WHEREAS, the bonded manufacturing system in the garments industry is regulated by different agencies with different policies and procedures;

WHEREAS, to sustain the rapid growth of the country ™s garment exports, particularly in the light of growing protectionism among importing countries, there is a need to integrate and rationalize government efforts, policies and procedures on garment exports;

WHEREAS, such integration and rationalization will result in greater economy and efficiency and will provide an effective monitoring mechanism that will ensure the reexportation of imported raw materials in processed form and thereby prevent smuggling;

WHEREAS, implementation of the Textile Modernization Program requires the rationalization of the bonded manufacturing system in the garments industry;

WHEREAS, under Presidential Decree No. 1416, as amended, the President is empowered to undertake such organizational and related improvements as may be appropriate in the light of changing circumstances and new developments;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution and the authority vested in me by Presidential Decree No. 1416, as amended, hereby order and direct:

Section 1. Board Composition. - The Garments and Textile Export Board created under Executive Order No. 537, as amended by Executive Order No. 720, hereinafter referred to as the GTEB, shall be composed of the following: The Minister of Trade and Industry as Chairman, the Deputy Minister of Finance to be designated by the Minister of Finance as Vice-Chairman, the Deputy Minister of Trade and Industry to be designated by the Minister of Trade and Industry, the Vice-Chairman of the Board of Investments and the Commissioner of the Bureau of Customs, as members.

Section 2. Powers and Functions of the GTEB. -Section 3 of Executive Order No. 537 is hereby amended to read as follows:

œSection 3. Powers and Functions. - The GTEB shall have the following powers and functions:

a. Negotiate, conclude and implement garments and textile agreements, whether bilateral or multilateral, between the Republic of the Philippines and other countries, and for this purpose approve quota allocations and export authorizations, issue export licenses and similar authorizations;

b. Issue licenses for the establishment and operation of all bonded garment manufacturing warehouses, and authorize the importation of textile fabrics, accessories, chemicals, packages, brands, labels and other supplies, whether on consignment or otherwise, without taxes and duties but under re-export bond provided they are manufactured or processed, either directly or through subcontractors or other exporters into finished goods for re-export; authorize the importation, without duties but under re-export bond, of machineries and equipment to be used in bonded manufacturing warehouses;

c. Provide on a regular basis the necessary information and statistics relating to the administration of garments and textile export quotas and the flow of garments and textile exports, for monitoring purposes and in order to obtain maximum benefits from textile negotiations with other countries;

d. Inspect and examine through its authorized personnel, books, records, shipments, importations or inventories of textile fabrics, accessories, chemicals and supplies, of all garments and textile exporters, including those in export processing zones, for the purpose of determining compliance with its rules and regulations;

e. Maintain a data bank on statistics regarding world trade in garments and textiles for monitoring purposes and to obtain maximum benefits from bilateral and multilateral textile negotiations with other countries;

f. Undertake the development and promotion of garments and textile exports to maximize the benefits derived from the implementation of garments and textile agreements and to hasten the diversification and expansion of export markets;

g. Fix and collect the following fees: for the issuance of licenses to operate bonded garment manufacturing warehouses, a fee not exceeding five thousand pesos (P5,000.00); for the issuance of quota allocations and export authorizations, a fee not exceeding fifty (P0.50) centavos per square yard equivalent of the quantity allocated; and for the issuance of other licenses and related services, a fee not exceeding one fifth of one percent of the gross value of the goods to be imported or exported;

h. In case of violations of its rules and regulations, cancel or suspend quota allocations, export authorizations and licenses for the operation of bonded garment manufacturing warehouses;

i. Impose fines, in an amount not exceeding fifty (P0.50) centavos per square yard equivalent of the quantity unshipped in cases of unutilized allocation as defined by its rules and regulations, and not more than ten percent of the gross value of the goods to be exported in case of other violations of its rules and regulations;

j. Promulgate and enforce rules and regulations to carry out its powers and functions including rules on liquidation of bonded importations of textile fabrics, accessories and raw materials, provided that bonded importations shall be re-exported within a period of twelve months from date of importation, subject to such modifications and extensions as the GTEB may authorize but in no case shall the total period exceed thirty months, and provided further that the bond to be filed by the importer shall not be less than one hundred percent nor more than two hundred percent of the amount of taxes, duties and other charges due thereon. 

Section 3. Audit and Inspection Unit. - To enforce its rules and regulations, the GTEB is hereby authorized to create its own audit and inspection unit. This unit shall be responsible for conducting regular audit and inspection of all phases of operations of garment and textile exporters. Upon recommendation of this unit, the GTEB may refer to the Ministry of Justice or to the proper fiscal ™s office the prosecution of those found violating any law relating to the bonded importation of textile fabrics, accessories and related materials.

Section 4. Abolition of Embroidery Board and Transfer of Certain Functions. -The Embroidery and Apparel Control and Inspection Board created pursuant to Republic Act No. 3137 is hereby abolished and its functions and powers transferred to the GTEB except as otherwise provided herein. The functions of the Board of Investments with respect to the regulation of raw material importations of registered enterprises engaged in the manufacture or exportation of garments or textiles are hereby transferred to the GTEB.

Section 5. Transfer of Appropriations, Properties and Records. - The applicable appropriations, records and property of the Embroidery and Apparel Control and Inspection Board and of the Board of Investments are hereby transferred to the GTEB; provided that applicable appropriations, records and property pertaining to warehouse storekeeping of firms registered with the Embroidery and Apparel Control and Inspection Board shall be transferred to the Bureau of Customs.

Section 6. Transfer of Personnel. - Such personnel of the Embroidery and Apparel Control and Inspection Board as the GTEB may deem necessary and as its Chairman may reappoint within sixty (60) days from the date of this Executive Order are hereby transferred to the GTEB; provided that warehouse storekeepers of the Embroidery and Apparel Control and Inspection Board whom the Commissioner of Customs may reappoint within sixty (60) days from date of this Executive Order shall be transferred to the Bureau of Customs. All personnel not so transferred or reappointed are deemed terminated and shall be entitled to all benefits and gratuities provided for under existing laws; provided that those personnel who are retirable shall be allowed to retire with full benefits and gratuities under existing laws.

Section 7. Critical Agency. - The GTEB is hereby declared a critical government agency pursuant to P.D. No. 985. All income from fees, fines, penalties, and other charges imposed by it are deemed corporate income for purposes of this Section, and such income shall be directly used by the GTEB to provide additional financial incentives to all its employees according to criteria to be determined by the GTEB. Such income may also be directly used by the GTEB to defray expenses of its negotiators in bilateral and multilateral textile negotiations as well as to defray other expenses that the GTEB may authorize to be incurred.

Section 8. Transition Phase. - All present incumbents in the abolished Embroidery and Apparel Control and Inspection Board shall continue to exercise their usual functions, duties and responsibilities pending issuance by the GTEB of the appropriate orders to implement this Executive Order which shall not be later than thirty (30) days from date hereof. Existing licensed bonded manufacturing warehouses engaged in the garments or textile business shall continue to operate but shall register with the GTEB within three months from date of this Executive Order under rules and regulations to be promulgated by the GTEB.

Section 9. Repealing Clause. - All laws, presidential issuances, administrative rules and regulations inconsistent with this Executive Order are hereby repealed or modified accordingly.

Section 10. Separability Clause. - If any provisions of this Executive Order is declared invalid, such declaration shall not have the effect of nullifying the other provisions of this Executive Order; provided, that such remaining provisions can still be given effect in their entirety to accomplish the objectives of this Executive Order.

Section 11. This Executive Order shall take effect immediately.

DONE in the City of Manila, this 19th day of August in the year of Our Lord, nineteen hundred and eighty-two.


By the President:

(SGD.) JUAN C. TUVERA
Presidential Executive Assistant