Question & AnswerQ&A (Republic Act No. 7844)
The short title of Republic Act No. 7844 is the "Export Development Act of 1994."
The main policy is to evolve export development into a national effort, champion exports as a key strategy for sustainable agri-industrial development, and jointly transform the Philippines into an exporting nation with the private sector taking the lead.
An exporter is any person, natural or juridical, licensed to do business in the Philippines engaged in producing, manufacturing, or trading products or services that earn at least 50% of normal operating revenues from sales abroad for foreign currency, limited for services to information technology, construction, and other services defined by DOF and DTI. Overseas contract workers' services are excluded.
The Act calls for supportive macroeconomic policies including competitive exchange rate policies, adequate fiscal and credit policies, agricultural viability, trade and customs policies, technical support for export product quality, infrastructure improvements, support for SMEs, labor and industrial relations policies that foster productivity, and simplification of government procedures affecting exporters.
The PEDP is a rolling three-year export development plan approved by the President, prepared by DTI in consultation with the private sector, defining annual and medium-term export strategies, programs, and projects as part of the Medium-term Philippine Development Plan.
The Council oversees implementation and coordination of the PEDP, reviews export performance, identifies bottlenecks, ensures export quality control, recommends legislation, submits reports to Congress, formulates export incentive policies, grants exporter organization accreditation, and issues standards for local government units' support to export growth.
The Council includes the Secretary of Trade and Industry as chairman, heads of key government agencies like NEDA, Finance, BSP, DOST, Agriculture, Foreign Affairs, Labor, and nine private sector representatives, mostly nominated by the accredited exporters' organization.
Incentives include exemption from certain import duties, zero-percent duty on machinery and spare parts for three years, tax credits for imported inputs and increased export revenue, tax credits for using locally produced inputs in non-traditional products, subject to eligibility certification and exclusive use for export production.
Persons or entities willfully violating or grossly negligent in implementing the Act may face expulsion from office of chief executives and officers involved, and be banned from holding government positions for at least two years.
The Act takes effect two days after its publication in the Official Gazette or in at least two national newspapers of general circulation, whichever occurs earlier.