Republic of the Philippines:
HOUSE OF REPRESENTATIVES
Queson City

EIGHTEENTH CONGRESS
First Regular Session

House BILL No. _°389

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

EXPLANATORY NOTE

Ensuring crop and aquaculture productivity is not only essential to economic
growth in the country’s agricultural and fisheries sector but also key to sustaining
food security

Although pesticides and chemical fertilizers aid in enhancing crop production and
protection from adverse weather conditions, harmful tradeoffs such as waterways
pollution, chemical burns, increased air pollution, soil acidification and mineral
depletion have also been scientifically observed and established.

Under Article Il, Section 16 of the 1987 Constitution of the Republic of the
Philippines, the State is mandated “to protect and advance the right of the people
to a balanced and healthful ecology in accord with the rhythm and harmony of
nature.” Section 15 of the same article also mandates the State to “protect and
promote the right to health of the people.”

In a study published by the Japanese Association of Rural Medicine, data gathered
from the National Poison Control and Management Center (NPCMC), the
Philippine General Hospital, De La Salle Medical Center, and other hospitals,
suggest that from 2006 to 2010, the number of pesticide poisoning cases, including
mortality rates caused by pesticide poisoning has steadily risen. Pesticide
exposure, work practices, and pesticide residues in the immediate environment
were identified as common risk factors among these cases.

Similar hazards to public health and the environment have also been associated
with chemical fertilizers. Runoffs and residues from these chemicals that contain
nitrogen and phosphorus have been shown to create an overabundance of
nutrients in waterways and soil water that reduces oxygen content. In the long run,
chemical fertilizers deplete the soil's essential nutrients, vitamins, and mineral
content making it less conducive for crop production. Data from the United States


Department of Agriculture Nutrient Data Laboratory (US-DANDL) demonstrate that
food grown in chemically fertilized soils were found to have less magnesium,
potassium, and calcium content

Meanwhile, excessive fertilizer use has been documented to turn leaves yellow or
brown, damaging the plant and reducing crop yield. In addition, the use of nitrogen
in excess of what plants and crops can readily absorb during crop fertilization has
been shown to contribute to the release of greenhouse gases such as carbon
dioxide and nitrous oxide into the atmosphere.

In recent years, environmental taxation has become a key instrument of State
authorities in reducing or even eliminating environmental and health hazards.
Taxation creates incentives and disincentives for economic agents to change their
behavior.

In the context of pesticides and chemical fertilizers, taxation will decrease market
demand for these hazardous products. From an environmental point of view, a tax
will be beneficial since it will eliminate the mismatch between market prices and
social costs. An adjustment of this mismatch will lead to decreased production and
consumption of the environmentally degrading product.

Under this law, an Environmental Tax on Pesticides and Chemical Fertilizers
(ETPCF) shall be imposed equal to three percent (3%) of the wholesale price
per kilogram of the pesticides and chemical fertilizers defined herein. The
EPTCF shall cover domestic manufacturers and importers where pesticides and
chemical fertilizers are sold for agriculture and other commercial purposes.

Through this "Pesticide Tax Act", the Philippine government will not only be
fulfilling its constitutional mandate to promote the health of the people and the
ecology and to regulate potential public hazards but will also be contributing to
the growing global campaign towards a more mindful human relationship with
the environment and its finite resources.

In view of the foregoing, the immediate approval of this bill is earnestly sought.

AY” F. VILLAFUERTE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES.

Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 6389

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

AN ACT IMPOSING ENVIRONMENTAL TAX ON PESTICIDES AND
CHEMICAL FERTILIZERS

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

SECTION 1. Short Title. - This act shall be known as “PESTICIDES AND
CHEMICAL FERTILIZERS TAX ACT’.

SECTION 2. Declaration of Policy — It is a declared policy that the State shall
protect and promote the right to health of the people and instill health
consciousness advancing a balanced and healthful ecology according to the
rhythm and harmony of nature. The State shall also attain and maintain a balance
between agri-economic development and environmental protection.

Thereby, the state shall promote means that will preserve a healthy environment
not only for the present generation, but also for those to come — generations who
should be inheriting a rejuvenated earth capable of sustaining life.

The right to a balanced and healthful ecology carries with it the correlative duty to
refrain from impairing the environment.


SECTION 3. Definition of Terms. — For purposes of this Act, the following
definitions shall apply to the following terms:

a. Active Substance - are the chemical ingredients in pesticide
products that shall include but not be limited to the following: Acephate
(2,4-D), Acid Copper Chromate, Alkaline Copper Quaternary, Arsenic,
Bacillus thuringiensis (Bt), Bendiocarb, Bifenthrin, Boric Acid,
Bromadiolone, Bis-(N-cyclohexyldiazeniumdioxy-copper, Capsaicin,
Captan, Carbaryl, Chlordane, Chlorpyrifos, Chromated Copper
Arsenate, Chromium, Copper Azole, Copper Sulfate,
Creosote,Cyproconazole, Cyfluthrin, D-phentorin, DDT, DEET,
Deltamethrin, Diatomaceous earth, Diazinon, Dicamba, Fipronil,
Glyphosate, Hexaflumuron, Hydramethyinon, Hydroprene,
Imidacloropid, Iron Phosphate, Lambda-cyhalothrin, Malathion,
Methoprene, Methyl bromide, MGK-264, Naled, Napthalene,
Paradichlorobenzene, Pentachlorophenol, Permethrin, _Picardin,
Piperonyl Butoxide, | Potassium,  Propiconazole, _Pyrethrins,
Pyriproxytren, Resmethrin, Spinosad, Sulfur, Sulfuryl Flouride, Triclopyr,
Zinc Phosphide, Zinc Sulfate.

b. Active ingredient - are the chemical substance in chemical fertilizers
that shall include but not be limited to the following: Nitrogen, Urea,
Ammonium sulphate, Ammonium Chloride, Calcium Ammonium Nitrate,
Phosphorus, Singlesuper phosphate, Triplesuper phosphate,
Potassium, Calcium, Sulfur, Iron, Manganese, Zinc, Boron and
Molybdenum. :

c. Chemical Fertilizers - are compounds containing high concentration of
nutrients required for plant growth applied in the soil. It is classified as
Nitrogenous fertilizers, Phosphatic fertilizers and Complex and mixed
fertilizers


d. Pesticides - are substances that prevent, destroy, repel, or reduce the
severity of pests. Pesticides include: Algicides, Antifouling, Fungicides,
Fumigants, Herbicides, Insecticides, Mollusicides, Nematicides and
Rodenticides

e. Domestic Manufacturers and Importers - any person or group of

persons engaged in manufacturing and importation of pesticides and
chemical fertilizers

f. Organic - this law shall adopt the definition provided for under Republic
Act No. 10068 “Organic Agriculture Act of 2010” to wit

“Organic refers to the particular farming and
processing system, described in the standards and
not in the classical chemical sense. The term
“organic” is synonymous in other languages to
“biological” or “ecological”. It is also a labeling term
that denotes products considered organic based on
the Philippine National Standards for organic
agriculture.”

g. Organic Agriculture - this law shall adopt the definition provided for
under Republic Act No. 10068 “Organic Agriculture Act of 2010” to
wit:

“Organic agriculture includes all agricultural systems
that promote the ecologically sound, socially
acceptable, economically viable and technically
feasible production of food and fibers. Organic
agricultural dramatically reduces external inputs by
refraining from the use of chemical fertilizers,
pesticides and pharmaceuticals. It also covers areas
such as, but not limited to, soil fertility management,
varietal breeding and selection under chemical and
pesticide-free conditions, the use of biotechnology
and other cultural practices that are consistent with
the principles and policies of this Act, and enhance
productivity without destroying the soil and harming


farmers, consumers and the environment as defined
by the International Federation of Organic
Agricultural Movement (IFOAM): Provided, That the
biotechnology herein to shall not include genetically
modified organisms of GMOs.”

h. Organic/Compost Fertilizers - are fertilizers derived from animal

matter, animal excreta (manure), human excreta and vegetable matter.

i. Organic Pesticides - are pesticides made from naturally occurring
substances or self-made mixtures.

SECTION 4. Amount of Environmental Tax — The amount of Environmental
Tax on Pesticides and Chemical Fertilizers (ETPCF) shall be equal to 3% of the
wholesale price per kilogram of any of the pesticides and chemical fertilizers
mentioned under Section 3 paragraphs c and d of this Act containing any of the
active substance and ingredient included in the enumeration provided for in
Section 3 paragraphs a and b. The following formula shall be used for computing
the tax:
ETPCF = 3% of wholesale price per kilogram x total
kilogram of pesticides and chemical fertilizer sold

SECTION 5. Coverage and Fees —- ETPCF shall be imposed on the domestic
manufacturers and importers where pesticides and chemical fertilizers are sold for
agriculture and other commercial purposes.

SECTION 6. Exemptions - This Act shall exempt:
a. _ any person or group of persons that are engaged in organic agriculture;

b. any domestic manufacturers and importers of organic pesticides and
organic fertilizers.


SECTION 7. Disposition of Revenues Collected— All revenues collected under
this Act shall be earmarked solely and used exclusively for the following purposes:

a. Providing programs to assist agricultural workers in transitioning to organic
agriculture and production systems.
Providing effective rural productivity enhancement programs.

b.
c. _ Improving resiliency of agricultural infrastructures.
d. Investing on wildlife conservation.

e.

Environmental and health programs of the government.

SECTION 8. Implementing Rules and Regulations — The Department of Finance
(DoF) in coordination with Department of Agriculture (DA), the Fertilizer and
Pesticide Authority (FPA) under the Office of the President (OP), the Department
of Environment and Natural Resources (DENR) and Department of Budget and
Management (DBM) shall promulgate not later than thirty (30) days upon the
effectivity of this Act the necessary rules and regulations for its effective
implementation.

SECTION 9. Separability Clause - If any section or part of this Act is
unconstitutional or invalid, the other sections or provisions no other affected shall
remain in full force and effect.

SECTION 10. Repealing Clause - All laws, decrees, executive orders, rules and
regulations, issuances are any part thereof inconsistent with the provisions are
hereby repealed, amended or modified accordingly.

SECTION 11. Effectivity - This act shall take effect fifteen (15) days after

publication either in the Official Gazette or in at least two (2) national newspapers
of general circulation

Approved.