Isabela State University

Cabagan, Campus

HM 321 LEGAL ASPECTS IN HOSPITALITY AND TOURISM

1.Title of the Module

Chapter 5: Law Regulating Travel and Tour Services

2. Introduction

The tourism and hospitality industry operates within a comprehensive domestic and
international, legal and regulatory framework. This course examines this framework and covers key
principles of law applicable to hospitality, tourism and related industries. Various legislation on
business organization and several international law issues such as consumer protection, product and
service liability, employment and law access to the natural environment will be covered.

3. Learning Outcome:

• Enumerate the procedure in setting up a travel agency.

• Identify the responsibilities of a legitimate travel agency of tour operator.
• Differentiate ethical from unethical practices by travel agencies and tour operators.

4. Learning Content:

Chapter 5: Law Regulating Travel and Tour Services

 Accreditation of Travel Tour Agencies and Tour Operators

 RA 8239 Phil. Passport Act of 1996
 Accreditation under the International Air Transport Association (IATA)
 Law Regulating on Caterers
 Accreditation of Tour Guides

Chapter 5: Law Regulating Restaurants and Other Tourism- Oriented Establishments

 Nature and Description of Business

The Law

A restaurant is any establishment offering to the public refreshment and/or meals. Bars and pubs may also
be classified under this genetic category.

A department store is a store that sells or carries several lines of merchandise and that is organized into
separate sections for the purpose of promotion, service, accounting and control.

A shop is a small retail establishment offering a line of goods and services.

A sports and recreational club/center is any establishment offering sports and recreational facilities to
tourist and to the general public. Gym, clubs, dance studios, theme parks, cinemas, theaters, and concert
halls fall under this category.

A museum is an institutional establishment where a collection of valuable objects and artifacts on history
and culture, arts and sciences are put on exhibition for the general public.

A karaoke bar is any establishment offering karaoke and videoke facilities to tourists and to the general
public.

A gallery is any establishment that has a formal space for exhibition of paintings, sculptures, prints,
photographs, potteries and mixed media works.

Tertiary hospital for medical tourism is an institution that provides clinical care and management, as well
as specialized and sub-specialized forms of treatments, surgical procedure and intensive care. Medical
tourism involves traveling for the purpose of availing health care services or treatments of illnesses and
health problems in order to maintain one’s health and well-being.

A spa establishment that has a holistic approach to health and wellness, rest and relaxation that aims to
treat the body, mind and spirit integrating a range of professionally administered health, wellness, fitness
and beauty, water treatmenr and services.

Discussion of the Law

Accreditation, although not mandatory in nature, increases the marketability of the following tourism-
related establishments. For purposes of accreditation by the Department of Tourism, the following are the
minimum requirements that must be complied with for the operation of:

Restaurants
 The locality and environs including approaches shall be with proper ingress and egress. The façade
and architectural features of the building shall be appropriately designed.

The dining room should be adequate in size, with sufficient and well-maintained furniture. Flooring
materials shall be kept clean at all times.

Adequate number of well-trained, well-groomed, experienced, efficient and courteous staff should be
employed. The bar should be well-stocked at all times.

The kitchen, pantry and cold storage should be in good operating condition at all times and should be
well-equipped and hygienic.

All main dining or function rooms should be fully air-conditioned and/or well-ventilated. Adequate
firefighting facilities should be provided in accordance with the Fire Code of the Philippines.

Restaurants may take many forms such as casual dining restaurants, restaurant chains, fine dining
restaurants, specialty restaurants, fastfood or service restaurants, cafes or coffee shops, buffet or
smorgasbord restaurants, cafeterias, brasseries, and bistros, and bars and pubs.

Shops/Department Stores

The establishment should be fronting a major street or thoroughfare or is situated in a shopping center
or mall.

In case of a department store, it should be in an edifice or a building or may be part of a shopping

mall or center. A parking area should be made available to the clients or visitors.

All members of the staff should be well-groomed, courteous and efficient at all times. Goods
displayed in the shop window or showcase should be provided with clearly written price tags. A wide
selection of goods should be in stock.

Examples of shops are Islands Souvenirs, Papemelroti, Penshoppe, Uniqlo and Kulturang Pinoy.
Examples of department stores are Rustan’s, SM, Robinsons, Landmark, KCC Mall, Vista Mall, and
Metro Gaisano.

Sports and Recreational Center

These includes theme parks and amusement parks. These also include health and other fitness
establishments. Spas are governed by different accreditation nd

The locality and environs including approaches should be pleasant with proper ingress and egress.
The façade and architectural features should be appropriately designed.

There should be a dining outlet adequate in size, with pleasant atmosphere and furnished with
appropriate and well-maintained furniture. Tissue paper, soap, hand/paper towel shall also be provided.

There should be adequate number of lockers for male and female. Dressing areas and shower
cubicles shall also be provided.
Museums

The institution should be a member of the National Committee on Museums. The façade and
architectural features should be appropriately designed. An adequate and secured parking space for
customers should be made available. A well-informed receptionists should be available to usher the guest.

Laws Governing Casinos and Gaming Establishments

Presidential Decree No.1067-a (1975)
PD No. 1067-A created the Philippine Amusement and Gaming Corporation (PAGCOR) and defines
legal gambling in the Philippines. The Decree also defines PAGCOR’s powers and functions and
how funding will be provided to the government corporation and how revenue will be collected and
used by PAGCOR. Signed into in law in 1975 by then president Ferdinand Marcos.

Presidential Decree No. 1602 (1978)

PD 1602 creates harsher penalties for illegal gambling activities. Section 1 lists activities that are
usually associated with legal gambling in the Philippines: Basketball, Boxing, Slots,
Poker, Soccer, Football, Volleyball, Horse racing, Pinball and about every other sport you can think
of. It states that the punishment for wagering on those games without proper licensing shall be
punished by prison and a fine up to 6 thousand pesos (PHP). Section 2 gives an informants reward of
20%.

Presidential Decree No. 1869 (1983)

PD 1869 is the charter of the Philippine Amusement and Gaming Corporation (PAGCOR) of how to
properly regulate the gambling industry. It gives guidelines for PAGCOR to follow to authorize,
license, and regulate all games of chance within the Philippines while laying out the legal framework
for corporations to obtaining licenses.

Republic Act 7922 (1994)

The Republic Act 7922 established a special economic zone in the Cagayan Valley to be known as
the Cagayan Economic Zone while including neighboring islands and the city of Freeport. Section 4
of the act lays out governmental principals while section 5 creates the Cagayan Economic Zone
Authority (CEZA). The rest of the act contains legal information about CEZA compensation,
supervision, auditing and legal counsels.

Republic Act 9287 (2004)

The Republic Act 9287 was written into law on April 2nd, 2004 and was enacted by the Senate and the
House of Representatives of the Philippine Congress. The Act increases the penalty for illegal
numbers games and its implementing rules.

Executive Order No. 13 (2017)

The second section (2) of Executive Order No. 13 order clearly defines illegal gambling as any
activity not authorized by an operator’s licensing authority. Transcribed to combat illegal number
game operators in an effort to endorse state-run lottery services. Section 3 reinforces the policy of not
allowing Filipino players access to Philippine licensed online casinos and sportsbooks. Outside
players are targeted by Filipino online casinos while Philippine players are still allowed to play
offshore legally sanctioned online casinos and sportsbooks.
Republic Act 10927 (2017)
Implemented by the Philippine Anti-Money Laundering Council (AMLC) on November 4 th, 2017 the
Republic Act 10927 entails special requirements for all Philippine-based casinos to follow. The law
requires for casino owners to implement risk management policies and to keep records for their
players for at least 5 years.
Casino owners are now ordered to allow compliance checks when the AMLC suspects a case of
money laundering or terrorist financing. This new act also affects players. Players are now required
to give more detailed information about themselves before setting up an account and no more aliases
will be accepted.

The AMLC will also now be notified whenever there is a bet or a transaction of $100,000 USD or
more. Failure to abide by this new act will result in stiff fines and/or penalties and could lead to a
revoke of operating licenses.

House Bill 8910

HB-8910 is a proposed bill that would eliminate e-sabong nationwide if accepted into law. It
specifically targets online cockfight betting and seeks to strengthen the Games and Amusement
Board's oversight of all professional sports.

Laws Governing Casinos and Gaming Establishments

The Law

Section 1. Declaration of Policy. - It is hereby declared to the policy of the State to centralize and
integrate all games of chance not heretofore authorized by existing franchise or permitted by law in order
to attain the following objectives:

(a) To centralize and integrate the right authority to operate and conduct games of chance into
one corporate entity to be controlled, administered and supervised by the Government; and
(b) To establish and operate clubs and casinos, for amusement and recreation, including sports
gaming pools (basketball, football, lotteries, etc.) and such other forms of amusement and
recreation including games of chance, which may be allowed by law within the territorial
jurisdiction of the Philippines and which will:
(1) Generate sources of additional revenue to fund infrastructure and socio-civic
projects, such as flood control programs, beautification, sewerage and sewage
projects, Tulungan ng Bayan Centers, Nutritional Programs, Population Control
and such other essential public services;
(2) Create recreation and integrated facilities which will expand and improve the
country’s existing tourist attractions; and
(3) Minimize, if not only eradicate, the evils, malpractices and corruptions that are
normally prevalent in the conduct and operation of gambling clubs and casinos
without direct government involvement.

Section 2. Philippine Amusement and Gaming Corporation (PAGCOR), Creation Purpose. – To

implement State policy and pursue the objectives set forth in the preceding Section, there is hereby
created a body corporate to be known as the Philippine Amusement and Gaming Corporation.
Requirements for Accreditation by the Department of Tourism

Any person, partnership, corporation or other entity desiring to secure an accreditation from the
Department shall accomplish in duplicate and file with the Department, the application prescribed for
such purpose. The application shall be accompanied by two copies of the following documents.

(a) In case of corporation or partnership, a certified true copy of the Articles of Incorporation, its
By-laws, or Articles of Partnership and amendments thereof, duly registered with the
Securities and Exchange Commission, and Business Name Certificate and amendments
thereof, if any;
(b) Applicant’s latest income text return and audited financial statement sheets for the preceding
year of its operation (not applicable for new establishments);
(c) List of the names of all officials and employees and their respective designations,
nationalities, home address; for alien personnel, valid visa from Bureau of Immigration and
the proper permit from the Department of Labor Employment;
(d) Mayor’s Permit/Municipal License;
(e) For Galleries, proof of changing exhibitions at least three (3) times a year and proof of
membership and a certificate of good standing with the National Commission on Culture and
the Arts – Committee on Independent Arts Galleries;
(f) In case of tertiary hospitals for medical tourism, license from the Department of Health and
Fire Safety Inspection Certificate;
(g) For spas, updated list of management personnel and therapist and their respective positions,
nationalities and home addresses, certified by the general manager and duly authority;
Department of Health (DOH) license as massage therapist for supervisors; and Fire Safety
Inspection Certificate; and
(h) Such other documents as may be required from time to time by the Department of Tourism.

Laws Regulating Caterers

A caterer is defined as a person, firm, or association providing food and supplies, and sometimes
services, for parties, weddings, and other social functions. A caterer is defined as a provider of food and
provisions.

There are two (2) kinds of catering services:

(a) On-premise catering. In this type of catering, the caterer has his own banquet hall with an
attached kitchen or production area.
(b) Off-premise catering. For this type of catering, the caterer brings the complete service to the
customers. It is a kind of banquet operation that takes place in a venue chosen by a client or
in an airline, boat, industrial site and other places.

This banquet service caters to various types of functions such as:

 (a) Wedding;
(b) Social events like parties, debut, anniversaries, and the like;
(c) Seminars;
(d) Trade exhibits; and
(e) Other events
(f) partnership of a corporation.

There are no standard requirements for the accreditation of caterers by the Department of Tourism,
except when putting up a restaurant. Caterers are subject to value-added tax.

Retail Trade Law

The Law

The Retail Trade Liberalization Act of 2000 was enacted on March 7, 2000 which specifically
repealed Republic Act 1180 otherwise known as the “Retail Trade Nationalization Law”.

By virtue of the Retail Trade Liberalization Act of 2000, the Philippine retail industry is hereby
liberalized to encourage Filipino and competitive retail trade sector in the interest of empowering the
Filipino consumer through lower prices. Higher quality goods, better services and wider choices. This is
in line with the policy of the State to promote consumer welfare in attracting, promoting and welcoming
productive investments that will promote tourism and create more jobs.

The Act defines “retail trade” to cover any act, occupation or calling of habitually selling direct to the
general public, merchandise, commodities or goods for consumption, but the restrictions of the Act shall
not apply to restaurants incidental to the hotel business.

By the way of comparison, the Consumer Act of the Philippines defines “consumer products” as
“goods… which are primarily for personal, family, household or agricultural purposes, which shall
include but not limited to foods, drugs, cosmetics and devices.” (Art.4 [q], Consumer Act of the
Philippines)

Qualification and Requirements of Foreign Investors

No foreign retailer shall be allowed to engage in retail trade in the Philippines unless all the
following qualification met:

(a) A minimum of two hundred million US dollars (US$200,000,000) net worth in its parent
corporation for Categories B and C, and fifty million US dollars (US$50,000,000) net worth
in its parent corporation for Category D;
(b) Five (5) retailing branches or franchises in operation anywhere around the world unless such
retailer has at least one (1) store capitalized at a minimum of twenty-five million US dollars
(US$25,000,000);
(c) Five (5)-year track record in retailing; and
(d) Only nationals from, or juridical entities formed or incorporated in countries which allow the
entry of Filipino retailers shall be allowed to engage in retail trade in the Philippines.
 The Department of Trade and Industry is hereby authorized to pre-qualify all foreign retailers before
they are allowed to conduct business in the Philippines. Qualified foreign retailers shall not be allowed to
engage in certain retailing activities outside their accredited stores through the use of mobile or rolling
stores or carts, the use of sales representatives, door-to-door selling, restaurants and sari-sari stores and
such other similar retailing activities.

Laws Regulating Sale of Alcohol

The Law

The National Internal Revenue Code

The National Internal Revenue Code of 1997 (as amended by R.A. No. 9334, December 21, 2004)
has imposed excise taxes on the purchase of alcohol. The excise tax rates shall be based on the
classification of alcohol content as provided under the law.

The Local Government Code

Under said law, every local government unit shall exercise the powers expressly granted, those
necessarily implied, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare. Local government
units shall ensure promotion of health and safety, and maintenance of peace and order within their
respective territorial jurisdictions.

Laws Regulating Churches, Monuments, National Shrines, Landmarks and Other Important
Historic Edifices

The Law

By virtue of Presidential Decree No.260 (August 1, 1973), the following has been declared national
shrines, monuments, and landmarks:

1. The Sta. Ana Site Museum in Manila;

2. The Roman Catholic Churches of Paoay and Bacarra in Ilocos Norte;
3. The San Agustin Church and Liturgical Objects therein in Intramuros, Manila;
4. Fort Pilar in Zamboanga City;
5. The Petroglyphs of the Rockshelter in Angono, Rizal;
6. The Petroglyphs of Alab, Bontoc;
7. The Stone Agricultural Calendars in Dap-Ay Guiday in Besao, Bontoc;
8. The Mummy Caves of Kabayan, Benguet, Sagada and Alab, Bontoc;
9. The Ifugao Rice Terraces of Banaue as National Cultural Treasures;
10. The Barosian Church in Malolos, Bulacan;
 11. Tirad Pass in Cervantes, Ilocos Sur;
12. The Miagao Church in Miagao, Iloilo;
13. The Site of the Battle of Mactan in Mactan Island, Cebu;
14. The San Sebastian Church in Quiapo, Manila; and
15. The Church and Convent of Santo Nino in Cebu City.

Vandalism (Malicious Mischief)

The Law

Article 327. Who are liable for malicious mischief. Any person who shall deliberately cause to the
property of any other damage x x x shall be guilty of malicious mischief.

Article 328. Special cases of malicious mischief. Any person who shall cause damage to x x x the
National Museum or National Library, or to any archive or registry, x x x shall be punished.

Article 331. Destroying or Damaging statues, public monuments or paintings. Any person who shall
destroy or damage statues or any other useful or ornamental public monument x x x shall suffer the
penalty x x x.

Any person who shall destroy or damage any useful or ornamental painting of a public nature shall
suffer the penalty x x x.

Poisoning

The Law

Article 264. Administering injurious substances or beverages. The penalties established by the next
preceding article (serious physical injuries) shall be applicable in the respective cases to any person who,
without intent to kill, shall inflict upon another any serious physical injury, be knowingly administering to
him any injurious substances or beverages or by taking advantage of his weakness of mind and credulity.

Article 265. Less serious physical injuries. A person who shall inflict upon another physical injuries
not describe in the preceding articles, but which shall incapacitate the offended party for labor for ten
days or more, or shall require medical attendance for the same period x x x.

Article 266. Slight physical injuries and maltreatment. The crime of slight physical injuries shall be
punished:

1. By arresto menor when the offended has inflicted physical injuries which shall incapacitate the
offended party for labor from one to nine days, or shall require attendance during the same
period; and
 2. By arresto menor or a fine mot exceeding Php. 200 and censure when the offender has caused
physical injuries which do not prevent the offended party from engaging in his habitual work nor
require medical attendance.

Theft

The Law

Article 308. Who are liable for theft. – Theft is committed by any person who, with intent to gain but
without violence against or intimidation of persons nor force upon things, shall take personal property of
another without the latter’s content.

Article 310. Qualified theft. – The crime of theft shall be punished by the penalties next higher by
two degrees x x x if committed x x x with grave abuse of confidence.

Article 311. Theft of the property of the National Library or National Museum. If the property stolen
by any property of the National Library of the National Museum, the penalty shall be arresto mayor or a
fine x x x, unless a higher penalty should be provided under the provisions of this Code, in which case,
the offender shall be punished by such higher penalty.

Food Fortification Law

The Law

The Food Fortification Law was signed by then President Estrada on November 7, 2000.
The law establishes the Philippine Food Fortification Program covering all local and imported processed
food products for sale or distribution for human consumption in the Philippines, except for dietary
supplements where standards have already been prescribed. In other words, the law applies to all
manufacturers, producers, importers, traders, retailers, and repackers of food prescribed to the fortified. It
also covers restaurants and food service establishments whenever they serve foods prescribed to be
fortified.

5. Teaching and Learning Activities

These are activities related to the concepts and thinking skills that were covered in the
module. It also includes questions or an activity that integrates the idea, help learners to connect to
the module question, assess progress, and look ahead. Likewise, this may contain additional
problems that could be used for homework or tests, or additional readings that allow students to
apply new knowledge and skills in a different context.

Activity1: (30 items)

 1. Who is a restaurant? What must restaurant provide in its premises?
2. How do you handle severe drunkness or intoxication?
3. What is the importance of accreditation of restaurants, museums, galleries, recreational centers, and
amusements parks by the Department of Tourism?

6. Recommended learning materials and resources for supplementary reading.

Books:
First Edition 2020 Edition Legal Aspects in Tourism and Hospitality
Danny Araneta Cabulay, Christine Palaflox Carpio- Aldeguer

Mindshapers Co. Inc.

Legal Aspects in Tourism and Hospitality by:
Atty. Kenneth Lloyd G. Dela Cruz
Mario H. Maranan, DPA, LLB
Jovid Maricar D. Maranan
Cristina N. Caluza, MBA

Websites:

7. Flexible Teaching Learning Modality (FTLM) adopted

Online (synchronous)

Facebook page, google classroom, google meet, zoom meeting,

//module, case study, exercises, problems sets, etc

8. Assessment Task

This allows the students to pull together what they have learned and the skills they have
developed in order to answer the module question. In this part, students are given Self-
assessment Questions (SAQs) and asked to consider broader aspects of the question, such as
social and economic.

Enumeration:

1. What are the requirements for application on DOT Accreditation for Travel Agency?

2. What are the requirements for application on DOT Accreditation for Tour guides?
9. References (at least 3 references preferably copyrighted within the last 5 years, alphabetically
arranged)

First Edition 2020 Edition Legal Aspects in Tourism and Hospitality

Danny Araneta Cabulay, Christine Palaflox Carpio- Aldeguer

10. Learning Resources

Key readings and other learning materials for students to study, to learn the key concepts covered
in the module.

Learning resources are texts, videos, software, and other materials that the teacher.

Read more about Top 50 Business Etiquette and Rules at https://bit.ly/3dwLkSJ

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http://junvillegas.blogspot.com/2013/01/laws-of-transportationtravel-in.html

https://lawphil.net/judjuris/juri2015/oct2015/gr_208802_2015.html

https://www.moneymax.ph/car-insurance/articles/driving-laws