FOURTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
) 
Third Regular Session 
) 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
The rubber industry is vital to the Philippine export economy. The country has 
comparative advantage in rubber production over other Asian countries because of its 
fertile soil, favorable climate conditions, available labor force, and access to 
international markets. Yet the Philippines struggles in exporting rubber, and still needs 
to catch up with other Southeast Asian countries in supplying the brisk demand for 
rubber in the world market. 
The Philippine domestic rubber production is only at 351,556 metric tonnes. 
About 201,934 metric tonnes or 60% is for domestic consumption and 140,622 or 40% for 
export. The domestic market requires 323,000 metric tonnes per year, thus we have a 
deficit of 112,066 metric tonnes per year aside from the export requirement of 5% 
increase per year to the huge demand in the worrd market. The International Rubber 
Study Group (IRSG) reported that in 1999, the world total natural rubber production is 
6.68 million metric tonnes, while the natural rubber consumption is 6.55 million metric 
tonnes. Moreover, world demand is increasing by 2-3 percent annually. 
This low rubber production and productivity can be attributed to the following 
issues and problems: 1) area planted with rubber is dismally minimal; 2) limited value 
adding activities for rubber products; 3) lack of defined quality standards for rubber 
products; 4) weak linkage of farm producers with key players in the marketing chain; 5) 
limited access to credit and financing; and 6) absence of an enabling business 
environment that will attract investments. 
To immediately address the problems confronting the rubber industry, this bill 
seeks to create under tke Office of the President, the Philippine Rubber Authority 
(PhilRA). As a single entity directly under the control and supervision of the Office of 
the President, it will accelerate the execution of its program, projects, and activities. 
In view of the foregoing, approval of this measure is earnestly sought. 
F 
.- 
LOREN GGDA


FOURTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
) 
Third Regular Session 
i 
S E N A T E  
S.B. No. 
Introduced by Senator Loren Legarda 
AN ACT 
CREATING THE PHILIPPINE RUBBER AUTHORITY (PhilRA), DEFINING ITS 
POWERS AND FUNCTIONS AND APPROPRIATING FUNDS THEREFOR 
Be if enacted by tke Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Title. - This Act shall be known as the "Philippine Rubber Authority 
Act of2009". 
SEC. 2. Declavation of Policy. - It is hereby declared the policy of the State to 
promote and develop agriculture as an important part of the Philippine economy. 
Toward this end, the State shall provide full support to the rubber industry through 
appropriate technology and research, and adequate financial, production, marketing 
and other support services. It shall also recognize the right of rubber farmers and other 
stakeholders to actively participate in the planning and management of programs 
concerning the said industry. 
SEC. 3. Creating of the Philippine Rubber Authority (PkilRA.) - The Philippine 
Rubber Authority (PRA), hereinafter referred to as the Authority, is hereby created 
under the Office of the president to carry out the provisions of this Act. The Authority 
shall serve as the government's primary planning, regulating and marketing agency 
responsible for the rubber industry. 
SEC.4. Statement of Objectives. - This Act shall have the following objectives: 
a) To promote the integrated development of the rubber industry in all its aspects 
from research, production, processing, marketing and trade regulation to make 
them globally competitive; 
b) To sustain the growth of and demand for rubber in 
both domestic and 
international markets; 
c) To formulate and enforce standard and regulatory measures in order to maintain 
good quality rubber products traded in the domestic and international markets; 
d) To encourage and provide adequate incentives to investment in rubber industry; 
e) To improve farm productivity through the adoption of modern prescribed 
technology so as to increase farmers' income, sand; 
f) To encourage and promote the use of locally produced rubber products. 
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SEC.5. Powers and Functions - The Authority shall have the following powers and 
a) To undertake and regulate research studies on all aspects of the rubber industry, 
including its international markets, production, processing and marketing in the 
domestic and international markets; 
b) To administer and regulate in accordance with law, the licensing and registration 
and shipment of rubber processors/manufacturers including the tagging, 
marking, inspection, certification and shipment of their commercial products; 
c) To recommend production technology to guide the rubber production activities 
in the country; 
d) To design implement a specialized extension program and skills development 
training or workshops to improve the technical and entrepreneurial capabilities 
of rubber farmers, traders, processors and exporters to improve the quality of its 
commercial products; 
e) To establish a monitoring system in coordination with the Department of Trade 
and Industry and the Department of Agriculture for the assessment of rubber 
supply and demand situation in both domestic and international market; 
f) To provide assistance in the upgrading the efficiency and economy of existing 
processing facilities and the establishment of additional processing facilities as 
well as manufacturing plant in strategic locations in the country; 
g) To acquire world-class machinery and tools.for distribution to the farmers and 
producers; 
h) To identify and improve infrastructure in the locality in coordination with the 
Department of Agriculture, Department of Public Works and Highways and the 
Local Government Unit concerned; 
i) To undertake industry manpower development; 
j) To assist farmers in sourcing funds for capital build-up; 
k) To conduct regular consultations with farmers, growers and other sectors 
involved in the rubber industry; 
1) To accredit associations or confederations of rubber farmers, growers and other 
associations involved with the rubber industry; and 
m) To undertake all other functions as may be necessary to implement the objectives 
of this Act. 
functions: 
SEC.6. The Governing Board of PRA. - The corporate powers and duties of the 
Authority shall be vested in, and exercised by, the Board to be appointed by the 
President, composed of the following: 
a) Three (3) representatives of the Government, one of whom shall be designated by 
the President as Chairman; 
b) Three (3) representatives from the rubber processors/manufacturers association 
upon the recommendation of their respective confederations duly accredited by 
the Authority; and 
c) Three (3) representatives from the rubber farmers association upon the 
recommendation of their respective associations duly accredited by the 
Authority. 
SEC.7. Powers and Functions of the Board. - The Governing Board shall act as the 
policy making body of the Authority to formulate the policies, promulgate regulations 
and prescribe rules to attain the purposes and objectives of this Act. 
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SEC.8. Term of Office of the members of the Governing Board. - Unless sooner 
removed for cause by the President through the recommendation of their respective 
association, appointed members of the Governing Board shall hold office for a period of 
two (2) years from the date of appointments. 
SEC.9. Organization. - The Chief Executive Officer of the Authority shall be the 
Administrator to be appointed by the President upon recommendation of the Board. He 
shall be assisted by two (2) Deputy Administrators to be appointed by the President 
upon recommendation of the Board. The Board shall determine and create 
organizational structure of the Authority and shall appoint all other officers of the 
Authority. 
SEC.lO. Powers and Functions of the Administuator. - Subject to the control and 
supervision of the Board, the Administrator shall have the following powers and 
functions: 
a) Submit policy recommendations and proposed measures necessary to carry out 
the objectives and functions of the Authority, for the consideration of the Board; 
b) Recommend to the Board for approval, an organizational structure, and plantilla 
of personnel of the Authority, in accordance with existing laws, rules and 
regulations; 
c) Execute, administer and implement policies and measures approved by the 
Board; 
d) Submit to the Board, in line with the national budget cycle, an annual budget and 
such supplemental budget as may be necessary for its consideration and 
approval; 
e) Represent the Authority in all its dealings with other persons, entities, agencies 
and institutions whether public or private, domestic or foreign, subject to the 
limitations and conditions herein provided; 
f) Appoint, subject to the confirmation of the Board, and discipline or remove for 
cause in accordance with the civil service law, rules and regulations, the officers 
and personnel of the Authority; and 
g) Perform such other duties which may be assigned to him by the Board or by the 
Secretary of the Department of Agriculture. 
SEC.ll. Promulgation of Rules and Regulations - The Governing Body shall 
promulgate rules and regulations for the full implementation of this Act within ninety 
(90) days of its effectivity. Such rules and regulations shall take effect upon the 
publication in two (2) newspaper of to time as it may deem appropriate. 
SEC.12. Annual Report - The Board, shall within three months after the end of every 
fiscal year, submit its annual report to the President. The annual report shall include a 
statement of the Board's accomplishments together with its plans and recommendation 
to improve and develop the industry. 
SEC.13. Priority Projects. - Immediately after the approval of this Act, the 
Authority, in coordination with other related agencies, shall undertake vigorously the 
following: 
a) Plant Now Pay Later Program for Rubber and other Investment Promotion and 
Facilitation activities; 
b) Production Support, Research and Extension which include massive nursery 
development, establishment of budwood gardens in key areas nationwide, 
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strategic accreditation and plant material certification, technology extension, 
development and promotion of rubber production and harvesting technologies, 
technology extension, strengthening farmer cc~ops and industry associations and 
research on rubber-based cropping system; 
c) Upgrading the efficiency and economy for existing processing facilities and the 
establishment of additional processing facilities to absorb increased production 
as well as the establishment of on-site rubber manufacturing plant; 
d) Manpower Development program through training and scholarships. 
SEC.14. Rubber Development Fund. - To implement Section 13 of this Act, there is 
hereby created a Rubber Development Fund which shall be used exclusively for the 
above-mentioned programs, initially in the amount of Two hundred million pesos (I' 
200,000,000) from the funds in the National Treasury not otherwise appropriated. 
Annually thereafter, not less than One hundred forty million pesos (P140,000,000) shall 
be provided to augment the fund in the General Appropriations Act. 
SEC.15. Exemptionfrom Taxes and Duties. - The authority shall be exempt from the 
payment of customs duties and taxes on the importation of dairy animals, veterinary 
and other supplies, other farms inputs, rubber equipment and machineries, including 
spare parts, for distribution to rubber farmers cooperatives subject to the following 
conditions: 
(1) That said equipment and machineries, including its spare parts are not 
manufactured domestically in sufficient quantity, of comparable quality and 
reasonable prices; 
(2) That it shall be actually, directly and exclusively used by the rubber farmers and 
cooperatives in the manufacture of its products; 
(3) That it shall not be disposed within three (3) years from acquisition, without 
prior approval of the Authority; and 
(4) If it will subsequently sold, transferred or exchange in the Philippines to non 
exempt persons or entities, the purchasers and recipients shall be considered the 
importers thereof, and shall be liable for the customs duties and internal revenue 
taxes due on such importations. The customs duties and internal revenue taxes 
due on such articles shall constitute a lien on the article itself, superior to all other 
charges or liens, irrespective of the processors thereof. 
Any donation, contribution, bequest, subsidy or financial aid which may be made to 
the Authority shall constitute as allowable deduction from the income of the donor for 
income tax purposes and shall be exempt from dondr's tax, subject to such conditions as 
provided under the National Internal Revenue Code, as amended. 
SEC.16. Credit Facilities. - The Banko Sentral ng Pilipinas shall adopt such 
monetary and rediscounting policies as may be designed to encourage rural banks, 
savings and loan associations, commercial banks and other credit institutions to meet 
financing and credit needs essential to achieve the objectives of this Act. 
In addition, the Philippine National Bank, the Land bank of the Philippines and the 
Development Bank of the Philippines shall design and establish special lending 
programs at affordable terms for rubber farmers, cooperatives, processors and 
manufacturers. 
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SEC.17. Appropriations. - There is hereby authorized to be appropriated from the 
National Treasury not otherwise appropriated, the sums necessary to carry into effect 
the provisions of this Act: Provided, That thereafter, it shall be included in the annual 
budget of the General Appropriations Act of the year following its enactment into law 
and every year thereafter. 
SEC.18. Separability Clause. - If for any reason, any provision of this Act is declared 
invalid or unconstitutional, the remaining provisions not affected thereby shall continue 
to be in full force and effect. 
SEC.19. Repealing Clause. - All other laws; rules and regulations and other 
issuances or parts thereof contrary to or inconsistent herewith are likewise repealed or 
modified accordingly. 
SEC.20. Effectivity Clause. - This Act shall take effect fifteen (15) days following its 
publication in the Official Gazette or in at least two (2) national newspapers of general 
circulation. 
Approved, 
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