IMPLEMENTING THE RATIONALIZATION OF DUTY FREE STORES/OUTLETS AND THEIR OPERATIONS IN THE PHILIPPINES PURSUANT TO EXECUTIVE ORDER NO. 140 AND FOR OTHER PURPOSES

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WHEREAS, Executive Order No. 140, dated 30 November 1993, provides for the
rationalization of duty free stores/outlets and their operations in the
Philippines, in order to enhance their conformity with the generally observed
practices in most countries and to avoid their possible adverse impact on local
enterprises;

WHEREAS, to implement the rationalization, there is a need to modify
policies and improve certain existing operational aspects of the duty free
stores/outlets in the Philippines;

NOW, THEREFORE, I, FIDEL
V. RAMOS, President of the Republic of the
Philippines, by virtue of the powers vested in me by law, do hereby order, as
follows:

Section 1. Allowable
Areas for Duty Free Shop Operation. The
moratorium on the establishment of duty free stores/outlets imposed by EO No.
140 is hereby lifted. Accordingly, duty free stores/outlets, whether operated
by the government and/or private entities, may be established within the
country’s international ports of entry subject to the terms and conditions set
forth in EO No. 46, as amended, and in the secured and fenced-in areas of
special economic zones/freeports pursuant to the provisions of the Bases
Conversion and Development Act of 1992 (RA 7227), establishing the Subic
Special Economic Zone/Freeport Zone, Clark Special Economic Zone, John Hay
Special Economic Zone, Poro Point Special Economic and Freeport Zone; RA 7922
(Establishing the Sta. Ana, Cagayan Special Economic Zone and Freeport); and RA
7903 (Creating the Zamboanga City Special Economic Zone and Freeport).

Section 2. Phase Out of
Certain Duty-free Shops. Duty free
stores/outlets located outside said international ports of entry and special
economic zones/freeports shall be phased out on December 31, 1995.

Section 3. Purchase
Limits. The purchase limits for duty-free shopping
shall be as follows:

a. Tourists and Filipinos
traveling to or returning from foreign destinations-One Thousand U.S. Dollars
(US$1,000) but not to exceed Ten Thousand U.S. Dollars (US$10,000) in any given
year;

b. Overseas Contract Workers and
Balikbayans as defined under RA 6768-Two Thousand U.S. Dollars (US$2,000);

c. Residents, eighteen years of
age and above, of special economic zones and/or freeports, and in the case of
Clark Special Economic Zone, in accordance with Proclamation No. 163 and Executive
Order 80-One Hundred U.S. Dollars (US$100) per month per person; and

d. Non-Residents of special
economic zones and/or freeports – Two Hundred U.S. Dollars (US$200) per person
per year; provided that this privilege shall be terminated on December 31,
1995.

Section 4. Acceptable
Currency. Purchases in all duty free shops
shall be made only in U.S. Dollars or other acceptable foreign currencies.

Section 5. Allowable
Items in Duty Free Shops. The range of items
to be sold by duty free stores/outlets operated by Duty Free Philippines
outside of special economic zones/freeports established pursuant to Republic
Act Nos. 7227 and 7916 shall henceforth be limited only to consumables, light
durables, television sets of sizes not manufactured in the Philippines and
locally manufactured heavy durables. Imported heavy durables carried by duty
free stores/outlets operated within special economic zones/freeports can only
be sold to the residents of the secured area of the special economic zones
and/or freeports. Sale of all locally manufactured goods in duty free
shops/outlets shall be encouraged.

Section 6. Oversight
Committee. There shall be an Oversight
Committee, chaired by the Executive Secretary with the representatives of the
following as members: the National Economic and Development Authority,
Departments of Trade and Industry, Finance, Justice and Tourism, the Bases
Conversion Development Authority, and three (3) representatives from the
private sector, as recommended by the Department of Trade and Industry. The
Committee shall recommend to the President policies for the efficient
administration of the duty free shops operations and shall submit quarterly
reports to the President on the duty free shop operations.

Section 7. Secretariat. The Presidential Management Staff shall be the secretariat of the
Oversight Committee.

Section 8. Control
System. The Duty Free Philippines and
operators of duty free stores/outlets in special economic zones and/or
freeports shall put up and operate control systems designed to detect and
prevent abuses of the privileges granted under this Order. The control system
must be made available for audit by the Bureau of Customs. Any violation of
this Executive Order and/or abuse of the privileges granted herein or other
related laws and issuances shall be acted upon within seventy-two (72) hours
after its report or discovery and a report thereof submitted to the Bureau of
Customs for appropriate action.

Section 9. Reporting. The Duty Free Philippines and operators of duty free stores/outlets
shall submit to the Department of Finance on a quarterly basis such information
as may be required by the Department.

Section 10. Export
Promotion. Under the direction of the
Department of Trade and Industry, the Duty Free Philippines shall undertake
export promotion activities the cost of which shall not exceed one (1%) percent
of its annual net sales.

Section 11. All other provisions of E.O. No. 140 not otherwise affected by this
order shall stay in force, including, but not limited to, the requirement that
the Duty Free Philippines shall remit to the National Government an amount
equivalent to 1.5 per cent of its net sales.

Section 12. Repealing
Clause. All executive orders, letters of
instructions, issuances, memoranda, and proclamations not consistent with the
provisions of this Order are hereby repealed or amended accordingly.

Section 13. Effectivity.
This Executive Order shall take effect
immediately.

Done, in the City of Manila this 2nd day of June, in the year of Our
Lord, Nineteen Hundred and Ninety-Five.

(Sgd.) FIDEL
V. RAMOS
President of the Philippines

By the President.

(Sgd.) RUBEN D. TORRES
Executive Secretary

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