Amendment on Duty Free Stores Rationalization

Duty free shops may operate only within international ports of entry and fenced-in areas of freeport zones.
Other locations are excluded unless specified under subsequent provisions.

Between the effectivity of this Order and December 31, 1998:
- Permanent residents, locators, and employees within the fenced-in areas of Subic and Clark Zones enjoy unlimited duty free purchases for consumption within these areas.
- Residents of municipalities adjacent to Subic and Clark receive a monthly shopping limit of US$100.
- Domestic tourists visiting Subic and Clark zones are granted a US$25 shopping privilege for consumable goods, only for use within the fenced-in areas during their visit.

Only the following persons may shop duty free with specified limits:
- Tourists and Filipinos traveling abroad or returning: US$1,000 limit per purchase, not exceeding US$10,000 annually.
- Overseas Filipino Workers (OFWs) and Balikbayans: US$2,000 limit.
- Residents 18 years or older of fenced-in freeport areas: unlimited purchases for consumption within freeports.
Definitions clarify that "residents" exclude short- or long-term property lessees, outside business operators, and private club members within the freeports.
Revocation of privileges like unlimited shopping or tax-free car importation for others is mandated.

Permitted goods include consumables, light and heavy durables, and television sets not manufactured locally.
Imported heavy durables can only be sold to balikbayans, OFWs, and freeport residents, subject to proof of eligibility (passport, employment certificates, contracts, etc.).
Prohibited heavy durables for tourists and Filipinos include:
- Locally manufactured TVs
- Karaoke/videoke units without laser disk/CD
- Stereos, residential ovens, washing machines <10kg
- Furniture, kitchenware, refrigerators <15 cu. ft., electric fans, air conditioners
- Basic and prime commodities under the price watch list
Encouragement for sale of locally manufactured goods subject to Department of Finance regulations.
Ban on selling sensitive agricultural products like rice, sugar, corn, flour, coffee, garlic, and other critical products.

Selling or removing duty free goods from freeports into customs territories is prohibited even after tax payment.
Duty free goods must be sold only within authorized duty free shops.

Goods introduced into freeports must undergo pre-shipment inspection by an authorized organization starting 30 days after this Order’s effectivity.
Inspection fees are paid by importers.
Before this implementation, Customs Commissioner may inspect shipments to verify correctness of declarations.

Bureau of Customs, zone authorities, and other agencies must enforce strict control measures including:
- Permanent labels on duty free items stating "Not for resale, imported duty free".
- Thorough background checks on duty free shop operators.
- Computerized accounting systems to monitor duty free operations.
- Creation of internal audit teams for regular spot checks.

Breach of provisions results in administrative sanctions such as suspension or cancellation of duty free shop operations.
Implementing rules to be prepared by the Department of Finance.

If any provision is declared illegal or unconstitutional, the rest shall remain effective.

This Order repeals or modifies conflicting executive orders, memoranda, and proclamations.