Thursday, August 18, 2011

Individuals, Bloggers, Businesses need a DTI Sales Promotion Permit even if there is no purchase required

Last July 28, the DigitalFilipino Club and IMMAP discussion / briefing on online promotion with the Department of Trade and Industry gave a better understanding on the intent of the DTI Sales Promotion permit process that makes it a requirement even if there is no purchase required. The bottom-line is to protect the consumer joining these online promotions. Lessons learned from the said briefing: DTI DAO 10-02 series of 2010: Addenda to DAO 2 series of 1993 or the Rules and Regulations Implementing Rep... 1. Are bloggers, individuals, businesses required to get a DTI Sales Promotion permit even if there is no purchase required?


The answer is YES, individuals, bloggers, and businesses do need a DTI Sales Promotion Permit whenever they run an online or offline sales promotion even if there is no purchase required as you are targeting consumers to participate. This is in compliance with the Consumer Act of the Philippines whose application to E-Commerce transactions is explained. (Note that the running of an online promotion, the activities that take place in it, whether commercial in nature or not, is an e-commerce transaction. The E-Commerce Law recognizes e-commerce as activities that can be commercial or non-commercial in nature.) Here are some of the provision under the Consumer Act of the Philippines:
"Consumer" means a natural person who is a purchaser, lessee, recipient or prospective purchaser, lessor or recipient of consumer products, services or credit. 
"Sales Promotion" means techniques intended for broad consumer participation which contain promises of gain such as prizes, in cash or in kind, as reward for the purchase of a product, security, service or winning in contest, game, tournament and other similar competitions which involve determination of winner/s and which utilize mass media or other widespread media of information. It also means techniques purely intended to increase the sales, patronage and/or goodwill of a product. 
Art. 116. Permit to Conduct Promotion. - No person shall conduct any sales campaigns, including beauty contest, national in character, sponsored and promoted by manufacturing enterprises without first securing a permit from the concerned department at least thirty (30) calendar days prior to the commencement thereof. Unless an objection or denial is received within fifteen (15) days from filing of the application, the same shall be deemed approved and the promotion campaign or activity may be conducted: Provided, That any sales promotion campaign using medical prescriptions or any part thereof or attachment thereto for raffles or a promise of reward shall not be allowed, nor a permit be issued thereof. 
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(Update - August 4, 2011) However, until November 4, 2011 the following limit applies for bloggers running online promotion (as agreed last August 4, 2011 during the DTI discussion with bloggers). 
  • For personal bloggers with self-purchased incentives or tokens for online promotions (discount, raffle, contest, games, premium, redemption), for as long as the annual value given out is less than 1 million pesos, no DTI Permit necessary.
  • For sponsored incentives or tokens for online promotions, for as as long as the annual value received and then in turn given out by the blogger is no more than two hundred thousand pesos (P200,000), no DTI Permit necessary.
  • Individuals and Bloggers are expected to be clear in their online promotion mechanics and clearly stated on their website or blog.
Exclusions: CURRENTLY DOUBLE-CHECKING THIS
  • If the blogger got specifically chosen by a brand or agency to carry out an online promotion and received payment for doing such, DTI Permit is necessary and the blogger shall be the one to apply.
  • If the blogger collects payment from participants as part of its sales promotion, DTI permit is necessary.
  • It doesn't cover worldwide contest.
  • The limits DTI stated is only good for the DTI Sales Promotion Permit. Requirements of other government agencies are not included herein.
Update (November 5, 2011)


As no regulations were successfully issued, current regulation still holds. All promotions, with or without purchase required, needs a DTI Sales Promotion Permit.


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2. Bloggers and individuals who wants to carry out an online promotion, under their personal name, needs to present a Mayor's Permit and all documents necessary when applying for a DTI Sales Promotion Permit as stated in the corresponding application form: DTI References:
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(Update - August 4, 2011) CURRENTLY DOUBLE-CHECKING THIS


However, until November 4, 2011, the Mayor's Permit requirement shall not be enforced to bloggers as a result of the DTI consultation session last August 4, 2011. Individuals can register as themselves should their personal and sponsored online promotions exceed the indicated limits.


Update (November 5, 2011)


As no regulations were successfully issued, current regulation still holds. All promotions, with or without purchase required, needs a DTI Sales Promotion Permit.



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 3. For businesses, it is tricky if one decides "not to register" a no-purchase-required promotion.
DTI or any government agency that covers your promotion, under the Consumer Act of the Philippines, can run after you if a consumer files a complaint about it citing that "you are running a promotion without the required DTI Sales Promotion Permit".

4. What is IMMAP's position on the DTI issue? 
The organization is proactive in finding a solution that will work to all parties concern. The association also recognizes the need to update existing laws. Finding a workaround in between is being explored that will recognize new forms of promotion while maintaing adherence with the Consumer Act of the Philippines.

5. I am a blogger based outside of Metro Manila. How do I learn more about the DTI Sales Promotion Permit Process?

I suggest checking first if there is a bloggers association in your community. E-mail and call your local DTI office to request for a meeting - to be given clear information on the DTI Sales Promotion Permit process.

6. How does a DTI Sales Promotion Permit protect not only the consumers and contest joiners, but the business or individual organizing a promotion as well?

 The Consumer Act, as implemented by the DTI and other government agencies, primarily protects the consumer. However, in the course of running the promotion, if you have an abusive joiner that will game the system and got caught, DTI can also make them liable. This I believe provides a sense of security rather than making this decision, as a promotion organizer, on your own.

7. What potential problems might occur from holding contests, promos and giveaways without a DTI permit? What are the benefits for securing a permit?

In addition to what I mention in #6, if you have sponsors or partners who signed a commitment supporting your promotion (and this is included when you submit your permit application), it binds them with you in ensuring that the promises are delivered as stated in your promotion. If they don't deliver or back-out, it makes them equally liable. (under the DTI Permit process) Without a DTI permit, if your sponsors / partners backs-out on you halfway in your promotion, that accountability rest on you who made that promotion especially if those who joined files a complaint with the DTI.

8. The Consumer Act of the Philippines is already old. How can it be used to cover online promotions?

The E-Commerce Law of the Philippines (Section 33c), from my understanding, empowered all existing laws to recognize its electronic counterpart. They also released a Department Administrative Order 10-02 Series of 2010 to cover no-purchase-required type of promotions.

9. A lot of personal attacks was said about you because of this. What can you say about it?

No harm done on issues-based discussion as that is certainly necessary. For the non-issues-based, I updated my blog post on the "politics of blogging" and added #11.

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(Update - August 4, 2011) Moving forward:


1. The DTI will be forming a Technical Working Group (TWG) headed by the Bureau of Trade Regulations and Consumer Protection to formulate DTI Sales Promotion Permit Guidelines that will define the process for online promotions. The guideline is aimed to be release on or before November 4, 2011. Got designated during the August 4, 2011 DTI consultation meeting to submit names of people who can be part of the Technical Working Group. 


Based on the discussion last August 4, the following groups were identified as initial TWG members:
I suggested the following groups to be invited, to send a representative, as part of the TWG.
The idea for the above is to represent the perspective of relevant stakeholders who are one way or another involved in online promotions, with or without purchase required, either as an organizer, service provider, or as a consumer. 


Note that TWG members provide inputs and insight in the drafting of policies representing the interest of their association or group and industry sector. It must be clear to all parties that the TWG-Chairman (DTI-BTRCP) shall have the final say on what it will adapt that will be fair to all parties concern while protecting the interest of the consumer as its highest priority as mandated in the Consumer Act of the Philippines. All parties in this process shall respect such.




Apart from the TWG, the DTI-BTRCP will hold 2 to 3 public hearings as well where the draft version will be open for comments. Associations participating, especially their designated representative, should allot time in reviewing the following existing policies:
Update - August 17, 2011
DTI Sales Promotion Guidelines: a proposed position on issues
View more presentations from Janette Toral


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Update (November 5, 2011)


As no regulations were successfully issued, currentl regulation still holds. All promotions, with or without purchase required, needs a DTI Sales Promotion Permit.


48 comments:

  1. Bloggers who do not have an offline business should not be a part of this. Filing a Mayor's permit will just mean "cost" for the blogger and income for the town. How can they police this? If a simple blogger just wanted to give away something in exchange for comments, will that have to go through DTI as well? How about Filipino bloggers who are not residing in the Philippines? The blogging industry encompasses the world. it should not be limited by the local government. I feel they are merely wanting to make bloggers their cash cows. Don't tell me they are merely protecting the contestants. Information is the key to online protection. Word of mouth and referral (like asking around if the site legit or if one has been paid (like PTCs) or if one knows someone personally, etc.). As someone who has been online since the internet started in the Philippines, I have always been very careful of what I'm joining. If I get scammed, it's MY responsibility and learn the lesson from it. The best I can do afterwards it to WARN OTHERS about it. That's the additional protection others can have...NOT REQUIRING SIMPLE BLOGGERS TO FILE FOR A MAYOR'S PERMIT AND SPEND UNNECESSARILY WHEN ALL THE BLOGGER WANTED WAS A SIMPLE CONTEST GIVEAWAY.

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  2. Hook DTI or the Mayor's office for Paypal or some other online payment then we can talk. If they can make it less hassle then good. I feel the government will try to ground online businesses before they even launch. Hopefully, I'm wrong.

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  3. mayors permit = P500
    DTI = 300
    travel expense= 100
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    P900 <<== permit p lang yan.

    this is a crap... waste of time and undue expenses. nice one DTI

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  4. Hi. This is Mia, social media manager of asianTraveler Magazine. What if a client of ours wants to advertise their promotion? Like, we'll just post a link leading to their site (promotion)? Who needs to get the permit? Thanks!

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  5. Like one of the post here stated... It's utter bullshit... Does this also include if I set a promotion/event that is exclusively outside of the country? If so, hell no way will I do that. I mean, it's my blog, it's not a business and it's for my viewers. The hell do they care!

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  6. In my past experience w/ DTI when I was working in advertising, we get DTI permits on behalf of our client (brand) or the client apply for themselves. Regardless of what media vehicles we use to promote, it is a blanket approval based on the application.
    So for blog sites, this is also considered a marketing channel. Therefore, if they really want permits for such promos/contests, then gov't should require that from the company/brand who wants to hold promos, they should be the one to apply DTI permit, and NOT the blogger.

    Thank you for sharing this update with us! :)

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  7. @Joss Bleau Read my mind, due to the international nature of blogging, the DTI permit I'm assuming is for a locally run promotion. Otherwise how could they control a promotion run from singapore with all south east asia as a target market.

    In the same way, is a DTI permit nescessary for a promotion which, once again targets all south east asia?

    Well regardless, as mentioned above how is this diferent from doing an in-business raffle? or a wager amongst friends? We dont need a permit to do this, and we dont need a permit to discuss it on the internet.

    therefore couldn't out of pocket no purchase required promotions be under the same category? most bloggers know the people that frequent their blogs. At least the ones who post regularly, adn therefore can say they have a personal relationship. Therefore how is this diferent than a wager amongst friends?

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  8. this is just plain BS!!!! you guys are wasting the people's money, OUR MONEY, on stuff like these.There are more important matters than these.BS!

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  9. I would not be surprised if there are pro bloggers who initiated this in an aim to cash out on other bloggers. There are those who had a clich on power in the blogosphere that they want to control it because of its great potential. There are those who might seem interested in helping bloggers but in truth will earn if this is imposed. I am just stating a point. Including bloggers in the mayors permit and DTI requirement is idiotic.

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  10. why not make it a free registration for the bloggers, if they're (DTI) really sincere about just wanting to 'protect consumers' interest'.

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  11. Hi,

    When I first read about this unang naisip ko, what about email marketing to get leads or subscribers? Usually sites and blogs give away a freebie to encourage opt-in. Sa proseso nila mukhang di pa nakakarating sa mag-rereview nung application mo, lumipas na yung opportunity mo to get enough leads or subscribers. Lalo na kung you're riding on a trend, kunyari papalabas pa lang yung Harry Potter movie or kaya me ilo-launch na bagong iPad. Di mo pa napapaapprove yung application mo, naunahan ka na ng ibang bloggers na di sakop ng rule na to.

    How are they even gonna start implementing this rule? It's such an inconvenience lalo na sa mga online campaigns na kailangan mabilisan.

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  12. What if the promotion focuses on global audience not just local? Or what if the prize is a virtual good like hosting, software, apps, etc?

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  13. hay naku dti really knows how to make money out of other's expense... sana na lang they really know san nila ilalagay ang kitain nila d2 at baka sila na namn ang makinabang...papano pag international ang nag blog at me promotion do they have to present those permits??????..another money making machines para sa mga monkeys

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  14. mamimigay ka na nga ng LIBRE with shipping mula sa sariling bulsa, sisingilin ka pa para dun? anu bang kalokohan to?

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  15. I'm a book blogger and though I rarely run contests and promos, I know several of my fellow book bloggers who do for the fun of it. And some of these promos do require something from the reader/follower, like maybe posting one's favorite fairy tale character as a means of entering the contest. More often than not, the book to be won is not sponsored by another entity; it's just an extra copy that the book blogger has. Does DTI mean that we book bloggers have to get a permit just to initiate this kind of activity in our blogs? That's insane.

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  16. There's nothing good really coming out of this! It's nothing but full of BS! It's just plain stupid! I mean, anybody and everybody who blogs have their own free will to do giveaways or join giveaways! the online world has nothing to do with DTI and the likes. Maybe except for registered businesses but a Blog!?! Come on! they're just looking for another way to make some money!

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  17. wow, ive read everything. i share the disgust of the others. janette, thank you for posting this and patiently answering most of the replies. nakakapagod yun for sure!

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  18. these people know that blogging is getting to the next higher level and they need to get/earn something from it.

    When I visited the Philippines a couple of months a ago I directed the sponsor to ship the item to the Philippines but I was shocked that I have to pay custom tax. I thought paying tax is applicable only if you buy items from abroad. I still pay tax even the item is mark as a gift.

    And now they`re targeting bloggers world.

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  19. this is funny. So DTI, how can you deal with this deal sites like cashcashpinoy, ensogo, pakyaw, dealgrocer, megadeals, etc.?

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  20. Nakakaloka... ang hirap namang controlin nyan...

    Maraming butas ang patakarang yan?! They should have analyze things first. How about global audience? Naku....nakaka-nosebleed toh ha!

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  21. Kailangan ng gobyerno natin ng pangkape. Kaya lahat nalang pwede mahuthutan ng pera, pipigain.

    At syempre, nandyan din yung iba na masyadong pabibo at papansin na gustong sumikat.

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  22. Totally NOT Cool!

    This would be another means of corruption which bloggers are the ones who get compromised.

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  23. Hay naku ano na naman ba ito????? maraming business ang dapat may permit na wala ngayong permit eh bakit ang bloggers giveaway pa ang kailangang bigyan ng permit minsan personal money na ang nagagastos dyan...sus maryosep!!!onli in the Philipppines.

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  24. Utang na loob. Find something else to do. As you can see. You are not helping. You're taking away the fun in blogging.

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  25. @Edmond - I think the challenge with DTI is that each promotion is unique therefore requiring approval first prior to payment. There can also be questions in the application where doing it face-to-face helps. I agree that it will be of big help if the approval can be done online.

    @Mia - It seems that is more of an advertisement placed on your site. The DTI Sales Promotion Permit will apply to those promotions (contest, special deals, etc.) initiated by you that is open to consumers in the country.

    @Nendogamer - from my understanding, the DTI Sales Promotion Permit refers to businesses registered in the business targeting Philippines-based participants.

    @Mom-Friday - that is correct. If the brand can get the permit, that is the best option.

    @Sbalani - I agree that most blog promos are initiated and spent for by the blog owner. There is also no purchase required. However, it seems that for as long it is a contest targeting broad consumer based, then the DTI Sales Promotion Permit is necessary.

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  26. @Shen - the objective of the post is to share what were the lessons learned in the meeting (based from what was said there). It has no position of for or against it - on my end.

    @Mai - to make it free for individuals would require a separate guideline. That is if an individual (not a registered business) can be allowed at all.

    @Dyoonet - your observation is true. It can take up to 30 days before you get an approval. Therefore it requires planning ahead.

    @fantaghiro23 - based on what DTI said, for as long as promo targets / encourage broad consumer to participate in a contest, the sales promotion permit is necessary. On the promo example you cited. I guess it is not the book given out but the goodwill generated by getting your readers mobilized to to provide support.

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  27. If All DTI employees will sign up to my affiliates everyday, buy something online and click my ads. then I would apply for a permit. haay, another way to corruption.. iba ang pinoy..

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  28. This comment has been removed by the author.

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  29. looks like bloggers are in the losing end of this issue. as pointed out in this post: http://www.newmedia.com.ph/protesting-dti-sales-promotion-permit-for-blogger-giveaways, the policy needs to be amended. we need to act fast if we want to reach out to DTI and make things right. we cannot ignore the issue. i just hope we approach this in a professional and respectable manner. i also hope that anybody taking action on this will do so out of a pure heart, no intentions of making money out of it.

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  30. @Des - what Phil Younghusband did there was more of a spontaneous promo. Based on your description, who will be the first to respond will get it right away. That is impromptu and not necessarily need a DTI permit from my understanding. I'm basing analogy on last hour sale (where one hour before closing, you offer remaining buffet food at 50% off at that moment or day only).

    If I recall correctly, what is covered by a permit are those promotions that have a timeframe, mechanics (to-do list), and process for winner selection.

    @TheCityRoamer - to lobby for a change in policy, more effective if done as an association or body. Much more organized as well.

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  31. pag nagkataon eh malamang mas malaki pa gagastusin sa pagkuha ng permit ikumpara sa papremyo ng isang simple blogger na gusto magbigay ng kasiyahan sa readers nya... malabo itong proposal na ito.

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  32. Now what DTI is milking the bloggers now? what dumb and corrupt government we hav...

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  33. If we let this happen the next thing i might read is that DTI should make blogs registered as a businness, if that is what we call maturity of the social media sphere then please for the love of everything that breaths, dont ever grow up.

    i cannot see how the DTI protects the consumers, all in all its just "if you want to do this pay-up" it must be clear what the payment is for,

    Ok lets say that my 0.0000001% agreement tendency to the matter pushed thru and the so called law is implemented.

    Care to answer this?
    1. how does it really protect consumers, will they personally deliver the said price?
    or will they set up a place where the winner can claim the price?

    2. are they the one who will judge the winner?
    3. will they supervise the whole contest?
    4. will they send poeple over for that.
    5. will they be able to approve permits within 24 hours of application? or will there be an application where i can pay online like paypal or CC so its less the hassle going to the mayor?

    if the answer to these are NO then why am i giving them my hard earned money?

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  34. Try regulating my Google Adsense, DTI. G'head, I dare ya.

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  35. to all who reacted negatively, i think it would be best to wait for DTI's official stand on this issue....

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  36. Let's try putting ourselves on the other side. What happens if you join an online contest and you win. The promised prize was an all expensed paid trip to Boracay with a stay in a posh villa or something. When you got your prize and went to Boracay you find out that you will have to pay for your land travel, ferry ride and worst, the posh villa turned out to be a bedbug infested inn. What will you do? Where will you complain?

    Will you just shrug your shoulder and promise to write a flaming blog about the experience. In the meantime, blogger who did this will have another contest, only this time his prize is a defective point and shoot that he bought from HongKong using his own money and wanted to dispose of.

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  37. @anonymous (boracay / camera) - by default. You will need to turn to DTI to ask for assistance. You comment gave me a jump-off point for a consumer oriented perspective. I posted it at http://www.socialmediacontestphilippines.com/2011/08/consumers-do-you-want-online-contest.html

    @anonymous (on what DTI will do) - if with permit, it seems you need them to witness the raffle.

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  38. I have been helping organize marketing promotions when I was a managing editor of a Cebu paper. The DTI rep requires an allowance aside from a share of the giveaways. Including bloggers in this DTI raket is lucrative.

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  39. most of the contest online are free to join
    so no obligation on consumer side

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  40. hey DTI if u cannot sort this issue ASAP most of bloggers will blog with fictitious name and address and it sad to ruin the community just because of getting MONEY from BLOGGERS.

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  41. BLOG is an INTERNET DIARY. Followers to the blog are readers who became AVID FAN. And BLOGGERS need to update their BLOG for the sake of their FOLLOWERS. Some bloggers became stars. As they become popular. Most of the time they need to rewards those LOYAL followers/readers/fans. and INTERNET IS A FREE SPACE. ITS THE ONLY SPACE YOU WILL CONQUER NOT IN REAL WORLD with your INABILITIES. So please don't LIMIT the FREEDOM of SPACE with this PERMIT.

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  42. Sorry if this question was asked already, cannot find it somewhere...How about us, who work outside PI, who have a blog and want to increase visibility of both fb page and site page by promotions (i.e giveaways either by sponsor or from own pocket) How am i going to apply for a permit???

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  43. Ano na po ang current status? pwede magrun ng contest or not? I am based in Singapore but my niche market is from PI? Can i hold an online contest?

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  44. This is not necessary for freelance online marketers/bloggers.

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  45. Hi ms Jannette,

    i'd like to know if i need to get a permit to what i am planning to do, im not a blogger, but i have this site where people can win prizes by answering trivia questions.. it is not live yet but it's almost done. what i am planning to do is to get at lest 20 Beta testers to test the site, take note this is not live yet i just want to get another set of eyes to test my site before releasing it to public... during the TEST PERIOD i will be rewarding cash to the person who can give good feedback to my site (negative or positive) and as part of testing i want to know if the site is working by asking these testers to participate by answering the trivia questions i queued up and a participant who gets the highest score will also win a prize.

    do i need to secure permit for this? even though it is not a sales promo but just a part of my testing phase?

    i know, eventually once my site is fully developed and is ready to release to public i will need to have a permit.. but for these phase? do i really have to?

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