Republic Act No. 10641 | Official Gazette of the Republic of the Philippines

See - Republic Act No. 10641 | Official Gazette of the Republic of the Philippines

[REPUBLIC ACT NO. 10641]

AN ACT ALLOWING THE FULL ENTRY OF FOREIGN BANKS IN THE PHILIPPINES, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 7721

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section 2 of Republic Act No. 7721 is hereby amended to read as follows:

“SEC. 2. Modes of Entry. – The Monetary Board may authorize foreign banks to operate in the Philippine banking system through any one of the following” modes of entry: (i) by acquiring, purchasing or owning up to one hundred percent (100%) of the voting stock of an existing bank; (ii) by investing in up to one hundred percent (100%) of the voting stockof a new banking subsidiary incorporated under the laws of the Philippines; or (iii) by establishing branches with full banking authority.”

SEC. 2. Section 3 of Republic Act No. 7721 is hereby amended to read as follows:

“SEC. 3. Guidelines for Approval. – In approving entry applications of foreign banks, the Monetary Board shall: (i) ensure geographic representation and complementation; (ii) consider strategic trade and investment relationships between the Philippines and the country of incorporation of the foreign bank; (iii) study the demonstrated capacity, global reputation for financial innovations and stability in a competitive environment of the applicant; (iv) see to it that reciprocity rights are enjoyed by Philippine banks in the applicant’s country; and (v) consider willingness to fully share their technology.

“Only established, reputable and financially sound foreign banks shall be allowed entry in accordance with Section 2 of this Act. The foreign bank applicant must be widely-owned and publicly-listed in its country of origin, unless the foreign bank applicant is owned and controlled by the government of its country of origin.

“In the exercise of this authority, the Monetary Board shall adopt such measures as may be necessary to ensure that the control of at least sixty percent(60%) of the resources or assets of the entire banking system is held by domestic banks which are majority-owned by Filipinos.”

SEC. 3. Section 4 of Republic Act No. 7721 is hereby amended to read as follows:

“SEC. 4. Capital Requirements. – (i) For Locally Incorporated Subsidiaries – The minimum capital required for locally incorporated subsidiaries of foreign banks shall be equal to that prescribed by the Monetary Board for domestic banks of the same category.

“(ii) For Foreign Bank Branches - Foreign banks that shall be authorized to establish branches pursuant to Section 2(hi) of this Act shah permanently assign capital of an amount not less than the minimum capital required for domestic banks of the same category. The permanently assigned capital shall be inwardly remitted and converted into Philippine currency.

“The foreign bank branch may open up to five (5) sub-branches as may be approved by the Monetary Board. Locally incorporated subsidiaries of foreign banks pursuant to Section 2(h) of this Act shall have the same branching privileges as domestic banks of the same category.”

SEC. 4. Section 6 of Republic Act No. 7721 is hereby repealed.

SEC. 5. Section 8 of Republic Act No. 7721 is hereby amended to read as follows:

“SEC. 8. Equal Treatment. – Foreign banks authorized to operate under Section 2 of this Act, shall perform the same functions, enjoy the same privileges, and be subject to the same limitations imposed upon a Philippine bank of the same category. The single borrower’s limit of a foreign bank branch shall be aligned with that of a domestic bank.

“The foreign banks shall guarantee the observance of the rights of their employees under the Constitution.

“Any right, privilege or incentive granted to foreign banks or their subsidiaries or affiliates under this Act, shall be equally enjoyed by and extended under the same conditions to Philippine banks.”

SEC. 6. A new provision in Section 9 is hereby inserted in the same Act, in lieu of the original provisions of Section 9 repealed by Section 11 of Republic Act No. 10000. Section 9 shall now read as follows:

“SEC. 9. Participation in Foreclosure Proceedings.—Foreign banks which are authorized to do banking business in the Philippines through any of the modes of entry under Section 2 hereof shall be allowed to bid and take part in foreclosure sales of real property mortgaged to them, as well as to avail of enforcement and other proceedings, and accordingly take possession of the mortgaged property, for a period not exceeding five (5) years from actual possession: Provided,That in no event shall title to the property be transferred to such foreign bank. In case said bank is the winning bidder, it shall, during the said five (5)-year period, transfer its rights to a qualified Philippine national, without prejudice to a borrower’s rights under applicable laws. Should the bank fail to transfer such property within the five (5)-year period, it shall be penalized one half (1/2) of one percent (1%) per annum of the price at which the property was foreclosed until it is able to transfer the property to a qualified Philippine national.”

SEC. 7. Transitory Provisions. –Foreign banks which are already authorized to do banking business in the Philippines through any of the modes of entry under Section 2 hereof may apply to change their original mode of entry.

Foreign banks operating through branches in the Philippines upon the effectivity of this Act shall retain their original privilege upon entry to establish a limited number of sub-branches. However, the previous restriction on the locations of such additional branches is hereby lifted.

The existing Philippine branches of foreign banks shall comply within one (1) year from the effectivity of this Act with the minimum capital requirements as prescribed under Section 4(ii) of this Act, unless otherwise extended by the Monetary Board.

SEC. 8. Section 12 of Republic Act No. 7721 is hereby amended to read as follows:

“SEC. 12. Applicability of Other Banking Laws. – The provisions of Republic Act No. 7653, otherwise known as the New Central Bank Act and the provisions of Republic Act No. 8791, otherwise known as The General Banking Law of 2000′, insofar as they are applicable and not in conflict with any provision of this Act, shall apply to banks authorized pursuant to this Act.”

SEC. 9. Section 13 of Republic Act No. 7721 is hereby amended to read as follows:

“SEC. 13. Rule-Making Powers of the Monetary Board of the Bangko Sentral ng Pilipinas and Compliance Reports. – The Monetary Board is hereby authorized to issue such rules and regulations as may be needed to implement “the provisions of this Act. On or before May 30 of each year, the Monetary Board shall file a written report to Congress and its respective Banks Committees, on the developments in the implementation of this Act. The implementing rules and regulations of this Act shall be published in at least two (2) newspapers of general circulation.”

SEC. 10. Repealing Clause. – All laws, decrees, executive orders, proclamations, rules and regulations and other issuances or parts thereof insofar as they are inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SEC. 11. Effectivity. – This Act shall take effect fifteen (15) days after its publication in theOfficial Gazette or in at least two (2) national newspapers of general circulation.

Approved,

(Sgd.) FELICIANO BELMONTE JR.Speaker of the House of Representatives

(Sgd.) FRANKLIN M. DRILONPresident of the Senate

This Act which is a consolidation of Senate Bill No. 2159 and House Bill No. 3984 was finally passed by the Senate and the House of Representatives on June 11, 2014 and June 10, 2014, respectively.

(Sgd.) MARILYN B. BARUA-YAPSecretary General House of Representatives

(Sgd.) OSCAR G. YABESSecretary of the Senate

Approved: JUL 15 2014

(Sgd.) BENIGNO S. AQUINO III
President of the Philippines

Republic Act No. 10642 | Official Gazette of the Republic of the Philippines

See  -  Republic Act No. 10642 | Official Gazette of the Republic of the Philippines

[REPUBLIC ACT NO. 10642]

AN ACT STRENGTHENING CONSUMER PROTECTION IN THE PURCHASE OF BRAND NEW MOTOR VEHICLES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. – This Act shall be known as the “Philippine Lemon Law”.

SEC. 2. Declaration of Policy. – It is hereby declared the policy of the State to promote full protection to the rights of consumers in the sale of motor vehicles against business and trade practices which are deceptive, unfair or otherwise inimical to consumers and the public interest.

The State recognizes that a motor vehicle is a major consumer purchase or investment. Hence, the rights of consumers should be clearly defined, including the means for redress for violations thereof.

SEC. 3. Definition of Terms. – As used in this Act:

(a) Brand new motor vehicle refers to a vehicle constructed entirely from new parts and covered by a manufacturer’s express warranty at the time of purchase that it has never been sold or registered with the Department of Transportation and Communications (DOTC) or an appropriate agency or authority, and has never been operated on any highway of the Philippines, or in any foreign state or country;

(b) Collateral charges refer to the fees paid’ to the Land Transportation Office (LTO) for the registration of a brand new motor vehicle and other incidental expenses such as, but not limited to, the cost of insurance pertaining to the vehicle, chattel mortgage fees and interest expenses if applicable;

(c) Comparable motor vehicle refers to a motor vehicle that is identical or reasonably equivalent to the motor vehicle to be replaced, in terms of specifications and values, subject to availability, as the motor vehicle existed at the time of purchase: Provided, That there shall be an offsetting from this value for reasonable allowance for its use;

(d) Consumer refers to any person, natural or juridical, who purchases a brand new motor vehicle either by cash or credit from an authorized distributor, dealer or retailer in the Philippines;

(e) Dealer or retailer refers to any person, natural or juridical, authorized by the manufacturer or distributor to sell brand new motor vehicles directly to the retail buyers and the public;

(f) Distributor refers to any person, natural or juridical, authorized by the manufacturer to sell brand new motor vehicles to duly authorized dealers or retailers;

(g) Implementing agency refers to the Department of Trade and Industry (DTI), reorganized under Title X, Book IV of Executive Order No. 292, series of 1987, otherwise known as the “Administrative Code of 1987″;

(h) Lemon Law rights period refers to the period ending twelve (12) months after the date of the original delivery of a brand new motor vehicle to a consumer or the first twenty thousand (20,000) kilometers of operation after such delivery, whichever comes first. This shall be the period during which the consumer can report any nonconformity, as defined in paragraph (k) herein, to the standards and specifications of the manufacturer, authorized distributor, authorized dealer or retailer, and pursue any right as provided for under this Act;

(i) Manufacturer refers to any person, natural or juridical, engaged in the business of manufacturing or assembling motor vehicles;

(j) Motor vehicle refers to any self-propelled, four (4) wheeled road vehicle designed to carry passengers including, but not limited to, sedans, coupes, station wagons, convertibles, pick-ups, vans, sports utility vehicles (SUVs) and Asian Utility Vehicles (AUVs) but excluding motorcycles, delivery trucks, dump trucks, buses, road rollers, trolley cars, street sweepers, sprinklers, lawn mowers and heavy equipment such as, but not limited to, bulldozers, payloaders, graders, forklifts, amphibian trucks, cranes, and vehicles which run only on rails or tracks, and tractors, trailers and traction engines of all kinds used exclusively for agricultural purposes. Trailers having any number of wheels, when propelled or intended by attachment to a motor vehicle, shall be classified as separate motor vehicle with no power rating;

(k) Nonconformity refers to any defect or condition that substantially impairs the use, value or safety of a brand new motor vehicle which prevents it from conforming to the manufacturer’s or distributor’s standards or specifications, which cannot be repaired, but excluding conditions resulting from noncompliance by the consumer of his or her obligations under the warranty, modifications not authorized by the manufacturer or distributor, abuse or neglect, and damage due to accident or force majeure;

(l) Purchase price refers to the invoice price or the amount of money which the dealer or retailer actually received for the brand new motor vehicle, in consideration of the sale of such brand new motor vehicle;

(m) Warranty refers to the written assurance, so labeled, of the manufacturer of a brand new motor vehicle including any term or condition precedent to the enforcement of obligations under the warranty; and

(n) Warranty rights period refers to the period provided for under the contract of sale when the manufacturer would guarantee the materials used, the workmanship and the roadworthiness of a brand new motor vehicle for ordinary use or reasonable intended purposes.

SEC. 4. Coverage. – This Act shall cover brand new motor vehicles purchased in the Philippines reported by a consumer to be in nonconformity with the vehicle’s manufacturer or distributor’s standards or specifications within twelve (12) months from the date of .original delivery to the consumer, or up to twenty thousand (20,000) kilometers of operation after such delivery, whichever comes first. The following causes of nonconformity shall be excluded:

(a) Noncompliance by the consumer of the obligations under the warranty;

(b) Modifications not authorized by the manufacturer, distributor, authorized dealer or retailer;

(c) Abuse or neglect of the brand new motor vehicle; and

(d) Damage to the vehicle due to accident or force majeure.

SEC. 5. Repair Attempts. – At any time within the Lemon Law rights period, and after at least four (4) separate repair attempts by the same manufacturer, distributor, authorized dealer or retailer for the same complaint, and the nonconformity issue remains unresolved, the consumer may invoke his or her rights under this Act.

The repair may include replacement of parts components, or assemblies.

SEC. 6. Notice of Availment of Lemon Law Rights. – Before availing of any remedy under this Act and subject to compliance with the provisions of Section 5 hereof, the consumer shall, in writing, notify the manufacturer, distributor, authorized dealer or retailer of the unresolved complaint, and the consumer’s intention to invoke his or her rights under this Act within the Lemon Law rights period.

The warranty booklet issued by the manufacturer, distributor, authorized dealer or retailer shall clearly state the manner and form of such notice to constitute a valid and legal notice to the manufacturer, distributor, authorized dealer or retailer. It shall also clearly state the responsibility of the consumer under this section.

SEC. 7. Availment of Lemon Law Rights. – Subsequent to filing the notice of availment referred to in the preceding section, the consumer shall bring the vehicle to the manufacturer, distributor, authorized dealer or retailer from where the vehicle was purchased for a final attempt to address the complaint of the consumer to his or her satisfaction.

It shall be the duty of the manufacturer, distributor, authorized dealer or retailer, upon receipt of the motor vehicle and the notice of nonconformity required under Section 6 hereof, to attend to the complaints of the consumer including, as may be necessary, making the repairs and undertaking such actions to make the vehicle conform to the standards or specifications of the manufacturer, distributor, authorized dealer or retailer for such vehicle.

In case the nonconformity issue remains unresolved despite the manufacturer, distributor, authorized dealer or retailer’s efforts to repair the vehicle, pursuant to the consumer’s availment of his or her Lemon Law rights, the consumer may file a complaint before the DTI as provided for under this Act: Provided, however, That if the vehicle is not returned for repair, based on the same complaint, within thirty (30) calendar days from the date of notice of release of the motor vehicle to the consumer following this repair attempt within the Lemon Law rights period, the repair is deemedsuccessful: Provided, finally, That, in the event that the nonconformity issue still exists or persists after the thirty (30)-day period but still within the Lemon Law rights period, the consumer may be allowed to avail of the same remedies under Sections 5 and 6 hereof.

To compensate for the non-usage of the vehicle while under repair and during the period of availment of the Lemon Law rights, the consumer shall be provided a reasonable daily transportation allowance, an amount which covers the transportation of the consumer from his or her residence to his or her regular workplace or destination and vice versa, equivalent to air-conditioned taxi fare, as evidenced by official receipt, or in such amount to be agreed upon by the parties, or a service vehicle at the option of the manufacturer, distributor, authorized dealer or retailer. Any disagreement on this matter shall be resolved by the DTI.

Nothing herein shall be construed to limit or impair the rights and remedies of a consumer under any other law.

SEC. 8. Remedies for Dispute Resolution. – The DTI shall exercise exclusive and original jurisdiction over disputes arising from the provisions of this Act. All disputes arising from the provisions of this Act shall be settled by the DTI in accordance with the following dispute resolution mechanisms:

(a) Mediation

(1) The principles of negotiation, conciliation and mediation towards amicable settlement between the manufacturer, distributor, authorized dealer or retailer and the consumer shall be strictly observed;

(2) In the course of its dispute resolution efforts, the DTI shall endeavor to independently establish the validity of the consumer’s outstanding complaint. The DTI shall likewise retain the services of other government agencies or qualified independent private entities in the ascertainment of the validity of the consumer’s complaint. Any cost incurred in establishing the validity of the consumer’s complaint shall be bornejointly by the consumer and the manufacturer, distributor, authorized dealer or retailer;

(3) The complaint shall be deemed valid if it is independently established that the motor vehicle does not conform to the standards or specifications set by the manufacturer, distributor, authorized dealer or retailer;

(4) Upon failure of the negotiation or mediation between the manufacturer, distributor, authorized, dealer or retailer and the consumer, the parties shall execute a certificate attesting to such failure; and

(5) At any time during the dispute resolution period, the manufacturer, distributor, authorized dealer or retailer and the consumer shall be encouraged to settle amicably. All disputes that have been submitted for mediation shall be settled not later than ten (10) working days from the date of filing of the complaint with the DTI.

(b) Arbitration

In the event there is a failure to settle the complaint during the mediation proceedings, both parties may voluntarily decide to undertake arbitration proceedings.

(c) Adjudication

(1) In the event that both parties do not undertake arbitration proceedings, at least one of the parties may commence adjudication proceedings, administered by the DTI. The DTI shall rely on the qualified independent findings as to conformity to standards and specifications established herein. In no case shall adjudication proceedings exceed twenty (20) working days;

(2) In case a finding of nonconformity is arrived at, the DTI shall rule in favor of the consumer and direct the manufacturer, distributor, authorized dealer or retailer to grant either of the following remedies to the consumer:

(i) Replace the motor vehicle with a similar or comparable motor vehicle in terms of specifications and values, subject to availability; or

(ii) Accept the return of the motor vehicle and pay the consumer the purchase price plus the collateral charges.

In case the consumer decides to purchase another vehicle with a higher value and specifications from the same manufacturer, distributor, authorized dealer or retailer, the consumer shall pay the difference in cost.

In both cases of replacement and repurchase, the reasonable allowance for use, as defined in this Act, shall be deducted in determining the value of the nonconforming motor vehicle; and

(3) In case a nonconformity of the motor vehicle is not found by the DTI, it shall rule in favor of the manufacturer, distributor, .authorized dealer or retailer, and direct the consumer to reimburse the manufacturer, distributor, authorized dealer or retailer the costs incurred by the latter in validating the consumer’s complaints.

An appeal may be taken from a final judgment or order of the Adjudication Officer which completely disposes of the case within fifteen (15) days from receipt thereof. The appeal shall be taken by filing a Memorandum of Appeal with the Secretary of the DTI, with Notice of Appeal to the Adjudication Officer, and with a copy duly furnished the adverse party or parties on any of the following grounds:

(i) Grave abuse of discretion;

(ii) The decision/order is in excess of jurisdiction or authority of the Adjudication Officer; and

(iii) The decision/order is not supported by the evidence or there is serious error in the findings of facts.

The Secretary of the DTI shall decide on the appeal within thirty (30) days from receipt thereof. A party seeking further appeal from the decision of the Secretary of the DTI may file a case for certiorari to the Court of Appeals under Section 4, Rule 65 of the Revised Rules of Court.

SEC. 9. Determination of Reasonable Allowance for Use. – For purposes of this Act, “reasonable allowance for use” shall mean twenty percent (20%) per annum deduction from the purchase price, or the product of the distance traveled in kilometers and the purchase price divided by one hundred thousand (100,000) kilometers, whichever is lower.

SEC. 10. Disclosure on Resale. – Should the returned motor vehicle be made available for resale, the manufacturer, distributor, authorized dealer or retailer shall, prior to sale or transfer, disclose in writing to the next purchaser of the same vehicle the following information:

(a) The motor vehicle was returned to the manufacturer, distributor, authorized dealer or retailer;

(b) The nature of the nonconformity which caused the return; and

(c) The condition of the motor vehicle at the time of the transfer to the manufacturer, distributor, authorized dealer or retailer.

The responsibility of the manufacturer, distributor, authorized dealer or retailer under this section shall cease upon the sale of the affected motor vehicle to the first purchaser.

SEC. 11. Penalty. – The manufacturer, distributor, authorized dealer or retailer adjudged to have violated the provisions requiring disclosure as mentioned in the preceding section shall be liable to pay a minimum amount of One hundred thousand pesos (P100,000.00) as damages to the aggrieved party without prejudice to any civil or criminal liability they and/or the responsible officer may incur under existing laws.

SEC. 12. Assistance by Other Agencies. – The DOTC and other agencies, political subdivisions, local government units, including government-owned and/or controlled corporations, shall render such assistance as required by the DTI in order to effectively implement the provisions of this Act.

SEC. 13. Implementing Rules and Regulations. – The DTI shall promulgate the necessary implementing rules and regulations within, ninety (90) days from the effectivity of this Act.

SEC. 14. Separability Clause. – If, for any reason, any part or provision of this Act is declared invalid, such declaration shall not affect the other provisions of this Act.

SEC. 15. Repealing Clause. – All laws, decrees, executive orders, issuances, rules and regulations or parts thereof which are inconsistent with the provisions of this Act are hereby deemed repealed, amended or modified accordingly.

SEC. 16. Effectivity. – This Act shall take effect fifteen (15) days after its publication in theOfficial Gazette or in any newspaper of .general circulation.

Approved,

(Sgd.) FELICIANO BELMONTE JR.Speaker of the House of Representatives

(Sgd.) FRANKLIN M. DRILONPresident of the Senate

This Act which is a consolidation of Senate Bill No. 2211 and House Bill No. 4082 was finally passed by the Senate and the House of Representatives on June 11, 2014 and June 10, 2014, respectively.

(Sgd.) MARILYN B. BARUA-YAPSecretary General House of Representatives

(Sgd.) OSCAR G. YABESSecretary of the Senate

Approved: JUL 15 2014

(Sgd.) BENIGNO S. AQUINO III
President of the Philippines

Republic Act No. 10643 | Official Gazette of the Republic of the Philippines

See - Republic Act No. 10643 | Official Gazette of the Republic of the Philippines

[REPUBLIC ACT NO. 10643]

AN ACT TO EFFECTIVELY INSTILL HEALTH CONSIOUSNESS THROUGH GRAPHIC HEALTH WARNINGS ON TOBACCO PRODUCTS

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. – This Act shall be known as “The Graphic Health Warnings Law”.

SEC. 2. Declaration of Principles. – The State shall protect and promote the right to health of the people and instill health consciousness among them.

The State shall protect consumers from trade malpractices and from substandard tobacco products.

The State accepts that, as a State-Party to the World Health Organization’s Framework Convention on Tobacco Control (FCTC), a treaty that reaffirms the right of all peopleto the highest standards of health, the Philippines is obliged to inform every person of the health consequences of tobacco consumption and exposure to tobacco smoke; to enact effective measures to curb and reduce tobacco use, especially among the youth; and to protect public health policy from the commercial and vested interests of the tobacco industry.

The State is cognizant of the Philippines’ duty under Article 11 of the FCTC which is to adopt and implement by September 2008 effective health warnings on tobacco products that should describe the harmful effects of tobacco use.

The State recognizes that based on empirical data, text warnings have been shown to be insufficient in conveying the dangers of tobacco products while Graphic Health Warnings have been shown to be more effective in conveying the truth about the dangers of exposure and consumption of tobacco smoke.

SEC. 3. Purposes. – The purposes of this Act are:

(a) to have Graphic Health Warnings that effectively warn of the devastating effects of tobacco use and exposure to second hand smoke;

(b) to remove misleading or deceptive numbers or descriptors like “low tar”, “light”, “ultra lights” or “mild” which convey or tend to convey that a product or variant is healthier, less harmful or safer; and

(c) to further promote the right to health and information of the people.

SEC. 4. Definition of Terms. –

(a) “Insert” means any communication inside an individual package and/or carton purchased at either wholesale or retail by consumers, such as a leaflet or brochure.

(b) “Onsert” means any communication affixed to the outside of an individual package and/or carton purchased at either wholesale or retail by consumers, such as a brochure beneath the outer cellophane wrapping or glued to the outside of the cigarette package.

(c) “Graphic Health Warnings” refer to the photographic image printed on the tobacco product package which accurately depicts the hazards of tobacco use and is accompanied by textual warning related to the picture.

(d) “Principal Display Surface”, means:

(1) In the case of a package and carton that has at least two (2) equal sized sides or surfaces, other than the top and bottom, that may be displayed or visible under normal or customary conditions of sale or use, the areas of each of the two (2) largest surfaces;

(2) In the case of a spherical, cylindrical or conical container of tobacco products, the two (2) largest surfaces that are predominantly displayed; and

(3) In the case of a package and carton that do not have a particular side or surface that is predominantly displayed or visible under normal or customary conditions of sale or use or those that are not described under subsections 1 and 2, fifty percent (50%) of the three (3) dominant sides or the total surface thereof, whichever is bigger, which will ensure that the Graphic Health Warnings are visibly shown.

(e) “Tobacco Product Package” means the packet and package of tobacco products and any outside packaging and labelling of tobacco products for sale and distribution in the domestic market, importation, trade, exchange, or for exhibition, such as, but not limited to, packs, tins, boxes, pouches, flip-tops, slide and shell packages, cartons, packages containing one (1) product unit, or other containers of tobacco products containing the logo or trademark of the tobacco companies, primarily intended for consumers or for retail sale: Provided, That for mastercases that contain the logo or trademark of tobacco brands, such mastercases shall contain the textual health warning “SMOKING KILLS” which shall be printed in the same single color and in bold print as the trademark logo: Provided, further, That textual health warnings shall be of equal prominence and visibility as the logo or trademark of tobacco companies. Such textual warnings on the mastercase shall occupy not more than fifty percent (50%) of each principal display panel of the mastercase.

(f) “Tobacco Products” means products entirely or partly made of leaf tobacco as raw material, which are manufactured to be used for smoking, sucking, chewing or snuffing, or by any other means of consumption.

SEC. 5. Coverage. – This Act is only applicable to tobacco products that are locally manufactured or imported and introduced in the Philippine market. Cigarettes intended or offered for export shall only be subject to the requirement that one (1) side panel of the mastercases, reams/cartons, and one (1) side panel of each cigarette pack primarily intended for retail sale to consumers, shall contain the following markings and information: “For sale only in ______”, “Made under authority of______”, tax number assigned by the Bureau of Internal Revenue (BIR) to the domestic manufacturer that exports tobacco products and fiscal and regulatory marking requirements of the country where the tobacco products will be ultimately sold.

SEC. 6. Graphic Health Warnings. – One (1) year after the issuance of the templates by the Department of Health (DOH), cigarette packages and other tobacco product packages, including package inserts and onserts, and any outside packaging and labelling, withdrawn from the manufacturing facilities, or imported into the Philippine customs territory shall bear the prescribed highly visible full-color Graphic Health Warnings, that shall have two (2) components: a photographic picture warning and an accompanying textual warning that is related to the picture.

(a) The Graphic Health Warnings shall be printed on fifty percent (50%) of the principal display surfaces of any tobacco package; it shall occupy fifty percent (50%) of the front and fifty percent (50%) of the back panel of the packaging, as described in Section 4;

(b) The Graphic Health Warnings shall be located at the lower portions of the said panels or Principal Display Areas;

(c) Nothing shall be printed or applied on a location where it is likely to obscure or cover, in part or in whole, the Graphic Health Warnings or the location where the internal revenue strip stamp is to be affixed as may be required by the BIR;

(d) No part of the warning may be obliterated, obscured, folded, severed or become unreadable when the tobacco package is opened or closed or when a wrapper on the package is removed;

(e) The Graphic Health Warnings shall be printed in four colors /-cmyk-/ screen 133 lines per inch based on a source file of 300 dpi;

(f) The printing of the Graphic Health Warnings shall be done using current available technology for purposes of providing vivid and realistic pictures, without the use of any border, frame or any other design that will effectively lessen the size of the warning;

The Graphic Health Warnings shall be printed or inscribed on the package in a color which contrasts conspicuously with the background of the package or its labels;

(g) A maximum of twelve (12) templates of Graphic Health Warnings shall be printed simultaneously and these shall be rotated periodically for each brand family and also for each variant, so that every twenty-four (24) months, the variations of the warnings shall appear in the market with approximately equal frequency and equal display of health warnings and messages on retail packages; and

(h) Graphic Health Warnings specifications –

(1) The text warning accompanying the photographic picture warning shall be worded in such manner that an ordinary layman will understand what the picture is about and what the ill-effects of smoking are on the health of the smoker and on the people around him;

(2) The text warning shall be placed on areas of the photograph where it will not obscure the picture itself but will be prominently displayed;

(3) The text shall use no more than twenty percent (20%) of the entire area of the Graphic Health Warnings and shall appear in clearly legible type and in contrast by typograph, layout and color, without the use of any border, frame or any other design that will effectively lessen the size of the textual warning; and

(4) The accompanying text shall be printed in Filipino on the front panel and English on the back panel. In the case of other containers where there is only one (1) external surface area, the accompanying text will alternately be in English or Filipino.

SEC. 7. Side Panel. – Cigarette packages and other tobacco product packages found in the market, shall bear, on one (1) side panel, additional information which shall be issued by the DOH together with the templates in accordance with Section 15 of this Act, namely; additional health warnings, hotlines or websites for tobacco-related concerns, or tips on how to stop smoking. This information shall be prominently displayed and the text thereto shall appear in clearly legible type and in contrast by typograph, layout and color, without the use of any border or frame or any other design that will effectively lessen the size of the additional health warnings: Provided, That such additional information shall not occupy more than thirty percent (30%) of the display surface of one (1) side panel. This is in addition to any fiscal markings as may be required by other government agencies such as the BIR.

SEC. 8. Descriptors. – One (1) year after the issuance of the templates by the DOH, no cigarette packs or other tobacco product packages withdrawn from a manufacturing facility or imported into the Philippine customs territory, shall bear any number or descriptor such as, “low tar”, “light”, “ultra-light”, or “mild”, “extra”, “ultra”, and similar terms in any language that claims or misleads a consumer to believe that a tobacco product or variant is healthier, safer or less harmful.

SEC. 9. Costs. – All printing costs pertaining to packaging and labelling shall be shouldered by tobacco manufacturers and/or importers.

SEC. 10. Prohibition on Sales. – No person or legal entity shall sell or commercially distribute or display any cigarette or tobacco product without ensuring that the labels and packages, as well as any other container used in displaying the cigarette or tobacco products, meet the requirements under this Act. Manufacturers, importers, retailers and distributors of tobacco products shall ensure the removal from all displays of noncompliant tobacco products manufactured, imported, distributed or sold by them eight (8) months after the Graphic Health Warnings are required, as mandated under Section 6.

Noncompliant packages thereafter found in the market on display, for sale or distribution shall be subject to removal and/or confiscation.

SEC. 11. Prohibition on Obstruction of Display. – No person or legal entity shall obscure or cover in part or in whole the Graphic Health Warnings in the selling areas. The Graphic Health Warnings shall be prominently displayed whenever the said packages are commercially displayed.

SEC. 12. Liability of Manufacturers, Importers, and Distributors. – Manufacturers, importers, and distributors of tobacco products shall be directly liable for any violations of the provisions of this Act. In the case of a business entity or establishment, the chairperson of the Board of Directors, the president, manager and the corporate officials thereof, owner in the case of a sole proprietorship, and partners in the case of a partnership shall be directly responsible therefore and shall be made accountable when such officials directly participated in violating any provision of this Act. Agents/ representatives of the aforecited manufacturers, importers, and distributors who commit any violation of the provisions of this Act and. its implementing rules shall be jointly and severally liable with the manufacturers, importers, and distributors:

SEC. 13. Liability of Retailers and Sellers. – Retailers and sellers of tobacco products shall be directly liable for violations of Sections 10 and 11 of this Act. In the case of a business entity or establishment, the chairperson of the Board of Directors, the president, manager and the corporate officials thereof, owner in the case of sole proprietorship, and partners in the case of a partnership shall be directly responsible and shall be made accountable.

SEC. 14. Penalties for Noncompliance. –

(a) The following penalties shall individually apply to manufacturers, importers, and distributors of tobacco products as well as their agents/representatives for any violation of Sections 6 and 7, and Section 11 insofar as they areresponsible for providing display materials that are in violation of this Act:

(1) On the first offense, a fine of not more than Five hundred thousand pesos (P500,000.00);

(2) On the second offense, a fine of not more than One million pesos (P1,000,000.00); and

(3) On the third offense, a fine of not more than Two million pesos (P2,000,000.00) or imprisonment of not more than five (5) years, or both, at the discretion of the court: Provided,That the business permits and licenses, in the case of a business entity or establishment shall be revoked or cancelled.

If the guilty officer is a foreign national, he shall be deported after service of sentence and/or payment of applicable fines without need of further deportation proceedings and shall be permanently barred from re-entering the Philippines.

Each withdrawal or importation into the Philippine customs territory of noncompliant tobacco packages, regardless of size, for sale to the market, after the compliance date shall constitute one (1) offense. An additional penalty of One hundred thousand pesos (P100,000.00) per day shall be imposed for each day the violation continues after having received the order from the Department of Trade and Industry (DTI) notifying the company of the infraction.

(b) The following penalties shall individually apply to retailers/sellers of tobacco products as well as their agents/ representatives for any violation of Sections 6 and 7 of this Act, insofar as they are involved in the display, offering for sale and selling of the covered products, as well as Section 11 of this Act:

(1) On the first offense, a fine of not more than Ten thousand pesos (P10,000.00);

(2) On the second offense, a fine of not more than Fifty thousand pesos (P50,000.00); and

(3) On the third offense, a fine of not more than One hundred thousand pesos (P100,000.00) or imprisonment of not more than one (1) year, or both, at the discretion of the court. The business permits and licenses, in the case of a business entity or establishment shall be revoked or cancelled.

Each day that noncompliant tobacco packages are found in the retail establishments of the retailers after the compliance date shall constitute one (1) offense. An additional penalty of Five thousand pesos (P5,000.00), per day shall be imposed for each day the violation continues after having received the order from the DTI notifying the retailers of the infraction.

(c) The imposition of the fines shall take into consideration the annual gross sales, capital investment and employee size of the manufacturers, importers and distributors, and in the case of retailers and sellers, their total assets.

SEC. 15. Graphic Health Warnings Templates and Timeline. – Thirty days (30) days after the effectivity of this Act, the DOH shall issue a maximum of twelve (12) templates of Graphic Health Warnings to be rotated, as well as guidelines with respect to the specific pictures, design, or content of the information relating to the Graphic Health Warnings, and other information that must appear in the tobacco product packages. The DOH shall consider the recommendations of leading nongovernment organizations (NGOs) that have established and proven records of dealing with tobacco-related diseases and deaths. All Graphic Health Warnings issued shall comply with the specifications above and must always present the devastating effects of tobacco use and exposure to tobacco smoke.

Under Section 6, manufacturers are given a period of one (1) year from the issuance of the initial set of templates to comply therewith. The initial set of templates is valid for two (2) years from implementation.

Within one (1) year from the effectivity of the initial set of templates, the DOH shall issue a new set of templates which will take effect upon expiration of the initial set. These new templates shall be valid for two (2) years and so on.

Eight (8) months after the validity of the initial set of templates, no person or legal entity shall sell or commercially distribute or display any cigarette or tobacco product without ensuring that the labels and packages, as well as any other container used in displaying the cigarette or tobacco products, meet the requirements under this Act, as mandated under Section 10 of this Act.

SEC. 16. Implementing Agencies. – For purposes of the implementation of this Act, the following government agencies are given these mandates:

(1) The DOH shall issue the templates as required under Sections 6, 7 and 15.

(2) The BIR shall ensure that cigarette stamps are not affixed on noncompliant packages and shall certify under oath that the products withdrawn are compliant with this Act.

(3) The Inter-Agency Committee on Tobacco (IAC-T) created under Republic Act No. 9211 or the Tobacco. Regulation Act of 2003 shall monitor compliance with the law, and motu proprioor upon any sworn written complaint, institute the appropriate action for any violation of this Act as provided under Section 14 and this section.

(4) The DTI shall hear complaints filed by the IAC-T or any private citizen, corporation or organization, for any violation of this Act, and after notice and hearing, impose administrative fines of not more than Two million pesos (P2,000,000.00) for any violation of this Act, the proceeds of which will be used for health promotion campaigns on tobacco control of the DOH and the Department of Education (DepED). The imposition of the administrative fines shall take into consideration the annual gross sales, capital investment and employee size of the manufacturers, importers and distributors, and in the case of retailers and sellers, their total assets.

(5) The DepED shall use Graphic Health Warnings templates to educate children on the ill-effects of tobacco and shall ensure that these are included in relevant subjects under the K-12 curriculum.

Within six (6) months from the effectivity of this Act, the Implementing Rules and Regulations (IRR) Committee led by the DOH and the DTI, and to be composed of the Department of Justice (DOJ), the Department of Finance (DOF), the Department of Environment and Natural Resources (DENR), the Department of Science and Technology (DOST), the DepED, the National Tobacco Administration (NTA) and the Department of Agriculture (DA) shall draft and issue the IRR for its effective implementation, after public consultations with stakeholders such as NGOs, farmers, and industry representatives: Provided, That the non-issuance of the IRR shall not prevent the coming into force of this Act.

SEC. 17. Creation of Oversight Congressional Committee. – A Congressional Oversight Committee co-chaired by the Senate Committee on Health and Demography and the House Committee on Health, is hereby constituted to monitor and review the implementation of this Act.

SEC. 18. Strict Compliance and Inspections. – Absolutely no extensions of time to comply with the provisions of this Act shall be granted to tobacco manufacturers and importers or any other affected party.

SEC. 19. Separability Clause. – If any clause, provision, paragraph or part thereof shall be declared unconstitutional or invalid, such judgment shall not affect, invalidate or impair any other part hereof but such judgment shall be merely confined to the clause, provision, paragraph or part directly involved in the controversy in which such judgment has been rendered.

SEC. 20. Repealing Clause. – Section 13 on Warning on Cigarette Packages of Republic Act No. 9211, DOH Administrative Order No. 2010-0013 and BIR Revenue Regulations No. 3-2006, Sections 18(e) and 23(a)(1)(b) are hereby repealed. All other laws, decrees, executive orders and other administrative issuances and parts thereof which are inconsistent with the provisions of this Act are hereby modified, superseded or repealed accordingly.

SEC. 21. Compliance with Existing International Conventions. – Nothing in this Act shall modify the measures adopted to give effect to the obligations of the Philippines under international conventions existing at the time of the enactment of this Act.

SEC. 22. Effectivity. – This Act shall take effect fifteen (15) days following its publication in theOfficial Gazette or in a major daily newspaper of national circulation in the Philippines.

Approved,

(Sgd.) FELICIANO BELMONTE JR.Speaker of the House of Representatives

(Sgd.) FRANKLIN M. DRILONPresident of the Senate

This Act which is a consolidation of Senate Bill No. 27 and House Bill No. 4590 was finally passed by the Senate and the House of Representatives on June 11, 2014.

(Sgd.) MARILYN B. BARUA-YAPSecretary General House of Representatives

(Sgd.) OSCAR G. YABESSecretary of the Senate

Approved: JUL 15 2014

(Sgd.) BENIGNO S. AQUINO III
President of the Philippines