Law Summary
Definitions Under the Act
- "Balikbayan": Filipino citizens out of the country continuously for at least one year, overseas Filipino workers, or former Filipino citizens naturalized abroad returning to the Philippines
- "Family": Spouse and children of balikbayan traveling with them who are not balikbayan themselves
- "Livelihood tools": Instruments essential to trades, vocations, or professions as defined by the OWWA; includes hand/power tools and computer units with accessories
Benefits and Privileges of the Balikbayan
- Tax-exempt purchase privilege amounting to US$1,500 at government-operated duty-free shops
- Special promotional or incentive programs by all domestic carriers
- Visa-free entry for one year for foreign passport holders except restricted nationals
- Travel tax exemption under relevant laws
- Designated reception areas and accredited transportation for expedient processing and safe travel
- Additional tax-exempt purchase of US$2,000 exclusively for livelihood tools (kabuhayan program)
- Benefits are cumulative with existing privileges under other laws
Limitations on Tax-exempt Purchases
- Purchases must be made within 15 days of arrival, extended to 30 days during Christmas season (Nov 15-Jan 15)
- Shopping privilege limited to one-time per visit and once a year usage
- Non-transferable and must generally be made personally by the balikbayan
- Senior citizens and handicapped balikbayan may avail privileges within one year of arrival
- Kabuhayan shopping can be claimed by immediate family for balikbayan gone abroad within one year
- OFWs certified by POEA or related agencies may endorse kabuhayan shopping privilege to immediate family once during contract period
- Only majority-age balikbayan can avail privilege; minors may purchase up to the passenger tax-exempt limits
- Only one item of non-consumables over US$200 may be purchased per product category
Promotion of Philippine-made Products in Duty-free Shops
- At least 10% of goods sold in government-operated duty-free shops to be Philippine-made
- DOT to coordinate with DTI in product selection considering competitiveness, design, marketability, and world-class standards
Training and Livelihood Support Programs
- DOLE with OWWA, TLRC, TESDA, and other agencies to provide entrepreneurial training, skills development, and marketing assistance
- Focus on balikbayan and immediate family members utilizing kabuhayan program
- For non-OFW balikbayan, DOT coordinates livelihood training arrangements
Reporting and Implementation
- DOT to submit semi-annual reports on goods sold in duty-free shops to the President, Secretary of Finance, and Congress
- Reports to include quantity and value of goods by tariff category
- DOT, in coordination with other agencies, to promulgate implementing rules within 30 days of effectivity
Repealing Clause and Effectivity
- Inconsistent laws, decrees, regulations repealed or modified
- Act takes effect 15 days after publication in Official Gazette or in two national newspapers, whichever is earlier