EXECUTIVE ORDER NO. 1037 July 4, 1985
CREATING THE PHILIPPINE RETIREMENT PARK SYSTEM, PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES
WHEREAS, the Philippine economy is undergoing structural changes to cope with its tight foreign exchange situation emphasizing the urgent need to establish non-conventional programs to attract foreign investment into the country;
WHEREAS, the development and promotion of the Philippines as a retirement haven makes use of a concept that has been tried and proven in other parts of the world resulting in the intensified inflow of foreign exchange to the country concerned;
WHEREAS, there exists a potent and untapped market of 25.5 million retired Americans (1980 Census) in the United States and 1.6 million overseas Filipinos who find the Philippines the most suitable place for retirement;
WHEREAS, the leverage of the US dollar against the Philippine peso enables the country to be competitive in offering an attractive package to targetted retirees who seek a change of environment while looking forward to an easy and comfortable lifestyle as the reach retirement age by way...
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Executive Orders
Creating the Philippine Retirement Park System, Providing Funds Therefor and for Other Purposes
Executive Order No. 1037
Summary of Executive Order No. 1037
Declaration of Policy (Sec. 1)
- Developing and promoting the Philippines as a retirement haven is declared a national policy to accelerate social and economic development, strengthen foreign exchange position, and provide quality of life to retirees.
Creation of the Philippine Retirement Park System (Sec. 2)
- A corporate body called the Philippine Retirement Park System (SYSTEM) is created to implement the policy.
- It shall have its principal office in Metro Manila and may have branches, agencies, and subsidiaries within and outside the Philippines.
- It shall be under the Office of the President and attached to the RP-US Business Development Council.
Purposes and Objectives (Sec. 3)
- To develop and promote the country as a retirement haven.
- To adopt an integrated approach in developing retirement communities considering the 11 basic needs of man.
- To provide an organizational framework to encourage foreign investment in the SYSTEM's development projects.
- To provide effective supervision, regulation, and control in the development and establishment of retirement communities and the SYSTEM's projects.
- To make optimum use of existing facilities and assets of the government and private sector.
Corporate Powers (Sec. 4)
- The SYSTEM shall have the following powers:
- To adopt and use a corporate seal, sue and be sued, adopt by-laws and rules, exercise eminent domain, and conduct business related to handling the transfer of foreigners into the country as immigrants, investors, tourists, etc.
- To acquire, own, use, sell, convey, exchange, lease, mortgage, work, improve, develop, and deal with real properties.
- To construct or cause the construction of houses, buildings, condominiums, and other improvements on its properties.
- To own, lease, operate, manage, and administer hotels and related facilities.
- To hold, purchase, sell, assign, pledge, or dispose of shares of stock, bonds, or other evidences of debt.
- To issue capital stock, bonds, debentures, or other evidences of obligation.
- To acquire and own capital assets such as vehicles, equipment, machinery, spare parts, tools, software, patent rights, trademarks, etc.
- To carry on the business of warehousing, storing, packing, crating, and repacking.
- To make and enter into contracts, agreements, and obligations.
- To borrow funds and issue promissory notes, bonds, debentures, and other evidences of indebtedness.
- To purchase, hold, convey, sell, lease, let, mortgage, encumber, and deal with real and personal property.
- To endorse or assume the payment of principal, interest, or dividends upon stocks, bonds, obligations, or other securities.
- To act as a general manager for the management of business, funds, properties, portfolios, and similar assets.
- To conduct a general advertising business.
- To secure rights, powers, privileges, franchises, and concessions from governmental agencies.
- To act as an agent or representative of corporations, firms, or individuals.
- To organize or cause the organization of corporations, associations, firms, or entities for accomplishing the SYSTEM's objectives.
- To make and enter into contracts and agreements with any person, corporation, or government agency.
The Board of Trustees (Sec. 5)
- The SYSTEM shall be governed and controlled by a Board of Trustees (BOARD) composed of:
- Minister of Human Settlements (Chairman)
- Chairman of the Philippines-United States Business Development Council (Vice Chairman)
- Chairman of the Monetary Board
- Minister of Tourism
- Commissioner on Immigration and Deportation
- Representative of the Office of the President
- Chief Executive Officer/General Manager of the SYSTEM (ex-officio)
- The BOARD shall meet regularly at least once a month, and the presence of at least 4 members shall constitute a quorum.
- Each member shall receive a per diem of at least P500 but not more than P2,500 per month.
Powers and Functions of the Board (Sec. 6)
- To formulate policies, guidelines, and programs to implement the SYSTEM's purposes and objectives.
- To prescribe, review, and revise fees, charges, and assessments for the SYSTEM's operations.
- To control the management, operation, and administration of the SYSTEM.
- To promulgate rules and regulations for the effective exercise of powers and functions.
- To authorize expenditures for the effective management, operation, and administration of the SYSTEM.
- To determine and approve the SYSTEM's organizational and administrative structure and compensation scheme.
- To approve the annual supplemental budget of the SYSTEM.
- To appoint, promote, transfer, remove, suspend, or discipline the Deputy General Manager and other executive and senior management positions.
- To do any and all acts necessary for the attainment of the SYSTEM's purposes and objectives.
Officers of the System (Sec. 7)
- The officers shall be one Chief Executive Officer, one General Manager as Managing Director, and at least one Deputy General Manager, all appointed by the BOARD.
- Other officers shall be appointed by the General Manager, subject to confirmation by the BOARD.
The Chief Executive Officer (Sec. 7a)
- The Chief Executive Officer shall coordinate all activities of the SYSTEM in relation to the Philippines-United States Business Development Council and have functions delegated by the Board of Trustees.
The General Manager: Powers and Duties (Sec. 8)
- The General Manager shall be the Chief Operating Officer of the SYSTEM and shall:
- Execute the policies, guidelines, and programs approved by the BOARD.
- Submit proposed measures, policies, guidelines, and programs to the BOARD.
- Direct and supervise the management, operation, and administration of the SYSTEM.
- Execute contracts and agreements on behalf of the SYSTEM.
- Present the SYSTEM in all dealings with other officers, agencies, and persons or entities.
- Appoint, promote, transfer, remove, suspend, and discipline officers and employees, except those appointed by the BOARD.
- Exercise other powers and perform duties vested or reposed upon him by the BOARD.
Incentives and Benefits (Sec. 9)
- To encourage foreign nationals and overseas Filipinos to participate in the SYSTEM's development projects, the following incentives are accorded:
- Entitlement to tax exemptions provided by P.D. No. 1217 upon certification by the SYSTEM. (Sec. 9a)
- Guaranteed repatriation of any foreign exchange currency remitted, brought in, or invested in the SYSTEM and its projects. (Sec. 9b)
- Extension of all Balikbayan privileges and exceptions to Filipinos and former Filipinos overseas returning to take up permanent residency in the SYSTEM's projects. (Sec. 9c)
- Grant of permanent resident status to foreigners participating or taking up residency under the SYSTEM's retirement programs or projects through a minimum investment of $50,000 in a Trust Fund, withdrawable only upon withdrawal from the program. The spouse and unmarried children under 21 years of age may also be given permanent resident status. The investment requirement may be increased or decreased by the Board of Trustees. (Sec. 9d)
- Exemption from customs duties and other import taxes, for one time only and up to $7,000, for the importation of household furniture. If the property is transferred within 3 years, the exempted taxes must be paid. (Sec. 9e)
- Importation of one automotive vehicle for personal or family use, free of all importation, customs, sales, and economic stabilization taxes, shall be allowed. The vehicle may be sold or transferred to third parties, exempt from taxes, after 7 years. The beneficiary may substitute the vehicle at any time and continue to enjoy the exemptions. If the vehicle is lost within 5 years, the beneficiary may acquire another vehicle tax-free. If the beneficiary withdraws from the SYSTEM's programs within 7 years, all exempted taxes must be paid. (Sec. 9f)
- The grant of incentives shall not preclude the entitlement to incentives under the Omnibus Investment Code, Tourism Incentives Program of 1974, and Investments Promotion Act in Less Developed Areas, if applicable.
Capitalization of the SYSTEM (Sec. 10)
- The SYSTEM shall have an authorized capital of P200,000,000 divided into 10 million shares with a par value of P100 per share, fully subscribed and paid for by the Government of the Republic of the Philippines.
- An initial release of P10,000,000 from the Special Activities Fund of the President is authorized for pre-operating expenses, marketing, operations, and other requirements.
- Thereafter, necessary amounts to support the SYSTEM's operations, maintenance, and expansion shall be included in the General Appropriations Act.
- The Central Bank is directed to pay the SYSTEM the peso equivalent of 2% of the foreign exchange generated by the SYSTEM, upon actual remittance into the country.
Donations to the SYSTEM (Sec. 11)
- The SYSTEM is authorized to solicit and receive donations, grants, contributions, gifts, or endowments from all sources, without securing a permit, approval, or registration from any government agency.
- All donations, grants, contributions, gifts, or endowments received by the SYSTEM shall be exempt from income, gift, and all other kinds of taxes, and shall be deductible in full from the gross income of the donors under the National Internal Revenue Code.
Exemption from Fees, Duties, and Taxes (Sec. 12)
- The SYSTEM is declared exempt from all income and other internal revenue taxes, tariff and custom duties, and all other kinds of taxes, fees, charges, and assessments levied by the government and its political subdivisions, agencies, and instrumentalities.
- The President of the Philippines, upon recommendation of the Minister of Finance, may partially or entirely lift the exemptions if the SYSTEM is found to be self-sustaining and capable of paying such taxes, duties, fees, charges, and assessments.
Merit System (Sec. 13)
- All officials and employees of the SYSTEM shall be selected and appointed based on merit and fitness in accordance with a comprehensive and progressive merit system established by the SYSTEM.
- The recruitment, transfer, promotion, and dismissal of all personnel, including temporary workers, shall be governed by the merit system.
- The officers and employees of the SYSTEM shall be exempt from the Civil Service Law, rules and regulations, and the rules and regulations of the Office of Compensation and Position Classification.
Auditor (Sec. 14)
- The SYSTEM shall have its own Auditor who shall not be subject to the supervision and control of the Commission on Audit and shall be appointed by the BOARD.
- The Chairman of the Commission on Audit shall conduct an annual audit to check the financial statements and comment on the efficiency and effectiveness of the SYSTEM's operations, and submit its findings to the President.
Legal Counsel (Sec. 15)
- The Office of the Government Corporate Counsel shall be the legal counsel of the SYSTEM.
- The SYSTEM shall appropriate and pay an amount assessed by the Government Corporate Counsel to defray the maintenance of the office and expenses of the lawyers assigned to handle the SYSTEM's legal matters.
- The SYSTEM may hire or contract the services of other lawyers and law offices in specific areas of specialization.
Annual Report (Sec. 16)
- The SYSTEM shall render an annual report on its operations and accomplishments to the President of the Philippines, through the Ministry of Human Settlements, not later than March 15.
Applicability of the Corporation Code (Sec. 17)
- The provisions of the Corporation Code, insofar as they are not inconsistent with this Executive Order or the purposes and objectives of the SYSTEM, shall apply to the SYSTEM.
Repealing Clause (Sec. 18)
- All laws, executive orders, rules and regulations, or parts thereof inconsistent with this Executive Order are hereby repealed, amended, or modified accordingly.
- The provisions of this Executive Order shall not be repealed, amended, or modified, unless expressly provided in subsequent general or special laws.
Separability Clause (Sec. 19)
- The provisions of this Executive Order are declared separable, and if any provision or section is held invalid or unconstitutional, it shall not affect the other provisions or sections.
Effectivity (Sec. 20)
- This Executive Order shall take effect immediately.
Declaration of Policy (Sec. 1)
- Developing and promoting the Philippines as a retirement haven is declared a national policy to accelerate social and economic development, strengthen foreign exchange position, and provide quality of life to retirees.
Creation of the Philippine Retirement Park System (Sec. 2)
- A corporate body called the Philippine Retirement Park System (SYSTEM) is created to implement the policy.
- It shall have its principal office in Metro Manila and may have branches, agencies, and subsidiaries within and outside the Philippines.
- It shall be under the Office of the President and attached to the RP-US Business Development Council.
Purposes and Objectives (Sec. 3)
- To develop and promote the country as a retirement haven.
- To adopt an integrated approach in developing retirement communities considering the 11 basic needs of man.
- To provide an organizational framework to encourage foreign investment in the SYSTEM's development projects.
- To provide effective supervision, regulation, and control in the development and establishment of retirement communities and the SYSTEM's projects.
- To make optimum use of existing facilities and assets of the government and private sector.
Corporate Powers (Sec. 4)
- The SYSTEM shall have the following powers:
- To adopt and use a corporate seal, sue and be sued, adopt by-laws and rules, exercise eminent domain, and conduct business related to handling the transfer of foreigners into the country as immigrants, investors, tourists, etc.
- To acquire, own, use, sell, convey, exchange, lease, mortgage, work, improve, develop, and deal with real properties.
- To construct or cause the construction of houses, buildings, condominiums, and other improvements on its properties.
- To own, lease, operate, manage, and administer hotels and related facilities.
- To hold, purchase, sell, assign, pledge, or dispose of shares of stock, bonds, or other evidences of debt.
- To issue capital stock, bonds, debentures, or other evidences of obligation.
- To acquire and own capital assets such as vehicles, equipment, machinery, spare parts, tools, software, patent rights, trademarks, etc.
- To carry on the business of warehousing, storing, packing, crating, and repacking.
- To make and enter into contracts, agreements, and obligations.
- To borrow funds and issue promissory notes, bonds, debentures, and other evidences of indebtedness.
- To purchase, hold, convey, sell, lease, let, mortgage, encumber, and deal with real and personal property.
- To endorse or assume the payment of principal, interest, or dividends upon stocks, bonds, obligations, or other securities.
- To act as a general manager for the management of business, funds, properties, portfolios, and similar assets.
- To conduct a general advertising business.
- To secure rights, powers, privileges, franchises, and concessions from governmental agencies.
- To act as an agent or representative of corporations, firms, or individuals.
- To organize or cause the organization of corporations, associations, firms, or entities for accomplishing the SYSTEM's objectives.
- To make and enter into contracts and agreements with any person, corporation, or government agency.
The Board of Trustees (Sec. 5)
- The SYSTEM shall be governed and controlled by a Board of Trustees (BOARD) composed of:
- Minister of Human Settlements (Chairman)
- Chairman of the Philippines-United States Business Development Council (Vice Chairman)
- Chairman of the Monetary Board
- Minister of Tourism
- Commissioner on Immigration and Deportation
- Representative of the Office of the President
- Chief Executive Officer/General Manager of the SYSTEM (ex-officio)
- The BOARD shall meet regularly at least once a month, and the presence of at least 4 members shall constitute a quorum.
- Each member shall receive a per diem of at least P500 but not more than P2,500 per month.
Powers and Functions of the Board (Sec. 6)
- To formulate policies, guidelines, and programs to implement the SYSTEM's purposes and objectives.
- To prescribe, review, and revise fees, charges, and assessments for the SYSTEM's operations.
- To control the management, operation, and administration of the SYSTEM.
- To promulgate rules and regulations for the effective exercise of powers and functions.
- To authorize expenditures for the effective management, operation, and administration of the SYSTEM.
- To determine and approve the SYSTEM's organizational and administrative structure and compensation scheme.
- To approve the annual supplemental budget of the SYSTEM.
- To appoint, promote, transfer, remove, suspend, or discipline the Deputy General Manager and other executive and senior management positions.
- To do any and all acts necessary for the attainment of the SYSTEM's purposes and objectives.
Officers of the System (Sec. 7)
- The officers shall be one Chief Executive Officer, one General Manager as Managing Director, and at least one Deputy General Manager, all appointed by the BOARD.
- Other officers shall be appointed by the General Manager, subject to confirmation by the BOARD.
The Chief Executive Officer (Sec. 7a)
- The Chief Executive Officer shall coordinate all activities of the SYSTEM in relation to the Philippines-United States Business Development Council and have functions delegated by the Board of Trustees.
The General Manager: Powers and Duties (Sec. 8)
- The General Manager shall be the Chief Operating Officer of the SYSTEM and shall:
- Execute the policies, guidelines, and programs approved by the BOARD.
- Submit proposed measures, policies, guidelines, and programs to the BOARD.
- Direct and supervise the management, operation, and administration of the SYSTEM.
- Execute contracts and agreements on behalf of the SYSTEM.
- Present the SYSTEM in all dealings with other officers, agencies, and persons or entities.
- Appoint, promote, transfer, remove, suspend, and discipline officers and employees, except those appointed by the BOARD.
- Exercise other powers and perform duties vested or reposed upon him by the BOARD.
Incentives and Benefits (Sec. 9)
- To encourage foreign nationals and overseas Filipinos to participate in the SYSTEM's development projects, the following incentives are accorded:
- Entitlement to tax exemptions provided by P.D. No. 1217 upon certification by the SYSTEM. (Sec. 9a)
- Guaranteed repatriation of any foreign exchange currency remitted, brought in, or invested in the SYSTEM and its projects. (Sec. 9b)
- Extension of all Balikbayan privileges and exceptions to Filipinos and former Filipinos overseas returning to take up permanent residency in the SYSTEM's projects. (Sec. 9c)
- Grant of permanent resident status to foreigners participating or taking up residency under the SYSTEM's retirement programs or projects through a minimum investment of $50,000 in a Trust Fund, withdrawable only upon withdrawal from the program. The spouse and unmarried children under 21 years of age may also be given permanent resident status. The investment requirement may be increased or decreased by the Board of Trustees. (Sec. 9d)
- Exemption from customs duties and other import taxes, for one time only and up to $7,000, for the importation of household furniture. If the property is transferred within 3 years, the exempted taxes must be paid. (Sec. 9e)
- Importation of one automotive vehicle for personal or family use, free of all importation, customs, sales, and economic stabilization taxes, shall be allowed. The vehicle may be sold or transferred to third parties, exempt from taxes, after 7 years. The beneficiary may substitute the vehicle at any time and continue to enjoy the exemptions. If the vehicle is lost within 5 years, the beneficiary may acquire another vehicle tax-free. If the beneficiary withdraws from the SYSTEM's programs within 7 years, all exempted taxes must be paid. (Sec. 9f)
- The grant of incentives shall not preclude the entitlement to incentives under the Omnibus Investment Code, Tourism Incentives Program of 1974, and Investments Promotion Act in Less Developed Areas, if applicable.
Capitalization of the SYSTEM (Sec. 10)
- The SYSTEM shall have an authorized capital of P200,000,000 divided into 10 million shares with a par value of P100 per share, fully subscribed and paid for by the Government of the Republic of the Philippines.
- An initial release of P10,000,000 from the Special Activities Fund of the President is authorized for pre-operating expenses, marketing, operations, and other requirements.
- Thereafter, necessary amounts to support the SYSTEM's operations, maintenance, and expansion shall be included in the General Appropriations Act.
- The Central Bank is directed to pay the SYSTEM the peso equivalent of 2% of the foreign exchange generated by the SYSTEM, upon actual remittance into the country.
Donations to the SYSTEM (Sec. 11)
- The SYSTEM is authorized to solicit and receive donations, grants, contributions, gifts, or endowments from all sources, without securing a permit, approval, or registration from any government agency.
- All donations, grants, contributions, gifts, or endowments received by the SYSTEM shall be exempt from income, gift, and all other kinds of taxes, and shall be deductible in full from the gross income of the donors under the National Internal Revenue Code.
Exemption from Fees, Duties, and Taxes (Sec. 12)
- The SYSTEM is declared exempt from all income and other internal revenue taxes, tariff and custom duties, and all other kinds of taxes, fees, charges, and assessments levied by the government and its political subdivisions, agencies, and instrumentalities.
- The President of the Philippines, upon recommendation of the Minister of Finance, may partially or entirely lift the exemptions if the SYSTEM is found to be self-sustaining and capable of paying such taxes, duties, fees, charges, and assessments.
Merit System (Sec. 13)
- All officials and employees of the SYSTEM shall be selected and appointed based on merit and fitness in accordance with a comprehensive and progressive merit system established by the SYSTEM.
- The recruitment, transfer, promotion, and dismissal of all personnel, including temporary workers, shall be governed by the merit system.
- The officers and employees of the SYSTEM shall be exempt from the Civil Service Law, rules and regulations, and the rules and regulations of the Office of Compensation and Position Classification.
Auditor (Sec. 14)
- The SYSTEM shall have its own Auditor who shall not be subject to the supervision and control of the Commission on Audit and shall be appointed by the BOARD.
- The Chairman of the Commission on Audit shall conduct an annual audit to check the financial statements and comment on the efficiency and effectiveness of the SYSTEM's operations, and submit its findings to the President.
Legal Counsel (Sec. 15)
- The Office of the Government Corporate Counsel shall be the legal counsel of the SYSTEM.
- The SYSTEM shall appropriate and pay an amount assessed by the Government Corporate Counsel to defray the maintenance of the office and expenses of the lawyers assigned to handle the SYSTEM's legal matters.
- The SYSTEM may hire or contract the services of other lawyers and law offices in specific areas of specialization.
Annual Report (Sec. 16)
- The SYSTEM shall render an annual report on its operations and accomplishments to the President of the Philippines, through the Ministry of Human Settlements, not later than March 15.
Applicability of the Corporation Code (Sec. 17)
- The provisions of the Corporation Code, insofar as they are not inconsistent with this Executive Order or the purposes and objectives of the SYSTEM, shall apply to the SYSTEM.
Repealing Clause (Sec. 18)
- All laws, executive orders, rules and regulations, or parts thereof inconsistent with this Executive Order are hereby repealed, amended, or modified accordingly.
- The provisions of this Executive Order shall not be repealed, amended, or modified, unless expressly provided in subsequent general or special laws.
Separability Clause (Sec. 19)
- The provisions of this Executive Order are declared separable, and if any provision or section is held invalid or unconstitutional, it shall not affect the other provisions or sections.
Effectivity (Sec. 20)
- This Executive Order shall take effect immediately.