sites and ensuring full enjoyment of the benefits of
tourism by the concerned communities;

j) Strengthen the role of tourism councils and encourage the participation

of nongovernmental organizations (NGOs), people’s organizations (POs)
and the private sector in initiating programs for tourism development
and environmental protection;

k) Promote the progressive development of existing civil aviation, land

and sea transportation policies as they relate to tourism, in consonance
with existing bilateral agreements and inter-agency pronouncements;

l) Promote and ensure the convention-handling capability of the country

as a worldclass convention center;

m) Achieve a balance in tourism development between urban and rural

areas in order to spread the benefits of tourism and contribute to
poverty alleviation, better access to infrastructure and to a reduction in
regional imbalances;

n) Enhance capability-building of local government units (LGUs), in

partnership with the private sector, in the management of local tourism
projects and initiatives, thereby ensuring accessible and affordable
destinations throughout the country, especially in areas which have
shown strong comparative advantage;

o) Maintain international standards of excellence in all tourism facilities

and services, and promote the country as a safe and wholesome tourist
destination;

p) Enhance international business relations for the support of tourism

projects of the private sector, through partnership, joint ventures and
other cooperative undertakings involving local and foreign investors;

q) Support the establishment of Tourism Enterprise Zones (TEZs), which

will provide the necessary vehicle to coordinate actions of the public
and private sectors to address development barriers, attract and focus
investment on specific geographic areas and upgrade product and
service quality; and
r) Ensure a sustainable funding mechanism for the implementation of
tourism policies, plans, programs, projects and activities.

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SECTION 3. Definition of Terms. - For purposes of this implementing rules
and regulations, the following terms, words, phrases shall mean and be
understood as follows:

a) Accreditation – a certification issued by the Department to a tourism

enterprise that officially recognizes it as having complied with the
minimum standards for the operation of tourism facilities and services.

b) Act – Republic Act No. 9593, otherwise known as the “Tourism Act of
2009”.

c) Brownfield Tourism Zone – an area with existing infrastructure or

development as determined by the TIEZA.

d) Culture of Tourism – a sustainable tourism development principle that

binds national and local governments, local communities, private
sector, and stakeholders to work together in creating pride of place and
sustaining a tourist friendly destination.

e) Department – the Department of Tourism created pursuant to

Presidential Decree No. 189, as amended.

f) Ecotourism – a form of sustainable tourism within a natural and

cultural heritage area where community participation, protection, and
management of natural resources, culture, and indigenous knowledge
and practices, environmental education and ethics, as well as economic
benefits are fostered and pursued for the enrichment of host
communities and the satisfaction of visitors.

g) Executive Management Committee – a policy and program

coordinating and monitoring body composed of the Department
Secretary and the heads of attached agencies and corporations.

h) Foreign Visitors – all passengers who are non-residents of the

Philippines traveling to and within as well as staying in the country for a
period of not more than one year for leisure, business, and other
purposes and whose visit is not intended for the exercise of an activity
remunerated from the place visited.

i) Goods – unless otherwise specified in this Rules, are merchandise used

by a registered enterprise in the normal operation of its business within
the TEZs.

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j) Greenfield Tourism Zone – a new or pioneer development as
determined by the TIEZA.

k) Duty Free Philippines (DFP) – government entity created pursuant

to Executive Order No. 46, Series of 1986.

l) Duty Free Philippines Corporation (DFPC) – corporate body

created pursuant to Chapter VI of the Act which has exclusive authority
to operate or franchise out stores and shops that would sell among
others, duty- and tax-free merchandise, goods and articles to service
the requirements of international tourists and travelers.

m) Intramuros Administration (IA) – government agency created

pursuant to Presidential Decree No. 1616, as amended, which is
attached to the Department pursuant to the Act.
n) Philippine Convention and Visitors Corporation (PCVC) –
corporate body created pursuant to Presidential Decree No. 867, as
amended which is attached to the Department pursuant to the Act.

o) Philippine Retirement Authority (PRA) – government agency

created pursuant to Executive Order No. 1037, as amended, which is
attached to the Department pursuant to the Act.

p) Philippine Tourism Authority (PTA) – corporate infrastructure arm of

the Department of Tourism created pursuant to Presidential Decree No.
189, as amended.

q) Primary Tourism Enterprises – facilities and services that are

directly related to tourism such as, but not limited to, travel and tour
services: inbound travel agencies and tour operators, local tour
operators, ecotour operators and tour guides; tourist transport services
whether for land, sea and air transport exclusively or majority of its
seats are for tourist use, including airport taxis and tourist drivers;
accommodation establishments such as, but not limited to, hotels,
resorts, apartment hotels, tourist inns, motels, pension houses, private
homes used for homestay, ecolodges, condotels, serviced apartments,
and bed and breakfast facilities; hotel and tourism estate management
services; meetings, incentives, conventions, and exhibition organizers
and facilities; sports and recreational facilities such as, but not limited
to, dive shops, amusement parks, adventure and ecotourism facilities;
foreign exchange dealers and such enterprises as may be identified by
the Secretary, after due consultation with concerned sectors.

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r) Registered Enterprise – an enterprise located within a TEZ that is
dulyregistered with the TIEZA.

s) Rules – this rules and regulations implementing the Act.

t) Secondary Tourism Enterprises – facilities and services that may be

related to tourism such as, but not limited to, restaurants; specialty
shops and department stores; sports facilities and recreational centers
such as, museums and galleries, theme parks, zoos; health and
wellness facilities such as, but not limited to, spas, tertiary hospitals,
ambulatory clinics and medical concierge; rest areas in gas stations;
agri-tourism farms and facilities; tourism training centers or institutes,
including tourism trainers; outbound travel agencies; and such other
enterprises as may be identified by the Secretary, after due
consultation with concerned sectors.

u) Secretary – Secretary of Tourism.

v) Services – unless otherwise specified under this Rules, logistic support

procured and secured by a registered enterprise for the normal
operation of its business within the TEZ.

w) Standards – set of written functional, aesthetic and technical

requirements in the form of specifications or guidelines to ensure that a
product and service complies with the rules and regulations set forth by
the Department.

x) Sustainable Tourism Development – the management of all

resources that meet the needs of tourists and host regions while
protecting the opportunities for the future, in such a way that
economic, social, and aesthetic needs can be fulfilled while maintaining
cultural integrity, essential ecological processes, biological diversity
and life support systems.
y) TEZ Administrator – a person appointed by the Board of Directors of a
TEZ Operator, who shall be responsible for implementing the policies,
plans and projects of the TEZ Operator.

z) TEZ Operator – an entity duly incorporated under Batas Pambansa

Bilang 68, otherwise known as The Corporation Code of the Philippines,
and other relevant laws, whose capital may be provided by LGUs and/or
private entities, and which shall administer and supervise each TEZ.

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 aa) Tourism Congress – a private sector consultative body which assists
the Department in the development, implementation, and coordination
of Philippine tourism policies, composed of aggrupations of Primary and
Secondary Tourism enterprises as well as aggrupations of allied and
relevant enterprises of the tourism industry duly registered with the
Securities and Exchange Commission, such as, but not limited to,
accommodation, travel and tours, tourist transport services, meetings,
incentive travel, conventions, exhibitions/events services and facilities,
and tourism estate development and management services, including
former Secretaries of Tourism.

bb) Tourism Development Plan – a strategic framework that provides for

the orderly and rational development of the tourism sector within a
given area, providing the policy and approaches to develop, promote,
and integrate various programs and projects such as, but not limited to,
accessibility, including infrastructure and transportation; investments
and businesses; environment; cultural heritage; tourism products;
marketing; human resources development; community development,
among others.

cc) Tourism Enterprises – facilities, services and attractions primarily

engaged in whole or in part in tourism and for the purpose of attracting
visitors to and within the Philippines, such as, but not limited to
enterprises provided for under the Primary and Secondary Tourism
Enterprises.

dd) Tourism Enterprise Zone (TEZ) – Tourism Enterprise Zone created

pursuant to Chapter IV-A, Section 59 of the Act.

ee) Tourism Infrastructure and Enterprise Zone Authority (TIEZA) –

a government corporation created pursuant to Chapter IV-B of the Act.

ff) Tourism Promotions Board (TPB) – body corporate created pursuant

to Chapter III of the Act, which under this Rules shall also be referred to
as the Philippine Tourism Promotions Board (PTPB).

RULE II. THE DEPARTMENT OF TOURISM AND ATTACHED

AGENCIES

CHAPTER I. The Department of Tourism

SECTION 4. Mandate. - The Department shall be the primary planning,

programming, coordinating, implementing, and regulatory government

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agency in the development and promotion of the tourism industry, both
domestic and international, in coordination with its attached agencies and
other government instrumentalities. It shall instill in the Filipino the industry’s
fundamental importance in the generation of employment, investment and
foreign exchange.

SECTION 5. Powers and Functions. - The Department shall have the

following powers and functions:

a) Formulate tourism policies, plans, and projects for the development of

tourism as an engine of socio-economic and cultural growth;

b) Supervise and coordinate the implementation of tourism policies, plans,

and projects;

c) Call upon all agencies of government to properly carry out their

programs in relation to and in coordination with the policies, plans, and
projects of the
Department and to assist in the implementation thereof;

d) Communicate to the President, and the heads of departments, agencies

and instrumentalities of the government, the impact upon tourism and
the economy of proposed governmental actions;

e) Provide an integrated market development program to attract people to

visit the Philippines and enhance the prestige of the country and the
Filipino people in the international community;

f) Represent the government in all domestic and international

conferences and fora, and in all multilateral or bilateral treaties and
international agreements concerning tourism, and ensure the
government’s implementation thereof and compliance with all
obligations arising therefrom;

g) Request the President for representation in all government agencies,

offices, boards, commissions, and committees that may affect tourism;

h) Call upon relevant government departments, agencies and offices, in

consultation with the private sector, to provide access to travel, to
facilitate the process of obtaining and extending visas, to integrate and
simplify travel regulations and immigration procedures and to ensure
their efficient, fair and courteous enforcement to assure expeditious
and hospitable reception of all visitors;

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i) Support, advance and promote the protection, maintenance, and
preservation of historical, cultural, and natural endowments, in
cooperation with appropriate government agencies and the private
sector, and take appropriate measures against acts and omissions
contrary to these objectives;

j) Monitor conditions of any community in the Philippines and, in

consultation with the LGUs and law enforcers, issue timely advisories
on the safety or viability of travel to particular places within the
Philippines and on patronage of entities engaged in tourismrelated
activities and of tourism products;
k) Evaluate tourism development projects for the issuance of permits and
the grant of incentives by appropriate government agencies, establish a
databank of tourism areas and projects for investment purposes, and
encourage private sector investment and participation in tourism
activities and projects;

l) Formulate and promulgate, in consultation with the LGUs, the private

sector industries and other tourism stakeholders, rules and regulations
governing the operation and activities of all tourism enterprises
including, but not limited to, a national standard for licensing,
accreditation, and classification of tourism enterprises, prescribing
therein minimum levels of operating quality and efficiency
for their operation in accordance with recognized international
standards, impose reasonable penalties for violation of accreditation
policies and recommend to the LGUs concerned the suspension or
prohibition of operation of a tourism enterprise;

m) Monitor the LGUs’ compliance to national standards in the licensing of

tourism enterprises, receive, and investigate complaints concerning
these enterprises, and act on such complaints to properly implement
the provisions of the Act;

n) Ensure the proper coordination, integration, prioritization, and

implementation of local tourism development plans with that of the
national government;

o) Provide technical assistance to LGUs in destination development,

standard setting and regulatory enforcement;

p) Undertake continuing research studies and surveys to analyze

economic conditions and trends relating to tourism and travel, and
compile and integrate a statistical databank on the tourism industry;

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 q) Delegate to regional offices, in coordination with LGUs, specific powers
and functions in the implementation of tourism policies, plans, and
projects;

r) Collect necessary fees and charges for the proper implementation of

tourism policies, plans, and projects; and

s) Exercise such other powers and functions as are necessary for the
implementation of the Act.

SECTION 6. Structure of the Department.

a) The Department shall consist of the Department Proper, Department

offices, services and units, and the regional and foreign offices.

b) The Department shall establish a staffing pattern with the

corresponding job description and qualification standards in accordance
with the guidelines and rules and regulations, as prescribed by the
Department of Budget and Management (DBM) and the Civil Service
Commission (CSC).

SECTION 7. Department Proper. - The Department Proper shall consist of

the Offices of the Secretary, Undersecretaries, Assistant Secretaries,
Directors and various operating units.

SECTION 8. Office of the Secretary. - The Office of the Secretary shall

consist of the Secretary and his or her immediate staff.

SECTION 9. Office of the Undersecretary for Tourism Department.

a) The Undersecretary for Tourism Development shall be responsible for

the Office of Product Development, the Office of Tourism Development
Planning, Research and Information Management and the Office of
Industry Manpower Development.

b) The Undersecretary shall be assisted by an Assistant Secretary to

oversee the day-today operation of the sector and to perform such
other tasks as may be delegated.

SECTION 10. Office of Product Development. - The Office of Product

Development shall have the following functions:

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 a) Conceptualize and develop new products which will enhance tourism
sites and facilities;

b) Undertake tests on the viability and acceptability of new tourism-

related products and programs;

c) Encourage and promote joint undertakings with the private sector for
the development of new tourism-related products and programs; and

d) Perform such other functions as may be assigned to it by the Secretary.

The Office of Product Development shall consist of the following divisions:

A. Product Planning and Development Division which shall:

1) Plan and conceptualize the development of new and upgrading of

existing products in tourist destinations based on current market
trends and approved national and local tourism development plans;
2) Formulate guidelines on product planning and development to guide
the industry stakeholders;
3) Prepare product development plans to conserve and protect areas
covered under the National Integrated and Protected Areas System
Act (NIPAS) for their declaration as TEZs;
4) Undertake pilot tests of new tourism products and programs
together with the private sector and the PTPB to ascertain its
viability, acceptability, and marketability; and
5) Perform such other functions as may be delegated to it.

B. Product Monitoring and Evaluation Division which shall:

1) Develop a system for the monitoring and evaluation of tourism

products and programs;
2) Monitor and evaluate periodically tourism products;
3) Provide technical assistance to LGUs, local communities and private
sector on the development of new product concepts;
4) Maintain a databank of tourism products and operators for planning
and marketing purposes; and
5) Perform such other functions as may be delegated to it.

SECTION 11. Office of Tourism Development Planning, Research

and Information Management. - The Office of Tourism Development
Planning, Research and Information Management shall have the following
functions:

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a) Prepare a National Tourism Development Plan identifying geographic
areas with potential tourism value and outlining approaches to
developing such areas;

b) Formulate policies and programs for global competitiveness and

national tourism development, and approve local government tourism
development plans;

c) Monitor and evaluate the implementation of policies, plans and

programs of the Department;

d) Formulate an integrated marketing and promotions plan, identifying

strategic market areas and niches;

e) Conduct research and studies, disseminate all relevant data on tourism,

monitor and analyze the socio-economic impact of tourism upon
affected local communities and the nation to maximize the benefits of
tourism throughout affected local communities and to avoid or mitigate
possible negative impacts of the industry;

f) Provide technical assistance to the TIEZA and other government

agencies, including LGUs in the preparation of tourism development
plans for TEZs as well as local tourism development plans with the end
in view of integrating such plans with other sector plans for the area
while ensuring adherence to national policies and programs;

g) Coordinate with, together with the Office of Tourism Coordination,

government agencies, LGUs, NGOs and other private entities for the
development and implementation of the national tourism plans and
policies and other relevant concerns;

h) Source grants or loans from local and foreign funding institutions to

implement tourism policies, plans and projects;

i) Develop, coordinate, and supervise the Department’s information

systems strategic plan;

j) Pursue the Department’s interests in multilateral, bilateral,

international and regional tourism cooperation, agreements and
treaties; and

k) Perform such other functions as may be assigned to it by the Secretary.

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The Office of Tourism Development Planning, Research and Information
Management shall consist of the following divisions:

A. Statistics, Economic Analysis, and Information Management

Division which shall:
1) Formulate and implement a strategic statistical development plan
that would enable the Department to respond not only to its data
requirements but also to make tourism statistics accessible, reliable,
and continually updated to the needs of the tourists and general
public;

2) Compile and generate reports on tourism such as, but not limited to,
foreign arrivals, domestic travelers, tourist receipts, employment,
accommodation occupancy rates, room capacity, and investments;

3) Conduct research, studies and surveys on international and domestic

tourism as well as organize forum to share information on the results
of said undertakings for policy formulation, planning, product
development, regulation and marketing;

4) Establish and maintain a tourism statistical database and a library as

repository of all information in the Department and to allow access
to information by the general public;

5) Provide technical assistance to LGUs in the collection of statistics

and establishment of tourism databank at the local destinations;

6) Prepare economic and market analysis of the trends and

performance of the tourism industry at the national and local
destinations, including the periodic accomplishments of the
Department and its attached agencies;

7) Establish alliances and network with concerned government

agencies, statistical organizations, private sector, academe, and
research institutions to broaden and deepen awareness of tourism
research and statistics as well as address bottlenecks on gathering
and compiling of tourism data;

8) Disseminate tourism statistics and reports on a regular basis as well

as hold end-
users forum to provide update and elicit inputs to enhance the
statistical generation capacity of the Department;

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 9) Conduct research and studies on the effectiveness and efficiency of
the tourism promotions programs and activities as well as undertake
market intelligence on trends and competitor analysis in existing
markets;

10) Formulate an integrated marketing plan, identifying direction and

market priorities, for both international and domestic tourism in
close consultation with the PTPB, foreign and regional offices as well
as the private sector; and

11) Perform such other functions as may be delegated to it.

B. Tourism Development Planning Division which shall:

1) Formulate an annual and five-year National Tourism Development

Plan to provide the direction for the development and promotion of
tourism;

2) Prepare an annual tourism infrastructure program based on the

national and local tourism development plans in coordination with
the Department of Public Works and Highways (DPWH), the
Department of Transportation and Communications (DOTC), and
other infrastructure agencies, including the attached agencies and
corporations for approval by the Tourism Coordinating Council;

3) Review and approve local tourism development plans by the LGUs to

ensure adherence to national policies and programs;

4) Coordinate with NGAs, LGUs, NGOs and private sector the

implementation of National Tourism Development Plan;
5) Monitor and evaluate plans, programs and projects of the
Department and its attached agencies as well as the LGUs

6) Provide technical assistance to TIEZA and LGUs in the preparation of

tourism development plans;

7) Monitor and analyze the socio-economic, environmental and cultural

impacts of tourism on local destinations and affected communities;

8) Formulate, together with Financial and Management Service,

guidelines for the preparation of the Department’s annual work and
financial plans; and

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 9) Perform such other functions as may be delegated to it.

C. International Relations Division which shall:

1) Pursue, together with the appropriate offices, the Department’s

interests in multilateral, international, and regional as well as
bilateral tourism cooperation, agreements and treaties;

2) Formulate negotiating positions in coordination with relevant

government agencies and tourism stakeholders to ensure
consistency with the national policies and industry’s interests;

3) Develop strategic plan on enhancing the benefits and gains as well

as strengthen the institutional mechanism to carry out the
arrangements for agreed cooperation and treaties;

4) Provide technical assistance to the Department’s negotiating panel

and representatives to international organizations, agreements and
treaties;

5) Coordinate, monitor and evaluate the implementation and impacts

of tourism cooperation, agreements, and treaties; and

6) Perform such other functions as may be delegated to it.

D. Information Technology Division which shall:

1) Formulate an annual and five-year Information Systems Strategic

Plan for the
Department;

2) Coordinate, monitor, and evaluate the implementation of the

Information Systems Strategic Plan;

3) Oversee the Department’s information, communication, and

technology networking as well as maintain and enhance the
Department’s portal and website, hardware, software, and
application systems to keep them at par with industry and
international standards and practices;

4) Conduct studies on the information technology needs of the

Department and evaluate the feasibility of transforming to electronic

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 and other medium acceptable the various information and
transactions of the operating units; and

5) Perform such other functions as may be delegated to it.

SECTION 12. Office of Industry Manpower Development. - The Office

of Industry Manpower Development shall have the following functions:

a) Develop training modules and conduct multi-skills training seminars,

including continuing education programs for the industry manpower, in
coordination with appropriate government agencies and tourism
enterprises and associations, thereby upgrading their quality,
competence, and excellence in the delivery of tourism services, which
shall include topics on Philippine history, culture, environment, and
related subjects, in coordination with appropriate government agencies
and the private sector, specifically educational institutions;

b) Develop training courses and apprenticeship programs, in coordination

with the Office of Tourism Standards and Regulation, for tourist guides
and other similar workers jointly with appropriate government agencies
and the private sector;

c) Enlist the participation of experts for the training and education

programs to LGUs;

d) Develop, in conjunction with the Technical Education and Skills

Development Authority (TESDA), programs for the training and
certification of tourism professionals; and

e) Perform such other functions as may be assigned to it by the Secretary.

The Office of Industry Manpower Development shall consist of the following

divisions:

A. Manpower Planning and Monitoring Division which shall:

1) Formulate, coordinate, and monitor the implementation of the
annual and five-year Tourism Industry Manpower Development Plan
in consultation with the Technical Educational and Skills
Development Authority (TESDA) and the private sector;

2) Conduct training needs analysis and develop training modules and

continuing education programs to upgrade the competencies and
skills of the industry manpower and the LGUs;

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 3) Work with the Commission on Higher Education (CHED) for the
development of curriculum and regulation of colleges and
universities that grant undergraduate and postgraduate degrees on
tourism and related fields;

4) Develop, in conjunction with the Technical Education and Skills

Development Authority (TESDA), programs for the training and
certification of tourism professionals; and

5) Develop, implement and monitor job-placement and career

programs for trained tourism professionals as well as registered and
qualified industry manpower;

6) Develop a comprehensive tourism capability building program for

LGUs; and

7) Perform such other functions as may be delegated to it.

B. Manpower Training Division which shall:

1) Conduct regular training and continuing education programs for

industry manpower and tourism officers of the LGUs which shall
include topics on Philippine history, culture, environment, and
related subjects;

2) Implement an apprenticeship program for tour guides and other

similar workers in the tourism sector in close coordination with the
private sector;

3) Implement a tourism capacity building program for tourism officers

and LGUs;

4) Enlist the support and participation of experts in the conduct of

training for
LGUs and tourism manpower; and

5) Perform such other functions as may be delegated to it.

SECTION 13. Office of the Undersecretary for Tourism Regulation,

Coordination and Resource Generation.

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 a) The Undersecretary for Tourism Regulation, Coordination and Resource
Generation shall be responsible for the Office of Tourism Standards and
Regulations, the Office of Tourism Coordination, the Office of Tourism
Resource Generation and all regional and foreign offices.

b) There shall be created a support group or unit under the Office of the
Undersecretary to provide liaison and coordination work for the regional
and foreign offices with other government agencies and private sector
at the national level.

c) The Undersecretary shall be assisted by an Assistant Secretary to

oversee the day-today operation of the sector and to perform such
other tasks as may be delegated.

SECTION 14. Office of Tourism Standards and Regulations. - The

Office of Tourism Standards and Regulations shall have the following
functions:

a) Formulate and enforce standards for the operation and maintenance of

tourism enterprises, prescribing minimum and progressive levels of
operating quality and efficiency consistent with local and international
standards;

b) Coordinate with relevant tourism enterprise associations, including

adventure sports associations, in the formulation and enforcement of
the rules and regulations for the accreditation of tourism enterprises;

c) Develop and enforce a comprehensive system for mandatory

accreditation for Primary Tourism Enterprises, and voluntary
accreditation for Secondary Tourism
Enterprises, in accordance with prescribed guidelines and standards;
d) Establish a system of registration, information, linkage, and mutual
assistance among accredited tourism enterprises to enhance the value
of accreditation and improve the quality of service rendered by such
enterprises;

e) Evaluate tourism projects in accordance with standards and endorse

the same to appropriate government agencies such as, but not limited
to, Board of Investments (BOI), Department of Environment and Natural
Resources (DENR), Department of Agrarian Reform (DAR), and Land
Transportation Franchising and Regulatory Board (LTFRB), for availment
of incentives, permits, clearances and franchises and provide technical
assistance to incentive-giving institutions and concerned government

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 agencies in the formulation of tourism incentives and the
administration of their functions; and

f) Perform such other functions as may be assigned to it by the Secretary.

The Office of Tourism Standards and Regulations shall consist of the following
divisions:

A. Standards Development Division which shall:

1) Formulate and implement a national standard for the operation and

maintenance of Primary and Secondary Tourism Enterprises,
prescribing minimum levels of quality and efficiency in order to
ensure that facilities and services are maintained in accordance with
acceptable local and international standards;

2) Promulgate rules and regulations governing the operation,

classification and activities of all persons, firms and enterprises
engaged in tourism, including the imposition of fines and penalties
for violation of said rules and regulations;

3) Undertake continuing research on the development of standards for

tourism enterprises; and

4) Perform such other functions as may be delegated to it.

B. Standards Monitoring and Enforcement Division which shall:

1) Ensure that tourism enterprises comply with the prescribed rules

and regulations in the operation and maintenance of facilities and
services;

2) Ensure that personnel in the regional offices are equipped with the
necessary knowledge and facility to implement the prescribed
standards and classification of Primary and Secondary Tourism
Enterprises;
3) Assess the performance of the regional offices in relation to the
regulation of tourism enterprises in their respective areas of
responsibility and reverse their findings and/or take over the
functions of regulating tourism enterprises at the local level should
there be a determination that a regional office is unable to
satisfactorily perform its function;

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 4) Act on complaints regarding accredited tourism enterprises, and
after due notice and hearing, impose fines, downgrade, suspend or
revoke the accreditation, for violation of the terms thereof;

5) Issue public notices and advisories pertaining to tourism enterprises

found to have violated the terms of their accreditation;

6) Notify the LGU concerned when a tourism enterprise locating in their

area fails to obtain or loses its accreditation and monitor the
appropriate action taken by the LGU concerned in relation to said
enterprise’s license and permit to operate; and

7) Perform such other functions as may be delegated to it.

C. Project and Investment Evaluation Division which shall:

1) Evaluate applications of new tourism development projects,

including the renovation and expansion of existing projects, and
endorse the same to appropriate government agencies for the
availment of incentives and/or grant of permits, clearances and
franchises;

2) Monitor the compliance of approved projects with the development

timetable and other terms and conditions of the endorsement;

3) Establish a databank and monitor the purchase, sale or lease of

tourism enterprises;

4) Coordinate with the PTPB and TIEZA during the conduct of

investment promotion activities to ensure that prospective investors
are properly guided with the current tourism investment laws;

5) Extend technical assistance to approved tourism projects and

prospective investors on their proposed tourism development
projects; and

6) Perform such other functions as may be delegated to it.

SECTION 15. Office of Tourism Coordination. - The Office of Tourism

Coordination shall have the following functions:

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 a) Maintain close coordination with national government agencies, LGUs,
NGOs and other private entities for the development and
implementation of national tourism plans and policies;

b) Call upon the assistance and support of any or all of the government
agencies in the implementation of the policies of the Department;

c) Support the private sector in all tourism activities requiring

governmental coordination; and

d) Perform such other functions as may be assigned to it by the Secretary.

The Office of Tourism Coordination shall consist of the following divisions:

A. Government Coordination Division which shall:

1) Coordinate the implementation of national tourism development

plan and tourism infrastructure program with concerned government
agencies;

2) Develop education and advocacy programs together with concerned

agencies to instill the culture of tourism;

3) Develop a system, in coordination with appropriate agencies, to

provide access to travel, facilitate the process of obtaining and
extending visas, integrate and simplify travel regulations and
immigration procedures, and ensure the efficient, fair and courteous
enforcement of laws, rules and regulations to assure the expeditious
and hospitable reception of all visitors;

4) Develop a system of monitoring ongoing tourism projects of both

government and private sector entities, including a communication
and information sharing system through which all government and
private sector entities can monitor ongoing tourism activities;

5) Provide secretariat support to the Tourism Coordinating Council; and

6) Perform such other functions as may be delegated to it.

B. Industry and Media Coordination Division which shall:

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 1) Enlist the support of the private sector and media in all tourism
programs and activities as well as the implementation of tourism
development plans and policies;
2) Develop a communication plan to inform and educate the publics on
the importance of tourism and to mitigate the impacts of global,
regional and national phenomena directly and indirectly affecting
the tourism industry;

3) Monitor conditions of tourism destinations and issue appropriate and

timely advisories in consultation with the LGUs and concerned
agencies on the safety
or viability of travel to said places as well as the patronage of
entities engaged in tourism-related activities and of tourism
products; and

4) Perform such other functions as may be delegated to it.

SECTION 16. Office of Tourism Resource Generation. - The Office of

Tourism Resource Generation shall have the following functions:

a) Ensure a sustainable funding mechanism for the implementation of

tourism plans, policies, programs and activities of the Department and
it’s attached agencies;

b) Establish the Tourism Development Fund and formulate guidelines,

rules and regulations for its equitable allocation among projects relating
to the development and promotion of tourism;

c) Collect tourism charges and fees, as may be deemed necessary in

relation to the mandate of the Department; and
d) Perform such other functions as may be assigned to it by the Secretary.

The Office of Tourism Resource Generation shall consist of the following

divisions:

A. Revenue Research Division which shall:

1) Conduct researches and studies on the imposition of specific charges

and fees, such as, but not limited to, foreign tourists, tourism
enterprises and other entities providing and consuming tourism
resources and services;

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 2) Promulgate rules and regulations on the imposition of tourism
charges and fees as may be determined by the Department;

3) Formulate guidelines on the collection, allocation and utilization of

tourism revenues accruing to the Tourism Development Fund;

4) Monitor the utilization of Tourism Development Fund;

5) Coordinate with the Financial and Management Affairs Service the

processing and release of funds to appropriate entities, including the
attached agencies; and

6) Perform such other functions as may be delegated to it.

B. Revenue Collection Division which shall:

1) Develop and establish a system for the efficient and effective

collection of tourism charges and fees;

2) Set targets for the collection of tourism charges and fees;

3) Collect and turn-over the charges and fees to the Cashier’s Office for
deposit; and

4) Perform such other functions as may be delegated to it.

SECTION 17. Regional Offices.

a) The Department shall establish, operate and maintain a regional office

in each administrative region in the country. The regional offices shall
have the following functions:

1) Implement laws, policies, plans, programs, rules, and regulations of

the Department;

2) Accredit tourism enterprises in accordance with set standards, rules,

and regulations promulgated by the Department;

3) Collect and remit tourism charges and fees in accordance with the
Department’s policies and guidelines;

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 4) Coordinate with the LGUs the formulation and submission for
approval of local tourism development plans;

5) Coordinate with regional offices of other departments, bureaus and

agencies, LGUs, NGOs, and private sector, the implementation of
national tourism development plan;

6) Undertake research and gather data on local tourism trends and

other relevant tourism information;

7) Coordinate the establishment of tourism information and assistance

centers by LGUs in strategic locations as are necessary to
disseminate relevant information pertaining to the tourist locations
and products, and to assist tourists and tourism enterprises;

8) Provide technical assistance to the LGUs, local communities and

tourism enterprises on tourism planning, product development,
standard setting, promotions, formulation and enforcement of laws,
rules and regulations, among others;

9) Conduct seminars and information campaigns as well as organize

forum to inform the publics on subject matters pertaining to the
functions of the Department, tourism traffic and new tourism sites;

10) Supervise the implementation of the domestic tourism promotions

programs as well as provide information in the preparation of
domestic promotions plan;

11) Make recommendations to the Secretary on all matters relating to

tourism in the region; and

12) Perform such other functions as may be assigned to it by the

Secretary.

b) The regional offices shall be headed by a regional director. It shall have

three (3) operating units responsible for tourism planning, tourism
regulation, and administration.

SECTION 18. Foreign Offices.

a) The Department shall establish foreign offices based on market

analysis and planning. The foreign offices shall have the following
functions:

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 1) Undertake research and gather data on tourism market trends and
other relevant tourism information;

2) Coordinate the implementation of plans, policies, and programs of

the Department, including multilateral and bilateral agreements,
with the National
Tourism Organizations and other international associations;

3) Supervise the implementation of international tourism promotion

programs in their respective areas of responsibility as well as
provide information in the preparation of international promotions
plan;

4) Make recommendations to the Secretary on all matters relating to

tourism within their respective jurisdiction; and

5) Perform such other functions as may be assigned to it by the

Secretary.

b) The creation, operation and supervision of a foreign office shall be

vested on the Department of Tourism.

c) The Secretary shall designate and assign personnel in the foreign

offices from the pool of tourism service staff officers within the
Department and attached agencies. For this purpose, the Department
through the Undersecretary for Tourism Regulation, Coordination, and
Resource Generation shall formulate a manual with detailed guidelines
for the creation and operation of foreign offices, including the
assignment, entitlement, conduct and accountability of personnel of the
Department and attached agencies assigned in the foreign offices.

SECTION 19. Undersecretary for Special Concerns and

Administration

a) The Undersecretary for Special Concerns and Administration shall be

responsible for the Office of Special Concerns, the Financial and
Management Service, Administrative Affairs Service, and Legal Affairs
Service, also referred to in this Rules as Office of Financial and
Management Affairs, Office of Administrative Affairs, and Office of Legal
Affairs, respectively, the Office of Internal Audit Service and the
Legislative Liaison Unit.

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 b) The Undersecretary shall be assisted by an Assistant Secretary who
shall over-see the day-to-day operation of the sector.

SECTION 20. Office of Special Concerns. - The Office of Special

Concerns shall have the following functions:

a) Coordinate and monitor the implementation of the various directives,

pronouncements and issuances of the President pertaining to the
priorities of the government and the Department; and

b) Perform such other functions as may be assigned to it by the Secretary.

SECTION 21. Office of Financial and Management Affairs. - The

Financial and Management Service also referred to in this Rules as the Office
of Financial and Management Affairs, shall have the following functions:

a) Adviseand assist the Secretary on budgetary, financial and

management matters; and

b) Assist the Secretary, together with the Office of Tourism Development

Planning, Research and Information Management, in the review of
budget proposals of the attached agencies to ascertain consistency
with the Department’s priorities;

c) Organize technical budget hearing, in coordination with Office of

Tourism Development Planning, Research and Information
Management, of the budget proposals of various operating units;

d) Organize workshops and trainings for regional accountants and budget

officers on latest budgeting, accounting and auditing systems,
procedures, rules and regulations;

e) Perform such other functions as may be assigned to it by the Secretary.

The Office of Financial and Management Affairs shall consist of the following
divisions:

A. Budget Division which shall:

1) Conduct technical budget hearing, in coordination with Office of

Tourism Development Planning, Research and Information
Management, of the budget proposals of various operating units;

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 2) Consolidate and prepare the Department’s Budget Proposal/Estimate
based on approved plans and programs and in consonance with the
national government thrusts and priorities as provided in the Budget
Call;

3) Review and prepare the Department’s Annual Work and Financial

Plan to ensure efficient programming and utilization of funds;

4) Obligate valid claims of projected expenditures in support of the

Department’s programs, projects and activities;

5) Monitor the utilization of funds and implementation of planned

programs, projects and activities;

6) Conduct periodic reconciliation of funds commitment vis-à-vis the

obligation to preclude discrepancies;

7) Manage the monthly cash allocation;

8) Prepare and submit accountability reports to fiscal agencies and

higher authorities;

9) Provide technical assistance to subordinate budget units in the

application and utilization of budgetary methods and the budget
system; and

10) Perform such other functions as may be delegated to it.

B. Accounting Division which shall:

1) Certify as to the availability of funds;

2) Process claims for payments;

3) Undertake bookkeeping and maintain basic financial records, books

of accounts, general and subsidiary ledgers;

4) Advise management on financial matters;

5) Prepare and submit financial reports, including special reports to

management and other government agencies;

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 6) Ensure that all accounting records, books of accounts, financial
statements and reports for all types of funds and transactions reflect
accurate financial information required in compliance with
accounting and auditing rules and regulations; and

7) Perform such other functions as may be delegated to it.

C. Management Division which shall:

1) Develop plans and programs on management improvement;

2) Examine the administrative organization of the Department and

provide recommendation for improvement;

3) Maintain and update the Department’s organization structure and

other manuals;

4) Conduct regular management surveys of the organization structure,

manpower and operations, and perform studies on special problems
as assigned;
5) Review existing methods, systems and procedures/processes and
provide recommendations for improvement;

6) Develop new and improved management systems and provide staff

supervision over the implementation of such improvements, as well
as conduct training on the application of the system/s; and

7) Perform such other functions as may be delegated to it.

SECTION 22. Office of Administrative Affairs. - The Administrative Affairs

Service, also known in this Rules as Office of Administrative Affairs, shall have
the following functions:

a) Advise and assist the Secretary on all matters pertaining to personnel

and general services administration;

b) Provide the Department with centralized and integrated services

relating to personnel information, work environment, records,
communications, supplies, equipment, collection, disbursements,
security and other custodial work; and

c) Perform such other functions as may be assigned to it by the Secretary.

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The Office of Administrative Affairs shall consist of the following divisions:

A. Human Resource Division which shall:

1) Advise management on policies relative to personnel administration

and human resources development;

2) Develop and administer a personnel program which shall include

recruitment, selection and placement, training and development,
compensation, employee welfare, incentives and benefits,
performance appraisal, personnel information systems/records,
employee relations, and other personnel services;

3) Recommend modification of staffing pattern and manpower

requirements, visà-vis the Department’s goals and objectives, plans
and programs, in accordance with existing CSC, DBM, and COA rules
and regulations and other issuances;

4) Act on all matters concerning appointments, promotions, transfers,

reassignment, attendance, leaves of absence, compensation and
benefits, and other personnel actions/transactions, in accordance
with existing CSC, DBM, and COA rules and regulations and other
issuances;

5) Develop and implement a human resource development plan, based

on identified needs, which will provide the enhancement of the
competencies and skills of employees as well as their physical, social
and spiritual well-being;

6) Develop and implement a performance evaluation system;

7) Maintain and update personnel records; and

8) Perform such other functions as may be delegated to it.

B. General Services Division which shall:

1) Develop and administer a cash management program;

2) Prepare a list of account payables to support request for NCA
release;

3) Prepare collection and disbursement reports as required under

accounting and auditing rules;

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 4) Develop and administer an efficient, economical, and effective
property and supply management program;

5) Ensure transparent procurement of office equipment, supplies and

materials, spare parts, and the like in collaboration with the Bids and
Awards Committee;

6) Formulate policies on the proper control, utilization, storage, and

disposal of equipment, property, supplies and materials, in
accordance with government prescribed standards, rules and
regulations;

7) Coordinate with inspection committee regarding the inspection of

the delivery of purchased materials, supplies and equipment;

8) Conduct periodic inspection and inventory of existing supplies and

equipment and reconcile records with Accounting Division;

9) Prepare the Department’s Annual Procurement Plan based on the

requirements of the operating units of the Department;

10) Develop and administer maintenance program for building, grounds,

facilities, equipment, repair, improvement and/or enhancement as
well as security programs and measures;

11) Coordinate the transportation, communication, messengerial,

security and janitorial services of the Department;

12) Develop and implement a centralized records management and

tracking system;

13) Develop and maintain a records retention and disposition policy

congruent with existing government rules and regulations;

14) Classify, catalog, index and store archival documents for ready
reference of the operating units; and

15) Perform such other functions as may be delegated to it.

SECTION 23. Office of Legal Affairs. - The Legal Affairs Service, also
known in this Rules as the Office of Legal Affairs, shall have the following
functions:

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 a) Advise and assist the Secretary on all legal matters involving the
Department;

b) Review and finalize all issuances, circulars, and rules and regulations to
be promulgated by the Department, as well as all legislative
instruments to which the Department is a party;

c) Hear, investigate, and adjudicate administrative cases involving

employees of the Department;

d) Coordinate with relevant agencies on legal concerns affecting the

Department;

e) Organize and/or conduct workshops, seminars, and similar trainings on

legal procedures for the Department and its employees; and

f) Perform such other functions as may be assigned to it by the Secretary.

The Office of Legal Affairs shall consist of the following divisions:

A. Legislation, Research, and Documentation Division which shall:

1) Interpret laws and rules in relation to the operations of the

Department;

2) Maintain a compendium of international and local legislations,

decrees and issuances, relevant to tourism, as well as international
and local agreements to which the Department is a party;

3) Review and finalize all issuances, circulars, and rules and regulations
to be promulgated by the Department;

4) Prepare/review contracts, other legal instruments, and international

agreements to which the Department is a party;

5) Conduct researches and prepare comments, opinions, and position

papers on proposed legislations affecting the mandate of the
Department and the tourism industry; and

6) Perform such other functions as may be delegated to it.

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B. Administrative Investigation, Adjudication, and Counseling
Division which shall:
1) Receive, investigate, and act on complaints involving tourists in
coordination with the Philippine National Police and other relevant
agencies;

2) Conduct investigation of cases involving administrative charges

against the Department’s personnel as well as provide counseling
services to its employees;

3) Represent the Department in collaboration with the Office of Solicitor

General in litigations before any judicial, quasi-judicial, or
administrative body/tribunal;

4) Organize and/or conduct seminars, workshops, and similar trainings

on legal procedures for the Department and its personnel; and

5) Perform such other functions as may be delegated to it.

SECTION 24. Internal Audit Service. - The Internal Audit Service shall
have the following functions:

a) Advise the Secretary on all matters relating to management control and

operations audit;

b) Institute and conduct operations and financial performance audit to

ensure compliance with existing rules and regulations for an effective
and efficient fiscal administration, internal control, and performance of
Department affairs; and

c) Perform such other functions as may be delegated to it by the

Secretary.

The Internal Audit Service shall consist of the following divisions:

A. Operations Audit Division which shall:

1) Conduct performance audit, in coordination with the other division,

of the Department’s organizational units to determine overall
effectiveness and efficiency in the delivery of services;

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 2) Conduct studies on any phase of management activity, survey work
and special assignment as may be instructed by the Secretary or his
duly legal representative;

3) Review and appraise the operation of the Department’s offices and

organizational units to determine the extent of compliance with
established policies, systems and procedures;

4) Conduct special audit of the Department’s foreign assisted, locally

funded, and inter-agency projects to appraise standards of
performance and ascertain whether the projects have achieved the
goals and objectives;

5) Recommend improvements and corrective actions on operational

deficiencies, deviations or variances from the programs/ projects,
targets and objectives;

6) Review work plans, accomplishments and status reports of all

Department’s projects and programs to determine whether results
are consistent with established goals and objectives and whether the
programs are implemented as planned;

7) Formulate and implement performance indicators and standards

related to special audit; and

8) Perform such other functions as may be delegated to it.

B. Financial Audit Division which shall:

1) Conduct financial audit of the Department’s income, expenditures,

payrolls, books of accounts, financial reports, vouchers, and other
relevant files of the agency to determine the degree of compliance
with established objectives, policies, rules and regulations;

2) Review and analyze financial statements, reports of the

Department’s organizational units, projects, programs, regional and
foreign offices to ascertain the reliability and usefulness of
accounting, financial and statistical data/ information;

3) Appraise the effectiveness or economy with which money,

manpower, property and other agency assets are utilized;

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 4) Develop and implement performance indicators and standards
related to financial audit;

5) Recommend improvements or corrective actions on operational

deficiency related to financial matters; and

6) Perform such other functions as may be delegated to it.

SECTION 25. Legislative Liaison Unit. - The Legislative Liaison Unit shall
have the following functions:

a) Establish and maintain regular coordination and liaison with Congress;

b) Monitor the passage of legislative measures that are in the

Department’s agenda;

c) Provide relevant information and technical support to Members of

Congress;

d) Represent the Department in meetings and hearings of both Houses of

Congress;

e) Liaise with both Houses of Congress regarding the Department’s inputs,

opinions and recommendations on legislative matters in consultation
with appropriate offices of the Department; and

f) Perform such other functions as may be assigned to it by the Secretary.

CHAPTER II. The Tourism Development Fund

SECTION 26. Establishment of the Fund.

a) Pursuant to Section 16 of the Act, the Department shall establish a

special account in the National Treasury to be called the Tourism
Development Fund, the proceeds of which shall accrue directly and
automatically to the Department.

b) The Fund shall be sourced from the fees and charges that may be
imposed by the Department in pursuant of its mandate.

c) The Fund shall be used to implement tourism policies, plans, programs,

projects, and activities of the Department and its attached agencies
and corporations.

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SECTION 27. Fees and Charges.

a) As may be determined in furtherance of its mandate, the Department

shall collect appropriate fees and charges.

b) The said fees and charges shall be deposited in the Tourism

Development Fund.

c) The fees currently collected by the Department from accreditation and

conduct of trainings for the industry shall form part of the said Fund
effective immediately.

SECTION 28. Fund Allocation.

a) The Fund shall be allocated by the Department for the following

purposes:

1) Promotion and marketing efforts of the PTPB;

2) Development of infrastructure facilities, utilities and services of the

TIEZA;

3) Market research, planning, product development, training, and

enforcement of standards, rules and regulations by the
Department’s operating units; and

4) Other projects of the Department that will boost tourism.

b) The Department shall issue specific guidelines, and rules and

regulations on the collection, allocation and disbursements of the Fund
in coordination with concerned agencies.
CHAPTER III. Attached Agencies and Corporations

SECTION 29. Attached Agencies and Corporations. – The following

agencies and corporations shall be attached to the Department and shall be
under the supervision of the Secretary for policy and program coordination
while continuing to operate under their respective charters.

a) Philippine Tourism Promotions Board (PTPB);

b) Tourism Infrastructure and Enterprise Zone Authority (TIEZA);
c) Duty Free Philippines Corporation (DFPC);
d) Intramuros Administration (IA);

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 e) National Parks Development Committee (NPDC);
f) Nayong Pilipino Foundation (NPF);
g) Philippine Retirement Authority (PRA); and
h) Philippine Commission on Sports Scuba Diving (PCSSD).

SECTION 30. Supervision over Attached Agencies and

Corporations. - Pursuant to the charters of the agencies and corporations
attached to the Department, the Secretary, as Chairperson of the governing
boards and authorities of the attached agencies and corporations, shall
exercise the following authority to ensure policy and program coordination:

a) Appoint the Chief Operating Officers of the PTPB, the TIEZA, and the
DFPC as elected by the respective governing Boards from the list of
qualified applicants;

b) Ensure the compliance of attached agencies to the approved plans and

programs in the National Tourism Development Plan;

c) Prescribe standards and guidelines to effectively and efficiently carry

out their mandates;

d) Without prejudice to the powers and functions of each Board of

Directors of attached agencies, approve the annual budget and work
plan of the attached agencies as conforming to the Department’s
priorities;

e) Monitor and evaluate the agencies’ performance to determine

compliance with the Department’s policies, standards and guidelines;

f) Take appropriate action as may be necessary for the proper

performance of official functions, including rectification of violations,
abuses and other forms of maladministration; and

g) Other forms of supervisory authority by a Secretary over its attached

agencies as provided under Executive Order No. 292 or the
Administrative Code of 1987.

SECTION 31. Executive Management Committee. - To ensure an

effective policy and program coordination between and among the
Department and its attached agencies and corporations, an Executive
Management Committee shall be established to be composed of the
following:

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 a) Department Secretary as Chairperson;
b) DOT Undersecretary for Tourism Development as Member;
c) DOT Undersecretary for Tourism Regulation, Coordination, and Resource
Generation as Member;
d) DOT Undersecretary for Special Concerns and Administration as
Member;
e) PTPB Chief Operating Officer as Member;
f) TIEZA Chief Operating Officer as Member;
g) DFPC Chief Operating Officer as Member;
h) IA Administrator as Member;
i) NPDC Executive Director as Member;
j) NPF Executive Director as Member;
k) PCSSD Executive Director as Member; and
l) PRA General Manager as Member.

The Secretary shall issue the appropriate directive defining the functions,
meetings, and conduct of the Executive Management Committee.

SECTION 32. Budget Approval.

a) All attached agencies and corporations of the Department shall submit

their annual budgets and work plans as well as their supplemental
budgets to the
Secretary for determination as to the consistency with the Department’s
priorities.

b) The Secretary through the heads of attached agencies and Chief

Operating Officers of the corporations shall submit the recommended
annual budgets and work plans for the ensuing year to the respective
governing boards and authorities of said agencies within the last
quarter of the preceding calendar/ fiscal year for final consideration and
approval.

c) Upon approval of the governing boards, copies of the approved budgets

of the attached agencies and corporations shall be furnished the
Oversight Committee. The budgets of the PTPB, the TIEZA, and the
DFPC reported to the Oversight Committee shall contain detailed
information on the compensation and benefits received by their
employees.

SECTION 33. Operation of TEZ.

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 a) The IA, NPDC, and NPF may operate TEZs within their respective
jurisdictions under the supervision of the TIEZA as provided in the rules
and regulations governing the creation and operation of TEZs.

b) Any restoration activity undertaken by the IA, NPDC, and NPF within the
TEZs shall be entitled to a tax deduction equivalent to the full cost of
the restoration activity directly incurred in accordance with the
provisions of the National Internal Revenue Code, as amended.

SECTION 34. Scuba Diving Rules and Regulations. - The PCSSD, in

consultation with the Office of Tourism Standards and Regulations shall
undertake measures to provide the standard basic dive rules to all levels or
kinds of divers, regulate scuba sports and technical diving, and formulate
policies to ensure the safety of the sports, including the regulation of
accredited scuba sports and technical diving establishments.

RULE III. THE TOURISM PROMOTIONS BOARD

CHAPTER I. The Tourism Promotions Board

SECTION 35. Reorganization.

a) The Philippine Convention and Visitors Corporation is reorganized as the

Tourism Promotions Board (TPB), also to be referred to in this Rules as
the Philippine Tourism Promotions Board (PTPB).

b) The Bureaus of Domestic and International Tourism Promotions and the

Office of Tourism Information of the Department, pursuant to the Act
and as modified under Executive Order No. 366, otherwise known as
the Rationalization Program, are hereby absorbed into the PTPB.

SECTION 36. Mandate. - The PTPB shall be responsible for marketing and
promoting the Philippines domestically and internationally as a major global
tourism destination, highlighting the uniqueness and assisting the
development of its tourism products and services, with the end in view of
increasing tourist arrivals and tourism investments; marketing the Philippines
as a major Meetings, Incentives, Conventions, and Exhibitions (MICE)
destination; attracting, promoting, facilitating, and servicing large scale
events, international fairs and conventions, congresses, sports competitions,
expositions and the like; ensuring the regular local and international
advertisement of the country’s major tourism destinations and other tourism
products, including TEZs; and providing incentives to travel agencies, tour

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operators, wholesalers and investors abroad capable of drawing a sizeable
number of tourists and tourism investments to the country.

SECTION 37. Powers and Functions. - The PTPB shall have all the
general powers of a corporation as provided under the Corporation Code. In
addition, the PTPB shall have the following functions:

a) Organize the PTPB in a manner most efficient and economical for the
conduct of its business and the implementation of its mandate;

b) Develop and implement a plan to market the Philippines as a premier

tourist destination;

c) Direct and coordinate the resources and efforts of the government and
the private sector in the tourism and allied fields for the full realization
of the tourism marketing plans and programs;

d) Develop and promote the Philippines as a center for international

meetings, incentive programs, conventions, exhibitions, sports and
wellness, medical tourism, and other special events;

e) Engage in the business of tourism and perform acts in consonance

therewith, such as, but not limited to, creating subsidiaries in support of
its marketing functions in partnership with the private sector; as well as
attending conventions and other events abroad in representation of the
country, encouraging sales promotions and advertising, and
implementing programs and projects with the objective of promoting
the country and enticing tourists to visit its tourism destinations and to
enjoy its tourism products;

f) Contract loans, indebtedness, and credit, and issue commercial papers

and bonds, in any local or convertible foreign currency from
international financial institutions, foreign government entities, and
local or foreign private commercial banks or similar institutions under
terms and conditions prescribed by law, rules and regulations;

g) Execute any deed of guarantee, mortgage, pledge, trust, or assignment

of any property for the purpose of financing the programs and projects
deemed vital for the early attainment of its goals and objectives,
subject to the provisions of the Constitution (Article VII, Section 20 and
Article XII, Section 2, paragraphs (4) and
(5));

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 h) Receive donations, grants, bequests, and assistance of all kinds from
local and foreign governments and private sectors and utilize the same;

i) Extend loans through government banks and financial assistance for

manpower training, heritage preservation, infrastructure development
and other programs of the Department;

j) Obtain the services of local and foreign consultants and enter into
contracts locally and abroad in the performance of its functions; and

k) Perform all other powers and functions of a corporation.

CHAPTER II. The Tourism Board

SECTION 38. Board of Directors. - The PTPB shall be governed and its
powers exercised by a Board of Directors to be called the “Tourism Board”,
which shall be composed of the following:

a) The Department Secretary as Chairperson;

b) The PTPB Chief Operating Officer as Vice-Chairperson;
c) The TIEZA Chief Operating Officer as Member;
d) The Department of Foreign Affairs (DFA) Secretary as Member;
e) The Department of Trade and Industry (DTI) Secretary as Member;
f) The Department of Transportation and Communications (DOTC)
Secretary as
Member; and
g) Five (5) representative directors to be appointed by the President upon
the recommendation of the Tourism Congress from a list of three (3)
nominees coming from its members, from each of the following sectors:

1) Accommodation enterprises;
2) Travel and tour services;
3) Land, air, and sea tourist transport services;
4) Conventions, meetings, incentive travel, exhibitions, and events
services and facilities; and
5) Other accredited tourism enterprises.

The Secretaries of the DFA, the DTI, and the DOTC shall each designate a
permanent representative in the Board who must possess relevant
experience and whose position must be at least Assistant Secretary or
equivalent rank. The permanent representative shall be duly authorized in
writing to act on behalf of the Secretary in his or her absence.

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SECTION 39. Representative Directors.

a) The members of the Tourism Congress as convened pursuant to Section

137 of this Rules, shall nominate at least three (3) candidates from
each of the following sectors to represent the tourism industry in the
Tourism Board:

1) Accommodation enterprises;
2) Travel and tour services;
3) Land, air, and sea tourist transport services;
4) Conventions, meetings, incentive travel, exhibitions and events
services and facilities; and
5) Other accredited tourism enterprises.

b) The nominees must be:

1) Filipino citizens;
2) With recognized competence in business management, marketing,
finance, tourism and other related fields;
3) Must represent an accredited tourism enterprise as of the date of
selection and appointment;
4) Must be a high ranking official of an accredited tourism enterprise;
and
5) Must be duly authorized by the governing Board of the tourism
enterprise he/she is representing.

c) The term of office of the representative directors of the Tourism Board

shall be three (3) years to commence upon the appointment by the
President. Each director may be reappointed at most for one additional
term upon expiration date of his/her original term. Upon the expiration
of their term, the directors’ offices shall be deemed vacated.

d) If a representative director ceases to be connected with the sector he

or she represents, a new representative director shall be appointed to
serve the unexpired portion of his/her predecessor’s term. The new
representative shall be chosen by the President from the rest of the
nominees as recommended by the Tourism Congress.

SECTION 40. Powers and Duties of Tourism Board. - The Tourism

Board shall have the following powers and duties:

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 a) Promulgate policies, approve programs and prescribe rules and
regulations necessary to implement the intents and purpose of the
Tourism Promotions Board;

b) Approve the annual Budget and such supplemental Budget as may be

submitted by the Chief Operating Officer;

c) Approve the utilization of the Special Contingency Fund to meet the

adverse effects of emergencies;

d) Create committees and sub-committees as may be necessary;

e) Appoint a Corporate Board Secretary;

f) Authorize contracts or agreements as may be necessary for the proper,

efficient and stable administration of the PTPB and for the attainment of
the purposes and objectives of the Act;

g) Approve the compensation, allowances, and benefits of PTPB officers

and employees, including the compensation and benefits scheme which
shall be comparable with the prevailing compensation plans in the
private sector and which shall be exempt from Republic Act No. 6758,
otherwise known as the Salary Standardization Law, as well as other
laws, rules and regulations on salaries and compensations;

h) Render through its Chairperson annual reports to the President and

such other special reports that may be required from time to time;

i) Exercise all powers necessary or incidental to the attainment of the

intent or purpose of the Act.

SECTION 41. Meetings of the Board.

a) The Tourism Board, shall meet at least once a month at the principal
office of the PTPB, unless the Tourism Board previously agrees in writing
to meet at another location. The Chairperson may motu propio call for
a special meeting or at the instance of a majority
of the members of the Board.

b) Immediately after its organization, the Tourism Board shall adopt the
rules and procedures for the conduct of its meetings.

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 c) The presence of the majority of the Tourism Board, including the
Chairperson or the Vice-Chairperson, shall constitute a quorum for the
transaction of the business of the Board.

d) The Chairperson of the Tourism Board shall have voting rights in case of
a tie.

e) The Corporate Secretary shall prepare the agenda for Tourism Board
meetings in consultation with the Chairperson.

SECTION 42. Compensation of the Board of Directors.

a) Subject to existing constitutional and legal prohibitions on double

compensation, members of the Tourism Board in an ex officio capacity
or his/ her permanent representative shall not be entitled to receive
compensation in any form for their services but may receive reasonable
per diems, to be determined by the Tourism Board, for attendance at
regular and special Board meetings.

b) The private sector members of the Tourism Board shall not be entitled
to compensation but are entitled to receive reasonable per diems for
attendance at regular and special meetings. They shall not be allowed
other benefits whether in cash or in kind on top of the per diem, except
when specifically provided by law.

c) Attendance in meetings of any Committee created by and composed of

members of the Tourism Board shall be considered as attendance in
Board meetings, provided, that in regular meetings of the Board, no
proxies shall be allowed.

CHAPTER III. The Chief Operating Officer

SECTION 43. The Chief Operating Officer.

a) The PTPB shall have a Chief Operating Officer (COO) who shall be
elected by the Board from a list of qualified applicants and appointed
by the Secretary.

b) The Chief Operating Officer shall have a term of office of six (6) years,
unless removed for cause in accordance with law. In the event the COO
is unable to complete his/her term of office, the Secretary shall appoint
a replacement as elected by the Board, who shall serve the unexpired
portion of the term of office.

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 c) The Chief Operating Officer must:

1) Be a Filipino citizen;
2) Have a bachelor’s degree in any of the following fields: business,
law, tourism, public administration, or other relevant fields and have
demonstrated expertise therein; and
3) Have occupied a managerial position for at least five (5) years.

SECTION 44. Powers and Functions of the Chief Operating Officer. -

The PTPB Chief Operating Officer shall have the following powers and
functions:

a) Execute and administer the policies and measures approved by the

Tourism Board;

b) Direct, manage, and supervise the operation of the PTPB and be

responsible for the efficient and effective conduct thereof;

c) Formulate the general work program of the PTPB and ensure its strictly
and timely implementation in accordance with its mandate;

d) Represent the PTPB in all dealings with all other government offices,
agencies and private organizations whether foreign or domestic in
accordance with its mandate and as may be authorized by the Tourism
Board;

e) Prepare and submit to the Tourism Board, for final approval, the annual
budget and other supplemental budgets as approved by the Secretary
pursuant to Section 32 of this Rules;

f) Convene a PTPB Executive Committee at least once a month;

g) Prepare and submit to the Tourism Board the annual report including
statements of finances covering the operation of the PTPB; and

h) Perform such other duties and responsibilities to implement the policies

and programs of the PTPB as the Tourism Board may authorize.

CHAPTER IV. Organization

SECTION 45. Organizational Set-up.

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 a) Subject to the approval of the Tourism Board, the PTPB may consist of
the following offices: Office of the Chief Operating Officer, Office of
Tourism Promotions, Office of Marketing Services, Office of Corporate
Affairs, and such other offices as may be deemed necessary to carry
out its mandate, powers and functions.

b) The PTPB shall prepare an annual work and financial plan based on the
priorities and identified markets of the Department of Tourism and in
close consultation with the DOT foreign and regional offices.

SECTION 46. Marketing Coordinators. - As may be necessary, the

Tourism Board shall determine and authorize the designation and assignment
of marketing coordinators in the Department’s foreign and regional offices to
coordinate and implement the international and domestic tourism promotions
programs.

SECTION 47. Strategic Marketing Plan.

a) The PTPB shall draft comprehensive short, medium and long term
marketing plans for the Philippines as a destination for travel, business
and investment, particularly tourism investment. Said plans shall be in
consonance with the policies of the Department. It shall coordinate,
insofar as practicable, with relevant agencies of the government and
the private sector in the preparation of such plans. The plans shall be
duly approved by the Tourism Board.

b) The Chief Operating Officer shall ensure that the marketing plans are
duly implemented. The Chief Operating Officer shall also coordinate
with relevant agencies of the government and the private sector to
ensure the successful implementation of the plan as well as periodically
report to the Tourism Board the status of plan implementation.
SECTION 48. Membership.

a) The PTPB shall be open for membership to entities, groups and

individuals with economic, social or cultural interest in travel trade
directly related to accommodation, transport services and tour
operations, MICE and other activities related to Philippine tourism.

b) Annual membership dues to PTPB shall be determined by the Tourism

Board and shall be subject to review whenever necessary.

CHAPTER V. Funding

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SECTION 49. Capitalization. - The PTPB shall have an authorized capital of
Two Hundred Fifty Million Pesos (PhP 250,000,000.00) which is fully
subscribed by the national government and shall be released by the
Department of Budget and Management (DBM) to PTPB in two equal tranches
within two years upon promulgation of this Rules.

SECTION 50. Tourism Promotions Trust. - The Tourism Promotions Trust

shall be established from the proceeds of the sale or lease of the assets of
PTA. The Trust shall be managed by a government-owned back or financial
institution selected by the Tourism Board. Said bank or institution shall report
the status and profitability of the Trust on a quarterly basis to the Tourism
Board, the Secretary, and the Joint Congressional Tourism Oversight
Committee created under the Act.

SECTION 51. Tourism Promotions Fund.

a) The proceeds of the following shall be placed in a special Tourism

Promotions Fund to finance the Activities of the PTPB:
1) Investment earnings from the Tourism Promotions Trust;

2) An appropriation from the national government of not less than Five

Hundred Million Pesos (PhP 500,000,000.00) annually for at least five
(5) years from the time of its constitution;

3) Seventy percent (70%) of the fifty percent (50%) net income of the
DFPC accruing to the Department, in lieu of its statutory remittance
to the national government under Republic Act No. 7656, otherwise
known as the Dividends Law of 1994;

4) At least twenty five percent (25%) of the fifty percent (50%) national
government share remitted by the Philippine Amusements and
Gaming Corporation (PAGCOR) to the National Treasury pursuant to
Republic Act No.
7656; and

5) At least twenty five percent (25%) of the fifty percent (50%) national
government share remitted by international airports and seaports to
the National Treasury pursuant to Republic Act No. 7656.

b) Remittance of the 70% of the 50% of the share of the DOT from the
DFPC annual net profits shall be made directly by the DFPC to the PTPB;
Provided, however, that the Secretary is directly and officially informed
of transactions every time that said remittance is made.

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 c) Funds for item (a) sub-items (4) and (5) shall be directly remitted to
PTPB on a quarterly basis.
d) In no case shall promotions and marketing activities receive less than
fifty percent (50%) of the annual utilization of the Fund. Not more than
ten percent (10%) of the Fund shall be used for all other administrative
and operating expenses of the PTPB.

e) The unallocated portion of the Fund shall be earmarked by the PTPB for
the following purposes:

1) Development of TEZs by the TIEZA;

2) Programs for development planning, heritage preservation and
infrastructure development, and manpower training including, but
not limited to, scholarships for trainings abroad, among others of the
Department; and
3) Such other purposes as may contribute to the development of the
tourism industry.
SECTION 52. Special Contingency Fund. - At the beginning of each year,
ten percent (10%) of the allocation for promotions and marketing shall be set
aside as a Special Contingency Fund of the PTPB. This shall be used in the
event of emergencies to provide the PTPB with sufficient resources to
undertake marketing and promotions activities that will encourage sustained
tourism interest in the Philippines and that will address the adverse effects of
these emergencies

RULE IV. THE TOURISM INFRANSTRUCTIRE AND

ENTERPRISE ZONE AUTHORITY

CHAPTER I. The Tourism Infrastructure and Enterprise Zone

Authority

SECTION 53. Reorganization.- The Philippine Tourism Authority (PTA)

created pursuant to Presidential Decree No. 189, as amended by Presidential
Decree No. 564, is hereby reorganized as the Tourism Infrastructure and
Enterprise Zone Authority (TIEZA), attached to the Department of Tourism for
purposes of policy and program coordination.

SECTION 54. Mandate. - The Tourism Infrastructure and Enterprise Zone

Authority (TIEZA) shall:

a) Designate, regulate and supervise the Tourism Enterprise Zones (TEZs)

established under the Act;

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 b) Develop, manage, and supervise tourism infrastructure projects in the
country;

c) Supervise and regulate the cultural, economic, and environmentally

sustainable development of TEZs towards the primary objective of
encouraging investments therein;

d) Ensure strict compliance by the TEZ Operator with the approved

development plan. Pursuant thereto, the TIEZA shall have the power to
impose penalties for failure or refusal of the tourism enterprises to
comply with the approved development plan, which shall also be
considered a violation of the terms of registration; and

e) Continue to exercise functions previously exercised by the PTA under

Presidential Decree No. 564, not otherwise inconsistent with the other
provisions of the Act.

CHAPTER II. The TIEZA Board

SECTION 55. The TIEZA Board. - The powers and functions of TIEZA shall
be exercised by a Board of Directors to be composed of the following:
a) The Department Secretary as Chairperson;
b) The TIEZA Chief Operating Officer as Vice-Chairperson;
c) The PTPB Chief Operating Officer as Member;
d) The Department of Public Works and Highways (DPWH) Secretary as
Member;
e) The Department of Environment and Natural Resources (DENR)
Secretary as
Member;
f) The Department of Interior and Local Government (DILG) Secretary as
Member; and
g) Five (5) representative directors to be appointed by the President upon
the recommendation of the Tourism Congress from a list of three (3)
nominees coming from its members, from each of the following sectors:
1) Tourism estate development and management services;
2) Accommodation enterprises;
3) Air, land, and sea tourist transport services; 4)
Travel and tours enterprises; and
5) Other accredited tourism enterprises.

The Secretaries of the DPWH, the DENR, and the DILG shall each designate a
permanent representative in the Board who must possess relevant

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experience and whose position must be at least Assistant Secretary or
equivalent rank. The permanent representative shall be duly authorized in
writing to act on behalf of the Secretary in his or her absence.

SECTION 56. Representative Directors.

a) The members of the Tourism Congress as convened pursuant to Section

137 of this Rules, shall nominate at least three (3) candidates from
each of the following sectors to represent the tourism industry in the
TIEZA Board: 1) Tourism estate development and management
services;
2) Accommodation enterprises;
3) Air, land, and sea tourist transport services;
4) Travel and tours enterprises; and 5) Other accredited tourism
enterprises.

b) The nominees must be:

1) Filipino citizens;
2) With recognized competence in business management, marketing,
finance, tourism, and other related fields;
3) Must represent an accredited tourism enterprise as of the date of
selection and appointment;
4) Must be a high ranking official of an accredited tourism enterprise or
registered enterprise; and
5) Must be duly authorized by the governing Board of the company
he/she is representing.

c) The term of office of the representative directors of the TIEZA Board

shall be three (3) years to commence upon the appointment by the
President. Each director may be reappointed at most for one additional
term upon expiration date of his/her original term. Upon the expiration
of their term, the directors’ offices shall be deemed vacated.

d) If a representative director ceases to be connected with the sector he

or she represents, a new representative director shall be appointed to
serve the unexpired portion of his/her predecessor’s term. The new
representative shall be chosen by the President from the rest of the
nominees as recommended by the Tourism Congress.

SECTION 57. Powers and Functions of the TIEZA Board. - The TIEZA
Board of Directors, herein also referred to as the TIEZA Board, shall serve as
the policy-making body of the TIEZA and shall hold and exercise the powers
of a corporation as provided under the Corporation Code. Likewise, it shall
perform the following functions:
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a) Organize, reorganize, and determine the organizational structure and
staffing pattern of the TIEZA; abolish and create offices and positions;
fix the number of its officers and employees; and transfer and realign
such officers and employees, necessary for the efficient and
economical conduct of its business and the implementation of its
mandate;

b) Approve the compensation, allowances, and benefits of the TIEZA

officers and employees and adopt a compensation and benefits scheme
which shall be comparable with the prevailing compensation plans in
the private sector and which shall be exempt from Republic Act No.
6758, otherwise known as the Salary Standardization Law, as well as
other laws, rules and regulations on salaries and compensations;

c) Adopt and prescribe guidelines for the employment of personnel on the

basis of merit, technical competence, and moral character;

d) Approve the annual budget of the TIEZA;

e) Develop policies, plans, and programs in coordination with the

Department for the development and operation of TEZs and adopt rules
and regulations necessary for the implementation of the provisions of
the Act;

f) Approve TEZ development plans;

g) Authorize contracts or agreements as may be necessary for the proper,

efficient, and stable administration of the TIEZA and for the attainment
of the purposes and objectives of the Act;

h) Contract loans, indebtedness and credit, issue commercial papers and

bonds, in any local or convertible foreign currency from international
financial institutions, foreign government entities and local or foreign
private commercial banks or similar institutions under such terms and
conditions prescribed by law, rules and regulations;

i) Execute any deed of guarantee, mortgage, pledge, trust, or assignment

of its properties for the purpose of financing the programs and projects
deemed vital for the early attainment of its goals and objectives subject
to the provisions of Article VII, Section 20 and Article XII, Section 2,
paragraphs 4 and 5 of the Constitution;

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j) Construct, own or lease, operate and maintain infrastructure facilities
or enter into joint ventures, and grant franchises for and supervise the
operation of public utilities within
TEZs, in coordination with LGUs and agencies concerned;
k) Undertake or authorize the undertaking of reclamation projects within
TEZs;

l) Preserve, restore, or reconstruct all national cultural treasures and

shrines located within TEZs, in coordination with the National Museum
and other concerned agencies;

m) Receive donations, grants, bequests, and assistance of all kinds from

local and foreign governments and the private sector, and utilize the
same;

n) Exercise eminent domain and police power including, but not limited to,
the power to recommend to the Department the removal of structures
which may be considered nuisances per se or which impede or impair
the enjoyment of historical, cultural and natural endowments;

o) Coordinate with LGUs and other government agencies for the provision
of basic services, utilities and infrastructure required by TEZ;

p) Review and approve applications for designation of TEZs based on the

criteria provided herein; approve, facilitate, and assist in the
organization of TEZ Operators; and grant incentives thereto;

q) Regulate and supervise the operations of TEZ Operators, review and

ensure their compliance with the approved development plans and
establish and implement other policies, plans, and programs for the
development and operation of TEZs;

r) Register, monitor, and regulate enterprises seeking to invest and

operate within TEZ and approve and grant incentives to such registered
enterprises as provided under the Act, provided that new and
expanding tourism enterprises located within the TEZs shall be
accredited by the Department;

s) Periodically check and verify, either by inspection of the books or by

requiring regular reports, the compliance by registered enterprises with
the relevant provisions of this Rules and terms and conditions of
designation of TEZ and registration of enterprises;

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 t) Collect such fees and charges as may be imposed and assigned to it
under the Act or other laws;

u) Appoint a Corporate Secretary whose functions shall include the

preparation of the agenda for board meetings in consultation with the
Chairperson; and

v) Exercise such other powers and functions as may be necessary to

accomplish the mandate as provided in the Act.
SECTION 58.
SECTION 59. Meetings of the TIEZA Board.

a) The TIEZA Board shall meet at least once a month at the principal office
of the TIEZA, unless the Board previously agrees in writing to meet at
another location. The Chairperson may motu propio call for a special
meeting or at the instance of a majority of members of the Board.

b) Immediately after its organization, the TIEZA Board shall adopt the
rules and procedures for the conduct of its meetings.

c) The presence of the majority of the TIEZA Board, including the

Chairperson or the Vice-
Chairperson, shall constitute a quorum for the transaction of the business of
the Board.

d) The Chairperson of the TIEZA Board shall have voting rights in case of a
tie.

e) The Corporate Secretary shall prepare the agenda for board meetings
in consultation with the Chairperson.

SECTION 60. Pier Diems.

a) Subject to existing constitutional and legal prohibitions on double

compensation, members of the TIEZA Board in an ex officio capacity or
his/her permanent representative shall not be entitled to receive
compensation in any form for their services but may receive reasonable
per diems, to be determined by the Board, for attendance at regular
and special Board meetings.

b) The private sector members of the TIEZA Board shall be entitled to

receive reasonable per diems for attendance at regular and special
meetings. They shall not be allowed other benefits whether in cash or

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 in kind in addition to the per diem, except when specifically provided by
law.

CHAPTER III. The Chief Operating Officer

SECTION 61. The Chief Operating Officer.

a) The TIEZA shall have a Chief Operating Officer (COO) who shall be
elected by the Board from a list of qualified applicants and appointed
by the Secretary.

b) The Chief Operating Officer shall have a term of office of six (6) years,
unless removed for cause in accordance with law. In the event the COO
is unable to complete his/her term of office, the Secretary shall appoint
a replacement as elected by the Board, who shall serve the unexpired
portion of the term of office.

c) The Chief Operating Officer must possess the following qualifications at

the time of appointment:
1) Be a Filipino citizen;
2) Have a bachelor’s degree in any of the following fields: business,
law, tourism, public administration or other relevant fields and have
demonstrated expertise therein; and
3) Have occupied a managerial position for at least five (5) years.

SECTION 62. The Powers and Functions of the Chief Operating

Officer. -The Chief Operating Officer shall be the principal representative of
the TIEZA and in such capacity shall exercise the following powers and
functions:

a) Execute and/or administer the policies, decisions, and measures

approved by the Board;

b) Direct, manage, and supervise the day-to-day operations and internal

administration of the TIEZA, in accordance with the policies laid down
by the Board;

c) Delegate any of his/her administrative responsibilities to other officials

or employees of the Authority, subject to such rules and regulations as
he/she, or the Board, may prescribe;

d) Sign all acts, memorials, and resolutions of the Board;

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e) Establish the internal organization of the TIEZA subject to such
conditions as the Board may prescribe: Provided, that any major
reorganization shall be subject to the approval of the Board;

f) Submit within thirty (30) days after the close of each fiscal year an
annual report to the Board;

g) Recommend to the TIEZA Board the designation of TEZs in accordance

with set policies and standards;

h) Coordinate with the PNP and other concerned agencies of the

government for the maintenance of peace and order within the TEZs;

i) Ensure that all revenues and sources of funds of the TIEZA are collected
and applied
in accordance with law by issuing the appropriate circulars and
guidelines therein to ensure its effective implementation;

j) Prepare and submit to the TIEZA Board, for final approval, the annual
budget and other supplemental budgets as approved by the Secretary
pursuant to Section 32 of this Rules;

k) Submit to the TIEZA Board ongoing and proposed projects, works and
financial programs, annual and supplemental budgets, receipts and
expenditures of the TEZs;

l) Receive protests, complaints, and claims concerning TEZ Operators,

tourism enterprises and residents and, after due investigation, make
corresponding recommendations to the Board for its appropriate action;

m) Enforce all legal easements along lakeshores, riverbanks among others,

as provided under existing laws, rules and regulations, to allow free and
open access thereto and aid in the proper development of the national
patrimony;

n) Take such emergency measures as may be necessary to avoid fires,

floods, and mitigate the effects of storms and other natural or public
calamities;

o) Recommend to the TIEZA Board all necessary actions to properly

supervise the operation of TEZ Operators;

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 p) Coordinate with the PTPB for the promotion of tourism and the
encouragement of investments in the TEZs;

q) Inquire into and investigate reported anomalies or irregularities alleged

to have been committed within TEZs upon a written formal complaint
made under oath, which upon its face shall provide a reasonable
ground to believe that such acts or irregularities were committed by a
TEZ Operator, registered enterprise, and/or their employees. For this
purpose, the COO, or his authorized representative, may subpoena
witnesses, administer oaths, and compel the production of books,
papers, and any other evidence. The TIEZA COO shall thereafter make a
recommendation to the Board for appropriate action as the
circumstances may warrant;

r) Represent the TIEZA in all dealings with other offices, agencies, and
instrumentalities of the government and with all other persons and
entities, whether public or private, domestic, foreign, or international;

s) Authorize, with his signature, contracts concluded by the TIEZA, notes

and securities issued by the TIEZA, and the annual reports, balance
sheets, profit and loss statements, correspondence, and other
documents of the TIEZA. The signature of the Chief Operating Officer
may be in facsimile whenever appropriate; and

t) Represent the TIEZA, either personally or through counsel, in any legal

proceedings or actions.

u) Perform such other duties and responsibilities to implement the policies

and programs of the TIEZA as the TIEZA Board may authorize.

CHAPTER IV. Funding

SECTION 63. Capitalization. - The TIEZA shall have an authorized capital

of Two Hundred Fifty Million Pesos (PhP 250,000,000.00) fully subscribed by
the National Government and shall be released to TIEZA in two equal
tranches within two years upon promulgation of this Rules.

SECTION 64. Funding. - Funds for operations, investments, and programs

of TIEZA shall come from:

a) Fifty percent (50%) of the proceeds from travel tax collections;

Five percent (5%) of the total amount from this source shall be
earmarked for the development of historic, cultural, religious, and

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 heritage sites as determined by appropriate agencies, and prime tourist
destinations based on guidelines to be issued by the COO. Another five
percent (5%) shall be for the development of ecotourism sites in
depressed provinces with strong tourism potentials; Provided, that the
allocation of these funds shall be included and specified in the total
budget to be approved by the Board.
b) Reasonable share from the collections of the Office of Tourism Resource
Generation, as determined by the Department of Tourism under Section
16 of the
Act;
c) Income from projects managed by TIEZA;
d) One-third (1/3) of proceeds from back taxes to be paid under Section 39
of the
Act;
e) Unallocated portion of the Tourism Promotions Fund under Section 55 of
the Act;
f) One-third (1/3) of the 5% tax on gross income earned by new tourism
enterprises under
Section 86 of the Act;
g) Subsidies or grants from local and foreign sources; and
h) Other sources of funds.

SECTION 65. Collection and Allocation of Travel Taxes.

a) The TIEZA shall be the principal agency responsible for the timely,
effective, and efficient collection of travel taxes. In pursuance thereof,
the TIEZA shall station itself in strategic areas in all airports and
seaports, including final check areas, to ensure full compliance with
travel tax requirements by departing passengers. International airport
and seaport authorities shall allow deployment of the TIEZA personnel
to areas so designated.

b) The COO shall issue other appropriate circulars and guidelines

whenever necessary for the implementation of the travel tax laws, rules
and regulations.

SECTION 66. Allocation of Travel Taxes.

a) The amounts collected by the TIEZA shall be distributed, upon

effectivity of the Act, as follows:
50% - TIEZA;
40% - CHED’s Higher Education Development Fund; and
10% - National Commission for Culture and the Arts (NCCA).

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 b) The TIEZA shall retain its share as above specified and remit to the
National
Treasury on a quarterly basis the balance of the travel taxes pertaining
to the Commission on Higher Education (CHED) and the National
Commission for Culture and the Arts (NCCA).

c) In the event of a phase-out of travel tax collection following

international agreements, the national government shall ensure
alternative funding sources and/or appropriate from the General Fund
for programs funded from the collection of travel taxes.

SECTION 67. Exemption from Payment of Corporate Income Tax and

Other
Taxes. - Notwithstanding any provisions of existing laws, decrees, or
executive orders to the contrary, the TIEZA shall be exempt from the
payment of corporate income tax as provided under the National Internal
Revenue Code (NIRC).

SECTION 68. Exemption from Statutory Remittance of Dividends. -

The TIEZA’s share from the collection of travel tax, together with the
proceeds from back taxes, other fees and charges, and other income which
the TIEZA is authorized to collect and/or earn and which shall be used for the
operations of the TIEZA, shall be exempt from statutory remittance of
dividends as mandated by RA 7656.

RULE V. TOURISM ENTERPRISE ZONES

CHAPTER I. Designation of Tourism Enterprise Zones

SECTION 69. Survey of Resources. - The TIEZA shall, in coordination with

appropriate authorities and neighboring cities and municipalities, conduct a
survey of the physical and natural assets and potentials of the Tourism
Enterprise Zone (TEZ) areas under its jurisdiction.

SECTION 70. Designation of Tourism Enterprise Zones.- The TIEZA

shall designate TEZs, upon the recommendation of any Local Government
Unit (LGU), or private entity, or through joint ventures between the public and
the private sectors. Such designation shall be subject to the provisions of the
Act and to minimum requirements which the TIEZA shall subsequently
promulgate.

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SECTION 71. General Criteria for the Designation of TEZ. - Any
geographic area where a Tourism Enterprise Zone may be established shall
conform with the following general criteria to ensure that they will not
proliferate in a manner that diminishes their strategic economic and
developmental value to the national economy:

a) The area is capable of being defined into one contiguous territory;

b) It has historical and cultural significance, environmental beauty, or
existing or potential integrated leisure facilities within its bounds or
within reasonable distances from it;
c) It has, or it may have, strategic access through transportation
infrastructure, and reasonable connection with utilities infrastructure
systems;
d) It is sufficient in size, such that it may be further utilized for bringing in
new investments in tourism establishments and services; and
e) It is in a strategic location such as to catalyze the socioeconomic
development of neighboring communities.

SECTION 72. Specific Criteria. - The Board shall promulgate rules and
regulations prescribing specific criteria and guidelines to define the general
criteria in Section 71 of this Rules.

SECTION 73. Development Plan. - No TEZ shall be designated without a

development plan duly approved by the TIEZA and without the prior approval,
by resolution, of the concerned municipality or city. The development plan
shall specifically identify the following:

a) Tourism focal points and resources available within the proposed TEZ
and adjoining areas;
b) Features which satisfy the requisites for the designation of a TEZ
enumerated under
Section 59 of the Act;
c) Areas for infrastructure development, for investment, and for
preservation, as well as the kind of development, nature of investment
or sustainable activities allowed within preserved areas, respectively;
d) Medium and long-term studies on market trends, and corresponding
development strategies for the TEZ;
e) Studies on the economic impact of development within the TEZ and in
surrounding communities;
f) Studies on the environmental, cultural, and social carrying capacity of
the TEZ and surrounding communities;
g) Design plans for structures which incorporate design and sustainability
principles from local architecture and the surrounding environment; and
h) Such other information that the TIEZA may require.

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Any deviation or modification from the development plan shall require the
prior authorization of the TIEZA. Any unauthorized deviation or modification
may result in the suspension of granted incentives and withdrawal of
recognition as a TEZ Operator. The TIEZA may likewise impose reasonable
fines and penalties upon TEZ Operators and responsible persons for any
failure to properly implement the approved development plan.

SECTION 74. Exemption from Land Reform Laws. - Lands identified as

part of a TEZ shall qualify for exemption from the coverage of Republic Act
No. 7279, otherwise known as the “Urban Development and Housing Act of
1992”, and Republic Act No. 6657, otherwise known as the “Comprehensive
Agrarian Reform Law”, subject to rules and regulations to be crafted by the
TIEZA, the Housing and Urban Development Coordinating Council (HUDCC)
and the Department of Agrarian Reform (DAR).

SECTION 75. Relationship between Tourism Enterprise Zone and

Economic Zones. -Where an area comprising a Tourism Enterprise Zone
overlaps, falls within or encompasses that of an economic zone, the
Department and the DTI shall promulgate rules and regulations to govern the
relationship between TEZs created under the Act, and economic zones
created under Republic Act No. 7227, otherwise known as the “Bases
Conversion and Development Act of 1992” , and Republic Act No. 7916, as
amended, otherwise known as the “Special Economic Zone Act of 1995”,
provided, that such rules and regulations shall consider the special nature
and requirements of tourism in relation to other industries, establishments
and operations in economic zones.

CHAPTER II. Registration of Tourism Enterprises

SECTION 76. General Qualification for Registration.

a) Subject to the provisions of the Act and to minimum requirements

which the TIEZA shall subsequently promulgate, any person, firm,
association, partnership, corporation, or any other form of business
organization may apply for registration as a tourism enterprise within
the TEZ to avail of incentives and benefits.

b) Applicants for registration as tourism enterprise shall comply with the

applicable nationality, control and/or ownership requirements of the
working capital in accordance with the pertinent provisions of the
Philippine Constitution, Foreign Investments Act of 1991 and other
existing laws and regulations.

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SECTION 77. Fees and Charges. - The TIEZA shall impose fees and other
charges in pursuance of its powers and functions under the Act.

SECTION 78. One-Stop Shop Center.- A one-stop shop center shall be

established to facilitate the registration, licensing, issuance of permits, and
grant of incentives to TEZ enterprises. All government agencies involved shall
assign their respective representatives for this purpose.

CHAPTER III. TEZ Administration

SECTION 79. TEZ Operator. - Each TEZ shall be administered and

supervised by a TEZ Operator who shall be an entity duly incorporated under
the Corporation Code and other relevant laws, unless the TEZ Operator is an
LGU or any other instrumentality of the government in the pursuit of their
mandates, where capital may be provided by LGUs and/or private entities.

SECTION 80. Board of Directors and Consultative Bodies of TEZ

Operators.

a) The seats of the Board of Directors of a TEZ operator shall be allocated

pro-rata according to the respective capital contributions of the TEZ
operator’s shareholders.
b) TEZ Operators are encouraged to reserve seats on their Boards of
Directors for relevant interest groups, such as those representing
environmental, religious, and cultural TEZ investors’, TEZ residents’ and
other interests. In any case, TEZ Operators may form consultative
bodies for such special interest groups to assist them in the formulation
and implementation of policies, plans and projects.

SECTION 81. TEZ Administrator.

a) The Board of Directors of each TEZ Operator shall appoint its TEZ
Administrator, who shall be responsible for implementing the policies,
plans, and projects of the TEZ Operator’s Board of Directors. The
necessary educational and practical qualifications required of a TEZ
Administrator are the following:

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 1) Must have a bachelor’s degree in any of the following fields:
business, law, tourism, public administration, or other relevant fields
and have demonstrated expertise therein;
2) Must have served in a managerial capacity for at least three (3)
years prior to his or her appointment; and
3) Must possess such other qualifications as may be prescribed by the
TEZ Operator’s Board of Directors.

b) In addition to such qualifications, all TEZ Administrators must undergo

and pass a training program of the Department to provide them with
knowledge and skills relevant to the operation of a TEZ.

SECTION 82. Civil Dispute Resolution.

a) The TIEZA shall establish a civil dispute mediation office to effectively

and efficiently resolve civil disputes concerning tourism enterprises
and/or tourismrelated issues within a TEZ where at least one of the
parties to the dispute was residing in the TEZ at the time the dispute
arose, and is still residing within the TEZ at the time the complaint is
filed with the mediation office.

b) No civil dispute may be filed in court without having undergone

mediation proceedings as provided under this section except in
extraordinary cases where a party may suffer irreparable damage. The
TIEZA shall charge reasonable fees for civil dispute mediation. This
provision is without prejudice to the application of the rules pertaining
to Katarungang Pambarangay with respect to other matters.

SECTION 83. Labor Dispute Resolution. - To resolve disputes between

workers and employers for any violation of Presidential Decree No. 442, as
amended, otherwise known as the “Labor Code of the Philippines” , the
TIEZA shall, in coordination with the Department of Labor and Employment
(DOLE), establish a labor dispute resolution office to mediate between
workers and employers.

SECTION 84. Penalties. - The TIEZA shall have the power to impose
penalties for failure or refusal of the tourism enterprises to comply with,
among others, the approved development plan and the terms and conditions
of its registration.

RULE VI. TOURISM INCENTIVES

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SECTION 85. General Principles on the Grant and Administration of
Incentives.

a) The TIEZA shall have the sole and exclusive jurisdiction in the grant and
administration of incentives provided under this Rules. This shall not be
impliedly repealed or modified.

b) In the grant of incentives, equal preference shall be given to large

investments, those with great potential for employment and those of
local small and medium enterprises.

c) Registered tourism enterprises owned and operated by overseas

Filipino investors shall enjoy the same incentives granted to TEZ
operators and registered enterprises in general.

d) The investment incentives offered under the Act shall be without

prejudice to availing other incentives provided under other laws,
decrees, and presidential issuances. However, for similar or identical
incentive schemes provided in these laws, decrees or presidential
issuances, the investor may only avail of the scheme provided under
one particular law, decree or presidential issuance.

e) The minimum investment requirement for Greenfield Tourism Zones

shall be determined by the TIEZA Board.

f) LGUs are likewise encouraged to provide incentives for tourism

enterprises through, among others, reductions in applicable real estate
taxes and waivers of fees and charges, among others. Should an LGU
grant such incentives, it shall report the same to the Department and
the PTPB to assist in the marketing and promotions of investment in
that LGU.

SECTION 86. Fiscal Incentives Available to TEZ Operators and

Registered Tourism Enterprises within TEZs.

a) Income Tax Holiday

1) New enterprises in Greenfield and Brownfield Tourism Zones shall,

from start of business operations, be exempt from tax on income for
a period of six (6) years.

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 2) The income tax holiday may be extended if the enterprise
undertakes a substantial expansion or upgrade of its facilities prior
to the expiration of the first six (6) years.
3) Existing enterprise in a Brownfield Tourism Zone shall be entitled to
avail of a nonextendable income tax holiday if it undertakes an
extensive expansion or upgrade of facilities. The cost of such
expansion or upgrade in relation to the original investment shall be
considered in the grant of said incentive.

4) These enterprises shall be allowed to carry-over as a deduction from

the gross income for the next six (6) consecutive years immediately
following the year of the loss, their net operating losses for any
taxable year immediately preceding the current taxable year which
had not been previously offset as deduction from gross income. Only
such losses as have been incurred after registration may be carried
over.

b) Gross Income Taxation

1) Except real estate taxes and such fees as may be imposed by the
TIEZA, a new enterprise shall be exempt from payment of all
national and local taxes and license fees, imposts, and assessments.

2) In lieu thereof, it shall pay a tax of five percent (5%) on its gross
income earned which shall be distributed as follows:
(i) One-third to be proportionally allocated among
affected cities or municipalities;
(ii) One-third to the national government; and (iii) One-
third to the TIEZA.

c) Capital Investment and Equipment - A registered enterprise shall

be entitled to an exemption of one hundred percent (100%) of all taxes
and customs duties on importation of capital investment and
equipment provided that these are directly and actually needed and will
be used exclusively by the enterprise in its registered activity.

d) Transportation and Spare Parts - Importation of transportation and

the accompanying spare parts of new and expanding registered
enterprises shall be exempt from customs duties and national taxes,
provided that:

1) they are not manufactured domestically in sufficient quantity, of

comparable quality and at reasonable prices;

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 2) they are reasonably needed; and
3) will be used exclusively by an accredited tourism enterprise.

e) Goods and Services

1) Importation of goods actually consumed in the course of services

actually rendered by or through registered enterprises within a TEZ
shall enjoy one hundred percent (100%) exemption from all taxes
and customs duties: Provided, however, That no goods shall be
imported for the purpose of operating a wholesale or retail
establishment in competition with the DFPC; and

2) A tax credit shall be granted equivalent to all national internal

revenue taxes paid on all locally-sourced goods and services directly
or indirectly used by the registered enterprise for services actually
rendered within the TEZ.

f) Social Responsibility Incentive - A registered enterprise shall be

entitled to a tax deduction equivalent to a reasonable percentage, not
exceeding fifty percent (50%), of the cost of environmental protection
or cultural heritage preservation activities, sustainable livelihood
programs for local communities, and other similar activities.

SECTION 87. Non-fiscal Incentives Available to TEZ Operators and

Registered Tourism Enterprises.

a) Employment of Foreign Nationals - A registered enterprise may

employ foreign nationals in executive, supervisory, technical, or
advisory positions, for such reasonable periods and under such terms
as may be provided by the TIEZA Board.

b) Special Investor’s Resident Visa

1) A foreign national who invests at least Two Hundred Thousand

Dollars ($200,000.00) in a registered enterprise shall be entitled to a
special investor’s resident visa enabling the foreign national to
reside in the Philippines while his or her investment subsists.

2) Subject to regulations to be issued by the Bureau of Immigration

(BI), the TIEZA shall issue working visas renewable every two (2)
years to foreign personnel and other aliens possessing highly-
technical skills which no Filipino within the TEZ possesses, after they

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 have secured Alien Employment Permits (AEP) from the Department
of Labor and Employment (DOLE).

c) Foreign Currency Transactions. - Subject to the provisions of Section

72 of Republic Act No. 7653, as amended, otherwise known as the
“New Central Bank Act”:

1) Repatriation of Investment - In 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.

2) Remittance of Foreign Exchange - The right to remit earnings

from foreign investments in the currency in which the investment
was originally made and at the exchange rate prevailing at the time
of remittance.

3) 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.

d) Requisition of Investment - There shall be no requisition of the

property of the registered enterprise, except in the event of war or
national emergency and only for the duration thereof. In such case, the
affected person shall be entitled to just compensation, and shall have
the right to repatriate such compensation as provided for in Section (c)
above.

e) Lease and Ownership of Land

1) Without prejudice to existing laws regulating the ownership of land

by individuals and corporations, and consistent with the provisions of
Republic Act 7652, otherwise known as the “Investor’s Lease Act”,
lands and buildings in each TEZ may be leased to foreign investors
for a period not exceeding fifty (50) years, renewable once for a
period of not more than twenty-five (25) years.

2) The leasehold right acquired under long-term contracts may be sold,

transferred or assigned, subject to the conditions set forth under the
Investor’s Lease Act.

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SECTION 88. Incentives Available to Tourism Enterprise Outside
TEZs.

a) Upon compliance with the requirements provided by law, they shall be

entitled to avail of any economic incentives found under existing laws,
such as Executive Order No. 226 (1987), otherwise known as the
“Omnibus Investments Code”; Republic Act No. 7042, as amended by
Republic Act No. 8179, otherwise known as the “Foreign Investments
Act”; the Special Economic Zone Act; and the Bases
Conversion and Development Act, among others, subject to the last
paragraph of Section 86 (a), at the option of the said enterprises.

b) An existing accommodation establishment not located within a TEZ

shall be entitled to:

1) Avail of income tax holiday for up to six (6) years for any significant
expansion, renovation, or upgrade in its facilities in relation to the
amount of the original investment; and

2) Import capital equipment free of taxes and duties when necessary

for such expansion, renovation, or upgrade.

c) Tourismenterprise may avail of incentives under the Omnibus

Investments Code provided that :

1) Tourism activities shall always be included in the Investment

Priorities Plan;

2) Rules and regulations concerning the grant of incentives to tourism

enterprises shall be jointly formulated by the Board of Investments
(BOI) and the Department;

3) The income tax holiday provided under Section 39.1 of the Omnibus
Investments Code shall also apply to existing accommodation
enterprises undergoing substantial upgrade of facilities; and

4) Accredited tourism enterprises shall be entitled to import

transportation and accompanying spare parts free of taxes and
duties provided:
(i) It shall be exclusively used by the enterprise in its operations;
and
(ii) They are not manufactured domestically in sufficient quantity,
comparable quality and prices.

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SECTION 89. Rationalization of Incentives.

a) Tourism enterprises located in special economic zones created under

the Special Economic Zone Act or by special charter shall continue to
be governed by the same.

b) Incentives offered under the Act shall be without prejudice to the

availment of other incentives provided in other laws. However, where
such laws provide for similar incentives schemes as those contained
herein, the investor may elect to avail of the scheme provided only
under one particular law, decree, or issuance.

SECTION 90. Annual Review.

a) Within six (6) months from the issuance of this Rules, the TIEZA shall, in
consultation with government agencies concerned, formulate the
necessary mechanisms/ guidelines to implement the provisions of Rules
V and VI of this Rules.

b) The TIEZA Board shall conduct an annual review of the registrable

activities and incentives as provided in this Rules, and issue appropriate
guidelines, rules and regulations to govern the grant of incentives.

RULE VII. THE DUTY FREE PHILIPPINES CORPORATION

CHAPTER I. Mandate

SECTION 91. Mandate. - Duty Free Philippines Corporation (DFPC) is

hereby organized as a government corporation which shall be a body
corporate to operate the duty and tax-free merchandising system in the
Philippines to augment the service facilities for tourists and returning Filipino
travelers to generate foreign exchange and revenue for the government. In
the performance of its mandate, the DFPC shall have the following powers
and functions:

a) Exclusive authority to operate and/or franchise out the operation of

stores and shops that shall sell, among others, duty and tax free
merchandise, goods and articles in international airports and seaports,
other ports of entry throughout the country and in Tourism Enterprise
Zones (TEZs).

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 Franchising out the operation of stores shall be in accordance with
guidelines dulyadopted by the DFPC Board.3

b) Authorize to operate stores and shops within the immediate vicinity of

international airports and seaports to service the requirements of
arriving and departing passengers.

c) Operate without prejudice to any privatization in the future, subject to

existing laws on privatization and procedures on public bidding.

CHAPTER II. Board of Directors

SECTION 92. Board of Directors.

a) The corporate powers and functions of DFPC shall be vested in and

exercised by a Board of Directors, hereinafter referred to as the Board.

b) The DFPC Board of Directors, herein also referred to as the DFPC Board,
shall be composed as follows:

1) The DOT Secretary as Chairperson;

2) The Chief Operating Officer of the DFPC as Vice-Chairperson;
3) The Department of Finance (DOF) Secretary as Member;
4) The Department of Trade and Industry (DTI) Secretary as Member;
and
5) Three (3) representative directors, to be appointed by the President
upon the recommendation of the Tourism Congress from a list of at
least six (6) nominees coming from its members.

c) The Secretaries of the DOF and the DTI shall each designate a
permanent representative in the Board with a rank not lower than
Assistant Secretary or equivalent rank and who must possess relevant
experience and shall be duly authorized to act on behalf of the
Secretary in his or her absence.

SECTION 93. Term of Office. - The term of office of the representative

directors of the DFPC Board shall be three (3) years to commence upon the
appointment by the President. Each director may be reappointed at most for
one additional term upon expiration date of his/ her original term. Upon the
expiration of their term, the directors’ offices shall be deemed vacated.

3 As amended by DOT Department Order No. 2020-046.

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SECTION 94. Qualification of Representative Directors.

a) Each representative director recommended by the Tourism Congress for

appointment by the President must be:

1) A Filipino citizen;
2) With recognized competence in business management, marketing,
finance,

tourism, and other related fields; and

3) Must be a high ranking official of an accredited tourism enterprise or
registered enterprise.

b) Each director appointed by the President shall have no conflict of

interest in any matter concerning the operations of the DFPC.

SECTION 95. Vacancy before Expiration of Term. - Any member

appointed to fill a vacancy in the Board occurring prior to the expiration of
the term to which his predecessor was appointed shall serve only for the
unexpired portion of the term of his predecessor. He/she shall likewise be
appointed by the President from the rest of the nominees as recommended
by the Tourism Congress.

SECTION 96. Meetings of the DFPC Board.

a) The DFPC Board shall hold a regular meeting once every calendar
quarter, at the principal place of business of DFPC unless the Board
previously agrees in writing to meet at another location. The
Chairperson may motu propio call for a special meeting or at the
instance of a majority of the members of the Board.

b) Immediately after its organization, the DFPC Board shall adopt the rules
and procedures for the conduct of its meetings.

c) The DFPC Board shall appoint a Corporate Secretary whose functions

shall include the preparation of the agenda for board meetings in
consultation with the Chairperson.

SECTION 97. Quorum.

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 a) The presence of a majority of the members of the DFPC Board,
including the Chairperson or the Vice-Chairperson, shall constitute a
quorum for the transaction of the business of the Board.

b) The Chairperson of the DFPC Board shall have voting rights in case of a
tie.

SECTION 98. Per Diems.

a) Subject to existing constitutional and legal prohibitions on double

compensation, members of the DFPC Board in an ex officio capacity or
his/ her permanent representative shall not be entitled to receive
compensation in any form for their services but may receive reasonable
per diems, to be determined by the Board, for attendance at regular
and special Board meetings.

b) The private sector members of the DFPC Board shall not be entitled to
compensation but are entitled to receive reasonable per diems for
attendance at regular and special meetings. They shall not be allowed
other benefits whether in cash or in kind in addition to the per diem,
except when specifically provided by law.

SECTION 99. Powers and Functions of the DFPC Board. - The DFPC
Board shall be vested in and exercise the following powers and functions:

a) Organize the DFPC in a manner most efficient and economical for the
conduct of its business and the implementation of its mandate;

b) Adopt by-laws, promulgate policies, approve plans and programs and

prescribe rules and regulations necessary to implement the intents and
purpose of the DFPC;

c) Approve the annual corporate budget and such supplemental budget as

may be submitted by the Chief Operating Officer;

d) Approve the compensation, allowances, and benefits of DFPC officers

and employees, including the compensation and benefits scheme which
shall be comparable with the prevailing compensation plans in the
private sector and which shall be exempt from Republic Act No. 6758,
otherwise known as the “Salary Standardization Law”, as well as other
laws, rules and regulations on salaries and compensations;

e) Appoint a Corporate Secretary;

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 f) Authorize contracts or agreements as may be necessary for the proper,
efficient, and stable administration of the DFPC and for the attainment
of the purposes and objectives of the Act;

g) Exercise all powers necessary or incidental to the attainment of the

intent or purpose of the Act.

h) Contract loans, indebtedness and credit, issue commercial papers and

bonds in any local or foreign currency from international financial
institutions, foreign entities, and local or foreign private commercial
banks or similar institutions under such terms and conditions prescribed
by law, rules and regulations;

i) Construct, own or lease, operate and maintain stores, warehouses and

other facilities necessary to support its operations;

j) Grant franchises and concessions for the operation of tax and duty free
stores and/or product categories and/or brands; In granting franchises,
the DFPC Board shall adoptguidelines defining the following:

(i) Scope and limitation of franchise;

(ii) Competitive selection;
(iii) Eligibility of franchise (Technical, Financial, and Legal
Requirements);
(iv) Financial soundness and technical viability;
(v) Such other components that shall guide the DFPC Board to fairly
select themost advantageous terms for the government.4

k) Create subsidiaries in support of its retail functions;

l) Exercise all powers necessary or incidental to the attainment of the

intent or purpose of the Act.

CHAPTER III. The Chief Operating Officer

SECTION 100. Qualifications.- The DFPC shall have a Chief Operating

Officer who must be:

a) A Filipino citizen;
b) With a bachelor’s degree in any of the following fields: business
management, law, tourism, public administration or other relevant
4 As amended by DOT Department Order No. 2020-046.

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 fields directly related to the operation of a retail establishment and
have demonstrated expertise therein; and
c) Have occupied a managerial position for at least five (5) years.

SECTION 101. Appointment and Term of Office.

a) The DFPC shall have a Chief Operating Officer (COO) who shall be
elected by the Board from a list of qualified applicants and appointed
by the Secretary.

b) The Chief Operating Officer shall have a term of office of six (6) years,
unless removed for cause in accordance with law. In the event the COO
is unable to complete his/her term of office, the Secretary shall appoint
a replacement as elected by the Board, who shall serve the unexpired
portion of the term of office.

SECTION 102. Powers and Functions of the Chief Operating Officer.

a) Execute and/or administer the policies and measures approved by the

Board of Directors;

b) Establish the internal organization of DFPC in a manner most efficient

for the conduct of its operations under such conditions that the Board
may prescribe, provided, that any major reorganization shall be subject
to the approval of the Board;

c) Direct, manage and supervise the day-to-day operations and internal

administration of the DFPC in accordance with policies laid down by the
Board;

d) Represent the Corporation in all dealings with other offices, agencies,

and instrumentalities of the government and with all other persons and
entities whether public or private, domestic, foreign or international;

e) Enter into, make, perform and carry out contracts of every class, kind
and description which are necessary or incidental to the realization of
its purposes with any person, firm or corporation, private or public, and
with foreign entities as may be authorized by the Board;

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 f) Prepare and submit to the DFPC Board, for final approval, the annual
corporate operating budget and other supplemental budgets as
approved by the Secretary pursuant to Section 32 of this Rules;

g) Prepare and submit to the Board of Directors the annual report

including statement of finances covering the operations of DFPC; and

h) Perform such other duties and responsibilities to implement the policies

and programs of the DFPC as the DFPC Board may authorize.

CHAPTER IV. Capitalization and Remittance

SECTION 103. Capitalization. - The DFPC shall have an authorized

capitalization of Five Hundred Million Pesos (PhP 500,000,000.00) which shall
be fully subscribed by the national government. The DFPC shall coordinate
with the Department of Budget and Management (DBM) for the release of the
50% of the authorized capital, or PhP 250,000,000.00, directly to the DFPC
within one year from the effectivity of this Rules. The balance of PhP
250,000,000.00 shall be released within the second year of DFPC’s operation.

SECTION 104. DFPC’s Fiscal Year. - DFPC’s fiscal year shall coincide with
the calendar year, beginning on January 1 and ending on December 31.

SECTION 105. Remittance of DOT’s Share of Net Profit.

a) After the end of each fiscal year, a variable percentage of the net profit
of the DFPC for that particular year shall be remitted to the Office of the
Secretary to fund tourism programs and projects, in lieu of its statutory
remittance to the national government under Republic Act No. 7656.

b) The DFPC Board shall determine the percentage of DFPC’s net profit for
a given fiscal year that shall be remitted to the Office of the Secretary
in accordance with the provisions of the Act; Provided, however, that at
least 50% of the net income shall be automatically remitted to the
Office of the Secretary as provided for in the Act.

SECTION 106. Schedule of Remittance of Contributions Due DOT.

a) The determination of the Contributions Due DOT to the Office of the

Secretary shall be based on the year-end financial statements of DFPC
as audited by the Commission on Audit (COA).

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 b) Until such time that the audited financial statements are issued by the
Commission on Audit (COA), the unaudited financial statements shall be
the basis for the determination of the Contributions Due DOT and this
sum will be remitted to the Office of the Secretary on a quarterly basis.
The first remittance shall be made no later than the 15th of March of
each year with the succeeding remittances on the 15th day of the last
month of each remaining quarter (June, September, and December).
Upon receipt by the DFPC of the COA audited financial statements, the
balance of unremitted annual net profit shall be settled in full within
fifteen (15) working days from the date of receipt.

c) In such case where the audited financial statements yield a lower net
profit figure than the unaudited financial statements, any remittance of
Contributions Due DOT made in excess of the Actual amount due shall
be credited as part of the remittance of Contributions Due DOT to be
made for the succeeding year.

These provisions setting the procedures for the remittance of the

Contributions Due DOT may be amended by the Board of Directors within the
parameters set forth in the Act.

SECTION 107. Retained Earnings. - Unless the DPFC Board provides

otherwise, the DFPC shall retain a minimum of twenty five (25%) of its annual
net profits to fund its operations, make allowances for possible future losses
and fund any expansion program.

CHAPTER V. Operations

SECTION 108. Areas of Operation.

a) The DFPC shall have the exclusive authority to operate and/or franchise
out the operation of stores and shops that shall sell, among others,
duty and tax-free merchandise, goods and articles in and within the
vicinity of international ports of entry, Tourism Enterprise Zones, and
other areas as may be determined by the Board.

b) DFPC may likewise operate stores regardless of such store’s proximity

to a port of entry, provided that they meet all of the following
qualifications:

1) The store shall be in a physically secure facility that will prevent

any form of leakage of duty and tax free merchandise into the tax-paid
customs territory;

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 2) That the customers that shall be serviced by the stores referred
to in this
Section shall be strictly limited to
any of the following:

(i) Family members of qualified Overseas Filipino Workers

(OFWs) that are entitled to the absentee buying program as
permitted by RA 9174;

(ii) Departing foreign tourists who shall purchase items at such

store location and pick-up said item upon their departure
from the Philippines, wherein the item shall be picked up at
the departure section of an international airport or seaport;

(iii) Upon the development of a “sealed bag” system in

cooperation with the Bureau of Customs (BOC), departing
foreign tourists who shall purchase items at such store
location and present the item in a sealed bag at the
departure area of an international airport or seaport. The
items, including the corresponding transaction receipt,
must be presented no later than one month from the date
of purchase and all items must remain sealed in its bag.
Failure to do so will result in the payment by DFPC of the
proper taxes and duties due on the entire transaction.

SECTION 109. Operation in Tourism Enterprise Zones.

a) DFPC stores located in Tourism Enterprise Zones may be registered with

the TIEZA and entitled to all incentives available to registered tourism
enterprises in the TEZs. The enjoyment of incentives shall be without
prejudice to other incentives provided to DFPC under the Act.

b) The importation and resale of goods in direct competition with DFPC by

registered enterprises within a TEZ shall be prohibited.

SECTION 110. Sales.- The following persons and entities are entitled to
purchase tax and duty-free goods, articles, and merchandise in DFPC stores:

a) Incoming passengers within 48 hours upon arrival from a foreign

country for regular travelers;
b) Incoming balikbayans and OFWs, as defined in existing laws, within 15
days upon arrival from a foreign country and 30 days upon arrival
beginning November 15 to

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 January 15;
c) Departing passengers with confirmed bookings destined to foreign
countries before boarding their flights or vessel at an international
airport or seaport;
d) Diplomatic personnel as well as personnel of other governments and
offices of international organizations, institutions, associations, and
agencies entitled to tax and/or duty exemptions pursuant to Philippine
law or agreements to which the government of the Republic of the
Philippines is a signatory as endorsed by the
Department of Foreign Affairs (DFA);
e) The persons enumerated in Section 108 item (b)(2) of this Rules.

CHAPTER VI. Tax and Duty Free Exemptions

SECTION 111. Exemption from Taxes and Duties. - To enable DFPC to

compete in the international tax and duty free market and generate foreign
exchange and revenue for the government, the sale and importation of
goods, articles and merchandise in DFPC stores shall be exempted from all
duties and taxes. DFPC shall be exempted from all taxes and duties arising
from merchandise imported/purchased and subsequently sold by DPFC
through its duty free shops
SECTION 112. Merchandise for Sale. - Merchandise and articles to be
sold at duty and tax free stores shall be imported and shall enter into DFPC’s
stores tax and duty free; the merchandise shall be exempt from all duties and
taxes including excise and Value Added Tax. Importation of liquor and tobacco
products made by DFPC shall automatically be exempt from the payment of
the excise and Value Added Tax upon the effectivity of the Act. The purchase
of locally sourced merchandise and articles to be sold at duty and tax free
stores and shops shall likewise be exempt from Value Added Tax.

SECTION 113. Fixtures and Other Supplies and Materials. -

Importation of fixtures and other supplies and materials required and
necessary to ensure that the operation of the duty and tax free stores is at
par with international standards, shall also be duty and tax free provided that
they are of no commercial value and will not be subsequently sold and are
directly related and necessary to the operation of the tax and duty free store
outlet.

SECTION 114. Promotional Items, Advertising Materials, and

Samples. -
Importation of promotional items, advertising materials, samples and other
articles shall likewise be tax and duty free provided that they are accessories

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to the principal merchandise for sale or solely intended for promotional
purposes as an essential part of the effort and are without commercial value.

SECTION 115. Local Taxes. - DFPC shall be exempt from the payment of
local taxes and license fees, imposts, and assessments as may be imposed
by the Local Government Units.

SECTION 116. Corporate Income Tax. - DFPC shall be exempt from the
payment of corporate income taxation as provided under the National
Internal Revenue Code.

SECTION 117. Enjoyment of Tax and Duty-Free Exemptions. - The

foregoing tax and dutyfree exemptions granted pursuant to the Act shall be
available to DFPC upon effectivity of the Act.

RULE VIII. TOURISM GOVERNANCE

CHAPTER I. Shared Responsibilities of National and Local

Governments

SECTION 118. Coordination between National and Local

Governments.

a) The Department and the Department of Interior and Local Government

(DILG) shall integrate all local tourism development plans by LGUs in
the formulation and annual updating of the national tourism
development plan.

b) The Department shall provide assistance, training, and other capacity-

building measures to the LGUs in the formulation, implementation, and
monitoring of the national tourism development plans, gathering of
statistical data and enforcement of tourism laws and regulations.

c) The Department, the PTPB, and the TIEZA shall prioritize promotion and
development assistance to LGUs which successfully adopt and
implement their tourism development plans.

SECTION 119. National Tourism Development Planning. - The

Department in coordination with its attached agencies, LGUs, and the private
sector shall continuously update the national tourism development plan
taking into consideration the evolving needs and capabilities of LGUs,
approved local tourism development plans as well as domestic and global
tourism market trends.

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SECTION 120. Local Tourism Development Planning.

a) Pursuant to Republic Act No. 7160, otherwise known as the “Local

Government Code of 1991”, LGUs shall prepare, adopt, implement,
and monitor their local tourism development plans, enforce standards
for tourism enterprises, and collect statistical data for tourism
purposes.

b) LGUs shall adopt the principle of sustainable tourism development in

the formulation of their local tourism development plans to give due
regard to the conservation of natural endowments and preservation of
cultural heritage while according opportunity for local communities to
achieve a better quality of life. Local tourism plans shall, insofar as
practicable, include zoning, land use, infrastructure development,
standards, heritage and environmental protection, community
development and investment.

c) LGUs shall submit their local tourism development plans to the

Department for review and approval as to consistency of said local
tourism plans with national policies and development plan.

d) LGUs shall coordinate and monitor the implementation of their local

tourism development plans. Report on the status of the plan shall be
rendered to the Department on a quarterly basis.

SECTION 121. Reports.

a) As determined by the Department and the DILG, LGUs shall regularly

provide a report on the status of tourism plans and programs, tourist
arrivals, and tourism enterprises and inventory of all the resources
available in their areas of jurisdiction, among others, to the
Department.

b) The Department and the DILG shall formulate and disseminate a

standard system for the collection and reporting of tourism statistics,
status of tourism plans and programs, as well as inventory of tourism
resources by the LGUs.

c) LGUs which regularly provide reports to the Department shall be

accorded priority in the provision of assistance for planning, product
enhancement, standards development, enforcement of laws,
promotions and capability building.

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SECTION 122. Accreditation.

a) National Standard

The Department shall prescribe the standards for the operation and
maintenance of the tourism facilities and services. For this purpose, the
Department in consultation with concerned sectors, shall formulate the
minimum standards for accreditation thereof and promulgate the
appropriate rules and regulations to govern the operation of Primary
and Secondary Tourism Enterprises.

b) Accreditation System

1) The Department shall evolve a system for the accreditation of

tourism enterprises in accordance with established international
standards.

2) Primary Tourism Enterprises shall be periodically required to obtain

compulsory and mandatory accreditation from the Department.
3) Accreditation shall be voluntary for Secondary Tourism Enterprises.

4) Prior accreditation by the Department shall be required for the

issuance of license or permit to operate Primary Tourism Enterprises
by the LGU.

5) The Department and LGUs shall ensure strict compliance by tourism

enterprises with the accreditation rules and regulations.

6) The Department shall act on complaints regarding accredited

tourism enterprises, and after notice and hearing, shall impose fines,
or downgrade, suspend or revoke accreditation.

7) The Department shall notify the concerned LGU when a tourism

enterprise in their locality has failed to obtain or loses its
accreditation. The LGU shall issue the necessary closure order
should the tourism enterprise fail to rectify its deficiencies despite
being accorded a reasonable period to comply with the standards.

8) The Department shall issue tourism advisories pertaining to tourism

enterprises found to have violated the terms of their accreditation,
which shall include among others:

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 (i) Complete identification of the pertinent tourism enterprise;
(ii) Location of the entity;
(iii) Its registered owner or proprietor and the business address;
(iv) The specific term or terms of accreditation violated; and
(v) The statement that the advisory shall only be lifted upon
continued compliance of the enterprise with the terms of
accreditation.
The tourism advisory shall be disseminated through effective
means, such as but not limited to, the website of the
Department, to the local government units and to widely-
circulated publications of the tourism industry.

9) Primary Tourism Enterprises located in TEZs shall be accredited by

the Department.

10) The Department may delegate the enforcement of the system of

accreditation to LGUs that have adopted and successfully
implemented their tourism development plans.

11) The Department shall promulgate the necessary implementing rules

and regulations to enforce the accreditation of tourism enterprises.

12) The Department shall review on periodic basis the standards and
accreditation system, in coordination with stakeholders in the said
sector.

SECTION 123. Value of Accreditation.

a) The Department shall develop a system to enhance the value of

accreditation among Primary and Secondary Tourism Enterprises such as,
but not limited to, the following:

1) Only accredited enterprises shall be beneficiaries of promotional,

training, and other programs of the Department and its attached
agencies and corporations; and
2) Accredited enterprises shall give due preference to other accredited
enterprises in obtaining relevant services.

b) The Department shall develop an integrated system of accreditation in

coordination with concerned agencies and entities in order to reduce the
regulatory and financial burden on tourism-related enterprises.

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SECTION 124. Local Government Capabilities. - The Department shall
develop a comprehensive capacity-building program to enhance the
capability of the LGUs to monitor and administer tourism activities, and
enforce tourism laws, rules, and regulations. Funding for this program shall be
shared equitably between the Department and the LGUs concerned.

SECTION 125. Tourism Officer.

a) The position of a tourism officer shall be created as a permanent item

in every province, city, or municipality in which tourism is a significant
industry.

b) The tourism officer shall be appointed by a local executive based on the

following qualifications:
1) Must be a Filipino citizen permanently residing in the LGU where the
position is available;
2) Must obtain relevant bachelor’s degree in tourism, business, law,
economics, marketing, public administration, or other related fields;
3) At least five (5) years of substantial work experience and
involvement in the tourism industry either in the private sector or
government; and
4) Must undergo and pass the training programs undertaken by the
Department.

c) LGUs shall ensure the periodic attendance and completion by the

tourism officers of the training programs conducted by the Department.

d) The tourism officer shall be responsible for the following functions at

the local level:
1) Prepare, implement, coordinate, monitor, and update local tourism
development plans;
2) Ensure the proper enforcement of tourism standards, laws, rules,
and regulations;
3) Submit regular reports on status of tourism plans and programs,
tourist arrivals, employment, occupancy rates, investment, and
tourist products, among others, to the Department; and
4) Coordinate with the Department and its attached agencies and
corporations in regard to the development and promotion of tourism
in their locality.

The Department of Tourism may issue appropriate guidelines to prescribe

other relevant qualifications that will guide the LGU in the selection and
placement of tourism personnel in their locality.

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SECTION 126. Tourism Assistance.

a) LGUs in which tourism is a significant industry shall establish a tourist

information and assistance center to assist tourists and tourism
enterprises.

b) The Department shall provide technical advice to the LGUs regarding

the establishment and management of the said center.

c) LGUs shall allocate appropriate funds for the construction and

maintenance of the tourist information and assistance center, including
the provision of personnel to manage the center.

SECTION 127. Tourism Site Classification.

a) The tourism councils in the administrative regions shall meet on a

regular basis to classify and evaluate tourism destinations, sites, and
activities within their respective regions.

b) The classification and evaluation of the council may guide the

Department and its attached agencies, LGUs, and the private sector in
the development and implementation of their respective programs for
said destinations and sites.

CHAPTER II. Control and Supervision of Areas with Overlapping

Jurisdiction

SECTION 128. Rationalization of Tourism Areas, Zone and Spots.

a) Organization into TEZ - Any other area specifically defined as a

tourism area, tourist zone, or tourist spot under any special or general
law, decree, or presidential issuance shall be organized into a TEZ
under the supervision of the TIEZA, subject to relevant provisions of this
Rules and subsequent regulations that may be issued by the TIEZA
Board governing the creation and operation of TEZs.

b) Transfer of Control

1) With respect to tourism zones, tourist areas, or tourist spots not

organized into TEZs, the Department through appropriate

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 arrangements may transfer the control over the same or portions
thereof, to another agency, office, or to an LGU;

2) The transfer shall only be effected upon the submission by the

appropriate agency, office or LGU of comprehensive development
plan for the use, preservation and promotion of these zones, areas,
or spots, which the Department shall likewise approve;

3) Such transfer shall not have the effect of diminishing the jurisdiction
of the
Department over these zones, tourist areas, or tourist spots;

4) The Department shall exercise supervisory powers over such

agency, office, or LGU in accordance with the terms of the transfer
and the approved development plan for tourism zone, area or spot;
and

5) The Department shall rescind the arrangement transferring control

over the tourism zone, area, or spot and regain such control thereof
if a government agency, office or LGU failed to implement the
comprehensive plan approved by the Department.

SECTION 129. National Integrated Protected Areas System (NIPAS)

and the National Ecotourism Policy.

a) The Department, in coordination with the Department of Environment

and Natural Resources (DENR), shall identify areas covered by the
National Integrated Protected Areas System (NIPAS) with ecotourism
potentials and cultural heritage value, and prepare policies, plans, and
programs for their development, preservation, operation, or conversion
into TEZs.

b) The National Ecotourism Steering Committee (NESC) shall formulate the

appropriate development plans for the designation of ecotourism sites
in the National Ecotourism Strategy pursuant to Executive Order No.
111 into TEZs. The NESC shall also be responsible for finding the
appropriate TEZ Operator for the said sites.

c) The Department together with the DENR, the NESC, and the TIEZA shall
promulgate the rules and regulations for the conversion into TEZs of
the identified areas under the NIPAS and the ecotourism sites in the
National Ecotourism Strategy.

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 CHAPTER III. Tourist Access

SECTION 130. International and Domestic Tourist Travel.

a) The Department in coordination with relevant government agencies

shall formulate appropriate policies and develop joint programs to
increase and improve the accessibility of the Philippines to domestic
and foreign tourists.

b) Realizing the critical importance of the progressive development of the

civil aviation environment in the advancement of the country’s
international and domestic tourism sector, the Secretary shall:

1) Be the ex officio Vice-Chairperson of the Civil Aviation Board (or Civil

Aeronautics Board pursuant to RA 776);

2) Be the ex officio Vice-Chairperson of the governing boards of all

international airports;

3) Be authorized to appoint a representative to the board of directors of

each international seaport of the Philippines; and

4) Be a member of the Civil Aviation Authority of the Philippines Board.

c) The Department and other relevant government agencies shall develop
an integrated, one-stop shop system for the speedy issuance of
franchise and accreditation for tourism transport operators.

SECTION 131. Tourism Infrastructure Program.

a) The Department, in accordance with the National Tourism Development

Plan and local government initiatives, shall coordinate with the
Department of Public Works and Highways (DPWH), the Department of
Transportation and Communications (DOTC), and their attached
agencies in the establishment of a tourism infrastructure program in
the respective work programs of said agencies, identifying therein vital
access roads, airports, seaports, and other infrastructure requirement in
identified tourism areas.

b) The DPWH, DOTC, and other relevant infrastructure agencies, including

the Department of Budget and Management (DBM), shall accord priority
status the funding of projects in the Tourism Infrastructure Program.

SECTION 132. Visas.

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 a) The Department, the Department of Foreign Affairs (DFA), and the
Department of Justice (DOJ), shall develop a system of granting visas
that encourages the arrival and longer stay of tourists in the
Philippines.

b) Regular review of visa and entry policies shall be undertaken by the

foregoing agencies to ensure the amendments of any laws, rules and
regulations on this regard.

CHAPTER IV. Culture of Tourism

SECTION 133. Tourism Coordinating Council. - A tourism coordinating

council shall be established to serve as coordinating body for national tourism
development effort. It shall be composed of the following:

a) Department Secretary as Chairperson;

b) PTPB Chief Operating Officer as Member;
c) TIEZA Chief Operating Officer as Member;
d) DFPC Chief Operating Officer as Member;
e) IA Administrator as Member;
f) NPDC Executive Director as Member;
g) NPF Executive Director as Member;
h) PRA General Manager as Member;
i) PCSSD Executive Director as Member;
j) Secretary of Department of Transportation and Communications (DOTC)
as
Member;
k) Secretary of Department of Public Works and Highways (DPWH) as
Member;
l) Secretary of Department of Foreign Affairs (DFA) as Member;
m) Secretary of Department of Environment and Natural Resources (DENR)
as
Member;
n) Secretary of Department of Interior and Local Government (DILG) as
Member;
o) Secretary of Department of Labor and Employment (DOLE) as Member;
p) Secretary of Department of Education (DepED) as Member;
q) Heads of the Philippine National Police (PNP) as Members;
r) Commissioner of the Bureau of Immigration (BI) as Member;
s) Executive Director of the National Historical Institute (NHI) as Member;

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 t) Executive Director of the National Commission on Culture and the Arts
(NCCA) as
Member;
u) Chief Executive Officer of the Philippine Amusement and Gaming
Corporation
(PAGCOR) as Member;
v) Executive Directors of the Leagues of LGUs as Members;
w) Representative from the Tourism Congress as Member;
x) Representative from accredited NGO or PO engaged in ecotourism as
Member; and
y) Representative from recognized indigenous people’s federation as
Member.

The council shall carry out the following functions:

a) Prepare a five (5) year strategic plan to develop and enhance a culture
of tourism;
b) Approve the annual tourism infrastructure program that shall promote
access to and from airports and seaports, and TEZ and other tourism
destinations; and
c) Create committees and technical working groups in pursuit of its
functions.

SECTION 134. Education.

a) The Department, in close coordination with the Department of

Education (DepEd), shall develop basic education programs for in-
school and out-of-school youth to promote a culture of tourism through
the integration of tourism concepts and enhancement of education
curriculum for languages, history and culture and the arts.

b) The Department shall work with the Commission on Higher Education

(CHED) in the regulation of colleges and universities that grant
undergraduate and postgraduate degrees in tourism.

c) The Technical Education and Skills Development Authority (TESDA), in

conjunction with the Department, shall develop programs for the
training of tourism entrepreneurs in languages, history and cultural
appreciation, and small business management.
SECTION 135. Peace and Order.

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 a) A tourism security force shall be established by the Philippine National
Police (PNP) to assist in maintaining peace and order within areas of
high tourism traffic.

b) A tourist police assistance desk shall be established by the Philippine

National Police in its local offices within areas of high tourism traffic.

c) The Department shall coordinate with the DILG in training of the

members of the tourism security force and tourism assistance desks on
cultural sensitivity, languages and relevant laws, among others.

SECTION 136. Funding for Tourism Grassroots Initiatives. -

Government owned and controlled banks, and financial institutions shall
provide microfinance schemes to assist the development of small and
medium-size enterprises in the tourism industry.

SECTION 137. The Tourism Congress.

a) Within thirty (30) days from the publication of this Rules, the Secretary
shall convene the Tourism Congress composed of representatives of
accredited tourism enterprises and former government officials
involved in tourism. Former government officials shall refer to former
Secretaries of Tourism.

b) The Tourism Congress as convened herein, shall be composed of

aggrupation’s of Primary and Secondary Tourism Enterprises as well as
aggrupation’s of allied and relevant enterprises of the tourism industry
duly registered with the Securities and Exchange Commission, such as,
but not limited to, accommodation, travel and tours, tourist transport
services, meetings, incentive travel, conventions, exhibitions/events
services and facilities, and tourism estate development and
management services, including former Secretaries of Tourism.

Each aggrupation composing the Tourism Congress shall designate one

representative who shall be a high ranking official in good standing in a
membertourism enterprise accredited by the Department or other
government regulatory bodies; Provided, That the representative shall
be duly authorized by the aggrupation’s governing Board.

c) The Tourism Congress as convened in accordance with this Rules shall

elect its officers from among its members. The Tourism Congress shall
elect at least a President; three (3) Vice-Presidents to represent Luzon,
Visayas and Mindanao; a Secretary; and a Treasurer; Provided, That

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 only high ranking officials of tourism enterprises accredited by the
Department or other government regulatory bodies shall be elected
officers of the Congress. The Tourism Congress shall establish a
Secretariat.

d) The Tourism Congress as convened herein shall adopt and ratify its
Constitution and By-laws; Provided, That the same are consistent with
this Rules.

e) The Tourism Congress as convened herein shall nominate three (3)

candidates from among its members, as far as practicable, providing
for equal representation from Luzon, Visayas and Mindanao, from each
of the following sectors to represent the tourism industry in the Tourism
Board:

1) Accommodation enterprises;
2) Travel and tour services;
3) Land, air and sea tourist transport services;
4) Conventions, meetings, incentive travel, exhibitions and events
services and facilities; and
5) Other accredited tourism enterprises.

f) The Tourism Congress as convened herein shall recommend three (3)

candidates from among its members, as far as practicable, providing
for equal representations from Luzon, Visayas and Mindanao, from each
of the following sectors to the TIEZA Board:

1) Tourism estate development and management services;

2) Accommodation enterprises;
3) Travel and tour enterprises;
4) Land, air and sea tourist transport services; and 5) Other
accredited tourism enterprises.

g) The Tourism Congress shall, from among its members, likewise

nominate at least six
(6) candidates to the DFPC Board.

h) In the selection of candidates to be nominated to the Tourism Board,

the TIEZA Board, and the DFPC Board, the Tourism Congress shall
ensure that the following minimum qualifications are complied with: 1)
Candidates must be Filipino citizens;
2) With recognized competence in business management, marketing,
finance, tourism and other related fields;

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 3) Must represent an accredited tourism enterprise as of the date of
selection and appointment;
4) Must be a high ranking official of an accredited tourism enterprise or
registered enterprise, as the case may be; and
5) Must be duly authorized by the governing Board of the company
he/she is representing.

i) The Tourism Congress shall designate its representative to the Tourism

Coordinating Council from among its members who is a high ranking
official of an accredited tourism enterprise or registered enterprise.

j) Within 30 days from the election of officers of the Tourism Congress, the
nominations of the Congress to the Tourism Board, the TIEZA Board and
the DFPC Board, as the case may be, shall be transmitted, through a
Board Resolution, to the Secretary for endorsement to the President;
Provided, That the Board Resolution shall state that the Congress
certifies that the nominees possess the qualifications set forth in this
Rules.

k) The Tourism Congress shall serve as the private sector consultative

body to assist the government in the development, implementation and
coordination of tourism policies, plans and programs.

l) The Tourism Congress as convened herein shall meet annually to carry

out its mandate pursuant to this Rules.

m) The Tourism Congress as convened herein shall be open for

membership to other aggrupation’s; Provided, That the applicant
aggrupation has complied with the minimum criteria set forth under
item (b) of this Rules.

RULE IX. TRANSITORY AND MISCELLANEOUS PROVISIONS

SECTION 138. Transfer of Powers, Assets, Liabilities and Rights.

a) In view of the reorganization of the PTA, the PCVC and the DFP, their
powers and functions are hereby transferred to the TIEZA, the PTPB and
the DFPC, respectively. All personnel performing such duties and
responsibilities are hereby transferred to the reorganized agencies.

b) The PTPB, the TIEZA and the DFPC shall also be subrogated to all rights
and assume all liabilities of the PCVC, the PTA and the DFP,
respectively, in accordance with pertinent laws, rules and regulations.

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 In addition, the properties, monies, assets, rights, choses in action,
obligations, liabilities, records, and contracts of the defunct PCVC, PTA
and DFP shall continue to be vested in and assumed by the PTPB, the
TIEZA and the DFPC as government corporations, pursuant to the Act.

c) The transfer of functions of the defunct Bureaus of Domestic and

International Tourism Promotions, and the Office of Tourism Information
of the Department pursuant to the Act and as modified under Executive
Order No. 366, otherwise known as the Rationalization Program, to the
PTPB shall also include all applicable funds, personnel and records, as
may be necessary.

d) Within one hundred and twenty (120) days from the effectivity of this
Rules, an audit shall be conducted by the Commission on Audit (COA) to
determine the true value of the assets and liabilities of the PTA. After
such audit, the TIEZA and the Department, in coordination with the
Privatization Council, shall determine which assets shall be put up for
sale or lease, provided, that concerned LGUs interested to manage and
operate said assets shall have the right of first refusal.

The TIEZA and the Department shall take into consideration the
importance of maintaining and preserving the PTA assets which may
already be considered cultural treasures and heritage sites, such as the
Banaue Hotel and similar assets, which shall not be sold or in any way
disposed of and shall be placed under the ownership of the TIEZA for
their continued maintenance.

Proceeds from the sale or lease of the assets of the PTA shall be
deposited in the Tourism Promotions Trust to be managed by a
government-owned bank or financial institution selected by the Tourism
Board. Said bank or institution shall report the status and profitability of
the trust on a quarterly basis to the Tourism Board, the Secretary, and
the Joint Congressional Tourism Oversight Committee.

SECTION 139. Transition Committee.

a) There shall be created an Inter-agency Transition Committee to be

composed of the representatives from the Department, the PTPB, the
TIEZA and the DFPC that will oversee the smooth and orderly
implementation of this Rules.

b) The Transition Committee shall address the issues and concerns

involving the placement, transfer and re-assignment of personnel as

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 well as transfer of funds, records, properties and equipment, as may be
deemed necessary.

SECTION 140. Transition Period.

a) To ensure the smooth transition into the new organizational structure,

all officers and employees under the Department, the PCVC, the PTA
and the DFP shall continue to function under their present mandates
until such time as the new staffing pattern and manning shall have
been approved and funded by the DBM for the Department and
respective governing Boards for the PTPB, the TIEZA and the DFPC.

b) All officers currently serving in the PCVC, the PTA and the DFP Boards
shall continue
to serve the unexpired portion of the term of the position in the Boards
of the PTPB, the TIEZA and the DFPC, respectively. The PCVC Executive
Director, PTA General Manager, and DFP General Manager shall assume
functions of the PTPB COO, TIEZA
COO, and DFPC COO, respectively, and sit in the governing Boards as
ViceChairpersons of the respective Boards, until such time that the
COOs of the PTPB, the TIEZA and the DFPC are elected by the Boards
and appointed by the Secretary in accordance with this Rules.

c) As soon as the staffing pattern of the Department, the PTPB, the TIEZA,
and the DFPC is approved by the Department of Budget and
Management (DBM), all officials and employees of the Department, the
PCVC, the PTA, and the DFP shall
be transferred and/or absorbed, as applicable, in the reorganized
Department, the PTPB, the TIEZA, and the DFPC, subject to existing civil
service rules and regulations.

d) Under its new organizational structure, the officials and employees of

the PTPB, the TIEZA and the DFPC shall be exempt from the coverage of
the Salary Standardization Law.

e) The Secretary and the heads of attached agencies shall institute anti-
graft and corrupt mechanisms in their respective offices/ agencies.

SECTION 141. Placement of Personnel.

a) The Transition Committee shall ensure that the following measures

are adopted in the placement of affected personnel arising from the
reorganization:

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 1) Personnel occupying positions declared redundant on account of the
reorganization shall be assigned, insofar as practicable, to similar
positions within the Department, the PTPB, the TIEZA and the DFPC,
taking into consideration their skills and experience, without loss of
seniority or other rights and privileges.

2) Position classification system and qualification standards for the

Department, the PTPB, the TIEZA and the DFPC shall be established
in accordance with the Civil Service Commission and Department of
Budget and Management guidelines, rules and regulations.

3) All relevant laws, decrees, executive orders, rules and regulations

concerning the rights of government employees in the
reorganization of an office shall be adhered to in the placement,
transfer and reassignment of affected personnel.

SECTION 142. Separation, Retirement, and Re-employment.

a) The Department, the PCVC, the PTA, and the DFP shall ensure that no
mandatory separation of any employee is made as a result of the
reorganization.

b) An employee of the Department who elects to leave the service or

retire shall be given entitlement to claim separation or retirement
benefits as may be provided under existing laws governing the civil
service or other laws and issuances whichever may be beneficial to the
employee concerned.

c) The PTPB, the TIEZA and the DFPC, subject to the approval of its Board
of Directors not contrary to existing laws, rules and regulations, may
adopt and implement an Early Retirement/ Separation Package for
those who may opt to voluntarily retire from the service within the
period that may be provided for the purpose and for those who may be
adversely affected thereby, such as, but not limited to, those whose
positions will
be declared redundant, without prejudice to other benefits provided
under existing laws.
d) Affected officer/employee who avails of the benefits under the
reorganization of the Department and the retirement/separation
program of the PCVC, the PTA and the DFP shall not qualify for re-
employment within the Department, the PTPB, the TIEZA and the DFPC.

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SECTION 143. Remittance of Contribution Due DOT for 2010. -
Within the first calendar quarter of 2010, the Chief Operating Officer of DFPC
shall present to the Board of Directors the estimated/projected net profit for
2010. In order to immediately assist in the Department’s tourism promotions
and development goals, an amount equivalent to twenty five percent (25%)
of that estimated/projected net profit for 2010 shall be automatically remitted
to the Office of the Secretary in the first quarter of 2010.

Upon the completion of fiscal/calendar year 2010, DFPC shall make a

determination of its actual net profit and the corresponding Contributions Due
DOT based on the procedures set forth on Rule VII, Chapter III of this Rules.
Any sums disbursed/remitted to the DOT during 2010 shall be credited to the
Contributions Due DOT for the fiscal/ calendar year 2010.

RULE X. FINAL PROVISIONS

SECTION 144. Joint Congressional Oversight Committee on Tourism.

a) A Joint Congressional Oversight Committee shall be constituted

composed of the following:
1) Chairpersons of the Committee of Tourism of both Houses of
Congress;
2) Chairperson of the Committee on Appropriations of the House of
Representatives;
3) Chairperson of the Committee on Finance of the Senate; and
4) Three (3) additional members from each House to be designated by
the Senate President and the Speaker of the House of
Representatives.

b) The Secretary shall report to the Oversight Committee on a monthly

basis the latest statistics on tourist arrivals and other relevant data. The
Secretary shall also report on a quarterly basis the status of the
implementation of the Act in accordance with the monthly report
submitted thereto by all attached agencies of the Department with
respect to the implementation of their respective programs.

SECTION 145. Review. - The implementation of the Act and this Rules shall
be subject to congressional review by Congress three (3) years after its
approval and promulgation, respectively, and every three (3) years thereafter.
The first congressional review of the Act and its Rules shall be undertaken on
13 August 2012.

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SECTION 146. No Injunction Clause. - No temporary restraining order or
preliminary injunction shall be issued or be effective against the TIEZA unless
the same is issued by the Supreme Court.

SECTION 147. Repealing Clause.

a) The provisions of Executive Order No. 120; Executive Order No. 292;
Presidential Decree No. 189, as amended; Presidential Decree No.
1448, as amended; Executive Order No. 46; Executive Order No. 30;
Presidential Decree No. 37; Presidential Decree No. 1616;
Presidential Decree No. 442, as amended; Republic Act No. 7160;
Republic Act No. 7722; Republic Act No. 9497; and all other laws,
presidential decrees, executive orders, proclamations and
administrative regulations inconsistent with the provisions of the Act
and this Rules are hereby amended, modified, superseded or
repealed accordingly.

b) Nothing in the Act or this Rules shall diminish the powers of the LGUs
under the Local Government Code, pertaining to the issuance of
business permits, licenses and the like.

SECTION 148. Separability Clause.- In the event that any provision of

this Rules or parts thereof are declared unconstitutional, such declaration
shall not affect the validity of the other provisions.

SECTION 149. Effectivity Clause. - This Implementing Rules and

Regulations shall take effect immediately upon publication in at least two (2)
newspapers of general circulation. The Secretary shall furnish the Oversight
Committee a copy of this Rules immediately after promulgation.

Signed this 10th day of November 2009 in Manila, Philippines.

JOSEPH H. DURANO Secretary

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