Republic Act No. 12289, or the Accelerated and Reformed Right-of-Way (ARROW) Act, was signed into law on 12 September 2025 by President Ferdinand R. Marcos, Jr. This landmark reform strengthens and modernizes the legal framework governing right-of-way (ROW) acquisition for national infrastructure projects and selected private entities performing public services.

1. Policy Objectives

RA 12289 seeks to:

• Accelerate infrastructure implementation by streamlining ROW processes and minimizing delays tied to valuation disputes, expropriation bottlenecks, and procedural gaps;
• Ensure prompt and fair compensation to landowners and project-affected persons (PAPs), grounded in a consistent, nationally applied valuation framework aligned with the Real Property Valuation and Assessment Reform Act (RA 12001); and
• Reinforce transparency and accountability, deterring corruption and enhancing investor confidence in the country’s infrastructure pipeline.

2. Key Amendments to Right of Way Act

a. Expanded Coverage of ROW Acquisition

Section 3 of RA 10752 is extensively amended to include not only national government infrastructure projects but also private entities providing public services (e.g., electricity distribution/transmission, water and wastewater systems, petroleum pipelines, telecommunications, airports/seaports, and irrigation systems.

A distinction is made between entities with legislative franchises vested with eminent domain, and those with purely administrative franchises, which do not automatically carry expropriation authority.

b. Modernized Valuation Framework

The ARROW Act introduces a uniform valuation scheme:

• Primary Basis: Schedule of Market Values (SMV) under RA 12001
• Fallback Basis:
  • BIR zonal valuation
  • Assessed value of improvements
  • Replacement cost for eligible machinery, structures, crops, and trees

For untitled lands, documentary requirements include tax declarations, affidavits of disinterested residents, DENR certifications, RPT certificates, and technical descriptions.

c. Revised Expropriation Guidelines

When filing an expropriation complaint, the implementing agency or authorized private entity must now deposit:

• 15% of the land’s market value;
• 100% of replacement cost for improvements (inclusive of depreciation); and
• 15% of market value for crops and trees.

These changes aim to deter frivolous expropriation filings and assure landowners of timely compensation.

d. Relocation of Informal Settlers

The Act mandates the Department of Human Settlements and Urban Development (DHSUD) and LGUs to collaboratively provide resettlement sites for informal settlers affected by national projects.

This codifies a more structured approach to social safeguards.

e. Updated Rules for PPP Projects

ROW acquisition for public-private partnership initiatives must now strictly follow the PPP Code of 2023 (RA 11966) and its IRR. This ensures uniform procedures and mitigates delays stemming from multi-agency approvals.

f. Accountability of Private Entities

Private entities violating the ARROW Act may face civil or criminal sanctions, with liability extending to responsible officers (presidents, directors, trustees, or managers).

g. Subsurface Rights Acquisition

The ARROW Act modernizes subsurface acquisition rules:

• Entry and use now permitted beyond 40 meters below ground (previously 50 meters).

Priority national infrastructure projects may access depths of up to 18 meters, enabling subway and tunneling systems to proceed with fewer legal impediments

3. Implementing Agencies and Expanded Oversight

RA 12289 significantly broadens the inter-agency group tasked with drafting and implementing the IRR.

This now includes agencies such as:

• DA
• DILG
• DAR
• DENR
• Department of Economy, Planning, and Development, among others

This expanded oversight aims to reduce overlap, improve coordination, and ensure applicability across varied project landscapes.

4. Practical Impact and Market Outlook

a. Faster Infrastructure Rollout

The Act is expected to substantially reduce project delays, particularly those caused by TROs, land valuation disputes, and resettlement issues. Stakeholders anticipate accelerated timelines under the “Build Better More” agenda.

b. Increased Investor Confidence

International and domestic investors view the ARROW Act as a structural reform that enhances predictability in ROW acquisition, which is an area previously plagued by inconsistent enforcement and corruption vulnerabilities.

c. Improved Delivery of Public Services

The Act covers ROW acquisition for utilities critical to public welfare: water, telecom, energy, and transport systems. This is expected to enhance service reliability and expand coverage, particularly in underserved regions.

5. Conclusion

RA 12289 represents the most comprehensive reform to the Philippines’ ROW framework since 2016. With its strengthened valuation rules, enhanced coordination mechanisms, and broadened coverage, the ARROW Act is designed to reduce long-standing bottlenecks, protect landowner rights, and support national ambitions for large-scale infrastructure modernization.

On 8 January 2026, the Securities and Exchange Commission (“SEC”) issued Memorandum Circular No. 1, Series of 2026 (“MC No. 1”), revising key provisions of the Implementing Rules and Regulations (“IRR”) of the Real Estate Investment Trust (REIT) Act of 2009 (“RA 9856”). The amendments broaden the scope of allowable REIT assets, modernize investment structures, and strengthen investor protection measures.

The SEC notes that the update aims to deepen the Philippine capital markets, align the REIT framework with regional practices, and expand opportunities for both issuers and investors.

1. Key amendments under MC No. 1 (Series of 2026)

a. Expanded Definition of Income‑Generating Real Estate

The circular substantially broadens what qualifies as “income‑generating real estate,” enabling REITs to invest directly or indirectly in assets that exhibit steady, predictable cash flows, including:

• Toll roads, railways, airports, and air navigation facilities
• Seaports
• Data centers and ICT infrastructure
• Energy infrastructure assets
• Malls, warehouses, storage facilities, buildings, and parking lots
• Real rights such as usufructs, easements, and registered leases

Excluded assets include those held primarily for sale, such as inventory properties or assets generating income mainly through disposition.

b. Recognition of SPVs and Joint Ventures as Permissible Holding Structures

• Unlisted special purpose vehicles (“SPVs”); and/or
• Incorporated joint ventures (“JVs”)

provided that the REIT owns at least two‑thirds (2/3) of the SPV’s or JV’s outstanding and voting capital.

This aligns local practice with global REIT markets and offers sponsors greater flexibility in structuring asset acquisitions.

c. Extended Reinvestment Period

The reinvestment period for sponsors is extended to two (2) years, from the previous one-year requirement.

Reinvestments may include:

• Equity infusions
• Loan extensions or acquisition of debt instruments
• Repayment of loans or debt incurred for real estate or infrastructure projects in the Philippines

This extension provides issuers more time to responsibly deploy capital raised from REIT offerings.

d. Reinforced Dividend Distribution Rules

If a REIT invests through an SPV and/or JV, the intermediary entity must distribute at least 90% of its distributable income to the REIT before the REIT declares dividends to its own shareholders.

Non‑compliance is deemed a violation of the REIT’s statutory dividend obligation, safeguarding investor returns.

e. Updated Definition of “Public Shareholders”

The SEC refined the definition of public shareholders to ensure genuine investor participation. Excluded from “public” classification are those with substantial influence, which is defined as:

• Holding at least 10% or more of the REIT’s total issued shares; or
• Exercising influence despite holding less than 10%, such as immediate family members of key officers living in the same household.

This amendment strengthens governance by preventing concentrated influence within REIT structures.

2. Market Impact

Market analysts anticipate that the expanded asset classes and relaxed structural requirements may boost REIT listings, particularly from sectors like tollways, utilities, data infrastructure, and logistics.

The broadened framework is expected to support new REIT IPOs, increased foreign and domestic investor participation, and greater mobilization of capital toward infrastructure and commercial property development.

3. Conclusion

SEC Memorandum Circular No. 1, Series of 2026 reflects a decisive shift toward modernizing the Philippine REIT ecosystem, enabling diversified asset classes, expanded investment structures, and stronger investor safeguards. By aligning with global standards and removing structural barriers, the amendments reinforce the Philippines’ objective to further develop a vibrant capital market and support long‑term wealth creation for Filipino investors.

On 24 August 2025, the Konektadong Pinoy Act (“KPA”) lapsed into law, as President Ferdinand “Bongbong” Marcos neither signed nor vetoed the bill by Congress within the thirty (30) days from transmission to his Office. The initiative of the KPA is to significantly enhance digital inclusion and bridge the connectivity gap, particularly in underserved areas. The KPA will endeavor to modernize the digital infrastructure of the Philippines by encouraging bot local and foreign investment, promoting infrastructure sharing among data transmission industry participants (“DTIPs”), and ensuring fair competition.

The KPA represents a progressive step toward universal digital access in the Philippines. While the goals are laudable, implementation will require strong coordination among national and local governments, the private sector, and civil society. Early engagement can yield both compliance clarity and business advantage.

1.         Key Features of the KPA

In pursuit of the above, and if enacted, the KPA will:

1. Institutionalize a straightforward registration requirement for DTIPs;
2. Repeal the requirement for DTIPs to obtain a congressional franchise requirement for;
3. Allow DTIPs to deploy satellite technology and use associated spectrum/s in any/all segments of their broadband network without the need for a lease or rent capacity from public telecommunications entities;
4. Mandate the formulation of the Spectrum Management Policy Framework to prescribe the national policies and guiding principles that govern the management of spectrum (which includes spectrum valuation and pricing, spectrum allocation, and spectrum assignment for public, private, and government use); and

Mandate minimum quality standards, data privacy safeguards, and usage limits to ensure equitable access and protect against abuse

2.         Legal and Commercial Implications

While the objectives of the KPA are to be lauded, there certain implications to be noted:

1. Potential Impact on Telecommunications and Internet Service Providers, as free public internet may influence consumer usage patterns and create new collaborative or competitive dynamics;
2. Data Privacy and Security Considerations, particularly in light of mandatory public access points. In fact, a “group representing the country’s leading telcos warned that the version approved by the bicameral committee could ‘lead to national security vulnerabilities, weaken regulatory oversight and destabilize the telecommunications sector in the long run.’”[1]
3. Increased Compliance Obligations for LGUs, government offices, and public institutions regarding connectivity infrastructure and reporting.

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1. Konektadong Pinoy bill faces review amid telco concerns”, by Alexis Romero, 17 June 2025 accessed at https://www.philstar.com/headlines/2025/06/17/2451146/konektadong-pinoy-bill-faces-review-amid-telco-concerns

The Department of Energy (DOE) has launched the Fifth Round of the Green Energy Auction (GEA-5), its most ambitious and targeted effort yet to establish the Philippines as a regional leader in offshore wind energy. This round marks the first auction under the Green Energy Auction Program (GEAP) dedicated exclusively to fixed-bottom offshore wind (OSW) technology. With a target of 3,300 MW for delivery between 2028 and 2030, GEA-5 signals the government’s readiness to facilitate large-scale offshore renewables. GEA-5 is implemented pursuant to Department Circular No. DC2021-11-0036, which governs the GEAP framework, and forms part of the country’s broader commitments under the Philippine Energy Plan 2023–2050 and the updated National Renewable Energy Program. In parallel with the auction launch, the DOE has issued a permitting guidebook for offshore wind, setting out a consolidated process for over 80 permits across 25 regulatory agencies. Together, these developments represent a coordinated regulatory effort to address both market access and permitting certainty for the nascent OSW sector.

Auction Framework and Draft Terms

On 11 June 2025, the DOE released the draft Notice of Auction (NOA) and Terms of Reference (TOR) for GEA-5. These documents establish the legal and procedural foundation for auction participation. The NOA confirms that the auction is limited to fixed-bottom offshore wind technologies, citing their global maturity, cost-efficiency, and near-term scalability. Floating OSW, while not excluded in principle, is not yet covered by the current round due to its early stage of commercial deployment. The TOR outlines that eligible participants must hold valid Wind Energy Service Contracts (WESCs) and meet stringent technical, financial, and permitting readiness thresholds. Bidders are required to submit a pre-qualification portfolio including evidence of technical capability, development experience, and compliance with DOE and ERC registration requirements. The TOR imposes a bid bond requirement pegged to the offered capacity, payable in Philippine pesos or USD, to ensure seriousness of participation. The auction process will follow a sealed-bid format, with the lowest price offers—subject to the Green Energy Auction Reserve (GEAR) price ceilings to be issued by the Energy Regulatory Commission (ERC)—being awarded 20-year Power Supply Agreements under the Renewable Portfolio Standards (RPS) program. While the final bid evaluation criteria remain subject to stakeholder inputs, the draft TOR indicates that financial and permitting readiness will weigh heavily in the selection process, reflecting the DOE’s objective to award only bankable and implementation-ready projects

Regulatory Streamlining Through the OSW Permitting Guidebook

In parallel with the auction design, the DOE has published the country’s first Offshore Wind Permitting Guidebook. Developed in cooperation with the Southeast Asian Energy Transition Partnership, the guidebook consolidates complex requirements across government entities into a streamlined roadmap. Offshore wind projects historically required more than 80 permits from 25 government offices, contributing to significant project delays. The guidebook now organizes these into four main phases: pre-development, development and feasibility, construction and installation, and operations and decommissioning. Among the agencies involved are the Department of Energy (DOE), which oversees the issuance of Wind Energy Service Contracts (WESCs); the Department of Environment and Natural Resources (DENR), which grants Environmental Compliance Certificates (ECCs); the Philippine Ports Authority (PPA) and the Maritime Industry Authority (MARINA), which handle permits for marine construction; the National Grid Corporation of the Philippines (NGCP), responsible for grid connection studies and access; and the Philippine Coast Guard (PCG), which ensures maritime safety and issues navigation clearances. The DOE also proposes centralized digital tracking and inter-agency coordination—particularly through its Renewable Energy Management Bureau (REMB) and Wind Energy Management Division (WEMD)—to monitor regulatory compliance, resolve jurisdictional overlaps, and synchronize auction timelines.

Infrastructure Readiness and Marine Logistics

To complement the permitting reforms, the DOE and PPA have announced the repurposing of three key ports to support offshore wind deployment: the Port of Currimao in Ilocos Norte, the Port of Batangas in Batangas City, and the Port of Jose Panganiban in Camarines Norte. These ports are being prepared for turbine assembly, crew transfer, and long-term operations and maintenance (O&M) support. Grid infrastructure is also expected to be coordinated in advance with the NGCP to ensure project delivery by 2028–2030.

Conclusion

GEA-5 is a foundational step toward a scalable, bankable offshore wind market in the Philippines. The coordinated release of auction rules and a national permitting framework reflect the DOE’s whole-of-government approach. Developers and stakeholders are advised to participate in the public consultation process and monitor the finalization of the NOA, TOR, and GEAR pricing.

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1. DOE Media Release, “Fifth round of Green Energy Auction for offshore wind projects set to launch in 3Q of 2025,” December 12, 2024. Accessed through: Fifth round of Green Energy Auction for offshore wind projects set to launch in 3Q of 2025 | Department of Energy Philippines.
2. Philippine Energy Plan 2023–2050; DOE Circular No. DC2021-11-0036.
3. Offshore Wind (OSW) Permitting Guidebook (DOE and Southeast Asian Energy Transition Partnership), June 2025. Accessible through: OSW Guidebook.pdf.
4. DOE Draft Notice of Auction (GEA-5 NOA), dated June 11, 2025. Accessed through: Draft GEA-5 NOA 10062025_0.pdf.
5. DOE Press Release, “DOE Kicks Off Green Energy Auction for Fixed-Bottom Offshore Wind,” June 11, 2025. Accessed through: DOE Kicks Off Green Energy Auction for Fixed-Bottom Offshore Wind | Department of Energy Philippines.
6. OSW Permitting Guidebook, pp. 5–7.
7. Ibid., Chapter II – Phased Regulatory Map.
8. Ibid., Chapter IV – Roles of National Government Agencies.

On 2 October 2024, Philippine President Ferdinand Marcos Jr. signed into law Republic Act No. 12023, which amended the National Internal Revenue Code (“Tax Code”) to impose Value-Added Tax (“VAT”) on nonresident digital service providers (“DSPs”) for digital services consumed within the Philippines.

The Philippine Secretary of Finance then issued the Implementing Rules and Regulations (“IRR”) through Revenue Regulations No. 3-2025 (“RR 3-25”), published on the Bureau of Internal Revenue’s (“BIR”) official website on 17 January 2025. RR 3-25 provides the policies and guidelines related to implementing the VAT on Digital Services Law. Nonresident DSPs shall be immediately subject to VAT after 120 days from the effective date of the IRR. As per Revenue Regulations No. 14-2025, nonresident DSPs are given until 1 June 2025 within which to register, and shall be subject to VAT starting 2 June 2025.

1. Inclusion of Digital Services as a VAT Taxable Transaction

Digital services that are rendered in the course of trade or business by a DSP are now expressly covered by the enumeration of transactions subject to VAT in the Tax Code.
The term “digital service” refers to any services that are supplied over the internet or other electronic network with the use of information technology and where the supply of the service is essentially automated. Digital services include:

(i) online search engines;
(ii) online marketplaces or e-marketplaces;
(iii) cloud services;
(iv) online media and advertising;
(v) online platforms; and
(vi) digital goods.

Digital services that are delivered by nonresident DSPs are considered performed or rendered in the Philippines if the digital service is consumed in the Philippines. While the term “consume” is not defined in the law or the IRR, the wording of the law would also encompass the terms “used”, “utilized”, and “availed of” when referring to the gamut of digital services covered

2. Requirement of the DSP to Register and Pay VAT, and issue Invoices

Nonresident DSPs rendering digital services are required to register for VAT:

(i) if their gross sales for the past 12 months, other than VAT-exempts sales, have exceeded the VAT threshold (currently PHP 3 million1); or
(ii) if there are reasonable grounds to believe that their gross sales, other than VAT-exempt sales, will exceed the VAT threshold. The BIR will establish a simplified automated VAT registration system for nonresident DSPs.

If the nonresident DSP is an online marketplace or e-marketplace, it shall be liable to remit to the BIR the VAT on the transactions of the nonresident sellers that utilize its platform, provided that the said DSP controls key aspects of the supply and it, namely:

(a) sets, either directly or indirectly, any of the terms and conditions under which the supply of goods is made;
or
(b) is involved in the ordering or delivery of goods, whether directly or indirectly

For a business-to-consumer transaction (i.e., the end-user is a Philippine customer who is not VAT-registered), the nonresident DSPs are liable for assessing, collecting, and remitting VAT on the digital services consumed in the Philippines.

However, in a business-to-business transaction with a VAT-registered Philippine customer, nonresident DSPs will be subject to the “reverse charge mechanism,” where the VAT-registered taxpayer in the Philippines is required to withhold and remit VAT on its purchases of digital services consumed in the Philippines from the nonresident DSP.
This is the utilization of the withholding tax mechanism. Further, there is also the requirement of the nonresident DSP to issue digital sales or commercial invoices for every
sale, barter, or exchange of digital services. The digital sales or commercial invoice must contain the:

(i) date of the transaction;
(ii) transaction reference number;
(iii) identification of the consumer;
(iv) brief description of the transaction; and
(v) total amount, with the indication that such amount is inclusive of VAT.

If applicable, the breakdown of the sale price for the digital service by its taxable, VAT-exempt, and VAT zero-rated components, and the calculation of VAT on each portion of the sale shall also be included.

However, nonresident DSPs are not allowed to claim creditable input tax. Further, these DSPs are not covered by the requirement of maintaining subsidiary sales and purchases journals under the Philippine Tax Code

3. VAT-Exempt Digital Services

There are digital services that are VAT-Exempt, namely:

(a) online courses, online seminars and online trainings rendered by duly accredited private educational
institutions and by government educational institutions, as well as the sale of online subscription-based
services to the DepEd, CHED, TESDA and educational institutions recognized by these government
agencies; and
(b) services of banks, non-bank financial intermediaries performing quasi-banking functions, and other nonbank financial intermediaries, including those rendered through different digital platforms.

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1. Approximately USD 54,500 at exchange rate of USD 1 = PHP 55

The term “whistleblower” is defined by the Revised Corporation Code of the Philippines (“RCCP”) as “any person who provides truthful information relating to the commission or possible commission of any offense or violation under the Revised Corporation Code of the Philippines”. However, this statutory definition is limited to violations of a specific law and does not have a general application within the Philippine legal system.

Notably, there is no general whistleblowing law in the Philippines to protect all forms of whistleblowing acts in all contexts. However, whistleblowing may be governed by different laws depending on the context. These include the protection of witnesses in criminal cases, the protection of whistleblowers who report violations of the corporation code, the prohibition of retaliation against employees who testify against their employer, and other highly-specific situations.

The following are some of the different laws (and the various contexts) of whistleblower protection in the Philippines:

1. Witness Protection in Criminal Cases

The Witness Protection, Security, and Benefit Act (Republic Act No. 6981) establishes a witness protection program to “whistleblowers” if their testimony is vital in criminal investigations or criminal prosecutions. This law, however, does not define “whistleblowers”. Instead, the law defines and protects witnesses. A witness is defined as “any person who has witnessed or has knowledge or information on the commission of a crime and has testified or is testifying or about to testify before any judicial or quasi-judicial body, or before any investigating authority”.

Witness protection, however, is actually quite limited in scope. To be admitted into the witness protection program, a whistleblower’s testimony must be for an offense penalized by at least twenty (20) years and one (1) day. The “whistleblower” must also establish that they and/or their family are subjected to threats to their lives, bodily harm, or that there is a likelihood to be killed, forced, intimidated, harassed, or corrupted to be prevented from testifying.

Under the Rules on Criminal Procedure, a person facing trial in a criminal court may be discharged to be a state witness instead. He must prove to the satisfaction of the trial court that his testimony is absolutely necessary to secure the conviction, that his testimony can be corroborated, and that he does not appear to be the most guilty.

2. Whistleblower Protection in Corporation Code Violations

The Revised Corporation Code of the Philippines (Republic Act No. 11232) introduces measures to improve corporate governance and accountability, but it does not explicitly create a stand-alone whistleblower protection law.

As quoted above, a whistleblower” is defined “any person who provides truthful information relating to the commission or possible commission of any offense or violation under the Revised Corporation Code of the Philippines” The law provides penalties for retaliation against whistleblowers.

3. Prohibition against Employers’ Retaliation against Employees reporting Labor Code Violations

Under the Labor Code of the Philippines, it is an unfair labor practice for an employer “to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code”. Officers and agents of the employer who actually participated in, authorized or ratified unfair labor practices may be held criminally liable

4. Protection for Persons Required to Report Transactions Suspected of Money Laundering

The Implementing Rules and Regulations of the Anti-Money Laundering Act (Republic Act No. 9160, as amended) insulates persons required to report covered transactions and suspicious transactions from possible lawsuits as long as their reports are made in good faith.

Rule 22, Section 5 thereof provides that “No administrative, criminal or civil proceedings shall lie against any person for having made a covered transaction report or a suspicious transaction report in the regular performance of his duties and in good faith, whether or not such reporting results in any criminal prosecution under this Act or any other Philippine law.”

5. Confidentiality for Citizens Reporting against Government Inefficiency or Corruption

The Ombudsman accepts anonymous complaints, so long as it “contains sufficient leads or particulars to enable the taking of further action” (https://www.ombudsman.gov.ph/frequently-asked-questions/).

The Anti-Red Tape Authority also accepts anonymous complaints, so long as it includes “available evidence to prove the allegations of the complainant” (Rule II, Section 5(d) 2020 Rules for Procedure for Complaints Handling and Resolution).

6. Penalties against Employers and School Heads who fail to act on reported acts of Gender-based Sexual Harassment

The Safe Spaces Act (Republic Act No. 11313) imposes penalties on Employers and School Heads (principals, school heads, teachers, instructors, professors, coaches, trainers, or any older person who has authority, influence or moral ascendancy over another in an educational or training institution) for not taking action on reported acts of gender-based sexual harassment committed in the workplace or in the educational institution.

7. Internal Whistleblowing Policies

Most organizations, private and public, may have a whistleblowing policy or at least an anonymous/confidentialreporting mechanism for persons to report illegal acts to the authorities.

By way of example in the government, the following government agencies define “whistleblower” in their respective Rules on Internal Whistleblowing and Reporting:

Government Agency and Internal Issuance / Rule	Definition of “Whistleblower”
The Philippine Ombudsman, through Office Order No. 05-18	“Whistleblower” refers to an official or employee who makes protected disclosure to his immediate supervisor, other superior officers, the Tanodbayan and/or his duly authorized/designated representative or the Internal Affairs Board (IAB)”
The Bureau of Corrections, through Special Order No. 128-08	“Whistleblower” refers to any official or employee who makes protected disclosures to his immediate supervisor, other superior officers and the Internal Affairs Board (IAB)
Bases Conversion and Development Authority, through its Whistleblowing Policy	“Whistleblower” refers to any person who, in good faith, voluntarily reports, or is believed to be about to report, or is believed to have reported about a suspected integrity violation committed by a BCDA officer or employee. The Whistleblower may or may not be an officer or employee of BCDA or of the subsidiaries of BCDA. The Whistleblower has to show in his/her disclosure that the BCDA officer or employee “has engaged, is engaging or proposes to engage in improper conduct” or “has taken, is taking or proposes to take detrimental action”.

By way of example in the private sector, the hospital St. Luke’s Medical Center has an anonymous and independent whistleblowing platform available (https://secure.deloitte-halo.com/slmc-speakup/?Pg=makereport). St. Luke’s Medical Center states that it will “try and ensure that you remain anonymous if you choose to do so. SLMC whistleblowing service will keep any information you give about yourself confidential within SLMC whistleblowing service. SLMC whistleblowing service will also disclose it if required by law to do so.”

It is also common for industry groups or retailers or manufacturers (i.e., software, brand owners, etc.) to set up a hotline or reporting platform where any concerned individual or whistleblower may call or contact to report counterfeit products or activities.

Talk to a lawyer before engaging in whistleblowing activities

Due to disparate existing laws and internal whistleblowing policies, it is best to seek legal advice before engaging in whistleblowing activities or acting on anonymous/confidential complaints to ensure the protection of whistleblowers against retaliation.

Sy & Partners has experience handling corporate investigations, assisting whistleblowers, and advising institutions manage legal risks with integrity. For more information, you may reach out to us through the following lawyers:

On 28 January 2025, Philippine Supreme Court promulgated a Decision captioned Commissioner of Internal Revenue v. Estate of Charles Marvin Romig, represented by its sole heir Mrs. Maricel Narciso Romig (G.R. No. 262092, 9 October 2024) ruling that foreign currency deposit accounts are exempt from estate tax on the basis of Republic Act No. 6426 (“RA 6426”), also known as the Foreign Currency Deposit Act of the Philippines.

1. Factual Background

In the Decision, a claim for refund on erroneously paid estate taxes in the millions was filed by the estate if Charles Marvin Romig (“Mr. Romig”), an American national residing in Puerto Galera, Oriental Mindoro.

After Mr. Romig’s passing in 2011 without a will, his sole heir, Maricel Narciso Romig (“Mrs. Romig”), transferred ownership of his properties to herself, which included a dollar deposit account (the “Foreign Currency Deposit Unit” or “FCDU”) with the Hongkong and Shanghai Banking Corporation (“HSBC”) Limited Makati Branch, through an Affidavit of Self-Adjudication.

Initially, the HSBC FCDU was not included in the estate tax computation, but the estate later paid PhP 4.56 million to cover the supposed deficiency. Afterwards, the estate sought a refund of erroneously paid taxes, arguing that the FCDU was exempt from estate tax under RA 6426.

2. Ruling of the Court and Basis

The Court of Tax Appeals granted the estate’s refund, and found no merit to the Bureau of Internal Revenue’s argument that the 1997 National Internal Revenue Code (“NIRC”) repealed the exemption found in RA 6426.

The SC then affirmed the Court of Tax Appeals and emphasized that the NIRC, a general tax law, did not expressly repeal the specific tax exemption granted by RA 6426, which is a special law; that a general law cannot override or revoke a special law without a clear and explicit repeal provision.

Particularly, RA 6426 was designed to attract foreign investments and deposits by exempting foreign currency accounts from all taxes. Meanwhile, the NIRC was passed to govern the imposition of taxes, including estate tax, but it contained only a general repealing clause. Thus, there is no express repeal of the tax exemption in favor of foreign currency deposit accounts

Therefore, this Decision confirms that the exemption found in RA 6426 for FCDUs is still in effect to this day.

On 11 November 2024, Philippine President Marcos signed into law the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (“CREATE MORE”) Act. The amendment
made key amendments and enhancements to the tax regime introduced in the CREATE Act. Further, the law was passed to clear up inconsistencies and ambiguities, and importantly, to bring the Philippines tax regime in line with
the OECD’s Pillar Two Global Minimum Tax (“GMT”).

The CREATE Act was formulated upon previous tax reforms to make the Philippines an even more attractive investment opportunity destination. The CREATE Act granted tax relief for companies in financial need in the wake
of the COVID-19 pandemic, and also sought to provide transparent tax provisions and further increase the competitiveness of the Philippines. Now, CREATE MORE aims to enhance and broaden the incentives to stimulate economic recovery, further support enterprises, and attract even more foreign investment.

Kindly note of the following key salient provisions / amendments found in the CREATE MORE Act. Please also note that the Bureau of Internal Revenue (“BIR”) has yet to issue formal regulations on the implementation of the proposed amendments. We will issue an updated version of this advisory upon the issuance of such formal regulation/s.

On a final note, the provisions of the CREATE MORE Act apply prospectively to projects or activities granted under the CREATE Act.

1. Registered Business Enterprises Subject to 20% Income Tax

Registered Business Enterprises (“RBEs”) under the Enhanced Deductions Regime (“EDR”) shall be subject to an income tax of twenty percent (20%) on their net taxable income derived from registered projects or activities.

This is applicable when the RBE is a domestic corporation or a resident foreign corporation (i.e. a branch).

2. Export enterprises under the Special Corporate Income Tax (“SCIT”) regime no longer subject to RBE local tax

Export enterprises under the SCIT regime pay 5% tax on gross income in lieu of all national and local taxes

3. VAT zero-rating for RBEs

RBEs may continue to avail of the value-added tax (“VAT”) zero-rating on local purchases and VAT exemption or duty exemption, as applicable, on importation for the entire registration period as an RBE, as long as they continue
to meet the terms and conditions of registration with their respective investment promotion agencies (“IPAs”) as well as the following requirements for the immediately preceding year: (1) registered export enterprises maintain at least seventy percent (70%) of total annual production or output as export sales; and (2) high-value domestic market enterprises satisfy the investment capital or export requirement under the Tax Code.

The CREATE MORE Act also clarifies that the purchase of local goods and services by export-oriented enterprises whose export sales is at least 70% (of the total annual production of the preceding taxable year) is entitled to VAT
zero-rating. This is provided that the goods and services are “directly attributable” to the export activity of the exportoriented enterprise. Further, the CREATE MORE Act also clarifies that “directly attributable” to be such goods and
services that are incidental to and reasonably necessary for the export activity; expressly included here are (i) Janitorial services, (ii) Security services, (iii) Financial services, (iv) Consultancy services, (v) Marketing and promotion; and (vi) Administrative operations such as human resources, legal, and accounting. This is a welcome change, as the past few years service providers have been seeking clarity as to whether their services are actually subject to VAT zero-rating.

4. RBEs to enjoy VAT exemption for importation of goods

The importation of good by export-oriented enterprises whose export sales is at least 70% of the total annual production of the preceding taxable year shall be VAT exempt. This is provided that the goods are “directly attributable” to the export activity of the export-oriented enterprise. However, the Export Marketing Bureau of the Department of Trade and Industry shall determine compliance with such standard.

5. Input Tax attributable to VAT-Exempt sales now claimable as deductions

The input tax paid on local purchases that are attributable to VAT-exempt sales can now be claimed as a deduction on gross income under Sec. 34.

6. EDR for export and domestic market enterprises

CREATE MORE introduced the EDR for export and domestic market enterprises. Under the EDR, the following are the changes to the allowed enhanced deductions:

a. Increase from fifty percent (50%) to one hundred percent (100%) additional deduction on power expense incurred in the taxable year;
b. Addition of tourism industries in reference to reinvestment allowances;
c. Fifty percent (50%) additional deduction on expenses relating to exhibitions, trade missions or trade fairs;
d. The reckoning point for the Net Operating Loss Carry-Over (“NOLCO”) is now the last year of the income tax holiday (“ITH”) entitlement period of the registered project.

7. Standard registered business tax in lieu of local taxes

Under the new law, local government units (“LGUs”) may impose an “RBE local tax” on RBEs at the rate of not more than two percent (2%) of the RBEs’ gross income during the ITH and EDR in lieu of all local taxes, fees, and charges
imposed under the Local Government Code.

However, this RBE local tax shall not be imposed on export enterprises under SCIT.

On 02 October 2024, Philippine President Ferdinand Marcos Jr. signed into law Republic Act (“R.A.”) No. 12023, which introduced new amendments to the National Internal Revenue Code (otherwise known as the “Tax Code”).
The act provided for the imposition of a twelve percent (12%) value added tax (“VAT”) on digital services provided by foreign digital service providers, with the aim of leveling the playing field for local providers.

The following are among the key points of the AFASA:

1. Digital Service

The term “digital service” refers to any service supplied over the internet or other electronic network with the use of information technology and where the supply of the service is essentially automated. This includes:

a. Online search engine;
b. Online marketplace or e-marketplace;
c. Cloud service;
d. Online media and advertising;
e. Online platform; or
f. Digital goods

2. Liability of Digital Service Providers for VAT

Suppliers of digital services, whether resident or nonresident, shall be liable for assessing, collecting, and remitting the twelve percent (12%) VAT on the digital service performed in the Philippines. In the case of nonresident digital
service providers, the digital service is considered performed in the Philippines, and therefore subject to VAT, if the digital service is consumed in the Philippines

If a VAT-registered nonresident digital service provider is classified as an online marketplace or e-marketplace, it shall also be liable to remit the VAT on the transactions of nonresident sellers made through its platform if it controls
the key aspects of the supply and performs any of the ff:

a. It sets, either directly or indirectly, any of the terms and conditions under which the supply of the goods is made; or
b. It is involved in the ordering or delivery of goods, whether directly or indirectly.

Nonresident digital service providers are not allowed to claim creditable input tax.

3. Invoicing Requirements

A digital sales or commercial invoice shall be issued for every sale, barter, or exchange of digital services made by a VAT-registered nonresident digital service provider.

4. Invoicing Requirements

The power of the Commissioner of the BIR to suspend now includes the blocking of digital services performed in the Philippines by a digital service provider. This is implemented by the Department of Information and communications Technology (“DICT”) through the National Telecommunications Commission (“NTC”).

5. Automated Registration System

The BIR shall establish a simplified automated VAT registration system for nonresident digital service providers, as prescribed by the Secretary of Finance, upon the recommendation of the Commissioner of the BIR

6. Transitory Clause

Nonresident digital service providers shall immediately be subject to VAT after 120 days from the effectivity of the implementing rules and regulations of R.A. No. 12023, which have yet to be issued.