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MANUAL OF CORPORATE GOVERNANCE
Article I. Objectives.
Pursuant to the Code of Corporate Governance for GOCCs adopted per GCG Memorandum Circular No. 2012-07, the
Board of Directors of Duty Free Philippines Corporation (DFPC for brevity) hereby promulgates and adopts this Manual
of Corporate Governance.
This Manual shall provide the framework that would ensure responsible, transparent and accountable behavior in the
discharge of corporate powers in managing the business.
Article II. Definition of Terms.
For purposes of this Manual, the terms below shall have the following meanings:
1. “Act” refers to Republic Act No. 10149, and officially named the “GOCC Governance Act of 2011”.
2. “Appointive Directors” refer to the members of the DFPC-Board of Directors, who are not ex-officio members
thereof.
3. “Board Officers” refer to Officers whose primary task is to serve the Board or to pursue the immediate functions
of the Board, such as the Chairman, Vice-Chairman and the Corporate Secretary.
4. “Board of Directors” or “Board” refers to the collegial body constituted pursuant to Section 91 of RA 9593.
5. “Chief Operating Officer (“COO”) refers to the highest ranking corporate executive of DFPC pursuant to
Section 92 of RA 9593.
6. “Executive Officer (Officer) refers to the COO.
7. “Ex Officio Board Member” (Ex Officio Director) refers to the Department of Tourism (DOT) Secretary as
Chairperson, Secretaries of the Department of Finance (DOF) and Department of Trade and Industry (DTI)
or their duly authorized permanent representatives, who sits or acts as a member of the DFPC Board of
Directors.
8. “Fit and Proper Rule” refers to a set of standards for determining whether a member of the Board of Directors
or the COO is qualified to hold a position in a GOCC which shall include, but not be limited to, standards on
integrity, experience, education, training and competence, as such standards are set forth under GCG
Memorandum Circular No. 2012-05 and RA No. 9593.
9. “Management” refers to the COO and other executive officers identified in the approved Organizational
Structure and Staffing Pattern to implement the policies determined by the Board in directing the course and
business activities of DFPC
10. “Officers” refer to both Board Officers and Executive Officers.
11. “Per Diems” refer to the compensation granted to the representative directors/members of the DFPC Board
of Directors for actual attendance in meetings.
12. “Performance Evaluation System” (“PES”) refers to the process of appraising the accomplishments of DFPC
in a given fiscal year based on set performance criteria, targets and weights.
13. “Performance Scorecard” refers to a governance and management tool forming part of the performance
evaluation system which consists of a set of measures, targets and initiatives that facilitate the achievement
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of breakthrough results and performance through the effective and efficient monitoring and coordination of
the strategic objectives of DFPC.
14. “Stakeholder” refers to any individual or entity for whose benefit DFPC has been constituted, or whose life,
occupation, business or wellbeing is directly affected, whether favorably or adversely, by the regular
transactions, operations, or pursuit of the business or social enterprise for which DFPC has been constituted,
and which would include a stockholder, member, or other investor in DFPC, management, employees, supply
creditors, or the community in which DFPC operates.
15. “Strategy Map” refers to an integrated set of strategic choices or objectives drawn by the governing body, the
successful execution of which results in the achievement of DFPC’s vision in relation to its mission or purpose
for having been created.
Article III. The Governing Board
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Section 1. Mandate and Responsibility .The Board shall be primarily responsible for the governance of DFPC and is
accountable to the State for its operations and performance consistent with its mandate to operate the duty-and tax-
free merchandising system in the Philippines to augment the service facilities for tourists and to generate foreign
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exchange and revenue for the government.
1. Provide the corporate leadership of DFPC subject to the rule of law, and the objectives set by the National
Government through the Department of Tourism and the GCG;
2. Establish DFPC’s vision and mission, strategic objectives, policies and procedures, as well as defining
DFPC’s values and standards through:
a. Charter Statement
b. Strategy Maps
c. Other control mechanism mandated by the best business practices
3. Determine important policies that bear on the character of DFPC to foster its long term success, ensure
its long-term viability and strength, and secure its sustained competitiveness;
4. Ensure that personnel selection and promotion shall be on the basis of merit and fitness and that all
personnel action shall be in pursuit of the applicable laws, rules and regulations;
5. Provide sound written policies and strategic guidelines on DFPC’s operating budgets and capital
expenditures, and prepare the annual and supplemental budgets of DFPC;
6. Comply with all reportorial requirements as required by applicable laws, rules and regulations, including
that of GCG;
7. Formally adopt and conduct annually the mandated Performance Evaluation System and the
Performance Scorecard and timely and accurate report the results to GCG;
8. Ensure the fair and equitable treatment of all Stakeholders and enhancing DFPC’s relations with its
Stakeholders.
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Section 2. Powers and Functions. The Board shall be vested in and exercise the following powers and functions:
1 Adopted from Section 7, Code of Corporate Governance for GOCCs
2 Section 90 of RA No. 9593
3 Section 99 of the Implementing Rules and Regulations of the Tourism Act except for par.4 which was directed to be amended
per letter of March 6, 2014
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1. Organize DFPC in a manner most efficient and economical for the conduct of its business and the
implementation of its mandate;
2. Adopt by-laws, promulgate policies, approve plans and programs and prescribe rules and regulations
necessary to implement the intents and purpose of DFPC;
3. Approve the annual corporate and such supplemental budget as may be submitted by the COO;
4. Approve the compensation, allowances, and benefits of DFPC officers and employees, including the
compensation and benefits scheme which shall be comparable with the prevailing compensation plans in the
private sector and compliant with GCG’s Compensation and Position Classification System;
5. Appoint a Corporate Secretary;
6. Authorize contracts or agreements as may be necessary for the proper, efficient and stable administration of
the DFPC and for the attainment of the purposes and objectives of the Act;
7. Contract loans, indebtedness and credit, issue commercial papers and bonds in any local or foreign currency
from international financial institutions, foreign entities and local or foreign private commercial banks or similar
institutions under such terms and conditions prescribed by law, rules and regulations;
8. Construct, own or lease, operate and maintain stores, warehouses and other facilities necessary to support
its operations;
9. Grant franchises and concessions for the operation of tax and duty free stores and/or product categories
and/or brands;
10. Create subsidiaries in support of its retail functions;
11. Exercise all powers necessary or incidental to the attainment of the intent or purpose of the Tourism Act.
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Section 3. Specific Functions . In addition, the Board shall perform the following functions:
1. Meet regularly to properly discharge its responsibilities, with independent views expressed during such
meetings being given due consideration, and that all such meetings shall be properly documented or minuted;
2. Determine the DFPC’s purpose and value, as well as adopting strategies and policies, including risk
management policies and programs, in order to ensure that DFPC survives and thrives despite financial crises
and that its assets and reputation are adequately protected;
3. Monitor and evaluate on a regular basis the implementation of corporate strategies and policies, business
plans and operating budgets, as well as Management’s over-all performance to ensure optimum results;
4. Adopt a competitive selection and promotion process, a professional development program, as well as a
succession plan, to ensure that the Officers of DFPC have the necessary motivation, integrity, competence
and professionalism;
5. Monitor and manage potential conflicts of interest of Directors, Management, and shareholders, including
misuse of corporate assets and abuse in related party transactions;
6. Implement a system of internal checks and balances, which may be applied in the first instance to the Board;
and ensure that such systems are reviewed and updated on a regular basis;
7. Ensure the integrity of DFPC’s accounting and financial reporting systems, including independent audit, and
that appropriate systems of control are in place, in particular, systems for risk management, financial and
operational control and compliance with the law and relevant standards;
8. Identify and monitor, and provide appropriate technology and systems for the identification and monitoring of,
key risks and key performance areas;
4 Sec 8, Code of Corporate Governance for GOCCs
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9. Adopt, implement and oversee the process of disclosure and communications;
10. Constitute specialized committees as may be necessary, or required by applicable regulations, to assist the
Board in discharging its functions;
11. Conduct and maintain the affairs of DFPC within the scope of its authority, as prescribed in the Tourism Act
and its IRR, and applicable laws, rules and regulation; and.
12. Subject to existing civil service rules and regulations, and with ensuring compliance with the requirements of
due process, the Board shall have the authority to discipline, or remove from office, the COO, or any other
officer, upon a majority vote of the members of the Board who actually took part in the investigation and
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deliberation.
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Section 4. Composition. The DFPC Board of Directors shall be composed as follows:
1. The DOT Secretary as Chairperson;
2. The Chief Operating Officer of the DFPC as Vice-Chairperson;
3. The Department of Finance (DOF) Secretary as Member;
4. The Department of Trade and Industry (DTI) Secretary as Member; and
5. Three (3) representative directors to be appointed by the President upon the recommendation of the Tourism
Congress.
The Secretaries of the DOF and the DTI shall each designate a permanent representative in the Board with a rank not
lower than Assistant Secretary or equivalent rank and who must possess relevant experience and shall be duly
authorized to act on behalf of the Secretary in his or her absence.
Section 5. Ex-Officio Alternates. Ex Officio Directors may designate their respective alternates, who ideally should be
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the officials next-in-rank to them and whose acts shall be considered the acts of their principals.
Section 6. Multiple Board Seats. The capacity of Appointive Directors to serve with diligence shall not be
compromised. As such, no Appointive Director of DFPC may hold more than two (2) Board Seats in other GOCCs,
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Subsidiaries and/or Affiliates.
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Section 7. Qualifications of Appointive Directors .
1. Each appointive director, recommended by the Tourism Congress and shortlisted by the GCG in accordance
with its rules and criteria, for appointment by the President must be:
a. A Filipino citizen
b. With recognized competence in business management, marketing, finance, tourism and other related
fields; and
c. Must be a high ranking official of an accredited tourism enterprise or registered enterprise.
2. Each director appointed by the President shall have no conflict of interest in any manner concerning the
operations of DFPC; and
5 Sec 22, RA No. 10149
6 Sec 91, Tourism Act of 2009
7 Sec.36, RA 10149
8 Section 11, Code of Corporate Governance
9 Section 94 of IRR on Tourism Act and Section 15 of RA 10149
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