Tourism Act of 2009: Tourism Promotions Board (TBP) and the Tourism Promotions Fund

[This is Part 6/8 of the discussion on Republic Act No. 9593, also known as The Tourism Act of 2009. Link to other parts found below.]

What is the Tourism Promotions Board (TPB)? This is a body corporate created under this law, which shall have an authorized capital of P250 Million which shall be fully subscribed by the National Government. It is under the supervision of the DOT Secretary and attached to the DOT for purposes of program and policy coordination. The TPB shall formulate and implement an integrated domestic and international promotions and marketing program for the DOT.

What is the mandate of the TPB? The TPB shall be responsible for marketing and promoting the Philippines domestically and internationally as a major global tourism destination, highlighting the uniqueness and assisting the development of its tourism products and services, with the end in view of increasing tourist arrivals and tourism investment. Specifically, it shall market the Philippines as a major convention destination in Asia. To this end, it shall take charge of attracting, promoting, facilitating, and servicing large-scale events, international fairs and conventions, congresses, sports competitions, expositions and the like. It shall likewise ensure the regular advertisement abroad of the country’s major tourism destinations and other tourism products, not limited to TEZs. It may also provide incentives to travel agencies abroad which are able to draw tourists and tourism investments to the country.

Composition of the TPB. The TPB shall be governed and its powers exercised by a Board of Directors (“Tourism Board”), composed of the following:

  1. The Department Secretary, as Chairperson
  2. The TPB Chief Operating Officer, as Vice Chairperson
  3. The TIEZA Chief Operating Officer
  4. The DFA Secretary
  5. The DTI Secretary
  6. The DOTC Secretary
  7. A representative director from accommodation enterprises
  8. A representative director from  travel and tour services
  9. A representative director from land, air and sea tourist transport services
  10. A representative director from conventions and exhibitions services and suppliers
  11. A representative director from other tourism enterprises.

The representative directors shall be appointed for a 3-year term by the President, upon the recommendation of the Tourism Congress from a list of at least 3 nominees per group. They must be Filipinos with recognized competence in business management, marketing, finance, tourism and other related fields.

Powers and Functions of the TPB. The TPB shall have all the general powers of a corporation provided under the Corporation Code, and the following powers and functions, among others:

1. Develop and implement a plan to market the Philippines as a premier tourist destination.

2. Direct and coordinate the resources and efforts of the government and the private sector in the tourism and allied fields for the full realization of the tourism plans and programs.

3. Develop and promote the Philippines as a center for international meetings, incentives, conventions, exhibitions, sports, medical tourism, and other special events.

4. Engage in the business of tourism and perform acts in consonance therewith, such as, but not limited to, attending conventions and other events abroad in representation of the country, encouraging sales promotions and advertising, and implementing programs and projects with the objective of promoting the country and enticing tourists to visit its tourism destinations and to enjoy its tourism products.

5. Contract loans, indebtedness and credit, and issue commercial papers and bonds, in any local or convertible foreign currency from international financial institutions, foreign government entities, and local or foreign private commercial banks or similar institutions under terms and conditions prescribed by law, rules and regulations.

6. Execute any deed of guarantee, mortgage, pledge, trust or assignment of any property for the purpose of financing the programs and projects deemed vital for the early attainment of its goals and objectives, subject to the provisions of the Constitution.

7. Receive donations, grants, bequests and assistance of all kinds from local and foreign governments and private sectors and utilize the same.

8. Extend loans through government banks and financial institutions, provide grants and other forms of financial assistance for manpower training, heritage preservation, infrastructure development, and other programs of the Department.

9. Obtain the services of local and foreign consultants, and enter into contracts locally and abroad in the performance of its functions.

Strategic Marketing Plan. The TPB shall draft comprehensive short-, medium- and long-term marketing plans for the Philippines as a destination for travel, business and investment, particularly tourism investment. It shall coordinate, insofar as practicable, with relevant agencies of the government and the private sector in the preparation of such plans. Such plans shall be duly approved by the Tourism Board.

Tourism Promotions Trust. The Tourism Promotions Trust is established from the proceeds of the sale or lease of the assets of the PTA.  The TIEZA and DOT shall take into consideration the importance of maintaining and preserving the PTA assets which may already be considered cultural treasures and heritage sites, such the Banaue Hotel and similar assets, which shall not be sold or in any way disposed of and shall be placed under the ownership of the TIEZA for their continued maintenance.

Tourism Promotions Fund. A special Tourism Promotions Fund is created to finance the activities of the TPB, to be sourced from the proceeds of the following:

  1. The investment earnings from the Tourism Promotions Trust.
  2. An appropriation from the National Government of not less than P500 Million annually for at least 5 years from the time of its constitution.
  3. 70% of the 50% net income of the DFPC accruing to DOT, in lieu of its statutory remittance to the National Government under the Dividends Law of 1994 (Republic Act No. 7656).
  4. At least 25% of the 50% National Government share remitted by PAGCOR to the National Treasury pursuant to the Dividends Law of 1994.
  5. At least 25% of the National Government share remitted by the international airports and seaports to the National Treasury pursuant to the Dividends Law of 1994.

In no case shall promotions and marketing activities receive less than 50% of the annual utilization of the Fund. Not more than 10% of the Fund shall be used for all other administrative and operating expenses of the TPB. The unallocated portion of the Fund shall be earmarked by the TPB as follows:

  1. For use by the TIEZA in the development of TEZs;
  2. For the DOT, to enhance its programs for development planning, heritage preservation, and infrastructure development, and manpower training including, but not limited to, scholarships for trainings abroad, among others; or
  3. For such other purposes as may contribute to the development of the tourism industry.

Special Contingency Fund. At the beginning of each year, 10% of the allocation for promotions and marketing shall be set aside as a Special Contingency Fund of the TPB. This shall be used in the event of emergencies to provide the TPB with sufficient resources to undertake marketing and promotions activities that will encourage sustained tourism interest in the Philippines and that will address the adverse effects of these emergencies.

Exemption From Payment of Corporate Income Tax. Notwithstanding any provision of existing laws, decrees, executive orders to the contrary, the TPB shall be exempt from the payment of corporate income tax, as provided under the National Internal Revenue Code (NIRC) of 1997, as amended.

Back to:
+ Main Primer: Tourism Act of 2009 (RA 9593)
+ The Department of Tourism (DOT)
+ Shared Responsibilities of National and Local Governments
+ Tourism Enterprise Zones (TEZ)
+ Tourism Infrastructure and Enterprise Zone Authority (TIEZA)
+ Incentives
+ Increased Tourist Access
+ Full text of R.A. 9593

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