EXPORT DEVELOPMENT ACT OF 1994
[Republic Act No. 7844]

AN ACT TO DEVELOP EXPORTS AS A KEY TOWARDS THE ACHIEVEMENT
OF THE NATIONAL GOALS TOWARDS THE YEARS 2000

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ARTICLE I: BASIC PRINCIPLES AND POLICIES

Section 1.  Short title

This Act shall otherwise be known as the "Export Development Act of 1994."

Section.  2.  Declaration of policy

It shall be the policy of the State to evolve export development into a national effort. The government shall champion exports as a focal strategy for a sustainable agro-industrial development to achieve Philippine NIChood towards the year 2000. The private sector shall take the lead in the collective effort to promote exports through discipline and hard work, as it confronts the challenge of winning international markets.

The government and the private sector shall jointly transform the Philippines into an exporting nation. Towards this end, the State shall instill in the Filipino people that exporting is not just a sectoral concern, but the key to national survival and the means through which the economic goals of increased employment and enhanced incomes can most expeditiously be achieved.

Section. 3.  Key operating principles

A macro-economic policy framework that supports export development shall be provided, especially in key areas of concern to exporters:

a)       Monetary and foreign exchange policies shall establish and maintain a competitive exchange rate, supported by measures to provide safety nets for various sectors that may be adversely affected by the implementation of such policies. Such policies shall be consistent with the responsibility and primary objectives of the Bangko Sentral ng Pilipinas pursuant to Section 3 of Republic Act No. 7653.

b)       Fiscal and credit policies shall provide adequate funds for public and private investments and business expansion, while keeping the cost of credit comparable to international levels ensuring access to loanable funds for SMEs as well as highly technical export enterprises, especially those in the countryside.

c)       Agricultural policies shall build up viability and competitiveness of the country's agriculture sectors and facilitate their linkage with industry to strengthen the industrial-industrial base of the country's export thrust.

d)       Trade, tariff and customs policies shall engender competitiveness of domestic industries and facilitate their participation in international trade.

e)       Technical support policies to improve the quality of export products shall be adopted, particularly those relating to technology transfer, R & D, technical training and related activities. As such, the Department of Science and Technology [DOST] and the Department of Agriculture [DA] shall be supported by colleges and universities in the diffusion of technology, information and training to the countryside for industrial-industrial and export development.

f)         Urgent attention must be given to policies affecting infrastructure in order to ensure the adequate supply and quality of power, water [e.g., for irrigation], transportation [e.g., shipping and cargo handling], and communication to support the flow of goods and services in the context of the national export drive.

g)       The link between export growth and countryside development must be strengthened through policies favorable to SMEs, regional industrial centers, and export-processing zones to boost rural and farm-based entrepreneurship in identified geographic economic growth areas of the country.

h)       Labor and industrial relations policies must recognize the inevitable industrial shifts that will occur in the effort to achieve international competitiveness. Focus shall be given to the formulation of accords between labor and management, which shall provide for sustained increase in productivity and competitiveness. In line with this, dual training schemes shall be integrated as a basic component to the country's primary and secondary education program to ensure that the manpower needs of agriculture and industry will be matched by the skills generated by the educational system. Reasonable price and income policies shall likewise be adopted in order to safeguard the interest of the labor sector.

i)         All government agencies whose actions affect exporters, such as the Board of Investments [BOI], Bureau of Customs [BOC] and Bureau of Internal Revenue [BIR] shall simplify procedures to minimize bureaucratic red tape.

j)         Provisions of existing laws deemed detrimental to the export sector shall be repealed in subsequent acts.

Section. 4.  Definition of terms

For purposes of this Act, the following definitions shall apply to the following terms:

a)       "Exporter" means any person, natural or juridical, licensed to do business in the Philippines, engaged directly or indirectly in the production, manufacture or trade of products or services which earns at least fifty percent [50%] of its normal operating revenues from the sale of its products or services abroad for foreign currency: Provided, That in the case of services, the same shall be limited to information technology services, construction services and other services as defined jointly by the Department of Finance [DOF] and the Department of Trade and Industry [DTI]. Services rendered by overseas contract workers are not covered by the definition.

b)       "Export promotion" shall refer to a range of export activities which the public and private sectors undertake, such as networking, especially in export support services and the provision of trade/market information; organization of trade fairs and missions; provision of advisory services; conduct of seminars, lectures, workshops, conferences and training on export-related subjects; publication of export-related documents; handling of quality standard, product design and such other activities aimed at promoting existing exports, especially those meant to reinforce and improve the position of Philippine export products in specific foreign markets, principally being those activities necessary for the implementation of the Philippine Export Development Plan.

c)       "Export incentives" shall refer to support measures provided by the government to exporters to encourage investment in the export sector, create a freer trade environment and motivate exporters to increase export sales and perform competitively in the export market. The overall objective is to increase the country's export sales.

d)       "Accredited organization" shall refer to the organization of exporters granted accreditation by the Export Development Council, as provided in Section 7[1] of this Act.

ARTICLE II INSTITUTIONAL STRUCTURES AND STRATEGIES

Section. 5.  Philippine Export Development Plan [PEDP]

The President of the Republic of the Philippines shall approve a rolling three-year Philippine Export Development Plan prepared by the Department of Trade and Industry [DTI], which shall form part of the medium-term Philippine Development Plan [MTPDP].  It shall be formulated in consultation with the private sector, validated and updated semestrally.

The PEDP shall define the country's annual and medium-term export thrusts, strategies, programs and projects and shall be jointly implemented by the government, export and other concerned sectors.

Section. 6.  Export Development Council

The existing Export Development Council, hereinafter referred to as the Council, which was created by Executive Order No. 98 [1993] as modified by Executive Order No. 110 [1993], and Executive Order No. 180 [1994], shall be strengthened and institutionalized for the purpose of overseeing the implementation of the PEDP and coordinating the formulation and implementation of policy reforms to support the said Plan.

Section. 7.  Powers and functions

The Council shall:

a)       Approve the PEDP; coordinate, monitor and assess the implementation thereof, and when necessary, institute appropriate adjustments thereon in the light of changing conditions in both the domestic and international environment;

b)       Periodically review and assess the country's export performance, problems and prospects;

c)       Identify the main bottlenecks, problem areas and constraints in all areas/sectors/activities which influence the development of exports, including but not limited to, such matters as policy framework, physical infrastructure, finance, technology, production, promotions and marketing;

d)       Mandate specific departments and agencies to attend to the bottlenecks and problems constraining the development of exports in any of the areas mentioned in paragraph [c] above, and require the concerned Secretaries to deliver progress report[s] on the actions/initiatives taken to resolve these areas of concern at the next meeting[s];

e)       Ensure export quality control by overseeing the formulation and implementation of quality control guidelines by appropriate agencies to make Philippine exports at par with world-class products;

f)         Impose sanctions on any government agency or officer or employee thereof, or private sector entity that impedes efficient exportation of Philippine goods;

g)       Recommend to Congress any proposed legislation that would contribute to the development of exports;

h)       Submit quarterly reports to Congress;

i)         Formulate policies or recommend measures and draw up a study within ninety [90] days from the approval of this Act, relative to the rationalization of the government's export promotion and development functions/activities and programs for the eventual transfer of government export promotions and development activities to the sector within a period of two [2] years after the approval of this Act;

j)         Formulate the policies for the granting of incentives to exporters;

k)       Adopt such policies, rules, procedures and administrative systems for the efficient and effective exercise of its powers and functions, including the creation or adoption of an executive committee or secretariat; and

l)         Grant and review the accreditation of the organization of exporters, according to the guidelines which it shall later promulgate for the said purpose: Provided, That the organization accredited shall be the dominant one among the other existing export organizations as determined under the guidelines promulgated by the Council hereof.

m)      Issue standards and policies to be observed by Local Government Units [LGUs] in order to:  

1.       Ensure that LGUs' plans and budgets are supportive of industrial-industrial growth and export competitiveness thrusts of the national government; and

2.       Ensure optimal allocation of expenditures.

The DILG and the regional development councils shall be the channels through which these standards and policies shall be coursed.

Section. 8.  Composition of the Council

The Council shall be composed of the following:

a)       Secretary of the Department of Trade and Industry as chairman;

b)       Director-General of the National Economic and Development Authority;

c)       Secretary of the Department of Finance;

d)       Governor of the Bangko Sentral ng Pilipinas;

e)       Secretary of the Department of Science and Technology;

f)         Secretary of the Department of Agriculture;

g)       Secretary of the Department of Foreign Affairs;

h)       Secretary of the Department of Labor and Employment;

i)         Nine [9] representatives from the private sector, the majority of whom shall be recommendees of the accredited organization, and one of whom shall be appointed as vice-chairman.

Other heads of executive agencies, private organizations or individuals can be called upon by the Council to attend any Council meeting and assist the Council to resolve issues and problems that concern their respective offices.

Likewise, such heads of executive agencies, private organizations or individuals shall respond to the queries of the Council within two [2] weeks from the time such queries are received.

Section. 9.  Mode of selection and tenure of private sector representatives

The President shall appoint the private sector representatives, who are not ex officio members, upon nomination of the accredited organization, ensuring balanced representations from the Visayas and Mindanao and various sectors, such as the labor sector, agricultural and traditional export sectors as against the non-agricultural and non-traditional export sectors and the like.

The private sector representatives of the Council shall serve for a period of two [2] years. When a vacancy occurs due to the resignation, death or incapacity of a member, a replacement who shall serve for the remainder of the member's term of office shall be appointed by the President.

Section. 10.  Meeting of the Council

The Council shall meet once a month: Provided, that the President or the chairman may convene the Council anytime whenever he deems it necessary.

The President shall preside over meetings of the Council on a quarterly basis.

Section. 11.  Funding

The activities and operational expenses of the Council shall be funded jointly by budgetary appropriations from the government and by private sector contributions as provided for in Executive Order No. 98.

Section. 12.  Accredited export organization

The Council shall accredit a single umbrella organization of exporters pursuant to section 7[1] of this Act to represent the export sector concerns and interests for three [3] years, after which the Council shall undertake a review of the accreditation prior to the granting or re-granting of the said accreditation.

The accredited organization shall:

a)       Recommend private sector representatives to the Council with consideration of balanced sectoral representation, as provided in Section 9 hereof;

b)       Represent the interests of the export sector;

c)       Be responsible for coordinating, supporting and assisting the DTI relative to the formulation and implementation of the government's export promotion programs and policies:  Provided, That in the event that some of the export promotion functions of the government are privatized in accordance with the Act, it shall be responsible for the performance of such privatized export promotion function; and

d)       Manage the Philippine Trade Center, which shall include, among others, the authority to enter into contracts with promotion facilities or functions.

 

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