Tourism Act: Promote and Regulate Philippine Tourism

Defined terms and key tourism actors

“Department” refers to the Department of Tourism created under Presidential Decree No. 189 (1973), as amended.
“Secretary” refers to the Secretary of Tourism.
“Duty Free Philippines (DFP)” is the government agency created under Executive Order No. 46 (1986).
“Duty Free Philippines Corporation (DFPC)” is the corporate entity created out of DFP pursuant to this Act.
“Philippine Conventions and Visitors Corporation (PCVC)” refers to the corporate entity created under Presidential Decree No. 867, as amended.
“Tourism Infrastructure and Enterprise Zone Authority (TIEZA)” refers to the government agency created under this Act.
“Tourism Enterprise Zone (TEZ)” refers to tourism enterprise zones created under this Act.
“TEZ overseer” is a person appointed by TIEZA in specific zones to perform delegated functions.
“TEZ operator” is a duly incorporated entity under Batas Pambansa Blg. 68 (Corporation Code of the Philippines) and other relevant laws, whose capital may be provided by LGUs and/or private entities, and which administers and supervises each TEZ.
“TEZ Administrator” is the person appointed by the Board of Directors of a TEZ operator to implement the operator’s policies, plans, and projects.
“Registered enterprise” is an enterprise located within a TEZ and duly registered with TIEZA.
“Philippine Tourism Authority (PTA)” refers to the existing implementation arm of the Department created under Presidential Decree No. 189 (1973), as amended.
“Tourism Promotions Board (TPB)” refers to the body corporate created under this Act.
“Tourism enterprises” are facilities, services, and attractions involved in tourism, including travel and tour services; tourist transport services by land, sea, or air; tour guides; adventure sports services; convention organizers; accommodation establishments; tourism estate management services; restaurants, shops and department stores; sports and recreational centers; spas; museums and galleries; theme parks; convention centers; and zoos.
“Primary tourism enterprises” includes travel and tour services; transport services exclusively for tourist use; accommodation establishments; convention and exhibition organizers; tourism estate management services; and other enterprises identified by the Secretary after due consultation with concerned sectors.
“Secondary tourism enterprises” covers all tourism enterprises not classified as primary.
“Greenfield Tourism Zone” is a new or pioneer development as determined by TIEZA.
“Brownfield Tourism Zone” is an area with existing infrastructure or development as determined by TIEZA.
“Foreign visitors” refers to passengers using foreign passports.
“Sustainable tourism development” is resource management meeting tourists’ and host regions’ needs while protecting opportunities for the future, fulfilling economic, social, and aesthetic needs while maintaining cultural integrity, essential ecological processes, biological diversity, and life support systems.

Department of Tourism: mandate and powers

The Department of Tourism is the primary planning, programming, coordinating, implementing, and regulatory government agency for domestic and international tourism development and promotion.
The Department must instill in Filipinos the industry’s fundamental importance in employment, investment, and foreign exchange generation.
The Department must formulate tourism policies, plans, and projects, and supervise and coordinate their implementation.
The Department must call upon all government agencies to carry out programs in relation to tourism policies, plans, and projects.
The Department must communicate to the President and heads of departments and agencies the impact of proposed governmental actions on tourism and the economy.
The Department must provide an integrated market development program to attract visitors and enhance the prestige of the Philippines internationally.
The Department must represent the government in domestic and international tourism conferences and fora, and in multilateral or bilateral treaties and international agreements concerning tourism, ensuring compliance with obligations.
The Department must request presidential representation in government agencies, offices, boards, commissions, and committees that affect tourism.
The Department must coordinate to facilitate travel access, visa processing and extension, integration and simplification of travel regulations, and ensure efficient, fair, and courteous enforcement for hospitable reception of visitors.
The Department must support protection, maintenance, and preservation of historical, cultural, and natural endowments and take measures against acts or omissions contrary to these objectives.
The Department must monitor community conditions and, in consultation with LGUs and law enforcers, issue timely advisories on travel safety/viability and patronage of tourism-related entities and tourism products.
The Department must evaluate tourism development projects for permit issuance and incentive grants by appropriate agencies, establish a databank of tourism areas and projects, and encourage private sector investment and participation.
The Department must formulate and promulgate rules and regulations governing tourism enterprise operations and activities, including a national standard for licensing, accreditation, and classification with minimum operating quality and efficiency consistent with recognized international standards, impose reasonable penalties for violation of accreditation policies, and recommend suspension or prohibition of operations to concerned LGUs.
The Department must monitor LGU compliance with national standards for licensing tourism enterprises, receive and investigate complaints, and act to implement this Act.
The Department must ensure proper coordination, integration, prioritization, and implementation of local tourism development plans with national government plans.
The Department must provide technical assistance to LGUs for destination development, standard setting, and regulatory enforcement.
The Department must undertake continuing research and surveys, and compile and integrate statistical databanks on tourism.
The Department may delegate to regional offices, in coordination with LGUs, specific powers and functions for tourism policy implementation.
The Department must collect necessary fees and charges for proper implementation of tourism policies, plans, and projects.

Department organization and specialized offices

The Department consists of the Department Proper, Department offices, services, and units, and the regional and foreign offices.
The Department Proper consists of the Offices of the Secretary, Undersecretaries, and Assistant Secretaries necessary for implementation.
The Secretary is assisted by at least three (3) Undersecretaries:
- Undersecretary for Tourism Development (product development; tourism development planning, research and information management; industry manpower development).
- Undersecretary for Tourism Regulation, Coordination and Resource Generation (tourism standards and regulations; tourism coordination; tourism resource generation; and all regional and foreign offices).
- Undersecretary for Special Concerns and Administration (special concerns; financial and management service; administrative affairs service; legal affairs service; internal audit service; legislative liaison unit).
The Office of Product Development must conceptualize and develop new tourism products and undertake viability tests and acceptability testing, and promote joint private sector undertakings.
The Office of Tourism Development Planning, Research and Information Management must prepare the National Tourism Development Plan, formulate global competitiveness and national tourism development policies, approve local government tourism development plans, monitor and evaluate implementation, and formulate integrated marketing and promotions plans, among other research and coordination functions.
The Office of Industry Manpower Development must conduct seminars on Philippine history, culture, and environment; develop training modules and continuing education; encourage training and apprenticeship programs for tourist guides and similar workers; enlist experts for technical assistance, training, education, and certifications.
The Office of Tourism Standards and Regulations must formulate and enforce standards, coordinate with associations, develop mandatory accreditation for primary enterprises and voluntary accreditation for secondary enterprises, establish accreditation registration/information systems, and evaluate tourism projects for incentives with technical assistance to incentive-giving institutions.
The Office of Tourism Coordination must maintain coordination with national agencies, LGUs, NGOs, and private entities and support private sector tourism activities requiring governmental coordination.
The Office of Tourism Resource Generation must collect fees and charges used for TPB promotion/marketing and for TIEZA infrastructure and utilities/services, with proceeds accruing directly and automatically to the Department; it must define collection and disbursement guidelines in implementing rules.
The Tourism Development Fund is created and administered by the Department for development, promotion, marketing, and other Department tourism projects, sourced from collected fees and charges, with a special account in the National Treasury and disbursement subject to usual accounting and budgeting rules.
The Department must establish a regional office in each administrative region, headed by a regional director responsible for implementation, coordination, research/data gathering, tourist assistance centers, trainings and campaigns, and recommendations to the Secretary.

Tourism promotions board: governance and funding

A body corporate named the Tourism Promotions Board (TPB) is established under the supervision of the Secretary and attached to the Department for program and policy coordination.
The TPB must formulate and implement an integrated domestic and international promotions and marketing program for the Department.
The TPB must market and promote the Philippines domestically and internationally, highlighting uniqueness and assisting tourism product development with the end of increasing tourist arrivals and tourism investment.
The TPB must specifically market the Philippines as a major convention destination in Asia and must take charge of attracting, promoting, facilitating, and servicing large-scale events, international fairs and conventions, congresses, sports competitions, expositions and the like.
The TPB must ensure regular advertisement abroad of the Philippines as major tourism destination and tourism products, not limited to TEZs, and may provide incentives to travel agencies abroad that draw tourists and investments.
The TPB is governed by a Board of Directors composed of the Department Secretary (Chairperson), TPB Chief Operating Officer (Vice Chairperson), TIEZA Chief Operating Officer, DFA Secretary, DTI Secretary, DOTC Secretary, and five (5) representative directors appointed by the President upon recommendation of the Tourism Congress, each with recognized competence; the Chairperson has voting rights in case of a tie.
The TPB must appoint a corporate secretary to prepare board meeting agendas in consultation with the Chairperson.
The TPB has a Chief Operating Officer who is Filipino, with a bachelor’s degree in specified fields and managerial experience of at least five (5) years, elected by the Board from qualified applicants and appointed by the Secretary, with a term of six (6) years unless removed for cause under law.
The Board must meet at least once a month at the principal office unless agreed in writing to meet elsewhere.
The TPB’s authorized capital is PHP 250,000,000.00, fully subscribed by the national government.
The TPB must draft comprehensive short-, medium-, and long-term strategic marketing plans, approve them through the Tourism Board, and ensure implementation through the Chief Operating Officer with periodic reporting to the Board.

Tourism Promotions Trust and Special Funds

Within 120 days from this Act’s effectivity, an audit must be conducted by the Commission on Audit to determine the true value of PTA assets and liabilities.
After the audit, TIEZA and the Department, in coordination with the Privatization Council, must determine which PTA assets are put up for sale or lease, with interested LGUs having a right of first refusal.
PTA assets that are cultural treasures and heritage sites (such as Banaue Hotel and similar assets) must not be sold or disposed of and must be placed under the ownership of the TIEZA for continued maintenance.
The Tourism Promotions Trust is established from proceeds of sale or lease of PTA assets and is managed by a government-owned bank or financial institution selected by the Tourism Board, which must report the trust’s status and profitability quarterly to the Tourism Board, the Secretary, and the Joint Congressional Tourism Oversight Committee created under this Act.
A Tourism Promotions Fund is created as a special fund financed by:
- investment earnings from the Tourism Promotions Trust;
- an appropriation from the national government of not less than PHP 500,000,000.00 annually for at least 5 years from constitution;
- 70% of the 50% net income of the DFPC accruing to the Department in lieu of statutory remittance under Republic Act No. 7656;
- at least 25% of the 50% national government share remitted by PAGCOR to the national Treasury under Republic Act No. 7656; and
- at least 25% of the national government share remitted by international airports and seaports to the National Treasury under Republic Act No. 7656.
Promotions and marketing activities must receive at least 50% of the annual utilization of the fund.
No more than 10% of the fund may be used for all other administrative and operating expenses of the TPB.
The unallocated fund portion must be earmarked by the TPB for use by the TIEZA for TEZ development, for the Department to enhance development planning, heritage preservation and infrastructure development, and manpower training (including scholarships for trainings abroad), or for other purposes contributing to tourism industry development.
Portions of net income of government corporations and other enterprises under this section due the TPB must be remitted directly thereto on a quarterly basis.
A Special Contingency Fund must be set aside at the beginning of each year equal to 10% of the allocation for promotions and marketing to respond to emergencies and enable sufficient resources for marketing and promotions activities to encourage sustained tourism interest and address adverse emergency effects.
The TPB is exempt from the payment of corporate income tax under the National Internal Revenue Code (NIRC) of 1997, as amended, notwithstanding contrary provisions of existing laws.
Membership in the TPB is open to entities, groups, and individuals with economic, social, or cultural interest in travel trade, congresses, and conventions.

Tourism Enterprise Zones: designation and planning

Any geographic area may be designated as a Tourism Enterprise Zone (TEZ) if it is contiguous, has historical/cultural significance, environmental beauty, or existing/potential integrated leisure facilities; has strategic access through transportation infrastructure and reasonable utility connection; is sufficient in size for new tourism investments; and is in a strategic location to catalyze socioeconomic development of neighboring communities.
The TIEZA designates TEZs upon recommendation of any LGU or private entity or through public-private joint ventures, subject to this Act and minimum requirements that TIEZA promulgates.
TEZs must not proliferate in a manner that diminishes their strategic economic and developmental value to the national economy.
Each TEZ designation application must include a development plan identifying tourism focal points/resources; features meeting TEZ requisites; infrastructure development areas and investment/preservation zones and allowed development/investment/sustainable activities; medium- and long-term market trend studies and development strategies; studies on economic impact; studies on environmental, cultural, and social carrying capacity; structure design plans incorporating local architecture and sustainability principles; and other information TIEZA may require.
No TEZ may be designated without (1) a development plan duly approved by TIEZA and (2) LGU approval by resolution.
Any deviation or modification from the approved development plan requires prior authorization of TIEZA.
TIEZA may suspend granted incentives, withdraw recognition as a TEZ operator, impose reasonable fines and penalties on TEZ operators and responsible persons for failure to implement the approved development plan.
Lands identified as part of a TEZ qualify for exemption from coverage of Republic Act No. 7279 (Urban Development and Housing Act of 1992) and Republic Act No. 6657 (Comprehensive Agrarian Reform Law), subject to rules and regulations crafted by TIEZA, the Housing and Urban Development Coordinating Council, and the Department of Agrarian Reform.
A TEZ proponent must establish a corporate entity as the TEZ operator to administer the TEZ and supervise its activities.
Designation of a TEZ does not vest ownership of resources within the TEZ upon the TEZ operator.
If the TEZ operator has rights to land or resources within the TEZ, it may exercise such rights as allowed by existing laws in a manner consistent with the approved development plan.
Where rights to land and other resources within the TEZ are vested in a private third party, the TEZ operator must encourage the private third party to participate in policy making, planning, and program development and implementation by encouraging tourism enterprise registration where appropriate and through judicious incentives administration and services.
LGUs comprising, overlapping, embracing, or including a TEZ in their territorial jurisdictions retain basic autonomy and identity under the Local Government Code.
The government must encourage, facilitate, and provide incentives for private sector participation in construction and operation of public utilities and infrastructure in TEZs using schemes allowed under Republic Act No. 6957, as amended (Build-Operate-and-Transfer Law).

TIEZA: creation and supervisory role

The Tourism Infrastructure and Enterprise Zone Authority (TIEZA) is established as a body corporate under the supervision of the Secretary and attached to the Department for program and policy coordination.
TIEZA shall designate, regulate, and supervise TEZs established under this Act.