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SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
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SENATE 
S. B. No;59'2' ' 
Introduced by Senator FRANCIS G. ESCUDERO 
EXPLANATORY NOTE 
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The government's effort in advancing the .C9un:try's interest in the sugar industry cannot 
be overstated especially with its significant role in the export business: 
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. Historically, numerous legislations and el\.ecutiv(J issuances governed the sugar industry, . 
. from the creation of the Philippine Sugar Admiriistration to.Sugar Quota Administration; i11.1937· 
and 1957, respectively, to the present Sugar Reguhitory Administration established' under 
Executive Order No. 18, series of1986. 
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. Given the nature of the price of sugar in the world market, which fluctuates every now 
. and theil', has made the government intercede over a period of time. Worse, such interVention has 
more often than not. resulted in aggravating the Uncertainty ofthe sugar industry. 
With this in mind and factoring aneyenmore important. and inevitable scenario in 2015, 
where .sugar tariff will be zero rated, it becomes indispensable that 'Congress legislates the 
appropriate app'Iicable policy for the sugar industry. 
Hence, in the House of Representatives, Representative Alfredo Benitez ofthe3rd District 
ofNegros Occidental has filed House Bill No. 6113. 
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In joining the proposed policy. direction .. taken by Rep. Benitez, this representation is 
• filing the same biil with the end in vieW of ena()ting a measure that seeks to address the current· 
. and forthcoming issues in the sugar iIjdustry.1t issllbmittedthatthe sugar indllstry'scontribution. 
'. to econbmic development is worth looking intd(ifonlytoa<ldress,among'bthers, any ill.'effects 
of the 2015 "no-tariff;· C9rlunitrnerit of the country in the worldecon()my. . 
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R:~spectfti11y submitted for irnmediate considerati()nand appr6val, 
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. FRANCIS G.ESCUpEROI' 
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SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
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) 
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SENATE 
s.B.No.5S2 
Introduced by Senator FRANCIS G. ESCUDERO 
AN ACT 
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STRENGTHENING THE DEVELOPMENT OF THE SUGAR CANE INDUSTRY, 
. ESTABLISHING 
THE 
SUGAR 
CANE 
INDUSTRY 
DEVELOPMENT. FUND, 
AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1890, PROVIDING 
FlJNDS. THEREFOR AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. Short Title - This Act shall be known as the "Sugar Cane Industry 
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Development Act." 
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SEC 2. Declaration of Policy. - It is hereby declared the policy of the State to provide 
policy, qirections and support programs/projects for the sustained development and 
diversification of the sugarcane industry inasmuch as the industry provides employment and . 
livelihood to a sizeable number of Filipinos in the agricultural sector, contributes significantly to 
the national economy ~s well 'as local economies of host provinces,earns for the c~uiltry foreign 
reserves from exports to other countries, and is vital for food sufficiency lind enerr security of 
the country. . '  
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. . For the reasons stated, it is hereby further declared that the' development and 
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diversification of the sugarcane industry shall be directed primarily to the increase in incomes of 
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the farmers, the enhancement of the productivity of sugar planters and sugar mills and the 
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improvement in marketing and trading practices in terms of administrative, policy directives and 
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financial assistance to the sugarcane industry in 'support of the food security objectives and 
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environmental concerns of the national government. 
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. SEC. 3- Development of the Sugar Cane Industry---c 
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The main focus of the development of the sugar industry shall be on the following measures, 
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A. Industry-wide development 
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1. In general, the transformation of sugarcane industry from the limited "raw and refined 
sugar production" into a diversified industry producing not mainly raw and refined 
sugar, but also power, waste disposition and other possible. biochemiCal products 
primarily through integration of by-products production with sugar processing;' 
Z. The establishment of Special Economic Zones for SugaJ;cane Industry pursuant to 
R.A. No. 7916 (Special Economic Zone Act of 1995), and/or the designation and 
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establishment of nuclear farms/ Agro-Industrial Districts for Sugarcane Industry to be 
entitled to the existing fiscal incentives under Book VI of Executive Order No. 226 
otherwise known as the Omnibus Investments Code of 1987 as well as Sections 4,5, 6 
and '7 ofRA. 10000 (The Agri-AgraReform Credit Act of 2009), promoting, among 
others, block/corporate farming to achieve economies of scale; 
3, The development of programs that 
are environment friendly and will attract 
investment in the development, production, or manufacture of products derived from 
sugarcane, sugar, molasses, cane juice, crop waste, bagasse, filter mud rd other by-
products and co-products of sugarcane milling; 
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4. The institution of marketing programs that will lead to expansion of markets for 
sugarcane and by-products; 
5. The building and/or improvement of existing trans-loading ports for export or coast-
wide transport, of sugar and its by products in key sugar. producing areas through 
various programs or projects of other government agencies such as NEDA, DOTC 
andPPA; 
6. The development of a sugar cane industry that shall benefit sugar farmers, planters 
and mill workers; 
7. The encouragement and intensification of farm productivity improvement, including . 
but not limited to farm mechanization, organic farming, fertilization, irrigation, 
intensified inter-cropping, and dispersal of planting materials and improved high 
yielding varieties; 
8. The sustained support/conduct/sponsorship of research and development on the sugar 
cane industry including, among others, high yielding varieties, farm implements, farm 
methodologies, by-products profitability and marketing/promotion techniques, new 
manufacturing chemical and biotechnologies for bagasse, molasses and other by-
products, weather monitoring and soil fertility mapping; 
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B. Regulation ofsugar industry 
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1. The effective monitoring of the withdrawal, transfer, transport and movement of 
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sugar and premixes; provided, that, all sugar warehouses and storage facilities are 
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required to register with SRA. 
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2. The classification of imported sugar and premixes as either "C", "D", or "E" when 
imported at a time when there isa sufficienoy sugar stocks; provided, that the Bureau 
of Customs (BOC) shall not release imported sugar and premi~es without requisite 
SRA clearances alldclassificattob;'" 
3. The export of refined sugar to the world market shall be subjected to VAT zero 
percent rate from the time it is withdrawn or release from the sugar mill/refinery 
including refined sugar withdrawn for constrqctive export to CBW warehouse of food 
processors that are duly licensed and registered with SRA; 
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4. The wastewater discharge of mills that meet the standard of the Department of 
Agriculture on safe re-use of waste water for irrigation and other' agricultural 
purposes shall not be imposed any discharge fee. 
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C. Fund management 
1. The management and proper utilization and disposition of the Sugarcane Industry 
Development Fund established under Sec. 4 of this Act, with special emphasis on the 
industry's contribution to the food security program of the national government. 
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SEC. 4 -Establishment of Sugar Cane Industry Development Fund. 
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1. There is hereby established a Sugar Cane Industry Development Fund ("Sugar 
Fund") to support the implementation of the development strategy identified 
in Sec. 3 of this Act. The Sugar Fund shall be held in trust by the Philippine 
Sugar Corporation created under P.D. 1890. 
2. Initially, the Sugar Fund shall be utilized for the following specific purposes: 
a. Finance the establishment of Special Economic Zones, nuclear 
farms/Agro-Industrial Districts as provided for in Sec 4 (2. a) of this 
Act; 
b. Provide financial assistance to the sugar farmers, planters and mills 
covering purchase of seedlings, cane varieties, pesticides and fertilizer; 
acquisition of farm machinery and equipment; construction of farm to 
market roads; and construction or building of irrigation or water 
impounding facilities and water distribution networks; 
c. Provide financial conduitinglresources for industries harnessing the 
efficient use of the energy potential of the sugar cane (e.g. the Ethanol 
program) and utilization of farm wastes (e.g. bagasse as raw material 
for pulp and paper, boards and furfural and animal feeds) pud other by-
products using chemical and biotechllologies; 
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d. Conduct researches or feasibility studies to improve efficiency and 
productivity of farms and mills, identify areas for diversification, 
identify and develop other markets for sugar and it by-products and 
co-products particularly in the area of renewable energy and 
biochemical industry; 
e. Training of mill personnel on current technologies on efficiency, 
productivity and diversification; 
f. Finance socio-economic programs for sugar farmers and mill workers 
including but not limited to livelihood programs and trainings in 
addition to the programs under Republic Act 6982 (Strengthening the 
Social Amelioration program in the sugar industry); 
g. Scholarships for deserving university/college students taking relevant 
degrees to the sugar cane industry; and 
3. The Sugar Fund shall be constituted and collected from the proceeds of fifteen 
percent (15%) of: 
a. The Value Added Tax (VAT) on the sale and importation of refined 
sugar, and sugar cane by-products; and 
b. The total tariff collected on the importation of raw sugar (AHTN' 
1701.11.00), refined sugar (AHTN 1701.99 and its subheadings), and 
premix sugar (AHTN 1701.91.00 and 2106.90.52). 
All the proceeds collected from the above sources shall be remitted in full 
by the Department of Finance to a separate trust fund maintained by the 
Philippine Sugar Corporation (PhiiSuCor), created under P.D 1890, on or before 
August 1 of I'lvery year; prOVided, that the PhiiSuCor shall utilize and disburse 
such trust fund,in accordance with the purposes enumerated in Sec. 3 of this Act 
and its hnph,menting Rules and Regulations; provided further, that only the 
interest earnings of the trust fund shall be available for the operational expenses 
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of implementing the purposes of the trust fund; provided moreover, that the year-
end cumulative: financial balance of the trust fund shall constitute as the minimum 
matching amount of credit available to the sugarcane industry under Sec. 6 of 
R.A. 10900 (the Agri-Agra Reform Credit Act of 2009); and prohded finally, 
that this trust fund shall be audited by the Commission on Audit seParately from 
the other funds/accounts ofPhilSuCor. 
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SEC. 5. Members O!the Board o/the Philippine Sugar Corporation-- Section 8 ofP.D. 
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1890 is hereby amended as follows: 
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"(a) THE' ADMINISTRATOR OF THE SUGAR REGULATORY 
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COMMISSION SHALL BE THE CHAIRMAN OF THE BOARD"; 
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"(c) 
THE ADMINISTRATOR OF THE 
SUGAR REGULATORY 
COMMISSION SHALL BE THE CHAIRMAN OF THE BOARD"; 
ALL THE ELEVEN. MEMBERS OF THE BOARD SHALL BE 
NOMINATED BY SRA OF WHICH FIVE (5) SHALL COME FROM THE 
SUGAR FARMERS SECTOR, FIVE (5) FROM THE SUGAR MILLERS 
SECTOR' AND ONE (1) FROM THE INTERNATIONAL TRADER 
SECTOR;· 
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SEC. 6. Transitory Provisions. - Upoll. the effectivity of this Act, the positions in the 
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Board of Directors ofPHILSUCOR shall be deemed vacant, and the President shall appoint new 
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members based on the provi&ion of this Act; provided, however, the members of the Board shall 
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hold over until the new members are appointed. 
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SEC. 7. Implementing Agency. - The Sugar Regularoty Administration (SRA) shall be 
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the primary implementing agency of this Act.' The . SRA, together with the PhilSuCor and 
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representatives of sugar farmers, planters and mills, shall formulate the implementing rules and 
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regulations that shall, among others, identify and establish the requirements and restrictions 
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governing the execution oftheabove purposes.no later than three (3) months from the effectivity 
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ofthis Act. 
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SEC. 8. Repealing Clause. -
All laws, decrees, executive orders and rules and 
regulations or part or parts thereof inconsistent with any provision of this Act are hereby 
repealed, modified or amended accordingly. 
SEC. 9. Separability Clause. -
If any provision of this Act is declared un60nstitutional, 
the validity of the remaining provisions hereof shall remain in full force and effect. 
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SEC. 10. Effectivity, ~ This Act shall take effect fifteen (15) days after its complete 
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publication in the Official Gazette or in at least two (2) newspapers of general circulation. 
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Approved, 
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