Article 4Supplement v1, p. 4

COMMERCIAL LAWS SUPPLEMENT

EO No 226 | The Omnibus Investments

Code of 1987

As amended by RA No 7369, 7888, 7918, 8756

July 16, 1987

THE OMNIBUS INVESTMENTS CODE OF 1987

WHEREAS, the Government is committed to encourage

investments in desirable areas of activities;

WHEREAS, to facilitate investment, there is a need to

adopt

a

cohesive

and

consolidated

investments

incentives law;

WHEREAS, it is imperative to integrate basic laws on

investment, to clarify and harmonize their provisions for

the guidance of domestic and foreign investors;

NOW, THEREFORE, I, CORAZON C. AQUINO, President of

the Philippines, do hereby order and ordain the following:

PRELIMINARY TITLE

CHAPTER I Title and Declaration of Policy

ARTICLE 1. Short Title . — This Order shall be known as the

" Omnibus Investments Code " of 1987.

ARTICLE 2. Declaration of Investment Policies . — To

accelerate

the

sound

development

of

the

national

economy

in

consonance

with

the

principles

and

objectives of economic nationalism and in pursuance of a

planned economically feasible and practical dispersal of

industries and the promotion of small and medium scale

industries,

under

conditions

which

will

encourage

competition and discourage monopolies, the following

are declared policies of the State:

1. The State shall encourage private Filipino and foreign

investments

in industry, agriculture, forestry, mining,

tourism and other sectors of the economy which shall:

provide significant employment opportunities relative to

the

amount

of

the

capital being invested; increase

productivity of the land, minerals, forestry, aquatic and

other resources of the country, and improve utilization of

the products thereof; improve technical skills of the

people employed in the enterprise; provide a foundation

for the future development of the economy; meet the

tests

of

international

competitiveness;

accelerate

development of less developed regions of the country;

and result in increased volume and value of exports for

the economy.

2.

The

State

shall

ensure

holistic

development

by

safeguarding the well-being of the social, cultural and

ecological

life

of

the

people.

For

this

purpose,

consultation

with

affected

communities

will

be

conducted whenever necessary.

3.

The

State

shall

extend

to

projects

which

will

significantly

contribute

to

the

attainment

of

these

objectives, fiscal incentives without which said projects

may not be established in the locales, number and/or

pace

required

for

optimum

national

economic

development. Fiscal incentive systems shall be devised to

compensate

for

market

imperfections,

to

reward

performance contributing to economic development, be

cost-efficient and be simple to administer.

4. The State considers the private sector as the prime

mover

for

economic

growth.

In

this regard, private

initiative is to be encouraged, with deregulation and

self-regulation

of

business

activities

to

be generally

adopted where dictated by urgent social concerns.

5. The State shall principally play a supportive role, rather

than a competitive one, providing the framework, the

climate and the incentives within which business activity

is to take place.

6. The State recognizes that there are appropriate roles for

local and foreign capital to play in the development of the

Philippine economy and that it is the responsibility of

Government to define these roles and provide the climate

for their entry and growth.

7.

The

State

recognizes

that

industrial peace is an

essential element of economic growth and that it is a

principal responsibility of the State to ensure that such a

condition prevails.

8. Fiscal incentives shall be extended to stimulate the

establishment

and

assist

initial

operations

of

the

enterprise, and shall terminate after a period of not more

than 10 years from registration or start-up of operation

unless a specific period is otherwise stated.

The foregoing declaration of investment policies shall

apply to all investment incentive schemes.

CHAPTER II Board of Investments

ARTICLE 3. The Board of Investments . — The Board of

Investments shall implement the provisions of Books One

to Five of this Code.

ARTICLE 4. Composition of the Board . — The Board of

Investments shall be composed of seven (7) governors:

The

Secretary

of

Trade

and

Industry,

three

(3)

Undersecretaries of Trade and Industry to be chosen by

the President, and three (3) representatives from other

government

agencies

and

the

private

sector.

The

Secretary of Trade and Industry shall be concurrently

Chairman of the Board and the Undersecretary of the

Department of Trade and Industry for Industry and

Investments shall be concurrently the Vice-Chairman of

the

Board

and

its

Managing

Head.

The

three

(3)

representatives from the other government agencies and

the private sector shall be appointed by the President for

a

term

of

four

(4)

years:

Provided,

That

upon the

expiration of his term, a governor shall serve as such until

his successor shall have been appointed and qualified:

Provided, further , That no vacancy shall be filled except

for the unexpired portion of any term, and that no one

may be designated to be governor of the Board in an

acting capacity but all appointments shall be ad interim

or permanent.

ARTICLE 5. Qualifications of Governors of the Board . —

The governors of the Board shall be citizens of the

Philippines, at least thirty (30) years old, of good moral

character and of recognized competence in the fields of

economics,

finance,

banking,

commerce,

industry,

agriculture, engineering, law, management or labor.

ARTICLE 6. Appointment of Board Personnel . — The

Board shall appoint its technical staff and other personnel

subject to Civil Service Law, rules and regulations.

ARTICLE 7. Powers and Duties of the Board . — The Board

shall be responsible for the regulation and promotion of

investments in the Philippines. It shall meet as often as

may be necessary generally once a week on such day as it

may fix. Notice of regular and special meetings shall be

given all members of the Board. The presence of four (4)

governors shall constitute a quorum and the affirmative

vote of four (4) governors in a meeting validly held shall

be necessary to exercise its powers and perform its duties,

which shall be as follows:

(1) Prepare annually the Investment Priorities Plan as

defined in Article 26, which shall contain a listing of

specific activities that can qualify for incentives under

Book I of this Code, duly supported by the studies of

existing and prospective demands for such products and

services in the light of the level and structure of income,

production, trade, prices and relevant economic and

technical

factors

of

the

regions

as well as existing

facilities;

(2) Promulgate such rules and regulations as may be

necessary to implement the intent and provisions of this

Code relevant to the Board:

(3) Process and approve applications for registration with

the Board, imposing such terms and conditions as it may

deem necessary to promote the objectives of this Code,

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