Article 27p. 27

NATURAL RESOURCES AND ENVIRONMENTAL LAWS STATUTES and IMPLEMENTING RULES AND REGULATIONS

d) Exemption from the payment of the percentage tax

levied in Title V of the National Internal Revenue Code

when the timber and forest products are sold, bartered

or exchanged by the lessee, whether in their original

state or not, as well as exemption from all forms of sales

tax, local and municipal taxes, and from the real property

tax under the provisions of Presidential Decree No. 853;

e)

A lessee shall not be subject to any obligation

prescribed in, or arising out of, the provisions of the

National Internal Revenue Code on withholding of tax at

source upon interest paid on borrowings incurred for

development

and

operation

of

the

industrial

tree

plantation, tree farm, or agro-forestry farm;

f) Except when public interest demands, the boundaries

of an area covered by an industrial tree plantation, tree

farm, or agro-forestry farm lease, once establish on the

ground, shall not be altered or modified;

g) Amounts expended by a lessee in the development

and operation of an industrial tree plantation, tree farm,

or

agro-forestry

farm

prior

to

the

time

when

the

production state is reached, may, at the option of the

lessee, be regarded as ordinary and necessary business

expenses or as capital expenditures;

h) The Board of Investments shall, notwithstanding its

nationality requirement on projects involving natural

resources, classify industrial tree plantations, tree farms

and agro-forestry farms as pioneer areas of investment

under its annual priority plan, to be governed by the

rules and regulations of said Board;

In addition to the incentives under this section, private

landowners who engage in tree farming on areas fifty

hectares or below by planting their lands with Ipil-Ipil

and other fast-growing trees shall be exempt from the

inventory requirement and other requirements before

harvest as provided in this Decree for lessees of forest

lands of the public domain: Provided, That the transport

of trees cut shall be accompanied by the corresponding

certificate of origin duly issued by the authorized forest

officer. (Amendment to Section 36 of P.D. No. 705

(Revised Forestry Code), Batas Pambansa Blg. 701, [April

5, 1984])

i) Approved industrial tree plantations, tree farms, and

agro-forestry farms shall be given priority in securing

credit

assistance

from

the

government

and

government-supported

financing

institutions

which

shall set aside adequate funds for lending to the lessee

and/or investor at reasonable interest rates;

j) The lessee and its field employees and workers shall be

exempted from the provisions of Presidential Decree No.

1153;

k) Government institutions administering or financing

programs and projects requiring wood materials shall

specify

the

purchase

of,

or

utilize,

manufactured

products derived from trees grown and harvested from

industrial tree plantations, tree farms or agro-forestry

farms, whenever possible;

l) No wood, wood products or wood-derivated products

including pulp, paper and paperboard shall be imported

if the same are available in required quantities and

reasonable

prices,

as

may

be

certified

by

the

Department Head, from artificial or man-made forests,

or local processing plants manufacturing the same;

m) No processing plant of whatever nature or type,

made of, or utilizing, wood as primary materials shall be

allowed to be established, expanded or integrated, and

operated without a long-term assurance of raw materials

source from forest concessions and/or from industrial

tree plantations, tree farms or agro-forestry farms in

accordance with Section 30 hereof;

n) Timber grown and harvested from industrial tree

plantations, tree farms and agro-forestry farms may be

exported without restriction in quantity or volume, and if

the exporter is the same person or firm qualified and

allowed to export logs under the provisions of this

Decree, such timber from plantations/farms may be

exported exclusive of the quantity or volume authorized

under Section 32 hereof: Provided, That the rentals on

the forest land and the forest charges on the plantation

timber shall have been paid: Provided, further, That the

export of the plantation timber shall be covered by a

certificate to export issued by the Department Head on

a yearly basis: Provided, finally, That the Department

Head may at any time review the exportation of timber

harvested

from

the

plantations/farms

and

either

reduced or totally suspend the export of such plantation

timber whenever public interest so requires; and

o) Free technical advice from government foresters and

farm technicians.

The Department Head may provide other incentives in

addition

to

those

hereinabove

granted

to promote

industrial tree plantations, tree farms and agro-forestry

farms in special areas such as, but not limited to, those

where there are no roads or where roads are inadequate,

or areas with rough topography and remote areas far

from processing plants. (Amending P.D. No. 705 (Revised

Forestry Code of the Philippines), Presidential Decree

No. 1559, [June 11, 1978])

D. FOREST PROTECTION

Section 37. Protection of all resources. All measures shall

be

taken

to

protect

the

forest

resources

from

destruction, impairment and depletion.

Section 38. Control of concession area. In order to

achieve the effective protection of the forest lands and

the

resources

thereof

from

illegal

entry,

unlawful

occupation, kaingin, fire, insect infestation, theft, and

other

forms

of forest destruction, the utilization of

timber therein shall not be allowed except through

license agreements under which the holders thereof

shall have the exclusive privilege to cut all the allowable

harvestable timber in their respective concessions, and

the

additional

right

of

occupation,

possession, and

control over the same, to the exclusive of all others,

except the government, but with the corresponding

obligation to adopt all the protection and conservation

measures to ensure the continuity of the productive

condition of said areas, conformably with multiple use

and sustained yield management.

If the holder of a license agreement over a forest area

expressly or impliedly waives the privilege to utilize any

softwood, hardwood or mangrove species therein, a

license may be issued to another person for the harvest

thereof without any right of possession or occupation

over the areas where they are found, but he shall,

likewise, adopt protection and conservation measures

consistent with those adopted by the license agreement

holder in the said areas.

Section 39. Regulation of timber utilization in all other

classes of lands and of wood-processing plants. The

utilization of timber in alienable and disposable lands,

private lands, civil reservations, and all lands containing

standing or felled timber, including those under the

jurisdiction

of

other government agencies, and the

establishment and operation of saw-mills and other

wood-processing plants, shall be regulated in order to

prevent them from being used as shelters for excessive

and unauthorized harvests in forest lands, and shall not

© 2018 Compiled by RGL

27 of 244