Article 6Supplement v1, p. 6

COMMERCIAL LAWS SUPPLEMENT

(3) To act as liaison between investors seeking joint

venture arrangements in particular areas of investments;

(4) Recommend to the Board such policies and measures

he may deem necessary to carry out the objectives of this

Code; and

(5) Generally, to exercise such other powers and perform

such other duties as may be directed by the Board of

Governors from time to time.

ARTICLE 9. Powers and Duties of the Vice-Chairman . —

The Vice-Chairman shall have the following powers and

duties:

(1) To act as Managing Head of the Board;

(2) To preside over the meetings of the Board in the

absence of the Chairman;

(3) Prepare the Agenda for the meetings of the Board and

submit for its consideration and approval the policies and

measures which the Chairman deems necessary and

proper to carry out the provisions of this Code;

(4) Assist registered enterprises and prospective investors

to have their papers processed with dispatch by all

government

offices,

agencies,

instrumentalities

and

financial institutions; and

(5) Perform the other duties of the Chairman in the

absence of the latter, and such other duties as may be

assigned to him by the Board of Governors.

BOOK I Investments with Incentives

TITLE I Preferred Areas of Investments

CHAPTER I Definitions of Terms

ARTICLE 10. "Board" shall mean the Board of Investments

created under this Code.

ARTICLE

11.

"Registered

Enterprises"

shall mean any

individual, partnership, cooperative, corporation or other

entity incorporated and/or organized and existing under

Philippine

laws;

and

registered

with

the

Board

in

accordance with this Book: Provided, however , That the

term "registered enterprise" shall not include commercial

banks, savings and mortgage banks, rural banks, savings

and loan associations, building and loan associations,

development banks, trust companies, investment banks,

finance companies, brokers and dealers in securities,

consumers cooperatives and credit unions, and other

business

organizations

whose

principal

purpose

or

principal source of income is to receive deposits, lend or

borrow money, buy and sell or otherwise deal, trade or

invest in common or preferred stocks, debentures, bonds

or other marketable instruments generally recognized as

securities, or discharge other similar intermediary, trust or

fiduciary functions.

ARTICLE 12. "Technological assistance contracts" shall

mean

contracts

for:

(1)

the

transfer,

by

license

or

otherwise,

of

patents,

processes,

formulas

or

other

technological rights of foreign origin; and/or (2) foreign

assistance

concerning

technical

and

factory

management, design, planning, construction, operation

and similar matters.

ARTICLE 13. "Foreign loans" shall mean any credit facility

or financial assistance other than equity investment

denominated and payable in foreign currency or where

the creditor has the option to demand payment in

foreign exchange and registered with the Central Bank

and the Board.

ARTICLE 14. "Foreign Investments" shall mean equity

investments owned by a non-Philippine national made in

the form of foreign exchange or other assets actually

transferred to the Philippines and registered with the

Central Bank and the Board, which shall assess and

appraise the value of such assets other than foreign

exchange.

ARTICLE 15. "Philippine national" shall mean a citizen of

the Philippines or a domestic partnership or association

wholly-owned

by

citizens

of

the

Philippines;

or

a

corporation organized under the laws of the Philippines

of which at least sixty per cent (60%) of the capital stock

outstanding and entitled to vote is owned and held by

citizens of the Philippines, or a trustee of funds for

pension or other employee retirement or separation

benefits, where the trustee is a Philippine national and at

least sixty per cent (60%) of the fund will accrue to the

benefit of Philippine nationals; Provided , That where a

registered and its non-Filipino stockholders own stock in

a registered enterprise, at least sixty per cent (60%) of the

capital stock outstanding and entitled to vote of both

corporations must be owned and held by the citizens of

the Philippines and at least sixty per cent (60%) of the

members of the Board of Directors of both corporations

must be citizens of the Philippines in order that the

corporation shall be considered a Philippine national.

ARTICLE 16. "Preferred areas of investments" shall mean

the

economic

activities

that

the

Board

shall

have

declared as such in accordance with Article 28 which shall

be either non-pioneer or pioneer.

ARTICLE 17. "Pioneer enterprise" shall mean a registered

enterprise (1) engaged in the manufacture, processing or

production, and not merely in the assembly or packaging

of goods, products, commodities or raw materials that

have

not

been

or

are

not

being

produced

in the

Philippines on a commercial scale or (2) which uses a

design, formula, scheme, method, process or system of

production or transformation of any element, substance

or raw materials into another raw material or finished

goods which is new and untried in the Philippines or (3)

engaged

in

the pursuit of agricultural, forestry and

mining activities and/or services including the industrial

aspects

of

food

processing

whenever

appropriate,

pre-determined by the Board, in consultation with the

appropriate

Department,

to

be

feasible

and

highly

essential to the attainment of the national goal, in

relation

to

a

declared

specific

national

food

and

agricultural program for self-sufficiency and other social

benefits

of

the

project

or

(4)

which

produces

non-conventional

fuels

or

manufactures

equipment

which utilize non-conventional sources of energy or uses

or converts to coal or other non-conventional fuels or

sources of energy in its production, manufacturing or

processing operations. Provided , That the final product in

any of the foregoing instances, involves or will involve

substantial use and processing of domestic raw materials,

whenever available; taking into account the risks and

magnitude of investment: Provided, further , That the

foregoing definitions shall not in any way limit the rights

and incentives granted to less-developed-area enterprises

provided under Title V, Book I hereof.

ARTICLE 18. "Non-pioneer enterprise" shall include all

registered

producer

enterprises

other

than

pioneer

enterprises.

ARTICLE 19. "Expansion" shall include modernization and

rehabilitation and shall mean increase of existing volume

or value of production or upgrading the quality of the

registered product or utilization of inefficient or idle

equipment under such guidelines as the Board may

adopt.

ARTICLE

20.

"Measured

capacity"

shall

mean

the

estimated additional volume of production or service

which the Board determines to be desirable in each

preferred area of investment in order to supply the needs

of the economy at reasonable prices, taking into account

the export potential of the product, including economies

of scale which would render such product competitive in

the world market. Measured capacity shall not be less

than the amount by which the measurable domestic and

country's potential export market demand exceeds the

existing productive capacity in said preferred areas. For

export market industries, when warranted the Board shall

base measured capacity on the availability of domestic

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