EXECUTIVE ORDER NO. 815
EXECUTIVE ORDER NO. 815 - TO
SAFEGUARD AND PROMOTE THE DEVELOPMENT OF THE PHILIPPINE SEMICONDUCTOR
ELECTRONICS INDUSTRY
(REPEALED BY EXECUTIVE ORDER NO. 226, S. 1987)
WHEREAS,
in the last five years, the Philippines has attracted the investments
of the major multinational semiconductor manufacturers;
WHEREAS, the present Philippine semiconductor electronics industry
already accounts for some 20% of the world’s merchant semiconductor
assembly production (measured in units);
WHEREAS, the semiconductor electronics industry is a high technology
industry which is characterized by rapid technological changes that
require continuous new capital investments and higher manpower skills
and productivity;
WHEREAS, new technological inventions, such as the higher technology,
higher priced large scale-and very large scale-integrated circuits will
soon be the major products for semiconductor assembly;
WHEREAS, the forthcoming semiconductor assembly will require more
intensive capital process and production equipment, and less of the
historical labor content;
WHEREAS, the Philippines has sufficient educated; trainable manpower
resources for the production operations, technical and management needs
of the semiconductor electronics industry;
WHEREAS, to increase its value, the semiconductor process technology in
the Philippines should be raised to higher levels, and operations be
integrated forward into testing, and when conditions are favorable,
backward into wafer fabrication;
WHEREAS, it is to the national interest that the Philippines is viewed
by investors as an attractive, cost competitive environment in the face
of changing needs of the semiconductor electronics
industry;
WHEREAS, Article 57 of Presidential Decree No. 1789, otherwise known as
the Omnibus Investments Code, empowers the President to grant new or
additional incentives or modify existing ones in the interest of
national development;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the
Constitution and the authority vested in me by the Presidential Decree
No. 1789, do hereby order and ordain:
Section 1. Policy Statement and Objectives. — It is
hereby declared to be the policy of the State to maintain an investment
environment conducive to the growth and development of the
semiconductor electronics industry. Such investment environment
shall:
(a)
Provide operational maximum flexibility;
(b) Be cost
competitive;
(c) Provide an
adequate supply of required skills in the manpower pool;
(d) Provide
training to ensure a future supply of highly skilled engineers and
technicians;
(e) Create the
infrastructure of suppliers needed by the industry for the supply of
services, materials and supplies;
(f) Encourage
investors to evolve higher levels of assembly processes, automation,
forward integration into device testing, and backward integration into
wafer fabrication;
(g) Encourage
investors to develop a viable Consumer and Industrial Electronics
Products Industry to serve both domestic and export markets.
Sec. 2. Additional Incentives to the Semiconductor
Industry. — In addition to the incentives provided for firms in the
semiconductor electronics industry registered with the Board of
Investments as export producers under Book I of P.D. 1789, otherwise
known as the Omnibus Investments Code or R.A. 6135, otherwise known as
the Exports Incentives Act, such enterprise shall enjoy the incentives
enumerated hereunder:
(a)
Exemption from taxes and duties on imported spare parts. — Within seven
years from the date of registration, importation of required spare
parts and supplies shall be exempt from tariff duties and compensating
tax payable thereon, Provided, however, that such spare parts and
supplies are not locally available at reasonable price, sufficient
quantity and comparable quality.
(b) Exemption
from contractor’s tax. — Gross receipts of a registered firm in the
semiconductor electronics industry shall be exempt from the
contractor’s tax under the Internal Revenue Code.
(c) Exemption
from tax on accumulated profits or surplus. — Registered enterprises in
the semiconductor electronics industry shall be exempt from the tax on
accumulated profits or surplus as provided for in Sec. 25 of the
National Internal Revenue Code, as amended.
(d) Deemed
compliance with General Order 47. — Registered enterprises in the
semiconductor electronics industry are deemed to have complied with
General Order No. 47, requiring large companies to produce rice and
corn for their employees, Provided, however, that such company shall,
in addition to the specific in-company training for its personnel,
share in the financing of industry-wide training of engineers and
technicians for the semiconductor electronics industry to be organized
by the Ministry of Trade and Industry.
(e)
Declaration as vital industry. — Pursuant to Article 264(g) of the
Labor Code (Batas Pambansa Blg. 130 as amended by Batas Pambansa Blg.
227), the semiconductor electronics industry is hereby declared a vital
industry and any labor dispute therein causing or likely to cause
strikes or lockouts will adversely affect the national interest. In the
event of such labor dispute in the industry, the Minister of Labor and
Employment shall immediately assume jurisdiction over such dispute and
decide it or certify the same to the National Labor Relations
Commission for compulsory arbitration. Such assumption or certification
shall have the effect of automatically enjoining the intended or
impending strike or lockout as specified in the assumption or
certification order. If one has already taken place at the time of
assumption or certification, all striking or locked out employees shall
immediately return to work and the employers shall immediately resume
operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout.
(f) Exemption
from locational clearance. — Any provision of law to the contrary
notwithstanding, the enterprise shall be exempt from the locational
clearance required by any government agency.
(g) Customs
clearance. — The clearance for the importation of equipment, spare
parts, raw materials and supplies, and exports of processed products
shall be expedited by the Bureau of Customs for semiconductor companies
certified by the Board of Investments.
(h)
Unrestricted use of consigned equipment. — Provisions of existing laws
notwithstanding machinery, equipment and spare parts consigned to any
registered firm engaged in the manufacture of semiconductor devices
shall not be subject to restrictions as to period of use of such
machinery, equipment and spare parts provided that the appropriate
re-export bond is posted.
Sec. 3. Incentives to enterprises registered with
the Export Processing Zone. — The Board of Investments may extend
additional incentives herein provided to firms registered with the
Export Processing Zones without need of complying with the registration
requirements of the Board of Investments.
Sec. 4. Existing Firms. — Existing firms embarking
in higher technological processes such as automation or in forward
and/or backward integration, shall qualify to register such projects as
an expansion entitled to the new registration with the Board of
Investments.
Sec. 5. Extension of Incentives. — The Board may
extend the period of availment of incentives by firms in the
semiconductor electronics industry if such is necessary to maintain the
country’s competitive position in attracting additional investments in
the industry, Provided, however, that such extension shall not be for
more than twice the original period under the law.
Sec. 6. Assistance by the Government Agencies. —
The Central Bank, Ministry of Labor and Employment, Human Settlements
Regulation Commission, National Food Authority, Bureau of Customs,
Bureau of Internal Revenue, Ministry of Finance, Securities and
Exchange Commission and other government offices concerned are directed
to adopt respective rules and regulations which are applicable to the
semiconductor electronics industry to support the full and expeditious
implementation of the policy and objectives herein declared.
Sec. 7. Rules and Regulations. — The Board of
Investments is empowered to adopt rules and regulations for the
implementation of this Order.
Sec. 8. Repealing Clause. — Any provision of law,
decrees, or executive orders, instructions, rules, regulations or
circulars inconsistent with this Executive Order is hereby repealed or
modified accordingly.
Sec. 9. Effectivity. — This Executive Order shall
take effect immediately.
Done in the City of Manila,
this 26th day of June, in the year of Our Lord, nineteen hundred and
eighty-two.
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