EXPORT DEVELOPMENT ACT
OF
1994[Republic
Act
No. 7844]AN ACT TO
DEVELOP
EXPORTS AS A KEY TOWARDS THE ACHIEVEMENTOF THE
NATIONAL
GOALS TOWARDS THE YEARS 2000ARTICLE IBASIC
PRINCIPLES
AND POLICIES
SECTION 1.
Short title. - This Act shall
otherwise
be known as the "Export Development Act of 1994."
SEC. 2.
Declaration of policy. - It shall be
the
policy of the State to evolve export development into a national
effort.
The government shall champion exports as a focal strategy for a
sustainable
agri-industrial development to achieve Philippine NIChood towards the
year
2000. The private sector shall take the lead in the collective effort
to
promote exports through discipline and hard work, as it confronts the
challenge
of winning international markets.chanrobles virtual law library
The government and
the private sector shall jointly transform the Philippines into an
exporting
nation. Towards this end, the State shall instill in the Filipino
people
that exporting is not just a sectoral concern, but the key to national
survival and the means through which the economic goals of increased
employment
and enhanced incomes can most expeditiously be achieved.chanrobles virtual law library
SEC. 3.
Key operating principles. - A
macro-economic
policy framework that supports export development shall be provided,
especially
in key areas of concern to exporters:
[a] Monetary
and foreign exchange policies shall establish and maintain a
competitive
exchange rate, supported by measures to provide safety nets for various
sectors that may be adversely affected by the implementation of such
policies.
Such policies shall be consistent with the responsibility and primary
objectives
of the Bangko Sentral ng Pilipinas pursuant to Section 3 of Republic
Act
No. 7653.chanrobles virtual law library
[b]
Fiscal
and credit policies shall provide adequate funds for public and private
investments and business expansion, while keeping the cost of credit
comparable
to international levels ensuring access to loanable funds for SMEs as
well
as highly technical export enterprises, especially those in the
countryside.chanrobles virtual law library
[c]
Agricultural
policies shall build up viability and competitiveness of the country's
agriculture sectors and facilitate their linkage with industry to
strengthen
the agri-industrial base of the country's export thrust.chanrobles virtual law library
[d]
Trade,
tariff and customs policies shall engender competitiveness of domestic
industries and facilitate their participation in international trade.chanrobles virtual law library
[e]
Technical
support policies to improve the quality of export products shall be
adopted,
particularly those relating to technology transfer, R & D,
technical
training and related activities. As such, the Department of Science and
Technology [DOST] and the Department of Agriculture [DA] shall be
supported
by colleges and universities in the diffusion of technology,
information
and training to the countryside for agri-industrial and export
development.chanrobles virtual law library
[f]
Urgent
attention must be given to policies affecting infrastructure in order
to
ensure the adequate supply and quality of power, water [e.g.,
for
irrigation], transportation [e.g., shipping and cargo
handling],
and communication to support the flow of goods and services in the
context
of the national export drive.chanrobles virtual law library
[g] The
link
between export growth and countryside development must be strengthened
through policies favorable to SMEs, regional industrial centers, and
export
processing zones to boost rural and farm-based entrepreneurship in
identified
geographic economic growth areas of the country.chanrobles virtual law library
[h] Labor
and
industrial relations policies must recognize the inevitable industrial
shifts that will occur in the effort to achieve international
competitiveness.
Focus shall be given to the formulation of accords between labor and
management
which shall provide for sustained increase in productivity and
competitiveness.
In line with this, dual training schemes shall be integrated as a basic
component to the country's primary and secondary education program to
ensure
that the manpower needs of agriculture and industry will be matched by
the skills generated by the educational system. Reasonable price and
income
policies shall likewise be adopted in order to safeguard the interest
of
the labor sector.chanrobles virtual law library
[i] All
government
agencies whose actions affect exporters, such as the Board of
Investments
[BOI], Bureau of Customs [BOC] and Bureau of Internal Revenue [BIR]
shall
simplify procedures to minimize bureaucratic red tape.chanrobles virtual law library
[j]
Provisions
of existing laws deemed detrimental to the export sector shall be
repealed
in subsequent acts.chanrobles virtual law library
SEC. 4.
Definition of terms. - For purposes of
this Act, the following definitions shall apply to the following terms:
[a]
"Exporter"
means any person, natural or juridical, licensed to do business in the
Philippines, engaged directly or indirectly in the production,
manufacture
or trade of products or services which earns at least fifty percent
[50%]
of its normal operating revenues from the sale of its products or
services
abroad for foreign currency : Provided, That in the case of
services,
the same shall be limited to information technology services,
construction
services and other services as defined jointly by the Department of
Finance
[DOF] and the Department of Trade and Industry [DTI]. Services rendered
by overseas contract workers are not covered by the definition.chanrobles virtual law library
[b]
"Export
promotion"shall refer to a range of
export
activities which the public and private sectors undertake, such as
networking,
especially in export support services and the provision of trade/market
information; organization of trade fairs and missions; provision of
advisory
services ; conduct of seminars, lectures, workshops, conferences and
training
on export-related subjects; publication of export-related documents;
handling
of quality standard, product design and such other activities aimed at
promoting existing exports, especially those meant to reinforce and
improve
the position of Philippine export products in specific foreign markets,
principally being those activities necessary for the implementation of
the Philippine Export Development Plan.chanrobles virtual law library
[c]
"Export
incentives" shall refer to support
measures
provided by the government to exporters to encourage investment in the
export sector, create a freer trade environment and motivate exporters
to increase export sales and perform competitively in the export
market.
The overall objective is to increase the country's export sales.chanrobles virtual law library
[d]
"Accredited
organization" shall refer to the
organization
of exporters granted accreditation by the Export Development Council,
as
provided in Section 7[1] of this Act.chanrobles virtual law library
ARTICLE IIINSTITUTIONAL
STRUCTURES AND STRATEGIES
SEC. 5.
Philippine
Export Development Plan [PEDP]. - The
President of the Republic of the Philippines shall approve a rolling
three-year
Philippine Export Development Plan prepared by the Department of Trade
and Industry [DTI] which shall form part of the medium-term Philippine
Development Plan [MTPDP]. It shall be formulated in consultation
with the private sector, validated and updated semestrally.chanrobles virtual law library
The PEDP shall define
the country's annual and medium-term export thrusts, strategies,
programs
and projects and shall be jointly implemented by the government, export
and other concerned sectors.chanrobles virtual law library
SEC. 6.
Export
Development Council. - The existing
Export
Development Council, hereinafter referred to as the Council, which was
created by Executive Order No. 98 [1993] as modified by Executive Order
No. 110 [1993], and Executive Order No. 180 [1994], shall be
strengthened
and institutionalized for the purpose of overseeing the implementation
of the PEDP and coordinating the formulation and implementation of
policy
reforms to support the said Plan.chanrobles virtual law library
SEC. 7.
Powers and functions. - The Council
shall:
[a] approve
the PEDP; coordinate, monitor and assess the implementation thereof,
and
when necessary, institute appropriate adjustments thereon in the light
of changing conditions in both the domestic and international
environment;
[b]
periodically
review and assess the country's export performance, problems and
prospects;
[c]
identify
the main bottlenecks, problem areas and constraints in all
areas/sectors/activities
which influence the development of exports, including but not limited
to,
such matters as policy framework, physical infrastructure, finance,
technology,
production, promotions and marketing;
[d]
mandate
specific departments and agencies to attend to the bottlenecks and
problems
constraining the development of exports in any of the areas mentioned
in
paragraph [c] above, and require the concerned Secretaries to deliver
progress
report[s] on the actions/initiatives taken to resolve these areas of
concern
at the next meeting[s];
[e]
ensure
export quality control by overseeing the formulation and implementation
of quality control guidelines by appropriate agencies to make
Philippine
exports at par with world-class products;
[f]
impose
sanctions on any government agency or officer or employee thereof, or
private
sector entity that impedes efficient exportation of Philippine goods;
[g]
recommend
to Congress any proposed legislation that would contribute to the
development
of exports;
[h]
submit
quarterly reports to Congress;
[i]
formulate
policies or recommend measures and draw up a study within ninety [90]
days
from the approval of this Act, relative to the rationalization of the
government's
export promotion and development functions/activities and programs for
the eventual transfer of government export promotions and development
activities
to the sector within a period of two [2] years after the approval of
this
Act;
[j]
formulate
the policies for the granting of incentives to exporters;
[k] adopt
such
policies, rules, procedures and administrative systems for the
efficient
and effective exercise of its powers and functions, including the
creation
or adoption of an executive committee or secretariat; and
[l] grant
and
review the accreditation of the organization of exporters, according to
the guidelines which it shall later promulgate for the said purpose: Provided,
That the organization accredited shall be the dominant one among
the
other existing export organizations as determined under the guidelines
promulgated by the Council hereof.chanrobles virtual law library
[m] issue
standards
and policies to be observed by Local Government Units [LGUs] in order
to
:
[1] ensure
that LGUs' plans and budgets are supportive of agri-industrial growth
and
export competitiveness thrusts of the national government; and
[2]
ensure
optimal allocation of expenditures.chanrobles virtual law library
The DILG and the regional
development councils shall be the channels through which these
standards
and policies shall be coursed.chanrobles virtual law library
Sec. 8.
Composition
of the Council. - The Council shall be
composed of the following:
[a]
Secretary
of the Department of Trade and Industry as chairman;
[b]
Director-General
of the National Economic and Development Authority;
[c]
Secretary
of the Department of Finance;
[d] Governor
of the Bangko Sentral ng Pilipinas;
[e]
Secretary
of the Department of Science and Technology;
[f]
Secretary
of the Department of Agriculture;
[g]
Secretary
of the Department of Foreign Affairs;
[h]
Secretary
of the Department of Labor and Employment;
[i] Nine [9]
representatives from the private sector, the majority of whom shall be
recommendees of the accredited organization, and one of whom shall be
appointed
as vice-chairman.chanrobles virtual law library
Other heads of executive
agencies, private organizations or individuals can be called upon by
the
Council to attend any Council meeting and assist the Council to resolve
issues and problems that concern their respective offices.chanrobles virtual law library
Likewise, such heads
of executive agencies, private organizations or individuals shall
respond
to the queries of the Council within two [2] weeks from the time such
queries
are received.chanrobles virtual law library
SEC. 9.
Mode
of selection and tenure of private sector representatives.
- The President shall appoint the private sector representatives, who
are
not ex officio members, upon nomination of the accredited
organization,
ensuring balanced representations from the Visayas and Mindanao and
various
sectors, such as the labor sector, agricultural and traditional export
sectors as against the non-agricultural and non-traditional export
sectors
and the like.chanrobles virtual law library
The private sector
representatives of the Council shall serve for a period of two [2]
years.
When a vacancy occurs due to the resignation, death or incapacity of a
member, a replacement who shall serve for the remainder of the member's
term of office shall be appointed by the President.chanrobles virtual law library
SEC. 10.
Meeting
of the Council. - The Council shall
meet
once a month: Provided, That the President or the chairman may
convene
the Council anytime whenever he deems it necessary.chanrobles virtual law library
The President shall
preside over meetings of the Council on a quarterly basis.chanrobles virtual law library
SEC. 11.
Funding. - The activities and
operational
expenses of the Council shall be funded jointly by budgetary
appropriations
from the government and by private sector contributions as provided for
in Executive Order No. 98.chanrobles virtual law library
SEC. 12.
Accredited
export organization. - The Council
shall
accredit a single umbrella organization of exporters pursuant to
section
7[1] of this Act to represent the export sector concerns and interests
for three [3] years, after which the Council shall undertake a review
of
the accreditation prior to the granting or re-granting of the said
accreditation.chanrobles virtual law library
The accredited organization
shall:
[a]
recommend
private sector representatives to the Council with consideration of
balanced
sectoral representation, as provided in Section 9 hereof;
[b]
represent
the interests of the export sector;
[c] be
responsible
for coordinating, supporting and assisting the DTI relative to the
formulation
and implementation of the government's export promotion programs and
policies:
Provided, That in the event that some of the export promotion
functions
of the government are privatized in accordance with the Act, it shall
be
responsible for the performance of such privatized export promotion
function;
and
[d]
manage
the Philippine Trade Center, which shall include, among others, the
authority
to enter into contracts with promotion facilities or functions.chanrobles virtual law library
SEC. 13.
Export
financing guarantee and insurance. -
Pursuant
to Section 7[1] of this Act, the Council shall make the necessary legal
and feasibility study/recommendation on the alignment and
rationalization
of government programs relative to export financing and existing
organizations
dealing primarily and exclusively with export financing guarantee and
insurance
and likewise considering the creation of a private sector led export
financing
institution whose services shall be primarily devoted towards
supporting
the operations of exporters and indirect exporters, particularly the
SMEs.chanrobles virtual law library
The study shall include
the powers , functions, and operations of the proposed institution, and
government contributions to the said institution, and if and when
necessary
the preparation of a bill creating the same which the Council may
recommend
to Congress within six (6) months after the effectivity of this Act.chanrobles virtual law library
The government counterpart
funds shall come from direct budgetary appropriations and from
consolidated
capital funds of government institutions involved in export financing
and
guarantees, or from equity contributions from government financial
institutions.chanrobles virtual law library
SEC. 14.
Export
promotion and information. - As
provided
in Section 7[1] of this Act, the Council through the DTI shall prepare
an export promotion privatization program within ninety [90] days from
the approval of this Act and shall subsequently identify the
appropriate
funding mechanism for such a programThe privatization process shall
be completed within a period two [2] years.
While the appropriate
funding mechanism is not yet in place, financial and technical
assistance
to the accredited organization on a project-to-project basis shall be
granted.
In this regard, the national government shall appropriate such sums as
may be necessary to the Council to be exclusively earmarked for export
promotion and information until such time that the Council establishes
the funding mechanism. The Council shall formulate the criteria to
avail
of this financial and technical assistance and the extent to which the
assistance shall be granted with the primary consideration of
encouraging
the formation of a nationwide marketing cooperative for export
promotion.chanrobles virtual law library
SEC. 15.
Philippine
Trade Center. - The government shall
hereby
assist the private sector in the establishment of Philippine Trade
Centers
which shall house the trade promotion offices and shall serve as
permanent
exhibit sites of the country's export products. In this regard, the
government
shall provide the land for the center, through a land grant or long
term
lease to the accredited organization, and shall arrange financing for
the
construction of the trade complexes. Upon its establishment, the
centers
shall be managed by the accredited organization.chanrobles virtual law library
ARTICLE IIIOTHER
INCENTIVES
SEC. 16.
Incentives.- In addition to existing incentives
provided
by the Board of Investments, the following incentives shall likewise be
granted to exporters:
[a]
Exemption from Presidential Decree No. 1853, provided that the
importation
shall be used for the production of goods and services for export.chanrobles virtual law library
[b]
Importation
of machinery and equipment and accompanying spare parts which are used
in the manufacture of exported products at zero percent [0%] duty for a
period of three [3] years, until 1997.chanrobles virtual law library
[c] Tax
credit
for imported inputs and raw materials primarily used for the production
and packaging of export goods, which are not readily available locally
, shall be valid for five [5] years. Provided, That the tax
credit
shall be issued within thirty [30] days from exportation.chanrobles virtual law library
[d] Tax
credit
for increase in current year's export revenue computed as follows:
The first 5%
increase
in annual export revenue over the previous year would mean a credit of
2.5% to be applied on the incremental export revenue converted to pesos
at the current rate;
- The next 5%
increase
would be entitled to a credit of 5.0%;
- The next 5%
increase
would be entitled to a credit of 7.5%;
- In excess of
15% would
be entitled to a credit to 10%.chanrobles virtual law library
Such tax credit
is only
granted for the years when the performance is achievedExport
revenues
used in the calculation of such tax credits shall be subject to
verification
as prescribed under the implementing rulers and regulations.chanrobles virtual law library
[e] For
exporters
of non-traditional products who use or substitute locally produced raw
materials, capital equipment and/or spare parts, tax credits equivalent
to twenty-five percent [25%] of the duties that would have been paid
had
these inputs been imported ; Provided, That this incentives
would
be available for a period of three [3] years upon effectively of this
Act
and can be extended for another three [3] years by the President upon
the
recommendation of the Secretary of Finance; Provided, further,
That
the Secretary of Finance, in consultation with the Export Development
Council,
shall prepare a list of non-traditional exports which are entitled to
avail
of this incentives: Provided, That these incentives shall
be granted only upon; [1] the presentation of a Bureau of Export Trade
Promotion [BETP] certification of the exporter's eligibility, in
compliance
with the minimum wage and SSS laws; and that [2] in the case of
importation,
the items imported shall be used exclusively for production of export
goods.chanrobles virtual law library
[f] In
the
interim, while the Eximbank is not yet established, government
financial
institutions [GFIs] including the Development Bank of the Philippines
[DBP]
, the Philippine National Bank [PNB] and the Land Bank of the
Philippines
shall extend credit facilities to be used for plant and equipment
expansion
purposes, among others. These credit facilities shall offer
preferential
and simplified credit schemes to exporters.chanrobles virtual law library
SEC. 17.
Negotiability.- All tax credit herein provided shall be
negotiable.chanrobles virtual law library
ARTICLE IVTRANSITORY
PROVISIONS
SEC. 18.
Appointment
of private sector representatives. -
Upon
the effectivity of this Act, the President of the Republic of the
Philippines
shall appoint the nine [9] private sector representatives to the
Council
who shall serve for a term of two [2] yearsThereafter, the
determination
of the private sector representatives shall be governed by Section 9 of
this Act.chanrobles virtual law library
SEC. 19.
Funding
of the Council. - Upon the effectively
of this Act, the budget granted to the old Export Development Council
shall
be transferred to the new Council created under this Act. Thereafter,
such
sums as may be necessary for its operation and maintenance shall be
included
in the annual General Appropriations Act.chanrobles virtual law library
SEC. 20.
Operation of the Council.-
the Council shall immediately function one [1] month after the approval
of this Act.chanrobles virtual law library
ARTICLE VCRIMINAL
OFFENSES
AND PENALTIES
SEC. 21.
Non-compliance
of the mandatory provisions of this Act.
- Any person, entity, government instrumentality or institution, found
to be willfully violating or grossly negligent in executing the
mandates
of this Act shall result in the expulsion from office of its chief
executive
and operating officers, as well as the responsible officers
thereof.
Notwithstanding any provision of law to the contrary, they shall
likewise
be prohibited from holding any government position for least two [2]
years.chanrobles virtual law library
ARTICLE VIADMINISTRATIVE
PROCEDURES AND SPECIAL CLAUSE
SEC. 22.
Implementing
rules and regulations. - The
Secretaries
of Trade and Industry and Finance, in consultation with the Council,
shall
formulate the rules and regulations to implement the provisions of this
Act.chanrobles virtual law library
SEC. 23.
Separability
clause.-
The provisions of this Act are hereby declare separable and in the
event
any of such provisions is declared unconstitutional, the other
provisions
which are not affected thereby shall remain in force and effect.chanrobles virtual law library
SEC. 24.
Repealing
clause. - All other laws, decrees,
executive
orders, administrative orders, rules and regulations or parts thereof
which
are inconsistent with the provisions of this Act are hereby repealed ,
amended or modified accordingly.chanrobles virtual law library
SEC. 25.
Effectivity.- This Act shall take effect two [2] weeks
after its publication in the Official Gazette or in at least two [2]
national
newspapers of general circulation in the Philippines, whichever comes
earlier.chanrobles virtual law library
This Act which is
a consolidation of House Bill No. 12073 and Senate Bill No. 1863 was
finally
passed by the House of Representatives and the Senate on December 20,
1994.chanrobles virtual law library
Approved:21
December 1994
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