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COUNTRY FILE:
Philippines
Author: JJ Disini
Source: e-lawasia@
Date: June, 2000
Latest e-law developments
In a bid to make the Philippines a more attractive
site for foreign e-investment, the government is pursuing various initiatives
to support the growth of the New Economy in the Philippines.
The E-Commerce Law
Already in the final stages at the House of Representatives,
the E-Commerce Law (the Law) is expected to be passed as early as June
2000. Based primarily upon the UNCITRAL Model Law on Electronic Commerce,
the Law confers upon electronic documents and signatures the same legal
status as that accorded to paper-based documents and manually-subscribed
signatures. In addition, the Law will require all agencies of the Philippine
government to conduct all official business and functions electronically.
Finally, hacking and cracking will be penalised as a criminal offence
punishable by a minimum of Peso 100,000 (US$2,500) and a mandatory imprisonment
from six months to three years. In light of the recent ILOVEYOU virus
incident, the legislature is considering an increase in the proposed penalties.
E-Commerce Promotion Council
Formed in 1998, the E-Commerce Promotion Council,
a body composed equally of government and private sector representatives,
recently formed five task forces called e-infrastructure and technology,
e-legal, e-financial, e-manpower, and e-niche, to assist in the formulation
of an e-commerce strategy dubbed "ISP.com" or Internet Strategy
for the Philippines.
New e-incentives
Under the Omnibus Investments Code, qualified enterprises
enjoy the following incentives: an income tax holiday for a maximum of
six years; tax credits on domestic capital equipment; and, employment
of foreign nationals. The Department of Trade and Industry (DTI) is currently
pushing for amendments to the Code which would expand and enhance the
current menu of incentives for foreign and domestic investments in so-called
pioneer and non-pioneer industries. The amendments are expected to take
effect in July 2000. In the case of IT-related projects, the income tax
holiday would apply for as long as twelve years. Moreover, the importation
of capital equipment, spare parts and production consumables shall be
free from all taxes and duties. Finally, qualified IT enterprises shall
likewise enjoy a double deduction for expenses related to training and
R&D.
Update of the investment priorities plan
The Board of Investments is considering the inclusion
of the following in the Investment Priority Plan for 2000 (IPP2000):
- software development projects – system software, middle ware and applications
software programming;
- IT enabled services – data encoding, digital directories, legal records,
computer aided engineering design, and digital cataloguing.
- support and knowledge-based services - software maintenance, information
systems planning and related services;
- business processes outsourcing – technical support and back-office
services.
Previously, the above-mentioned services were qualified
for incentives only if they serviced the export market. Under the proposed
IPP 2000, such services targetted at the domestic market will likewise
enjoy such incentives.
IT zones
In a bid to encourage the development of IT-centric
special economic zones, the Philippine Economic Zone Authority (PEZA)
last year issued the Guidelines for the Establishment of Information Technology
(IT) Parks (PEZA Board Resolution No. 99-264 dated October 6 1999). These
IT Parks are required to provide world-class infrastructure within the
zone. In the first IT Park approved, developers have deployed a fibre-optic
network as well as a wireless wide area network. In an effort to ease
the glut in office space, the PEZA is currently exploring the possibility
of declaring buildings and even individual floors as IT Parks. This would
likewise allow IT businesses located in the central business districts
the opportunity to enjoy fiscal incentives.
Trademarks and domain names
The Intellectual Property Office has been accepting
trademark applications for domain names provided the applicants disclaim
non-registrable matters such as the ".com" or ".ph".
To date, no domain name trademark application has been granted although
a number are currently pending.
e-tailing
The Retail Trade Liberalisation Act of 2000 eased
the nationality requirements for businesses engaged in retail trade. Under
the law, e-tailers will be required to establish bricks-and-mortar stores
in order to avail of the benefits of the law.
e-banking
The Bangko Sentral ng Pilipinas (BSP), the central
monetary authority, recently issued Circular No. 240 (dated May 5 2000)
requiring all banks to secure prior approval before offering electronic
banking services. Those already offering such services must secure approval
for the same within three months. Basically, the banks are obliged to
maintain a risk management process adequate to assess, control and monitor
any risks arising from e-banking.
Convergence
The sponsor of the E-Commerce Law in the Senate,
Senator Ramon Magsaysay, Jr., filed a bill to remove all legal impediments
to convergence. Under the proposed initiative, all entities currently
providing Internet services, telecommunications and broadcasting will
be permitted to offer multimedia services - the simultaneous transmission
of voice, video and data in digital format through a common media from
which users may interact.
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