S enate Bill (SB) 2669 is a consolidation of bills authored by Senate President Franklin Drilon and Senate Pro
Tempore Ralph Recto. The proposed measures provide for the monitoring of tax incentives with the creation of a Tax Incentives Information (TII) section in the annual
Budget of Expenditures and Sources of Financing (BESF).
“The Philippines remains strongly competitive in the region in attracting investments. The steady stream of FDIs or foreign direct investments into our economy is not a mere coincidence. It is through the provision of tax incentives, among our other fi scal strategies, that we are able to promote investments that make us among the top emerging economies in the region,” said Sen.Angara, chairman of the Senate
Ways and Means Committee, who sponsored the measure.
According to Sen. Angara the proposed TIMTA does not, in any way, affect the independence or autonomy of the investment promotion agencies (IPAs) or other government agencies (OGAs) to administer incentives granted by law to registered business entities and qualifi ed private individuals or corporations.
“It should be emphasized as well that the proposed monitoring scheme for incentives is not an entirely new bureaucratic layer that would entail additional burden to the IPAs, OGAs, registered enterprises, private individuals and corporations,” Sen. Angara said.
The measure provides for the creation of a system which will monitor and track the tax incentives granted by investment promotion agencies like Bord of Investments (BOI), Philippine Economic
Zone Authority (PEZA), Tourism Infrastructure and Enterprise
Zone Authority (TIEZA) and freeports like those in Subic Bay,
Clark, Cagayan, Zamboanga City, John Hay, Morong, Poro Point.
Sen. Angara stressed that the only requirement is for IPAs and OGAs to submit an annual report, which will include tax incentives claimed as refl ected already in the tax returns of business entities, private individuals or corporations.
Philippine ANALYST January-February 2015
97

98 CONGRESSWATCH
SB 2669 also seeks the establishment of a Tax Incentives
Tracking Program of all tax incentives granted, and the setting-up of stringent reportorial schemes to the President and to Congress.
The Tax Incentives Tracking Program will be used by the DOF, Bureau of Internal Revenue (BIR) and Bureau of
Customs (BOC) to monitor tax incentives granted by the
IPAs and OGAs, project tax incentives for future years, and to conduct an annual evaluation study to determine the impacts of the tax incentives on the Philippine economy.
“TIMTA provides a solution for the lack of empirical data on fi scal incentives and what it reciprocates to the economy. It allows policymakers to conduct a cost-benefi t analysis of fi scal incentives to make better decisions, going forward, in crafting or revising laws, in overseeing the implementation of existing investment-related laws, and in managing the nation’s fi nances,” Sen. Angara said.
Aside from Tax Incentives and Management Transparency
Act (TIMTA), another bill that would help build a transparent and accountable mechanism in the administration of tax incentives is the Fiscal Incentives Rationalization bill.
The enactment of the bill is supported by congressional leaders as well as international fi nancial institutions like the International Monetary Fund.
The proposed Fiscal Incentives Rationalization bill harmonizes and rationalizes laws providing tax incentives to investors. Currently, the government has 186 incentive-giving laws that provide numerous fi scal and non-fi scal incentives and subsidies to foreign investors. Bills proposing to harmonize the incentive-giving statutes have been fi led since the 13th Congress
(2004-2007). The bills have been refi led this 16th Congress.
The Senate will reassess the laws to avoid redundant and overlapping incentives to cut foregone revenues. Senate
President Franklin Drilon believes the measure, once enacted, will attract more investments as it will level the playing fi eld to industries that truly deserve tax breaks and simplify procedures in granting incentives. The proposed measure will also provide incentives to activities that are in line with the government’s objective of creating job opportunities, boosting countryside development, and achieving inclusive growth.
“Tax incentives [positively] distort the tax structure of the Philippine economy. Through these twin fi scal incentives reform measures, in the long term the government will enhance the country’s fi scal capacity to continue to build on its macroeconomic fundamentals, level the playing fi eld, and improve competitiveness and investment opportunities.
Accounting for tax incentives needs to be transparent, and these tax incentives need to be granted properly,” the Secretary added.
House speaker Sonny Belmonte also supports the approval of the proposed measure. The Fiscal Incentives and Tax Incentives
Management bills are among the bills that both chambers of
Congress agreed to pass in its current legislative meeting.
Other priority measures that district representatives agreed upon with their counterparts from the Senate are the following:

Central Bank (Bangko Sentral ng Pilipinas) charter amendments;
 Customs Modernization and Tariff;

Rationalization of Mining Revenues;

Amendments to the Foreign Investment Act;
 Amendments to the Retail Trade Act;

Anti-trust and Competition law;
 Amendments to the Build Operate Transfer Law;

Amendments to the Electric Power Industry Reform Act.
(EPIRA);

Amendments to the Cabotage Law that would allow foreign vessel to pick up, transport, and deliver shipments to and from local ports;
 Freedom of Information Act;

Bangsamoro Basic Law (passage threatened by the
Mamasapano incident);
 Sandiganbayan (Anti-graft court) amendments Act;

Witness Protection Act; and

Whistleblowers’ Act.
The International Monetary Fund (IMF) supports the passage of the measure. “The need for the rationalization of tax incentives in the Philippines is widely recognized. Numerous
[IMF] studies and reports… established that the existing regime is very generous and unnecessarily complex,” the IMF stated in its Fiscal Affairs Department report in November 2013.
The IMF report added that the proposed TIMTA “could be an important step towards improving the transparency of tax incentives, and capping revenue foregone by tax incentives. This means that
IPAs have to begin to focus on revenue foregone costing so that IPAs begin to concentrate on the cost-effectiveness of tax incentives.”
According to Finance secretary Purisima the Department’s efforts to come up with a tax expenditure report (TER) puts the country at par with all of the OECD countries and some emerging economies in Asia “which place a high regard in promoting transparency in the government’s tax policy actions.” Sec. Purisima said these economies have been producing a comprehensive Tax Expenditure Report every year, that allows their respective incentive policies to get the same level of budget scrutiny as normal budget expenditures.
In the enactment of a Fiscal Incentives Rationalization bill the primary concern among businesses is that the government might prioritize increasing immediate revenues rather than making the Philippines a competitive investment site like its neighbors.
Philippine
ANALYST January-February 2015

CONGRESSWATCH
Lawmakers agree that fiscal incentives need to be rationalized, but the Department of Finance and Department of Trade and Industry are at odds over the proposed measure.
At this point, the bill’s provisions appear too contentious.
Upper chamber approves bill on 3rd and fi nal reading
The Senate has approved on third and fi nal reading a measure that would repeal the country’s 45-year old Pharmacy Law. The proposed bill aims to regulate the practice of pharmacy, integrate the pharmacy profession, and enhance professional competence in pharmacy through mandatory pursuit of development and research.
Once signed in to law, Senate Bill (SB) 2436 or the Philippine
Pharmacy Act, will standardize pharmacy education and regulate the registration and licensing of pharmacy graduates.
According to Senator Antonio Trillanes lV, sponsor of the bill, advances in the fi elds of science and technology coupled with the development of the global economy have made the country’s 45-year old Pharmacy Law “outdated, if not obsolete.”
Senate President Franklin Drilon, for his part, said the proposed bill forms part of efforts to modernize and improve the capacities of a number of key industries in such sectors as health service, business, and agriculture, given the new challenges that the Philippines is expected to face much like the ASEAN integration which is slated to begin this year.
“We need to ensure that important sectors like the pharmaceutical industry, which directly affect the lives of our countrymen, are not being left behind by their regional and international counterparts in adopting the latest structural innovations and systems that will allow them to provide better services and products,” Sen. Drilon said.
Sen. Trillanes said the passage of the measure is crucial in equipping pharmacists with the “necessary tools to further improve and maintain our vibrant pharmaceutical industry and provide them with the necessary competitive edge to be able to compete in the international arena.”
Among the measure’s key provisions is the establishment of a Professional Regulatory Board of Pharmacy. Under the measure, pharmacists in government service will receive a starting salary equivalent to Salary Grade 15 under Republic
Act No. 6758 or the Compensation and Position Classifi cation
Act of 1989. Those in the private sector, meanwhile, will receive an entry-level salary equivalent to at least 35 percent above the prevailing minimum wage in the National Capital Region.
The bill also provides for the integration of pharmacists under one nationally accredited professional organization.
The proposed measure also provides for a foreign reciprocity to allow a foreign-registered pharmacist to practice in the country, provided that his/her country of origin allows
Filipino pharmacists to practice within its territorial limits.
The Constitution allows foreign professionals to practice in the Philippines provided their countries of origin allow
Filipinos to practice there. The Constitution stipulates that “the practice of all professions in the Philippines shall be limited to Filipino citizens save in the cases provided by law.” There are 47 laws that govern the practice of specifi c professions and only 5 do not provide for a ‘reciprocity’ provision, including
Republic Act 5921 or An Act Regulating the Practice of
Pharmacy and Settings Standards of Pharmaceutical Education.
According to Sen. Trillanes the enactment of the measure would play a crucial role in complementing the talent and competence of local professional pharmacists as the bill provides an updated regulatory framework.
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100 CONGRESSWATCH
34.
35.
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41.
26.
27.
28.
29.
30.
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32.
33.
42.
43.
44.
45.
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47.
21.
22.
23.
24.
25.
13.
14.
15.
16.
17.
18.
19.
20.
5.
6.
7.
8.
9.
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12.
1.
2.
3.
4.
Accountancy
PROFESSION
Aeronautical Engineering
Agricultural Engineering
Agriculture
Architecture
Chemical Engineering
Chemistry
Civil Engineering
Criminology
Customs Broker
Dentistry
Electricity Engineering
Electronics and Communications Engineering
Environmental Planning
Fisheries
Foresters
Geodetic Engineering
Geology
Guidance Counseling
Interior design
Landscape Architecture
Librarians
Marine Deck Offi cers
Marine Engineer Offi cers
Master Plumbers
Mechanical Engineering
Medical Technology
Medicine
Metallurgical Engineering
Midwifery
Mining Engineering
Naval Architecture and Marine Engineering
Nursing
Nutrition and Dietetics
Optometry
Pharmacy
Physical and Occupational Therapy
Professional Teachers
Psychology
Radiologic Technology
Real Estate Service
Respiratory Therapy
Sanitary Engineering
Social Workers
Sugar Technologist
Veterinary Medicine
Law
LAWS
RA No. 9298
PD No. 1570
RA No. 8559
PRC Reso. No. 2000-663
RA No. 9266
RA No. 9267
RA No. 754
RA No. 1582
RA No. 6506
RA No. 9280
RA No. 9484
RA No. 7920
RA No. 9292
PD No. 1308
PRC Reso. No. 2000-664
RA No. 6239
RA No. 8560
RA No. 4209
RA No. 8534
RA No. 9258
RA No. 9053
RA No. 9246
RA No. 8544
RA No. 8544
RA No. 1378
RA No. 8495
RA No. 5527
RA No. 2382
RA No. 1536
RA No. 7392
RA No. 5677
RA No. 4565
RA No. 9173
PD No. 1286
RA No. 8050
RA No. 5921
RA No. 5680
RA No. 7836
RA No. 10029
RA No. 7431
RA No. 9646
RA No. 10024
RA No. 1364
RA No. 4373 n/a
RA No. 9268
Rules of Court Rule 138
Sec. 29
Sec. 34 x
Sec. 21
Sec. 24
Sec. 24 x
Sec. 24
Sec. 39
Sec. 27
Sec. 9
Sec. 11
Sec. 22
Sec. 28
Sec. 27
Sec. 20
Sec. 34
Sec. 32
Sec. 18 n/a
Sec. 31
Dual Citizens Only
Sec. 33 x
Sec. 27 x
Sec. 26
Sec. 11
Sec. 29
Sec. 29
Sec. 29
Sec. 28
Sec. 28
Sec. 28
Sec. 21
RECIPROCITY
(provision/clause)
Sec. 34
Sec. 14
Sec. 27
Sec. 27
Sec. 27
Sec. 30
Sec. 25
Sec. 25 x
Sec. 25
Sec. 38
Sec. 38
Source: Arangkada, http://www.investphilippines.info/arangkada/wp-content/uploads/2011/08/Letter-to-Sen-Trillanes-re-Pharmacy_.pdf
FORMATION OF CORPORATIONS
Citizenship not specifi ed
No provision
Citizenship not specifi ed
Unknown
Filipinos only
Citizenship not specifi ed
Citizenship not specifi ed
Citizenship not specifi ed
No provision
No provision
No provision
Citizenship not specifi ed
Citizenship not specifi ed
Filipinos only
Unknown
No provision
Citizenship not specifi ed
Citizenship not specifi ed
Citizenship not specifi ed
Citizenship not specifi ed
Citizenship not specifi ed
No provision
No provision
Citizenship not specifi ed
No provision
Citizenship not specifi ed
No provision
No provision
Citizenship not specifi ed
No provision
No provision
Citizenship not specifi ed
No provision
No provision
No direct provision
No provision
No provision
No provision
No provision
No provision
Sec. 32
No provision
Citizenship not specifi ed
Citizenship not specifi ed
Unknown
No provision unknown
Philippine
ANALYST January-February 2015