THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
1 
First Regular Session 
) 
S E N A T E _ L S O r  
S.B. No. 
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Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
The dependence of the Philippines on imported petroleum creates a major strategic 
vulnerability for the nation, with majority of the energy supply of the country reliant on foreign 
sources. From economically damaging Arab oil embargoes of 1973-1974 and 1979 to the current 
recession precipitated by rising oil prices which began in 1999, the economic stability of the 
Philippines has too often been shaken by economic forces outside its borders. 
This-bill seeks-to shift Philippines' dependence away from foreign petroleum as an 
energy source toward alternative, renewable, and domestic agricultural sources. Its ,aim is to 
convert the current petroleum trade deficit to a trade balance by replacing foreign sources of 
supply with steady increases of ethanol fuels through domestic production. 


THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
(1) “Ethanol” - refers to the biofuel made through fermentation and then 
starch and sugar crops such as maize, sorghum, potatoes, wheat, sugar-canes, 
S E N A T E  
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S.B.No. 
1907 
distillation of 
com;talks, fruit 
, 
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Introduced by Senator Miriam Defensor Santiago 
AN ACT 
MANDATING THE USE OF ETHANOL AS ALTERNATIVE TRANSPORT FUEL, 
ESTABLISHING FOR THE PURPOSE THE NATIONAL FUEL ETHANOL PROGRAM, 
APPROPRIATING FUNDS THEREFOR 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assem bled: 
SECTION 1. Short Title. - 
This Act shall be known as the “Fuel Ethanol Act of 2005.” 
SECTION 2. DecZarafion of Policy. - 
It is declared the policy of the State to (a) ensure 
a continuous, adequate, and economic supply of energy with the end in view of ultimately 
achieving energy independence through the integrated and intensive exploration, production, 
management and development of the country’s indigenous, renewable energy resources, and to 
(b) pursue economic growth by providing opportunities for generating income, knhancing 
productivity, and promoting industrialization and employment based on sound agricultural 
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development. 
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SECTION 4. The Fuel Ethanol Program. - 
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(1) A fuel ethanol program shall be established nationally to provide for the development, 
promotion and commercialization of fuel ethanol by implementing policies, mechanisms, and 
procedures that encourage research and development, technology transfer, and investments in 
fuel ethanol production, distribution, and utilization. 
(2) The use of ethanol as alternative transport fuel shall be mandatory nat onwide. In 
view thereof, all gasoline products, beginning January 1, 2007, shall have a man atory 10% 
ethanol blend, This shall be increased to 25% ethanol blend by January 1,2010. 
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(3) All new vehicles running on gasoline fuel produced, sold, and imported into the 
country beginning January 1, 2007 must have engines that can utilize 10% ethanol blend. In 
addition, beginning January 1, 2010, all gasoline-fed vehicles shall have engines that could 
utilize 25% ethanol blend. 
(4) On the basis of these specifications, the Department of Energy (DOE), in coordination 
with other government agencies, shall conduct consultations with the various stakeholders 
including but not limited to oil companies, car manufacturers, and sugar and alcohol industry 
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players. 
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SECTION 5. Implementing and Coordinating Agencies. - 
(1) The DOE shall be the lead implementing agency and shall set the policy directions to 
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meet the spZ%ffic targe&f the Program. 
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(2) The Program shall be established in coordination with relevant governmen1 agencies 
including but not limited to the following agencies and their respective functions in relation 
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thereto: 
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a. DEPARTMENT OF AGRICULTURE @A). -It 
shall 
and sustainable supply of ethanol feedstocks. It shall 
guarantee that a certain percentage of the total 
allocated for fuel ethanol production; 
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b. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR). - 
It shall facilitate the issuance of Environmental Compliance Certificates and other 
requirement%-related to the Fuel Ethanol Program and provide technical support 
related to emissions testing and standard-setting of ethanol vehicles with the view to 
improve the air quality; 
c. DEPARTMENT OF SCIENCE AND TECHNOLOGY (DOST). - 
It shall provide 
R&D and technical support in propagating feedstock cultivation and fuel ethanol 
production; 
d. DEPARTMENT OF TRADE AND INDUSTRY (DTI). - It shall ensure the 
inclusion in its Motor Vehicle Development Program the development an promotion 
of the manufacture and/or investment in production of gasoline-fed vehicles that 
could effectively utilize up to 25% ethanol blend; 
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e. GOVERNMENT FINANCING INSTITUTIONS (GFIs). - GFIs shall make 
available preferential financing to investment/developmental activities with the view 
to accelerate the development of the fuel ethanol industry. 
SECTION 6. Implementing Rules and Regulations. - 
The DOE shall, in consultation 
with the relevant government agencies mentioned in the preceding section, industry participants, 
non-governmental organizations and end-users, promulgate the implementing rules and 
regulations of this Act, within six (6) months from the effectivity of this Act. 
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SECTION 7. FzgI Ethanol Fund - One percent (1%) of the total excise tax collected 
from the sale of fuel ethanol shall be set aside by the Bureau of Internal Revenue (l3IR) to 
constitute a Fuel Ethanol Fund to support the development, promotion and cornmercidization of 
fuel ethanol. This fund shall be managed and administered by the DOE for these purposes. 
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SECTION 8. Penalty CJause. - 
The DOE shall formulate and promulgate 
penalties for any person or entity that willfully violates rules and regulations prov 
Act. 


SECTION 9. Separability Clause. - 
If any provision or part hereof, is held invalid or 
unconstitutional, the remainder of the Act or the provision not otherwise affected shall remain 
valid and subsisting. 
SECTION 10. Repealing Clause. - Any law, presidential decree or issuance, executive 
order, letter-of instruct&, administrative order, rule or regulation contrary to, or inconsistent 
with the provisions of this Act is hereby repealed, modified or amended accordingly. 
SECTION 11. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
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publication in at least two (2) newspapers of general circulation. 
Approved, 
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