TREATING CERTAIN TRANSACTIONS AS INTERNAL EXPORTS AND PROVIDING INCENTIVES THEREFOR.

WHEREAS, certain fiscal incentives can be improved to
increase the level of foreign exchange of the country to finance its growing
import bill;

WHEREAS, gift giving is a part of the Filipino cultural
heritage which is observed even by citizens who have migrated abroad by sending
gifts to relatives and friends in the homeland, usually in the form of foreign
manufactured goods;

WHEREAS, Philippine-made products can easily equal if not
surpass foreign-made articles, so that if pushed in the right direction it can
generate substantial foreign exchange for the country.

NOW, THEREFORE, I. FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and decree as part of the law of the land:

SECTION 1. Declaration of Policy.—It is hereby
declared to be a policy of the state to encourage Filipinos abroad and other
non-residents of the Philippines, to patronize Philippine-made products by
providing incentives therefore, so that locally manufactured goods paid for in
foreign exchange through the banking system of the Philippines, by Filipinos
abroad and nonresidents in general for delivery in the Philippines, are treated
as internal exports, consistently with similar practices elsewhere in the
world.

SECTION 2. Transactions Permitted.—Gifts paid for
in foreign exchange by Filipinos abroad and nonresidents in general for delivery
in the Philippines, shall be governed by and made subject to the following:

1. Goods assembled or manufactured in the Philippines, when paid for in
   convertible foreign currency inwardly remitted through the banking system in the
   Philippines, shall be subject to a sales tax equivalent to ten percent (10%) of
   the gross selling price or gross value in money of the goods sold and shall be
   exempt from the payment of gift taxes.
2. This exemption shall, however, apply only to sales not exceeding an
   aggregate foreign exchange value of One Thousand United States dollars
   (US$1,000,00), or its equivalent in other convertible foreign currencies, but in
   no case to exceed three (3) units or pieces of the same goods sold and delivered
   as gifts in the Philippines.
3. The Minister of Finance shall adopt and promulgate such rules and
   regulations as shall be necessary to effectively implement the fiscal incentives
   provided in this Decree.

SECTION 3. Transactions not Covered.—Finished goods
imported into the Philippines, purchased for delivery as gift to a resident,
even if paid for in foreign currency by the donor, shall not be entitled to the
fiscal incentives provided under this Decree.

SECTION 4. International Gift-giving Program.— The
Ministry of Trade, under an International Gift-giving Program that it shall
adopt and implement as part of its export promotion strategies, shall be and is
hereby authorized, to make available the facilities of its foreign trade service
network in the promotion of the products envisioned under this Decree and said
Ministry shall cause to be published and distributed, a catalogue of products
that it shall accredit to be eligible to participate in such programs under such
rules and regulations as the Minister of Trade shall adopt and promulgate.

SECTION 5. Repealing Clause.—Any and all acts,
statutes, decrees, orders, rules, regulations, or parts thereof inconsistent
herewith are hereby repealed or modified accordingly.

SECTION 6. Effectivity. ─This Presidential Decree
shall take effect immediately.

Done in the City of Manila this 16th day of January, in the year of Our Lord,
nineteen hundred and eighty-one.

			(Sgd.) FERDINAND E. MARCOS President of the Philippines
	By the President:
	(Sgd.) JUAN C. TUVERA
		Presidential Executive Assistant

Vol. 25, Vital Documents, Presidential Decree 1980-1981