Law Summary
State Policy on Industry Development
- Recognizes potential for employment generation and foreign exchange earnings.
- Supports growth of small and medium enterprises (SMEs) in these industries.
- Policies include:
- Creating business environments favorable to formal sector participation.
- Establishing support structures to enhance SME viability and competitiveness.
- Providing fiscal incentives and programs to accelerate industry growth.
- Promoting institutionalization of industry associations, cooperatives.
- Ensuring domestic market availability via government and private sector sourcing.
Development Incentives Provided
- Incentives available for up to 10 years post-enactment include:
- Zero duty on imported capital equipment, machinery, tools, parts, accessories, and certain chemicals.
- Additional 50% gross income deduction for expenses on approved training programs.
- Inclusion of locally manufactured products in government duty-free shops.
- Tax credit equal to 100% of national internal revenue taxes and customs duties on domestically purchased supplies and raw materials.
Government and Private Sector Support
- Government personnel receiving clothing/shoes allowances must source from accredited domestic manufacturers.
- Private recruitment agencies registered with POEA must source apparel, footwear locally.
- Other private organizations encouraged to purchase from domestic industries.
Product Quality Standards and Labeling
- Products must meet internationally comparable quality standards.
- Footwear sizing to conform at least to Philippine Sizing Standards updated to market requirements.
- Proper labeling mandatory for local and export products.
- Re-labeling without producer’s authorization is prohibited and punishable.
Access to Official Development Assistance
- Official development assistance provided via Land Bank and Development Bank of the Philippines at cost.
- SMEs given preferential treatment in accessing these funds.
Eligibility Requirements for Assistance
- Enterprises must be duly registered with relevant government agencies to qualify for benefits and services.
Ensuring Raw Material Supply
- Domestic raw materials prioritized through export bans or taxes to ensure adequate supply for local industries.
Product Development Initiatives
- Cottage Industry Technology Center (CITC) responsible for training, technology, and equipment acquisition support.
- CITC to collaborate with local government units for industry initiatives and programs.
Penalties for Violations
- Offenders subject to fines of not less than PHP 50,000 or imprisonment from 1 to 6 years, or both.
- Civil actions for damages remain available to aggrieved private parties.
Implementing Agency
- Department of Trade and Industry (DTI) tasked to monitor, supervise implementation, and report annually to President and Congress.
Rulemaking Authority
- Secretary of Trade and Industry to promulgate implementing rules within 60 days of law’s approval in consultation with relevant agencies.
Separability Clause
- Invalidity of any provision does not affect the remaining provisions, which shall remain in full force.
Repealing Clause
- Laws, decrees, and executive orders inconsistent with this Act are repealed or modified accordingly.
Effectivity
- Act takes effect 15 days after publication in the Official Gazette or a newspaper of general circulation.