" ;:' 
FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
) 
) 
) 
liq\ll, "i' '" 
,.'LH~ 
SENATE 
s.No.3207 
'12 
Introduced by Senator FRANCIS G. ESCUDERO 
EXPLANATORY NOTE 
The government's effort in advancing the country's interest in the sugar 
industry cannot be overstated especially with its significant role in the export 
business. 
Historically, numerous legislations and executive issuances governed the 
sugar industry, from the creation of the Philippine Sugar Administration to 
Sugar Quota Administration, in 1937 and 1957, respectively, to the present Sugar 
Regulatory Administration established under Executive Order No. 18, series of 
1986. 
Given the nature of the price of sugar in the world market, which 
fluctuates every now and then, has made the government intercede over a period 
of time. Worse, such intervention has more often than not resulted in 
aggravating the uncertainty of the sugar industry. 
With this in mind and factoring an even more important and inevitable 
scenario in 2015, where sugar tariff will be zero rated, it becomes indispensable 
that Congress legislates the appropriate applicable policy for the sugar industry. 
Hence, in the I-louse of Representatives, Representative Alfredo Benitez of 
the 3rd District of Negros Occidental has filed House Bill No. 6113. 
In joining the proposed policy direction taken by Rep. Benitez,. this 
representation is filing the same bill with the end in view of enacting a measure 
that seeks to address the current and forthcoming issues in the sugar industry. It 
is submitted that the sugar industry'S contribution to economic development is 
worth looking into if only to address, among others, any ill effects of the 2015 
"no-tariff" commitment of the country in the world economy. 
Respectfully submitted for immediate consideration and approval. 
> 
FRANCIS G. ESCUDERO 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session 
) 
) 
) 
SENATE 
S.No. 3207 
Introduced by Senator FRANCIS G. ESCUDERO 
AN ACT 
,-,-/ ' 
STRENGTHENING THE DEVELOPMENT OF THE SUGAR CANE INDUSTRY, 
ESTABLISHING THE SUGAR CANE INDUSTRY DEVELOPMENT FUND, AMENDING 
FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1890, PROVIDING FUNDS 
THEREFOR AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of tlu Philippines in Congress 
assembled: 
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SECTION 1. Short Title - This Act shall be known as the "Sugar Cane 
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Industry Development Act. 
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SEC 2. Declaration of Policy. - It is hereby declared the policy of the State 
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to provide policy directions and support programs/projects for the sustained 
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development and diversification of the sugarcane industry inasmuch as the 
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industry provides employment and livelihood to a sizeable number of Filipinos 
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in the agricultural sector, contributes significantly to the national economy as 
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well as local economies of host provinces, earns for the country foreign reserves 
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from exports to other countries, and is vital for food sufficiency and energy 
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security of the country. 
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For the reasons stated, it is hereby further declared that the development 
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and diversification of the sugarcane industry shall be directed primarily to the 
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increase in incomes of the farmers, the enhancement of the productivity of 
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sugar planters and sugar mills and the improvement in marketing and trading 
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practices in terms of administrative, policy directives and financial assistance 
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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-
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The main focus of the development of the sugar industry shall be on the 
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following measures, programs and projects: 
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A. Industry-wide development 
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1. In general, the transformation of sugarcane industry from the limited 
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"raw and refined sugar production" into a diversified industry 
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producing not mainly raw and refined sugar, but also power, waste 
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disposition and other possible biochemical products primarily through 
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integration of by-products production with sugar processing; 
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2. The establishment of Special Economic Zones for Sugarcane Industry 
pursuant to R.A. No. 7916 (Special Economic Zone Act of 1995), 
and/ or the designation and 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 of R.A. 10000 (The Agri-Agra Reform 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 and other by-products and co-products of 
sugarcane milling; 
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 [or 
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 and PPA; 
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 of sugar industry 
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1. The effective monitoring of the withdrawal, transfer, transport and 
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movement of sugar and premixes; 
provided, that, all sugar 
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warehouses and storage facilities are required to register with SRA. 
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2. The classification of imported sugar and premixes as either "C", "0", or 
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"E" when imported at a time when there is a sufficiency sugar stocks; 
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provided, that the Bureau of Customs (BOC) shall not release 
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imported sugar and premixes without requisite SRA clearances and 
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classification; 
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3. The export of refined sugar to the world market shall be subjected to 
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VAT zero percent rate from the time it is withdrawn or release from 
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the sugar mill/ refinery including refined sugar withdrawn for 
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constructive 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 
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Department of Agriculture on safe re-use of waste water for irrigation 
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and other agricultural purposes shall not be imposed any discharge 
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fee. 
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C. Fund management 
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1. The management and proper utilization and disposition of the 
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Sugarcane Industry Development Fund established under Sec. 4 of 
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this Act, with special emphasis on the industry's contribution to the 
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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 
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Fund ("Sugar Fund") to support the implementation of the 
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development strategy identified in Sec. 3 of this Act. The Sugar 
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Fund shall be held in trust by the Philippine Sugar Corporation 
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created under P.O. 1890. 
. 
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2. Initially, the Sugar Fund shall be utilized for the following 
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specific purposes: 
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a. Finance the establishment of Special Economic Zones, 
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nuclear farms/ Agro-Industrial Districts as provided for in 
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Sec 4 (2. a) of this Act; 
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b. Provide financial assistance to the sugar farmers, planters 
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and mills covering purchase of seedlings, cane varieties, 
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pesticides and fertilizer; acquisition of farm machinery 
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and equipment; construction of farm to market roads; 
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and construction or building of irrigation or water 
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impounding facilities and water distribution networks; 
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c. Provide financial conduiting/resources for industries 
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harnessing the efficient use of the energy potential of the 
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sugar cane (e.g. the Ethanol program) and utilization of 
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farm wastes (e.g. bagasse as raw material for pulp and 
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paper, boards and furfural and animal feeds) and other 
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by-products using chemical and biotechnologies; 
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d. Conduct researches or feasibility studies to improve 
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efficiency and productivity of farms and mills, identify 
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areas for diversification, identify and develop other 
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markets for sugar and it by-products and co-products 
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particularly in the area of renewable energy and 
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biochemical industry; 
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e. Training of mill personnel on current technologies on 
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efficiency, productivity and diversification; 
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f. Finance socio-economic programs for sugar farmers and 
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mill workers including but not limited to livelihood 
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programs and trainings in addition to the programs under 
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Republic Act 6982 (Strengthening the Social Amelioration 
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program in the sugar industry); 
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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%) 0[: 
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 1701.91.0.0 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 every year; 
provided, that the PhilSuCor shall utilize and disburse such trust 
fund in accordance with the purposes enumerated in Sec. 3 of this 
Act and its Implementing Rules and Regulations; provided further, 
that only the interest earnings of the trust fund shall be available 
for the operational expenses 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. 10000 (the Agri-Agra Reform Credit Act of 
2009); and provided finally, that this trust fund shall be audited 
by the 
Commission on Audit separately 
from 
the 
other 
funds/ accounts of PhilSuCor. 
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SEC. 5. Members of the Board of the Philippine Sugar Corporation--
3D 
Section 8 of P.D. 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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"(b) XXX 
"(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. - Upon the effectivity of this Act, the 
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positions in the Board of Directors of PHILSUCOR shall be deemed vacant, and 
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the President shall appoint new members based on the provision of this Act; 
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provided, however, the members of the Board shall hold over until the new 
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members are appointed. 
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SEC. 
7. Implementing Agency. - The Sugar Regularoty Administration 
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(SRA) shall be the primary implementing agency of this Act. The SRA, together 
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with the PhilSuCor and representatives of sugar farmers, planters and mills, 
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shall formulate the implementing rules and regulations that shall, among 
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others, identify and establish the requirements and restrictions governing the 
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execution of the above purposes no later than three (3) months from the 
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effectivity of this Act. 
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SEC. 8. Repealing Clause. -
All laws, decrees, executive orders and 
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rules and regulations or part or parts thereof inconsistent with any provision of 
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this Act are hereby repealed, modified or amended accordingly. 
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SEC. 9. Separability Clause. -
If any provision of this Act is declared 
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unconstitutional, the validity of the remaining provisions hereof shall remain in 
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full force and effect. 
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SEC. 10. Effectivity. -
This Act shall take effect fifteen (15) days after its 
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complete publication in the Official Gazette or in at least two (2) newspapers of 
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general circulation. 
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Approved, 
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