REPUBLIC ACT NO.

8762
AN ACT LIBERALIZING THE RETAIL TRADE BUSINESS, REPEALING FOR THE PURPOSE REALING FOR
THE PURPOSE REPUBLIC ACT NO. 1180, AS AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines of Representatives of the
Philippines in Congress assembled:
Section 1. Title This Act shall be known as the "Retail Trade Liberalization Act of 2000."
Section 2. Declaration of Policy. It is the policy of the State to promote consumer welfare in attracting
promoting and welcoming productive investment that will bring down price for the Filipino consumer, create more
jobs, promote tourism, assist small manufacturers, stimulate economic growth and enable Philippine goods and
services to become globally competitive through the liberalization of the retail trade sector.
Pursuant to this policy, the Philippine retail industry is hereby liberalized to encourage Filipino and competitive
retail trade sector in the interest of empower the Filipino consumer through lower prices, higher quality goods,
better services and wider choices.
Section 3. Definition. - As used in this Act.
(1) "Retail trade" shall mean any act, occupation or calling of habitually selling direct to the general public
merchandise, commodities or good for consumption, but the restriction of this law shall not apply to the
following:
(a) Sales by manufacturer, processor, laborer, or worker, to the general public the products
manufactured, processed or products by him if his capital dose not exceed One hundred
thousand pesos(100,000.00);
(b) Sales by a farmer or agriculturist selling the products of his farm;
(c) Sales in restaurant operations by a hotel owner or inn-keeper irrespective of the amount
capital: provided, that the restaurant is incidental to the hotel business; and
(d) Sales which are limited only to products manufactured, processed or assembled by a
manufactured, processed or assembled by a manufacturer though a single outlet, irrespective of
capitalization.
(2) "High-end or luxury goods" shall refer to goods which are not necessary for life maintenance and
whose demand is generated in large part by the higher income groups. Luxury goods shall include, but
are not limited to products such as; jewelry, branded or designer clothing and footwear, wearing apparel,
leisure and sporting goods, electronics and other personal effects.
Section 4. Treatment of Natural Born Citizen Who Has Lost His Philippine Citizenship. - A natural-born citizen of
the Philippines who resides in the Philippines shall be granted the same rights as Filipino citizens for purposes of
this Act.
Section 5. Foreign Equity Participation. - Foreign-owned partnerships, associations and corporation formed and
organized under the laws of the Philippines may, upon registration with the Securities and Exchange
Commission (SEC) and the Department of Trade and Industry (DTI), or in case of foreign owned single
proprietorships, with the DTI, Engage or invest in the retail trade business, subject to the following categories.
Category A Enterprises with paid-up capital of the equivalent in Philippine Peso of the than
Two million five hundred thousand US dollars (US$2,500,000.00) shall be reserved exclusively
for Filipino citizens and corporations wholly owned by Filipino citizens.
Category B Enterprises with a minimum paid-up capital of the equivalent in Philippine Pesos of
two million five hundred thousand US dollar (US$2,500,000.00) but less than Seven million five
hundred thousand US dollars (US$7,500,000.00) may be wholly owned by foreigners except for
the first two (2) years after the effectivity of this Act wherein foreign participation shall be limited
to not more than sixty percent (60%) of total equity.

Category C Enterprises with a paid-up capital of the equivalent in Philippine Pesos of Seven
million five hundred thousand US dollars (US$7,500,000.00), or more may be wholly owned by
foreigners: Provided, however, That in no case shall the investments for establishing a store in
vestments for establishing a store in Categories B and C be less than the equivalent in Philippine
pesos of Eight hundred thirty thousand US dollars (US$830,000.00).
Category D Enterprises specializing in high-end or luxury products with a paid-up capital of the
equivalent in Philippine Pesos of Two hundred fifty thousand US dollars (US$250,000.00) per
store may be wholly owned by foreigners.
The foreign investor shall be required to maintain in the Philippines the full amount of the prescribed minimum
capital unless the foreign investor has notified the SEC and the DTI of its intention to repatriate its capital and
cease operations in the Philippines. The actual use in Philippine operations of the inwardly remitted minimum
capital requirement shall be monitored by the SEC.
Failure to maintain the full amount of the prescribed minimum capital prior to notification of the SEC and the DTI,
shall subject the foreign investor to penalties or restrictions on any future trading activities/business in the
Philippines.
Foreign retail stores shall secure a certification from the Bangko Sentral ng Pilipinas (BSP) and the DTI, which
will verify or confirm inward remittance of the minimum required capital investments.
Section 6. Foreign Investors Acquiring Shares of Stock of Local Retailers. - Foreign investors acquiring shares
from existing retail stores whether or not publicly listed whose net worth is in the excess of the peso equivalent
of Two million five hundred thousand US dollars (US$2,500,000.00) may purchase only up to a maximum of
sixty percent (60%) of the equity thereof within the first two (2) years from the effectivity of this Act and
thereafter, they may acquire the remaining percentage consistent with the allowable foreign participation as
herein provided.
Section 7. Public Offering of Shares of Stock. All retail trade enterprises under Categories B and C in which
foreign ownership exceeds eighty percent (80%) of equity shall offer a minimum of thirty percent (30%) of their
equity to the public through any stock exchange in the Philippine within eight (8) years from their start of
operations.
Section 8. Qualification of Foreign Retailers. - No foreign retailer shall be allowed to engage in retail trade in the
Philippine unless all the following qualifications are met:
(a) A minimum of Two hundred million US dollar (US$200,000,000.00) net worth in its parent corporation
for Categories B and C, and Fifty million US dollar (US$50,000,000.00) net worth in its parent
corporation for category D;
(b) (5) retailing branches or franchises in operation anywhere around the word unless such retailer has at
least one (1) store capitalized at a minimum of Twenty-five million US dollars (US$25,000,000.00);
(c) Five (5)-year track record in retailing; and
(d) Only nationals from, or juridical entities formed or incorporated in Countries which allow the entry of
Filipino retailers shall be allowed to engage in retail trade in the Philippines.
The DTI is hereby authorized to pre-qualify all foreign retailers, subject to the provisions of this Act, before they
are allowed to conduct business in the Philippine.
The DTI shall keep a record of Qualified foreign retailers who may, upon compliance with law, establish retail
stores in the Philippine. It shall ensure that parent retail trading company of the foreign investor complies with
the qualifications on capitalization and track record prescribed in this section
The Inter- Agency Committee on Tariff and Related Matters Authority (NEDA) Board shall formulate and
regularly update a list of foreign retailers of high-end or luxury goods and render an annual report on the same to
Congress.

Section 9. Promotion of Locally Manufactured Products. - For ten (10) year after the effectivity of this Act, at
least thirty percent (30%) of the aggregate cost of the stock inventory of foreign retailers falling under Categories
B and C and ten percent (10%) for category D shall be made in the Philippines.
Section 10. Prohibited Activities of Qualified Foreign Retailers. Qualified foreign retailers shall not be allowed
to engage in certain retailing activities outside their accredited stores through the use of mobile or rolling stores
or carts, the use of sales representatives, door-to-door selling, restaurants and sari-sari stores and such other
similar retailing activities: Provided, That a detailed list of prohibited activities shall hereafter be formulated by
the DTI
Section 11. Implementing Agency: Rule and Regulations. The monitoring and regulation of foreign sole
proprietorships, partnerships, associations or corporations allowed to engage in retail trade shall be the
responsibility of the DTI. This shall include resolution of conflicts.
The DTI, in coordination with the SEC, the NEDA and the BSP, shall formulate and issue the implementing rules
and regulation necessary to implement this Act within ninety (90) days after its approval.
Section 12. Penalty Clause. - Any person who shall be Found guilty of Violation of any provision of this Act shall
be punished by imprisonment of not less that six (2) years and one (1) day but not more than eight (8) years,
and a fine of not less than One million pesos
(P1,000,000.00) but not more that Twenty million pesos (P20,000,000.00) In the case of associations,
partnerships or corporations, the penalty shall be imposed upon its partners, president, directors, manager and
other officers responsible for the violation. If the offender is not a citizen of the Philippines he shall be deported
immediately after service of sentence. If the Filipino of fender is a public officer or employee, he shall, in addition
to the penalty prescribed herein, suffer dismissal and permanent disqualification from public office
Section 13. Repealing Clause. Republic Act No. 1180, as amended, is hereby repealed. Republic Act No.
3018, as amended, and all other laws, executive orders, rules and regulations or parts thereof inconsistent with
this Act are repealed or modified accordingly.
Section 14. Separability Clause. If any provisions of this Act shall be held unconstitutional, the other
provisions not otherwise affected thereby shall remain in force and effect.
Section 15. Effectivity. This act shall take effect fifteen (150 days after its approval and publication in at least
two (2) newspapers of general circulation in the Philippines.
Approved: March 07, 2000
(SGD.) JOSEPH E. ESTRADA
President of the Philippines

REPUBLIC ACT NO. 8762

AN ACT LIBERALIZING THE RETAIL TRADE BUSINESS, REPEALING FOR THE PURPOSE REALING FOR
THE PURPOSE REPUBLIC ACT NO. 1180, AS AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines of Representatives of the
Philippines in Congress assembled:
Section 1. Title This Act shall be known as the "Retail Trade Liberalization Act of 2000."
Section 2. Declaration of Policy. It is the policy of the State to promote consumer welfare in attracting
promoting and welcoming productive investment that will bring down price for the Filipino consumer, create more
jobs, promote tourism, assist small manufacturers, stimulate economic growth and enable Philippine goods and
services to become globally competitive through the liberalization of the retail trade sector.
Pursuant to this policy, the Philippine retail industry is hereby liberalized to encourage Filipino and competitive
retail trade sector in the interest of empower the Filipino consumer through lower prices, higher quality goods,
better services and wider choices.
Section 3. Definition. - As used in this Act.
(1) "Retail trade" shall mean any act, occupation or calling of habitually selling direct to the general public
merchandise, commodities or good for consumption, but the restriction of this law shall not apply to the
following:
(a) Sales by manufacturer, processor, laborer, or worker, to the general public the products
manufactured, processed or products by him if his capital dose not exceed One hundred
thousand pesos(100,000.00);
(b) Sales by a farmer or agriculturist selling the products of his farm;
(c) Sales in restaurant operations by a hotel owner or inn-keeper irrespective of the amount
capital: provided, that the restaurant is incidental to the hotel business; and
(d) Sales which are limited only to products manufactured, processed or assembled by a
manufactured, processed or assembled by a manufacturer though a single outlet, irrespective of
capitalization.
(2) "High-end or luxury goods" shall refer to goods which are not necessary for life maintenance and
whose demand is generated in large part by the higher income groups. Luxury goods shall include, but
are not limited to products such as; jewelry, branded or designer clothing and footwear, wearing apparel,
leisure and sporting goods, electronics and other personal effects.
Section 4. Treatment of Natural Born Citizen Who Has Lost His Philippine Citizenship. - A natural-born citizen of
the Philippines who resides in the Philippines shall be granted the same rights as Filipino citizens for purposes of
this Act.
Section 5. Foreign Equity Participation. - Foreign-owned partnerships, associations and corporation formed and
organized under the laws of the Philippines may, upon registration with the Securities and Exchange
Commission (SEC) and the Department of Trade and Industry (DTI), or in case of foreign owned single
proprietorships, with the DTI, Engage or invest in the retail trade business, subject to the following categories.
Category A Enterprises with paid-up capital of the equivalent in Philippine Peso of the than
Two million five hundred thousand US dollars (US$2,500,000.00) shall be reserved exclusively
for Filipino citizens and corporations wholly owned by Filipino citizens.
Category B Enterprises with a minimum paid-up capital of the equivalent in Philippine Pesos of
two million five hundred thousand US dollar (US$2,500,000.00) but less than Seven million five
hundred thousand US dollars (US$7,500,000.00) may be wholly owned by foreigners except for
the first two (2) years after the effectivity of this Act wherein foreign participation shall be limited
to not more than sixty percent (60%) of total equity.

Category C Enterprises with a paid-up capital of the equivalent in Philippine Pesos of Seven
million five hundred thousand US dollars (US$7,500,000.00), or more may be wholly owned by
foreigners: Provided, however, That in no case shall the investments for establishing a store in
vestments for establishing a store in Categories B and C be less than the equivalent in Philippine
pesos of Eight hundred thirty thousand US dollars (US$830,000.00).
Category D Enterprises specializing in high-end or luxury products with a paid-up capital of the
equivalent in Philippine Pesos of Two hundred fifty thousand US dollars (US$250,000.00) per
store may be wholly owned by foreigners.
The foreign investor shall be required to maintain in the Philippines the full amount of the prescribed minimum
capital unless the foreign investor has notified the SEC and the DTI of its intention to repatriate its capital and
cease operations in the Philippines. The actual use in Philippine operations of the inwardly remitted minimum
capital requirement shall be monitored by the SEC.
Failure to maintain the full amount of the prescribed minimum capital prior to notification of the SEC and the DTI,
shall subject the foreign investor to penalties or restrictions on any future trading activities/business in the
Philippines.
Foreign retail stores shall secure a certification from the Bangko Sentral ng Pilipinas (BSP) and the DTI, which
will verify or confirm inward remittance of the minimum required capital investments.
Section 6. Foreign Investors Acquiring Shares of Stock of Local Retailers. - Foreign investors acquiring shares
from existing retail stores whether or not publicly listed whose net worth is in the excess of the peso equivalent
of Two million five hundred thousand US dollars (US$2,500,000.00) may purchase only up to a maximum of
sixty percent (60%) of the equity thereof within the first two (2) years from the effectivity of this Act and
thereafter, they may acquire the remaining percentage consistent with the allowable foreign participation as
herein provided.
Section 7. Public Offering of Shares of Stock. All retail trade enterprises under Categories B and C in which
foreign ownership exceeds eighty percent (80%) of equity shall offer a minimum of thirty percent (30%) of their
equity to the public through any stock exchange in the Philippine within eight (8) years from their start of
operations.
Section 8. Qualification of Foreign Retailers. - No foreign retailer shall be allowed to engage in retail trade in the
Philippine unless all the following qualifications are met:
(a) A minimum of Two hundred million US dollar (US$200,000,000.00) net worth in its parent corporation
for Categories B and C, and Fifty million US dollar (US$50,000,000.00) net worth in its parent
corporation for category D;
(b) (5) retailing branches or franchises in operation anywhere around the word unless such retailer has at
least one (1) store capitalized at a minimum of Twenty-five million US dollars (US$25,000,000.00);
(c) Five (5)-year track record in retailing; and
(d) Only nationals from, or juridical entities formed or incorporated in Countries which allow the entry of
Filipino retailers shall be allowed to engage in retail trade in the Philippines.
The DTI is hereby authorized to pre-qualify all foreign retailers, subject to the provisions of this Act, before they
are allowed to conduct business in the Philippine.
The DTI shall keep a record of Qualified foreign retailers who may, upon compliance with law, establish retail
stores in the Philippine. It shall ensure that parent retail trading company of the foreign investor complies with
the qualifications on capitalization and track record prescribed in this section
The Inter- Agency Committee on Tariff and Related Matters Authority (NEDA) Board shall formulate and
regularly update a list of foreign retailers of high-end or luxury goods and render an annual report on the same to
Congress.

Section 9. Promotion of Locally Manufactured Products. - For ten (10) year after the effectivity of this Act, at
least thirty percent (30%) of the aggregate cost of the stock inventory of foreign retailers falling under Categories
B and C and ten percent (10%) for category D shall be made in the Philippines.
Section 10. Prohibited Activities of Qualified Foreign Retailers. Qualified foreign retailers shall not be allowed
to engage in certain retailing activities outside their accredited stores through the use of mobile or rolling stores
or carts, the use of sales representatives, door-to-door selling, restaurants and sari-sari stores and such other
similar retailing activities: Provided, That a detailed list of prohibited activities shall hereafter be formulated by
the DTI
Section 11. Implementing Agency: Rule and Regulations. The monitoring and regulation of foreign sole
proprietorships, partnerships, associations or corporations allowed to engage in retail trade shall be the
responsibility of the DTI. This shall include resolution of conflicts.
The DTI, in coordination with the SEC, the NEDA and the BSP, shall formulate and issue the implementing rules
and regulation necessary to implement this Act within ninety (90) days after its approval.
Section 12. Penalty Clause. - Any person who shall be Found guilty of Violation of any provision of this Act shall
be punished by imprisonment of not less that six (2) years and one (1) day but not more than eight (8) years,
and a fine of not less than One million pesos
(P1,000,000.00) but not more that Twenty million pesos (P20,000,000.00) In the case of associations,
partnerships or corporations, the penalty shall be imposed upon its partners, president, directors, manager and
other officers responsible for the violation. If the offender is not a citizen of the Philippines he shall be deported
immediately after service of sentence. If the Filipino of fender is a public officer or employee, he shall, in addition
to the penalty prescribed herein, suffer dismissal and permanent disqualification from public office
Section 13. Repealing Clause. Republic Act No. 1180, as amended, is hereby repealed. Republic Act No.
3018, as amended, and all other laws, executive orders, rules and regulations or parts thereof inconsistent with
this Act are repealed or modified accordingly.
Section 14. Separability Clause. If any provisions of this Act shall be held unconstitutional, the other
provisions not otherwise affected thereby shall remain in force and effect.
Section 15. Effectivity. This act shall take effect fifteen (150 days after its approval and publication in at least
two (2) newspapers of general circulation in the Philippines.
Approved: March 07, 2000
(SGD.) JOSEPH E. ESTRADA
President of the Philippines

REPUBLIC ACT NO. 912

AN ACT TO REQUIRE THE USE, UNDER CERTAIN CONDITIONS, OF PHILIPPINE
MADE MATERIALS OR PRODUCTS IN GOVERNMENT PROJECTS OR PUBLIC
WORKS CONSTRUCTION, WHETHER DONE DIRECTLY BY THE GOVERNMENT
OR AWARDED THRU CONTRACTS.
Sec. 1. In construction or repair work undertaken by the Government, whether done directly
or thru contract awards, Philippine made materials and products, whenever available,
practicable and usable, and will serve the purpose as equally well as foreign made products or
materials, shall be used in said construction or repair work, upon the proper certification of
the availability, practicability, usability and durability of said materials or products by the
Director of the Bureau of Public Works and/or his assistants.

Sec. 2. For the purpose of carrying into effect the purposes of this Act, the Director of Public
Works shall prepare or cause to be prepared, from time to time, a list of building and
construction materials and products made in the Philippines that are available, durable, usable
and practicable for construction and building purposes. cdtai

Sec. 3. No contract may be awarded under the provisions of this Act unless the contractor
agrees to comply with the requirements of this Act, and a contract already awarded may be
rescinded for unjustified failure to so comply.

Sec. 4. It shall be the duty of the Director of Public Works and/or his assistants, including the
district engineers, to see to it that the requirements of this Act are faithfully complied with by
the persons concerned, and failure on their part to do so shall subject them to dismissal from
the government service or other disciplinary action.

Sec. 5. The Director of Public Works, subject to the approval of the Secretary of Public
Works and Communications, is hereby empowered to promulgate such rules and regulations
as may be necessary to carry into effect the purposes of this Act.

Sec. 6. This Act shall take effect upon its approval.

Approved: June 20, 1953

Copyright 1996 C D T e c h n o l o g i e s A s i a, I n c.

COMMONWEALTH ACT NO. 138

AN ACT TO GIVE NATIVE PRODUCTS AND DOMESTIC ENTITIES THE
PREFERENCE IN THE PURCHASE OF ARTICLES FOR THE GOVERNMENT
SECTION 1. The Purchase and Equipment Division (now Supply Coordination
Office) of the Government of the Philippines and other officers and employees of the
municipal and provincial government and the Government of the Philippines and of chartered
cities, boards, commissions, bureaus, departments, offices, agencies, branches, and bodies of
any description, including government-owned companies, authorized to requisition, purchase,
or contract or make disbursements for articles, materials, and supplies for public use, public
biddings, or public works, shall give preference to materials and supplies produced, made,
and manufactured in the Philippines or in the United States, and to domestic entities, subject
to the conditions hereinbelow specified.

SECTION 2. For the purposes of this Act, the terms hereunder are hereby defined as
follows:
(a) The term United States includes the United States of America, the District
of Columbia, and any State or territory of the North American Union;
(b) The term domestic entity means any citizen of the Philippines or of the
United States habitually established in business and engaged in the
manufacture or sale of the merchandise covered by his bid, or any corporate
body or commercial company duly organized and registered under the laws of
the Philippines of whose capital 75 per centum is owned by citizens of the
Philippines or of the United States, or both;
(c) The term domestic bidder means any person or entity offering
unmanufactured articles, materials, or supplies of the growth or production of
the Philippines or of the United States, or manufactured articles, materials or
supplies manufactured or to be manufactured in the Philippines or in the
United States, substantially from articles, materials or supplies of the growth,
production or manufacture, as the case may be, of the Philippines or of the
United States;
(d) The term foreign bid means any offer of articles, materials or supplies not
manufactured or to be manufactured in the Philippines or in the United States,
substantially from articles, materials, or supplies of the growth, production, or
manufacture, as the case may be, of the Philippines or of the United States.

SECTION 3. Only unmanufactured articles, materials, or supplies of the growth or

production of the Philippines or the United States, and only such manufactured articles,
materials or supplies as have been manufactured in the Philippines or in the United States,
substantially from articles, materials, or supplies of the growth, production, or manufacture,
as the case may be, of the Philippines or of the United States, shall be purchased for public
use and, in case of bidding, subject to the following: 2

(a) When the lowest foreign bid, including customs duties, does not exceed two
pesos, the award shall be made to the lowest domestic bidder, provided his bid
is not more than one hundred per centum in excess of the foreign bid;

(b) When the lowest foreign bid, including customs duties, exceeds two pesos but
does not exceed twenty pesos, the award shall be made to the lowest domestic
bidder, provided his bid is not more that fifty per centum in excess of the
lowest foreign bid;

(c) When the lowest foreign bid, including customs duties, exceeds twenty pesos
but does not exceed two hundred pesos, the award shall be made to the lowest
domestic bidder, provided his bid is not more than twenty-five per centum in
excess of the lowest foreign bid;
(d) When the lowest foreign bid, including customs duties, exceeds two hundred
pesos but does not exceed two thousand pesos, the award shall be made to the
lowest domestic bidder, provided his bid is not more than twenty per centum
in excess of the lowest foreign bid;

(e) When the lowest foreign bid, including customs duties, exceeds two thousand
pesos, the award shall be made to the lowest domestic bidder, provided his bid
is not more than fifteen per centum in excess of the lowest foreign bid.

SECTION 4. Whenever several bidders shall participate in the bidding for supplying
articles, materials, and equipment for any dependencies mentioned in section one of this Act
for public use, public buildings, or public works, the award shall be made to the domestic
entity making the lowest bid, provided it is not more that fifteen per centum in excess of the
lowest bid made by a bidder other than a domestic entity, as the term domestic entity is
defined in section two of this Act.

SECTION 5. This Act shall take effect on its approval.

Approved: November 7, 1936

PRESIDENTIAL DECREE No. 894 February 26, 1976

REQUIRING GOVERNMENT OFFICES, AGENCIES, INSTRUMENTALITIES AND GOVERNMENT OWNED OR CONTROLLED
CORPORATIONS, PERSONS AND ENTITIES ENJOYING TAX EXEMPTION, INCENTIVE OR SUBSIDY FROM THE
GOVERNMENT TO UTILIZE IN INTERNATIONAL TRANSPORTATION THE SERVICES OF THE PHILIPPINE FLAG AIR
CARRIER AND SHIPPING LINES AND FOR OTHER PURPOSES

WHEREAS, it is necessary for our national economic development that every effort is exerted by all to save and
conserve our foreign exchange reserves;
WHEREAS, payment of transportation fares to foreign airlines and shipping lines, even if made in Philippine Currency,
constitutes a heavy drain to our foreign exchange reserves in view of the fact that such foreign airlines and shipping
lines remit abroad their receipts in excess of their local expenses;
WHEREAS, the Philippine flag air carrier and shipping lines operating international transportation perform
transportation services of vital importance to the foreign commerce and trade of the Philippines including its balance of
payments, to the Postal Service, and to the national security and defense;
WHEREAS, in most countries of the World, the policy and practice of granting preference to the national flag air
carrier and shipping lines over foreign air carriers and shipping lines with respect to transportation of Government
financed passengers and property has either been adopted and implemented or is in the process of being adopted
and implemented;
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 follows:
Section 1. Whenever any branch, department, agency, instrumentality or office of the Government including local
governments and corporations and institutions owned and controlled by the Government, shall procure, contract for, or
otherwise obtain, directly or indirectly any transportation of persons or property by air or water between the Philippines
and a place outside thereof or between two places both of which are outside the Philippines, the payment for which is
made directly or indirectly from funds of the Republic of the Philippines, the appropriate agency or agencies and public
officials concerned shall take such steps as may be necessary to assure that such transportation is provided by the
Philippine flag air carrier or shipping lines to the maximum extent service by such carrier and shipping lines is
available.
Section 2. Any person, partnership, association or corporation, contractor and subcontractor, granted and enjoying
any tax exemption, subsidy or incentive from the Government, or with an outstanding loan from or whose existing
obligation is guaranteed by the Government or by any Government owned or controlled corporation and financial
institution, or awarded any contract by the Government or any of its agencies and instrumentalities, requiring any
transportation of persons and property by air or water between the Philippines and a place outside thereof or between
two places both of which are outside the Philippines, the payment for which is made directly or indirectly from the
funds of such person, partnership, association, corporation, contractor or subcontractor, shall cause such air or water
transportation to be provided by the Philippine flag air carrier or shipping lines to the maximum extent service by such
air carrier or shipping lines is available: Provided, That any such person, partnership, association, corporation,
contractor or subcontractor may procure the services of foreign air carriers or shipping lines to the extent that service
by the Philippine flag air carrier or shipping lines is not available, only upon prior certification by the Civil Aeronautics
Board or by the Board of Transportation, as the case may be.
Section 3. The Auditor General shall disallow any expenditure from appropriated funds of the Government for
payment of passenger or cargo transportation on foreign flag air carriers and shipping lines in the absence of
satisfactory proof of the clear necessity therefor.
Section 4. Any violation of the provisions of Section 2 shall cause the withdrawal, revocation, cancellation, or
acceleration of payment, as the case may be, of the tax exemption, subsidy, incentive, loan, guarantee and contract of
such person, partnership, association or corporation.
Section 5. All laws, decrees, orders, rules and regulations or part thereof inconsistent with this Decree are hereby
repealed or modified accordingly.
Section 6. This Decree shall take effect immediately.
Done in the City of Manila, this 26th day of February, in the year of Our Lord, nineteen hundred and seventy-six.

PRESIDENTIAL DECREE No. 715 May 28, 1975

AMENDING COMMONWEALTH ACT NO. 108, AS AMENDED, OTHERWISE KNOWN AS "THE ANTIDUMMY LAW"
WHEREAS, there have been conflicting interpretations as to whether Section 2-A of Commonwealth Act No. 108, as
amended, otherwise known as the Anti-Dummy Law, allows aliens to become members of the board of directors or
governing body of corporations or associations engaging in partially nationalized activities;
WHEREAS, it is fair and equitable and in line with the constitutional policy expressed in Article XIV, Section 5 of the
Constitution, that foreign investors be allowed limited representation in the governing board or body of corporations or
associations in proportion to their allowable participation in the equity of the said entities;
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:
Section 1. Section 2-A of Commonwealth Act No. 108, as amended, is hereby further amended to read as follows:
"Section 2-A. Any person, corporation, or association, which, having in its name or under its control, a right, franchise,
privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the
laws to citizens of the Philippines or of any other specific country, or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, permits or allows the use, exploitation or enjoyment thereof
by a person, corporation or association not possessing the requisites prescribed by the Constitution or the laws of the
Philippines; or leases, or in any other way, transfers or conveys said right, franchise, privilege, property or business to
a person, corporation or association not otherwise qualified under the Constitution, or the provisions of the existing
laws; or in any manner permits or allows any person, not possessing the qualifications required by the Constitution, or
existing laws to acquire, use, exploit or enjoy a right, franchise, privilege, property or business, the exercise and
enjoyment of which are expressly reserved by the Constitution or existing laws to citizens of the Philippines or of any
other specific country, to intervene in the management, operation, administration or control thereof, whether as an
officer, employee or laborer therein with or without remuneration except technical personnel whose employment may
be specifically authorized by the Secretary of Justice, and any person who knowingly aids, assists, or abets in the
planning, consummation or perpetration of any of the acts herein above enumerated shall be punished by
imprisonment for not less than five nor more than fifteen years and by a fine of not less than the value of the right,
franchise or privilege enjoyed or acquired in violation of the provisions hereof but in no case less than five thousand
pesos: Provided, however, that the president, managers or persons in violating the provisions of this section shall be
criminally liable in lieu thereof: Provided, further, That any person, corporation or association shall, in addition to the
penalty imposed herein, forfeit such right, franchise, privilege and the property provisions of this Act; and Provided,
finally, That the election of aliens as members of the board of directors or governing body of corporations or
associations engaging in partially nationalized activities shall be allowed in proportion to their allowable participation or
share in the capital of such entities.
Section 2. This Decree shall take effect immediately.
DONE in the City of Manila, this 28th day of May, in the year of Our Lord, nineteen hundred and seventy-five.

REPEALING CLAUSE
Art. 2270. The following laws and regulations are hereby repealed:
(1) Those parts and provisions of the Civil Code of 1889 which are in force on the date when this new Civil
Code becomes effective:
(2) The provisions of the Code of Commerce governing sales, partnership, agency, loan, deposit and
guaranty;
(3) The provisions of the Code of Civil Procedure on prescription as far as inconsistent with this Code; and
(4) All laws, Acts, parts of Acts, rules of court, executive orders, and administrative regulations which are
inconsistent with this Code. (n)