Eco-tourism Incentives Act of the Philippines

Senate Office of the Setretarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session ) 26 MAY 25 P5:00 SENATE RECEIVED BY: S. No. 2161 Introduced by Senator JV Ejercito AN ACT MANDATING THE ESTABLISHMENT OF MANGROVE BUFFER ZONES IN DEVELOPMENT PROJECTS THROUGHOUT THE PHILIPPINES EXPLANATORY NOTE Tourism remains a key driver of the Philippine economy. According to the Department of Tourism (DOT), the country recorded 5.235 million tourist arrivals from January to November 2025, reflecting a 2.16% decrease from the same period in 2024.1 Despite this decline, tourism continues to generate substantial economic and social benefits, accounting for around 34% of national employment, or approximately 16.4 million jobs for Filipinos.? A vital component of this sector is eco-tourism, which promotes environmental conservation, community participation, and sustainable local development. 3 However, eco-tourism sites continue to face serious challenges, including overuse, inadequate infrastructure, and insufficient sustainability measures.* Although tourism contributes 8.9% to the country's gross domestic product (GDP), many eco-tourism destinations 1 Philippine Daily Inquirer. (2026, January 4). Making PH more fun again. Inquirer. Net. Retrieved March 23, 2026, from https://opinion.inquirer.net/188749/making-ph-more-fun-again 2 Philippine Information Agency [PIA], & Tista, J. A. (2026). Tourism still a vital growth driver of PH economy - Frasco. In Philippine Information Agency. Information Agency. Retrieved March 23, 2026, from https://pia.gov.ph/news/tourism-still-a-vital-growth-driver-of-ph-economy-frasco/ 3 Koons, Eric. "Ecotourism in the Philippines: Runway for Future Growth." Climate Impacts Tracker Asia, 30 July 2025, www.climateimpactstracker.com/ecotourism-philippines/ 4 Alampay, R. B., & Libosada, C. M. (2023). Sustainable tourism in the Philippines: Challenges and prospects for the next decade. University of the Philippines Press.; Philippine Institute for Development Studies (PIDS). (2025). Assessment of infrastructure gaps in top Philippine tourist destinations. PIDS Discussion Paper Series No. 2025-04.

remain vulnerable to environmental degradation, particularly given the Philippines' exposure to natural calamities. Basic sustainable infrastructure, such as proper liquid and solid waste management systems, as well as adequate emergency medical facilities, remains underdeveloped or insufficient in many eco-tourism sites. These gaps underscore the need for measures that will strengthen the capacity of eco-tourism destinations to adopt sustainable practices, protect natural resources, and ensure the safety and welfare of tourists and host communities. Eco-tourism serves as a critical driver for sustainable growth in heritage-rich rural and coastal areas. This legislation establishes a robust fiscal and regulatory framework designed to harmonize rapid tourism growth with environmental preservation, specifically by mandating the creation of mangrove buffer zones for all coastal developments to serve as natural defenses against climate hazards. To encourage private sector compliance, the bill offers a tiered system of progressive tax incentives, including a 10% VAT exemption on specialized eco-friendly equipment and a 20% tax credit for verifiable biodiversity conservation and reforestation expenses. Beyond environmental protection, the measure institutionalizes a "community- first" labor policy by requiring accredited enterprises to prioritize local residents for at least 60% of their workforce, ensuring that the economic gains from sustainable tourism directly benefit rural and coastal municipalities rather than leaking out to external stakeholders. In light of the foregoing, the immediate passage of this legislation is earnestly sought. JV EJERCITO

Sentate Office of the Secretary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session 26 MAY 25 P5:00 SENATE RECEIVED BY: S. No. 2161 Introduced by Senator JV Ejercito AN ACT MANDATING THE ESTABLISHMENT OF MANGROVE BUFFER ZONES IN DEVELOPMENT PROJECTS THROUGHOUT THE PHILIPPINES Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

Section 1. Title — This Act shall be known as the "Eco-Tourism Incentives Act

2 of the Philippines."

Sec. 2. Declaration of State Policy - It is the policy of the State to advance a

4 sustainable, inclusive, and environmentally responsible tourism industry that preserves the country's rich biodiversity, cultural heritage, and natural landscapes. 6 The State recognizes eco-tourism as a vital tool for fostering climate resilience, 7 enhancing community empowerment, and achieving equitable economic growth, especially in rural and indigenous areas. To this end, the State shall adopt and institutionalize mechanisms that promote responsible travel, minimize ecological degradation, and ensure that tourism activities benefit host communities while conserving the environment for present and future generations. This Act seeks to stimulate public-private partnerships and support grassroots eco-tourism enterprises through a progressive incentive framework, consistent with the principles of sustainable development and national environmental policy. To this end, the government shall provide tax and financial incentives to stimulate private and

1 community investment in eco-tourism enterprises that adhere to sustainability 2 standards.

Sec. 3. Scope and Coverage. - This Act shall apply to all ecotourism enterprises

4 operating in terrestrial and marine protected areas, natural parks, heritage zones, 5 indigenous territories, and other designated eco-tourism development zones certified 6 by the Department of Tourism (DOT) in consultation with the Department of 7 Environment and Natural Resources (DENR) and local government units (LGUS).

Sec. 4. Grant of Tax Incentive - Accredited eco-tourism enterprises shall be

9 granted progressive income tax incentives based on the age and development stage 10 of their operations, provided they comply with sustainable tourism practices. The 11 progressive tax incentive framework shall be as follows: a. Years 1 to 3 of operation: One percent (1%) income tax reduction; b. Years 4 to 7 of operation: Two percent (2%) income tax reduction; c. Years 8 and onward of operation: Three percent (3%) income tax reduction; The above incentives are renewable upon proof of sustained compliance with environmental, social, and cultural protection standards as determined by the DOT and DENR. Additionally, the following tax privileges shall be granted: d. A value-added tax (VAT) exemption of up to ten percent (10%) on the purchase of equipment, technologies, and construction materials directly used for eco-tourism operations and infrastructure. The Department of Finance (DOF), through the Bureau of Internal Revenue (BIR), and in coordination with the DOT, shall issue guidelines to determine eligible items and ensure the integrity of VAT claims; e. Accelerated depreciation for capital investments related to renewable energy systems (e.g., solar, wind, micro-hydro), waste management facilities (e.g., recycling, composting, greywater treatment), and environmentally sustainable infrastructure (e.g., bamboo buildings, elevated walkways, eco-lodges). Assets under this category may be depreciated over a minimum of three (3) years instead of the standard schedule, subject to validation by the BIR;

f. Tax credits equivalent to twenty percent (20%) of documented expenses related to the conduct of capacity-building and training programs for local communities, implementation of biodiversity conservation activities and the generation of employment opportunities for residents within the eco- tourism site. The DOT and the Department of Labor and Employment (DOLE) shall issue joint guidelines for the accreditation of training programs and eligibility of community beneficiaries.

Sec. 5. Access to Credit and Financial Assistance. - The Department of Trade

9 and Industry (DTI), in coordination with the Land Bank of the Philippines (LBP), the 10 Development Bank of the Philippines (DBP), and other government financial 11 institutions, shall establish flexible loan programs for accredited eco-tourism 12 enterprises. These loans shall be prioritized for: a. Indigenous peoples' tourism cooperatives; b. Women-led or youth-led tourism groups; c. Community-managed marine or forest eco-tourism projects; d. Start-ups and micro-enterprises in declared eco-tourism zones.

Sec. 6. Creation of the National Eco-Tourism Incentives Council. - A National

Eco-Tourism Incentives Council (NETIC) is hereby created under the DOT. The Council shall be composed of: a. Secretary of Tourism, as Chairperson; b. Secretary of the Environment and Natural Resources, as Co- Chair; C. Secretary of Trade and Industry; d. Secretary of Finance; e. One (1) representative from the League of Provinces of the Philippines; f. One (1) representative from the civil society sector nominated by the PCNC; g. One (1) representative from the academe with expertise in sustainable tourism; h. One (1) representative from the National Commission on Indigenous Peoples (NCIP); i. One (1) representative from the private tourism sector. The Council shall formulate criteria for the grant of tax incentives and financial support; establish national guidelines for sustainable ecotourism standards; endorse

1 eligible eco-tourism sites for incentive approval; promote best practices and model 2 projects; conduct periodic evaluation and compliance audits; and recommend 3 additional incentives or disqualifications as may be deemed necessary.

Sec. 8. Monitoring and Compliance. - The DOT, in coordination with the DENR,

5 DTI, and LGUs, shall conduct annual inspections of accredited eco-tourism projects to 6 ensure adherence to environmental and cultural protection standards. The results of 7 such inspections shall be used in determining continued eligibility for tax incentives 8 and loan support. The findings of the monitoring and compliance shall be submitted 9 to the BIR to be used as a basis for the continuous grant of incentives provided for in 10 Section 4 of this Act.

Sec. 9. Penalties. - Any accredited eco-tourism enterprise found guilty of

fraudulently claiming incentives or failing to implement sustainable practices after notice and hearing shall: a. Pay double the value of incentives received; b. Have its accreditation and privileges suspended or revoked; c. Be barred from applying for any government tourism-related assistance for five (5) years.

Sec. 10. Implementing Rules and Regulations. - Within sixty (60) days from the

effectivity of this Act, the DOT and DENR shall, in consultation with the DILG, National 20 Commission on Indigenous Peoples, LGUs, and other concerned stakeholders, jointly promulgate the necessary implementing rules and regulations (IRR) for the effective implementation of this Act. The DOF, through the BIR, shall likewise formulate the necessary implementing rules and regulations pertaining to the grant of tax incentives provided for in this Act.

Sec. 11. Appropriations. - The amount necessary for the initial implementation

of this Act shall be sourced from the current appropriations of the DOT and DTI. Thereafter, funds shall be included in the annual General Appropriations Act.

Sec. 12. Separability Clause. - If any provision of this Act is declared

unconstitutional, the remainder thereof not otherwise affected shall remain in full force and effect.

Sec. 13. Repealing Clause. - All laws, presidential decrees, executive orders,

2 letters of instruction, proclamations or administrative regulations that are inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.

Sec. 14. Effectivity. - Notwithstanding the non-issuance of the implementing

rules and regulations, this Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation. Approved,