SIXTI<:I<:NTII CON(JRI':SS OF TIII( RIWIJBLlC 
) 
01''1'111<: PIIILlPI'INI':S 
) 
First Regulnr Session 
) 
·13 
[JEC -3 P2 :29 
Introduced by Senator Miriam Ikrensor Santiago 
I,XPI,ANATORY NOTE 
The Constitutioll, Artiele 2, Sections 19 and 20, provides: 
Section 19. The State shall develop a seH~rcliant and independent national 
economy elTcctivcly controlled by Filipinos. 
Section 20. The State recognizes the indispensable role or the private 
sector, encourages private cnterprise, and provides incentives to needed 
investments. 
The National Food ;\uthority (NFA) was crcated to address goals of cnsuring low and 
stable l(lOd grain prices I(lr consumers, pursuant to our national policy of agricultural 
Illodernization and sustainable poverty reduction. Historically, however, it has proven fiscally 
impossible to address all or these objectives. A study conducted by the International Rice 
Resenrch Institute has further revealed that under the NFA monopoly over rice importation, 
I'ilipino consumers have ended up paying more for rice than they would have had to under a rree 
trade regimc. 
There is a growing conSensus among economists that with the NFA monopoly on rice 
importation, the costs imposed by NFA operations on the Philippine economy far outweigh the 
benclits to rice producers and consumers, Thc NFA has both regulatory and proprietary hmctions 
over the grain sector. It sels import quantities and also works as the lone importer of the 
authori"ed volullle 01' imports. lIowever, such interventions in the markct ovcr the years created 
severe distortions in the rice market, contributing, among others, to the poor productivity of the 
rice sector over the years, thc ricc supply gap, and the increasing cost of govcrnment actions to 
fill such gaps and artilicially stabilizc rice prices and supply. 
This proposal aims to streamline government intervention in the rice sector by removing 
the rice importation function /i'om the NFA and all(lwing the participation of the private sector in 
rice importation. Allowing market ()["ces to work in the importation, stockpiling and marketing 
of rice wi II allow 1(1I' scarce government resources to be re-allocated away fi'om costly price 
stabi I ization functions to more productive iuvestment in rice research and development, 
extension scrvices and irrigation. This will also preparc the local market for the expiration ofthc 


quantitative restrictions on thc importation of rice under the General Agreement on Tariffs and 
Tradc- World Trade Organi/.ation (OATT-WTO). The revenues generated from the tariffs paid 
by the privat" sector once they import may also be invested back to the agricultural sector. 
This bill proposes the lransformation of NFA Ii'om a gram marketing monopoly to a 
public regulatory agency I()cusecl primarily on maintaining the bufrer stock requirement of the 
Country at hoth national and local levels which will allow the country to guard against price 
volatility due to natural calamities or emergencies. Along with this, the NFA shall continue other 
regulatory functions whieh include the licensing and registration of rice importers, allocation of 
import quolas among licensed riee traders, maintenance of marketing inlormation dissemination 
systems and the inspection of stored food grains for the purpose of taking inventory. This bill 
further mandates the transfer of duplicative limctions of the Nl''A, including the stabilization of 
prices and the licensing of warehouses to appropriate government agencies or local government 
units. 
A similar bill has been filed in the House of Representative by Rep. Delph Gan Lee of Agri-Agra 
Reporma Para sa Magsasakang Pilipinas (AGRI) in the 16'" Congress. 


SIXTI,I':NTII CONGRESS OF TIlE REl'UHLlC 
) 
(W Till, 1'1 II LlI'I'INI\S 
) 
First [(egular Session 
) 
'13 
!lEG -3 f' 2 :29 
SENATL 
S. No. 1992 
lniroduccd by Senator Mirimn Defensor Santiago 
AN ACT 
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TO STlmNCTlmN ANI) REORIENT THE MANDATE OJ<' THE NATIONAL 
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FOOl) AliTIIORITY IN ORDF;R TO ENSURE 'FOOD SUFFICIENCY AND 
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TO RATIONALlZI( ITS FUNCTIONS 
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lie il en{[(:led hy the Senate and the llouse of Representalives of the Philippines in 
(,'ongres.\· (J.I'.I'emhied: 
SLCTION I. Short rille. 
This Act shall be known as the "National Food Authority 
(, 
Rational ization Act of 20 13 ," 
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SI\CTION 2. Ike/amtion oj Policy. - AJ1irming the right of every Filipino to have access 
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to suJ'licient f()()d, it is hereby declared the policy of the State to make all government agencies 
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and corporations directly responsible for food production oriented toward the attainment of food 
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seclirity and sul'liciency, the enhancement of competitiveness and transparency in the rice 
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economy and to be more responsive to the increasing globalization of the agricultural market. 
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SI':CTION ]. I'olicy Goals and Ohjectives. - To carry .out the foregoing policy, the 
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mandate, programs and (unctions of the National Food Authority (NF A), shall be reoriented and 
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realigned towards the achievement of the following objectives: 
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(A) I':nsllre available adequate and accessible supply or rice and other foodgrains during 
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lean periods and in times of calamity and emergency; 
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(Il) Promote regulation aimed at enhancing competitiveness, transparency and 
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responsibility in the loodgrains marketing industry; and 
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(C) Encourage private sector participation in the importation of rice and in production 
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and post-harvest Iileilities; 
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SI':CTION 4. Re-orientation olthe National Food Authority.- The functions of the NfA 
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shall evolve to i()cus primarily on maintaining the buffer stock requirements of the country. All 
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olher deVelopmental and regulatory Ilmction oj' the NFA shall be transferred to appropriate 
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government agencies or local government units unless otherwise provided by this Act. 
A similar bill has been filed in the House of Representative by Rep. Delph Gan Lee of Agri-Agra 
Reporma Para sa Magsasakang Pilipinas (AGRtj in the 16
th Congress. 


SI,:CTION 5. /iu/li!/' ,"'tock Management. -
The NFA shall be the prImary agency 
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responsi ble I(n' the management 0 r the bulTer stock requirements of the country. For this purpose, 
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the NFA shall review on an annual basis the butler stock requirements of the country at the 
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national and local levels and shall clevise a system of regularly monitoring the buffer stock 
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levels. For the purpose or ensuring that dcsirable bulTer stock lcvel of the country are met and 
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maintained, the NFA may cnter into contracts for the procurement of rice for government; 
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j'/'ovided that the volume or rice procurement shall not be more than the strategic 30-day rice 
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bulkr stock requirement oCthe country. 
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Sm:T10N 6. Olher Powers and Funclions (If'the NFA. - The NFA shall exercise the 
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rollowing responsibilities, powers and functions: 
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(A) To establish rules and regulations governing private sector importation of rice ancl 
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collect fccs and charges I(w said importation 
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(B) To determinc and allocate import quotas among private sector entities and farmer 
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organizations licensed to engage in rice importation 
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(C) To coordinate with the Bureau of Agricultural Statistics in the generation of 
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marketing 
inl(lI'Ination 
and 
estahlish 
and 
maintain 
marketing 
information 
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disscmination systems in order to keep the public informed on the prevailing market 
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situation or I()()dgrains and their suhstitutes and/or their by-products/end products in 
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dilkrent parts orthe country; and 
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(0) To inspect f()odgrains and their substitutes and/or their by-products, stored by any 
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person, partnership, corporation, or association, tor purposes of taking inventory kind 
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record or such commodities, and to cnter the premises thereof hy nse of reasonable 
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means. 
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SI,:CTION 7. '11'ans!er of'Mandate.- The lollowing regnlatory and developmental 
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runctions or the Nl!A arc hereinafter translerred to the following: 
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CA) The registration, licensing and supervision or warehouses, whether bonded or not, 
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and the prescription, imposition and collection or tees and charges relative thereto to 
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the local government units; 
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(B) The stabilization of'prices of rice, curn and other f()odgrains at the farm gate level to 
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the Department of' Agriculture; 
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(e) The stabilizatioll or supply and prices of other foodgrains and other basic lood items 
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at the comulller levclto tbe Nationall'ricc Coordinating Council; 
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(D) The developmcnt of morc cfficient ways, systems. and facilities for harvesting, 
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threshing, 
drying, 
storage, 
milling, 
packaging, 
post-harvest handling, 
and 
transporting of f()odgrains to the Philippinc Rice Research Institute; 
II similar bill has been filed in the House of Representative by Rep. Delph Gan Lee of Agri-Agra 
Reporma Para sa Magsasakang Pilipinas (AGRI) in the 16'" Congress. 


(I \) Th~ registration, licensing, and supervision of persons, natural or juridical, who shall 
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engage or ar~ engaged in the business of. providing goods and services in support of 
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the dilkrcnt activities involved in the processing, transporting, marketing, and 
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trading of I()(ldgrains and thcir substitutcs and/or their byproductsl end-products as 
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well as the imposition and collection of fees, charges, and surcharges in licensing and 
() 
regulating the operations of such persons to the Departmcnt of Agriculture; 
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(Ii) Thc j(lI"Illulation of plans and programs on. l(JOdgrains production, storage, milling 
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and distribution, as well as the coordination for its implementation among various 
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agellcies or the government and the private sector to the Bureau of Agriculture and 
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liislwrics Product Standardization; and 
II 
((J) The establishment of appropriate post-production technology and formulation of 
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plans and programs aimed to reduce post-harvest losses to thc Bureau of Post-
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Ilarvest Research and Extension. 
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SI':CTION X. Role ojlhe Private Sector . .. Thc importation of rice shall henccforth be 
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open to the participation or and exclusively undertaken by private sector entities ancl [armers' 
I (, 
organizations, subject to appropriate tariffs and quotas; l'rovided. that the necessary registration 
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and licensing processes and requirements of the NF A have been complied with. For this 
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purposes, the policy of open importation and distribution by all interested private parties shall be 
. 
, 
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fully implemented. 
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SI':CI'ION 9. Tran.l'i/olY l'f'I)visions. 
Within one (I) year from the effectivity of this 
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Act, lhe NliA shall gradually phase out all its rice importation activities to give way to the entry 
22 
of private sector entities, especially farmers' organizations, in rice importation; Provided, that the 
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NFA shall have completely ceased all its rice importation functions and activities four (4) years 
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li'om the time or the enactmcnt of this Act. For this purpose, the NFA shall, within one hundred 
2S 
twcnty (120) days thlln the enactment of this Act, establish the necessary rules and regulations 
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lill' the importation of rice by the private sector. 
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To clTect a smooth transition, the NFA shall continue to exercise its developmental and 
2& 
regulatory functions, until the concerned government agencies or local government units shall 
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have established their plans, programs and rules and regulations to implcment their mandate 
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identilied in Section 6 above, which in no case shall be no longer than one (I) year from the 
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eflCctivity orthis Act. 
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SECTION 10. Penal Provisions." The following acts or omissions shall be punishable as 
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j(lilows: 
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(A) Serious Offenses: 
A similar bill has been filed in the House of Representative by Rep. Delph Gan Lee of Agri-Agra 
Reporma Para sa Magsasakang Pilipinas (AGRt) in the 16th Congress. 


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3 
4 
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i) 
ii) 
iii) 
iv) 
v) 
vi) 
Cornering or hoarding oC'foodgrains resulting in an artilleial shortage or 
scarcity ol'supply and increase of prices thereof in any part or the country; 
1 Jnreasonablc depletion of stocks; selling or lending of government stocks 
to another fooclgrains seller; selling or offering to sell government stocks 
heyond the maxiinum quantity or price allowed by the Department of 
Agriculture; or storing or selling government stocks in other places other 
than lilose duly authorized by law; 
Causing prices of essential commodities to fall or rise for one's own profit 
hy changing or falsifying figures, accounts, and other related information 
pertaining thereto; 
Printing, issuing, or knowingly usmg, proeessmg, or negotiating, a 
cancelled, unauthorized, illegal, collllterleit, or falsitied warehouse receipt; 
Failure or refusal 01' an accountable onleer to turn over or remit collection 
within a reasonable period of time; or 
I'ailure or refusal 01' a I()odgrains warehouseman to deliver foodgrains 
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deposited with him; Provided, that the warehouseman shall be entitled to 
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thc allowancc authorized for depreciation ofthc foodgrains deposited. 
I X 
The oCCender shall, upon conviction, be punished by imprisonment of not less than six (6) 
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years and one (I) day to not more than twelve (12) years, or a line of not less than Two Hundred 
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Thousand Pesos (1'200,000.00) to not more than Two Million Pesos (1'2,000,000.00) or both, at 
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the discretion of the court. 
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(1\) I,ess Serious OCfenses: 
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i) 
ii) 
iii) 
Conniving In the concealment of stoek shortage m a foodgrains 
warehouse; 
Knowingly submitting any report containing false information or data; 
Failure or reCusal of a warehouseman to allow the inspection of his 
271()(ldgrain stocks to misrepresent their quantity or quality or to conceal a 
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shortage, including impeding sucb inspection and cxamination by 
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abandonment, absence, or other similar lncans. 
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Thc olknder shall, upon conviction, he punished by imprisonmcnt of not less than lour 
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(4) years and onc (I) day to not more than eight (8) years, or by a tine of not less than One 
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lIundred Thollsand Pesos (1'100,000.00) to not more than One Million Pesos (PI ,000,000.(0), or 
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both, atlhe discretion o/'lhe court. 
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(C) I ,ight OITenses: 
A similar bill has been filed in the House of Representative by Rep. Delph Gan Lee of Agri-Agra 
Rcporma Para sa Magsasakang Pilipinas (AGRI) in the 16'h Congress. 


2 
3 
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i) 
ii) 
WilJl'ul non-compliancc with any orllcial order, circular, or directive 
lawrully issued by the DA, unless such C011stitutes a higher offense under 
this Act, in whieh case the olTender shall be penalized under the latter 
offense; 
Commilling any other violation of a provision of this Act for whieh no 
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specific penalty is prcscribcd and which is not punished under any othcr 
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existing law. 
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The ol"lender shall, upon conviction, be punished by imprisonment of not less than two 
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(2) years to not more than IClUr (4) years, or a fine of not less than Fifty Thousand Pesos 
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(l'SO,OOO.OO) to not more than One Hundrcd Thousand Pesos (I' J 00,000.00), or both, at the 
I J 
discretion o("thc courL 
J 2 
SFCTJON J 1. Implementing Rules and Regulations. - The NF A, in consultation with 
J3 
relevant gov(;rnmcnt ag(;ncics and LUUs, fanncr organizations and other stakeholders, shall 
14 
within one hundred and twenty (l20) days from the enactment of this Act, lormulate the 
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necessary rules and regulations to effectively implement the provisions of this Act. 
J 6 
SFCTION 12. Separahility Clause. - If any provision or part hereof is held invalid or 
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unconstitutional, the remainder or the law or the provision not otherwise affected shall remain 
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valid and suhsisting. 
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SI ':CTION 1]. Repealing ('louse . .. Any law, presidential decree or issuance, executive 
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order, leller or instruction, administrative order, rule or regulation contrary to or inconsistent 
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with, the provisions of this Act is hereby repealed, modificd, or amended accordingly. 
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SECTION 14. Ffjeclil'ity Clause.- This Aet shall take effcct 1l11een (15) days after its 
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puhlication in at least two (2) newspapers or general circulation. 
Approved, 
/jst 
A similar bill has been filed in the House of Representative by Rep. Delph Gan Lee of Agri-Agra 
I{cporma Para sa Magsasakang Pilipinas (AGRI) in the 16'h Congress.