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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 6454

Introduced by REP. JOHNNY T. PIMENTEL

EXPLANATORY NOTE

On August 2, 1960, Congress passed Republic Act No. 3018, otherwise known as “AN ACT
LIMITING THE RIGHT TO ENGAGE IN THE RICE AND CORN INDUSTRY TO
CITIZENS OF THE PHILIPPINES, AND FOR OTHER PURPOSES”. The Rice and Com
Nationalization Law absolutely prohibited non-Filipinos from engaging in the rice and/or com
industry, which the law defined as “the culture, milling, warehousing, transporting,
exportation, importation, handling the distribution, either in wholesale or retail, the provisions
of Republic Act Numbered Eleven hundred and eighty to contrary notwithstanding, or
acquisition for the purpose of trade of rice (husked or unhusked) or com and the by-products
thereof.” The purpose of the law was to transfer the rice and corn industry to Filipinos and
Filipino-owned entities and to do away with the possibility and practice of aliens creating
artificial shortages of rice and corn by hoarding these commodities, or cornering the market
therefor, so as to enable them to dictate prices thereof.

Thirteen (13) years later, R.A. No. 3018 had succeeded in transferring the rice and corn industry
in all its aspects to Filipinos and Filipino-owned entities. However, said law, in restraining
competition and foreign investment, created artificial restraints in the national effort to develop
the rice and corn industry. To lift the prohibitions, especially in cases where grains, including
rice and corn and/or by-products thereof, are used for direct consumption or as raw materials
and to encourage foreign investments on a large scale to develop virgin lands for rice and com,
Presidential Decree No. 194, was issued to liberalize the rice and corn industry. While the aim
of the Decree was laudable, Section 5 thereof — which imposes upon foreign-owned
corporations, partnerships, and associations, the eventual divestment of 60% of its foreign
equity participation to Filipino citizens ~ created another unnecessary restraint upon foreign
investment and the foreign investors that use rice and/or com as raw materials in their
manufacturing operations, such as feed mills. Besides creating numerous jobs and supporting
technology transfer in such industries, foreign participation has also caused improved
competition and efficiency in said markets while supporting growing downstream industries
such as livestock and protein markets as well as various food products and consumer goods.

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This Bill seeks to fulfill P.D. No. 194°s original vision of a truly liberalized rice and com
industry by repealing the aforementioned divestment requirement, rationalizing the definition
of rice and/or corn industry and to reiterate the promotion of productive foreign investments in
agriculture as a key to national and rural development.

JOHNNY T-


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Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 6454

” Introduced by REP. JOHNNY T. PIMENTEL

AN ACT FURTHER LIBERALIZING THE RICE AND CORN INDUSTRY,
REPEALING FOR SUCH PURPOSE REPUBLIC ACT NO. 3018, OTHERWISE
KNOWN AS “AN ACT LIMITING THE RIGHT TO ENGAGE IN THE RICE AND

CORN INDUSTRY TO CITIZENS OF THE PHILIPPINES, AND FOR OTHER

PURPOSES” AND AMENDING PRESIDENTIAL DECREE NO. 194
AUTHORIZING ALIENS, AS WELL AS ASSOCIATIONS, CORPORATIONS
OR PARTNERSHIPS OWNED IN WHOLE OR IN PART BY FOREIGNERS TO.
ENGAGE IN THE RICE AND CORN INDUSTRY, AND FOR OTHER
PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Title. — This Act shall be known as the “Rice and Corn Industry
Liberalization Act of 2019.

SECTION 2. Declaration of Policy. ~The State recognizes the importance of
attracting, promoting and welcoming productive investments in the rice and corn industry
that will bring down prices for the Filipino consumer, create more jobs, stimulate
economic growth, stabilize food supply, enable technology transfer, and enable Philippine
goods and services to become globally competitive. The State, therefore, adopts the policy
of removing artificial restraints upon the effort to develop the rice and com industry,
especially in cases where grains, including rice and corn and/or by-products thereof, are
used for direct consumption or as raw materials in the manufacture or processing of their
finished products.

SECTION 3. An alien, association, partnership or corporation, owned in whole or
in part by foreigners, may engage in the rice and/or corn industry in all its aspects.

SECTION 4. Definitio
shall include the following act

As used in this Act, the term “rice and/or corn industry”



a. Acquiring by barter, purchase, importation, or otherwise, rice and/or corn and/or
by-products thereof, to the extent of their raw material requirements when these
are used as raw materials in the manufacture or processing of their finished
products.

b. Engaging in the culture, production, warehousing, milling, processing, trading,
transport, and retailing of rice and/or com.

SECTION 5. Repealing Clause. ~ Republic Act No. 3018, as amended, is hereby
repealed. Sections 3, 4, 5, 7, 8, and 9 of Presidential Decree No. 194 are likewise repealed
and all other laws, executive orders, rules and regulations or parts thereof inconsistent with
this Act are repealed or modified accordingly.

SECTION 6. Separability Clause. — If any provisions of this Act is declared invalid,
the other provisioris not affected thereby shall remain valid.

SECTION 7. Effectivity.— This Act shall take effect fifteen (15) days after its complete
publication in two (2) national newspapers of general circulation,

Approved.