13* CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
1 
S E N A T E  
S. No. 1953 
Introduced by Senator Aquilino Q. Pimentel, Jr. 
EXPLANATORY NOTE 
This bill proposes to create the Philippine Cereals Research, Development and 
Extension Institute (PHILCEREAL), under the Department of Agriculture, which will fully 
engage in research, development and extension (RD&E) activities for cereals in the 
country. 
Pursuant to Executive Order 1061, the Philippine Rice Research Institute (PRRI), 
otherwise known as PhilRice, was established on November 5,1985. PhilRice has been in 
the forefront of national rice production programs, providing seeds, training and 
technology to help increase yields, farmers' income and national rice production. 
Through the years, PhilRice yielded immeasurable benefits to small Filipino farmers 
and Local Government Units. Its strong leadership has unified all rice research and 
development (R&D) activities in the country. PhilRice has been placed in the forefront of 
national rice production. It is the coordinating agency for the Agrikulturang Makamasa 
Rice Program which serves as the 'implementing vehicle of the Agriculture and Fisheries 
Modernization Act (AFMA) of 1997. 
Under the policy of reducing support to government-owned or -controlled corporation 
by 10% per year since 1997, the annual budget of PhilRice has been reduced from P193 
Million in 1997 to P144 Million in 1999. The financial condition of PhilRice is dim; on the 
other hand, the volume of importation of corn, wheat and other cereals continue to 
increase. 
Consequently, there is an urgent need to strengthen the institution. 
This legislative measure, among others, seeks to expand the present coverage of 
PhilRice to include other cereals. It also aims to authorize the Institute to collect a certain 
percentage of the Competitiveness Enhancement Fund to finance its establishment and 
maintenance of research, development and extension facilities and equipment; to establish 
by law a minimum annual operating subsidy of P200 million from the annual General 
Appropriations Act for the salaries of its scientists and other personnel; to continue to 
authorize the Institute to earn income from its seed production and distribution operations 
and from importation of rice, corn, wheat and other cereals to finance its continuing staff 
development program and its capital outlay and other investment requirements; and for 
the Institute to establish a career, compensation and retirement program for its scientists 
and other personnel chargeable against its operating revenues and other income. 
The immediate passage of this bill is ther 


13th CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
S E N A T E  
*Q4 
1153 
S. No. 
Introduced by Senator Aquilino Q. Pimentel, Jr. 
AN ACT 
ESTABLISHING THE 
PHILIPPINE 
CEREALS 
RESEARCH, 
DEVELOPMENT AND EXTENSION INSTITUTE (PHILCEREAL), 
AND APPROPRIATING FUNDS THEREFOR 
SECTION 1. Title. - The short title of this Act shall be "The Philippine 
Cereals Research, Development and Extension Act of 2004." 
SEC. 2. Establishment. - There is hereby established a body corporate to be 
known as the Philippine Cereals Research, Development and Extension Institute 
hereinafter referred to as PHILCEREAL, under the Department of Agriculture. 
The PHILCEREAL shall have its principal office at Mufioz, Nueva Ecija, but may 
establish other branches, offices or subsidiaries within its central office or 
elsewhere in the Philippines as may be necessary or proper for the accomplishment 
of its purposes and objectives. 
SEC. 3. Purposes and Objectives. - Pursuant to Republic Act No. 8435, 
otherwise known as The Agriculture and Fisheries Modernization Act (AFMA) of 
1997, PHILCEREAL shall develop and implement in coordination with the 
University of the Philippines at Los Ba~?os (UPLB), a national research, 
development and extension program for rice, corn, wheat, sorghum, millet and 
other cereals. The program shall be consistent with the principles of food security, 


poverty alleviation and social equity, rational use of resources, global 
competitiveness, sustainable development, people empowerment and protection 
from unfair competition, as embodied in R.A. 8435. 
Consistent with the principles in the aforementioned law, PHILCEREAL 
shall pursue the following objectives: 
(a) To transform the cereals sub-sector industry from being resource-based 
to technology-based; 
(b) To enhance profits and income of small cereals farmers, by ensuring 
them equitable access to modern, cost-reducing, and labor-productivity-enhancing 
technology; high yielding varieties; excellent quality seeds; training; and helping 
them engage in value-added processing, agribusiness activities and 
agro-industrialization; 
(c) To help ensure the accessibility, availability and stable supply of cereals 
at all times; and 
(d) To improve the quality of life of the people involved in the cereal sub-sector. 
SEC. 4. Powers and Functions. - In furtherance of its purposes and 
objectives, PHILCEREAL shall have the foliowing powers and functions: 
(a) To unify all the research, development and extension programs and 
activities for cereals in the country; 
(b) To plan, approve, organize, fund, direct, monitor and evaluate all cereals 
research, development and extension activities in the country; 
(c) To plan, approve, fund, direct, prioritize, rationalize and guide the 
establishment and construction of cereals research, development and extension 
facilities in the country; 
(d) To develop, scout, copy, adopt, verify, package and promote new 
technologies, machinery, varieties, procedures, and processes for cereals 
production developed in the country or abroad; 
(e) To promulgate, organize, develop, implement and authorize training 


curricula and training programs for farmers, seed growers, technicians and 
officials of local government units, research, development and extension managers, 
and others involved in the production of cereals in the country; 
(fj To authorize or approve the release, publication and dissemination of 
research, development and extension results, findings and recommendations on 
cereals in the country; 
(g) To develop, approve and implement career, promotion, incentive and 
retirement systems for scientists, researchers and managers involved in the 
research, development, and extension programs of cereals in the country; 
(h) To train, qualify and disqualify individuals or organized cereal seed 
producers; 
(i) To set the wholesale and retail prices of cereal seeds in the country and to 
impose royalties, fees and other charges from the sale, or use thereof; 
(j) To adopt and use a corporate seal; 
(k) To sue and be sued in its corporate name; 
(1) To succeed by its corporate name; 
(m) To adopt its by laws and promulgate rules and regulations and revoke, 
amend or rescind such as may be necessary or proper to implement the provisions 
of this Act; 
(n) To borrow money and obtain loans from all sources, whether local or 
foreign and whether government or private, to finance its research programs and 
its capital and operating expenditures; 
(0) To enter into contracts and execute agreements of any kind or nature 
with any person, firm, association or corporation, domestic or foreign; 
(p) To invest in, acquire, own, lease, mortgage, pledge, encumber, sell, 
assign, convey, or exchange, real or personal property of whatever kind or nature, 
or any interest therein; shares of stock, bonds, notes, securities and other evidences 
of indebtedness by natural or juridical persons, whether domestic or foreign and 
whether government or private; 


(q) To acquire from any governmental authority whether national or local, 
foreign or domestic; or from any person, corporation, partnership, association or 
entity, charters, franchises, licenses, rights, privileges, assistance, concessions, 
financial or otherwise, as are necessary or proper for the attainment of the 
purposes and objectives of this Act; 
(r) To receive from any public or private individual or entities whether 
foreign or domestic, grants, donations and contributions as may be useful, 
necessary or proper to carry out the purposes and objectives of this Act, and 
administer the same in accordance with the terms of such grants, donations and 
contributions; 
(s) To serve as the coordinating center of a national network of cereal 
research stations located in the different agro-ecological regions of the country; 
(t) To plan and carty out research and development activities, especially in 
the areas of varietal imprdvement, planting and fertilizer management; 
(u) To provide the data base or policy formulation that will stimulate and 
sustain cereal production, marketing and consumption; 
(v) To organize, create and maintain subsidiaries, and other corporate 
offspring, and own fully or partially any corporation and entity as may be 
necessary for the effective realization of its purposes and objectives and the 
maximum delivery of services, and to engage in any other lawful business 
whatsoever in pursuance of the purposes and objectives of this Act; 
(w) To have one or more offices in and outside of the Philippines, and to 
conduct its business and exercise its powers throughout and in any part of the 
Republic of the Philippines and/or in any foreign country, state and territory; 
(x) To adopt an Early Retirement Incentive Plan (ERIP) and financial 
assistance for the purpose of retirement of its own scientists, officials and 
employees; 
(y) To establish and maintain a provident fund to pay the medical, health, 
insurance and retirement benefits of the PHILCEREAL scientists, officials qnd 


employees or their dependents and heirs under such terms and conditions as it 
may prescribe, which shall not be inconsistent with those provided under existing 
laws; 
(z) To submit, not later than June 30 of each year, an Annual Report on the 
implementation and enforcement of this Act to the President of the Philippines and 
to the Congress of the Philippines; and 
(aa) To exercise all other powers of a corporation under the general 
corporation law, insofar as such powers are not inconsistent with the provisions of 
this Act. 
SEC. 5. Board of Trustees. - The corporate powers and functions of 
PHILCEREAL shall be vested in and exercise by the Board of Trustees, hereinafter 
referred to as the Board, composed of the Secretary of Agriculture as ex officio 
Chairman, and twelve members representing the different sectors in the cered 
industry, to be appointed by the President of 
the Philippines upon 
recommendation of the Secretary of Agriculture. The appointive members of the 
Board shall hold office for three years or until their successors are duly appointed 
and qualified. Vacancy, other than through the expiration of the term, shall be 
filled for the unexpired term only. 
The Board shall meet regularly 'at least once a quarter or as often as the 
exigencies of the service demand. The presence of at least seven members shall 
constitute a quorum and the majority vote of the members present, there being a 
quorum, shall be necessary for the adoption of any resolution, rule, regulation, 
decision or any other act of the Board. 
The members of the Board, including the Chairman, shall receive per diem, 
as the Board may determine, for each Board meeting actually attended: Provided, 
That such per diem shall not exceed Five thousand pesos (F5,OOO.OO) during any 
one month for each member. The said members shall also be entitled to 
reimbursable transportation and representation allowances in going to and coming 


from Board Meetings and transacting official business for the Institute. 
SEC.6. Powers and Functions of the Board. - The Board shall exercise the 
following powers and functions: 
(a) To promulgate the by laws, policies, guidelines and implementing rules 
and regulations to effectively carry out the purposes and objectives of 
PHILCEREAL under this Act, and to revoke, amend or rescind such as may be 
necessary; 
(b) To promulgate rules and regulations necessary or proper for the 
effective discharge of the duties and responsibilities of its officers and employees; 
(c) To approve the research, development and extension programs and 
projects of the PHILCEREAL in accordance with this Act; 
(d) To appoint scientists engaged in cereals research, development and 
extension programs and projects in the country into the PHILCEREAL scientific 
career system; 
(e) To approve the annual operating and supplemental budgets, operating 
(f) To review, 
and capital expenditures ahd disbursements of the PHILCEREAL; 
amend and approve the organization structure and staffing pattern, the 
administrative system and procedures and the compensation package for the 
scientists, officers and employees of PHILCEREAL; 
(g) To approve the retail and wholesale prices as well as the royalties, fees 
and other charges, for the production, marketing and distribution of foundation, 
breeder, registered and certified seeds of cereals; 
(h) To approve the amount of levy, fees and other charges to be imposed 
against all importation of cereals, whether for consumption, manufacturing or for 
seed purposes, into the country; 
(i) To amend and approve, or authorize the promulgation of reasonable 
rules and regulations and the code of conduct of PHILCEREAL employees 
including procedures for reprimand, suspension, removal and other forms of 


disciplinary action against any scientist and other official and employee of the 
PHILCEREAL, and to act on appeal, on all decisions of the Director-General. 
Unless otherwise amended, all existing rules and regulations of PHILCEREAL 
shall remain full force and effect; and 
I 
(j) To exercise such other powers and perform such other functions and 
other acts as may be necessary or proper for the attainment of the purposes and 
objectives of this Act. 
I 
SEC. 7. Qualifications, Appointment and Tenure of the Director-General 
and of Other 0Sj”iicials and Personnel. - The PHILCEREAL shall be headed by a 
Director-General who shall be appointed by the President of the Philippines upon 
the recommendation of the Secretary of Agriculture. He shall serve for a term of 
six (6) years, without reappointment. 
The Director-General shall be assisted by two (2) Deputy-Directors-General 
with established track records in research management and administration and 
other senior officials, the number of which shall be fixed by the Board, in addition 
to the usual supervisory and rank and file positions. The appointment of the 
Deputy Directors-General and other senior and supervisory officials, and rank and 
file personnel shall be issued by the Director-General in accordance with the Civil 
Service rules and regulations. The appointments shall be confirmed by the Board. 
SEC. 8. Powers, Functions and Duties of the Director-General. - The 
Director-General of PHILCEREAL shall be its Chief Executive Officer and shall be 
directly responsible to the Board. He shall have the following powers, functions 
and duties: 
(a) To exercise over-all supervision and direction over the implementation 
of all research and development programs of the Institute, and in general to 
supervise and direct the management, operation and administration of the 
Institute; 


.. 
(b) Within the limits of the authority delegated to him by the Board, to 
execute contracts, incur obligations, acquire and dispose of assets and deliver 
documents on behalf of the Institute; 
(c) To implement and enforce policies, decisions, orders, rules and 
regulations adopted by the Board; and 
(d) To exercise such other powers and functions and perform such other 
duties as may be authorized or assigned by the Board. 
SEC. 9. Compensation of 
PHILCEREAL Personnel. - The basic 
compensation of PHILCEREAL scientists, officials, and personnel shall be based on 
the Salary Standardization Law as well as other laws that may be promulgated for 
the purpose. 
Subject to guidelines approved by the Board of Trustees, 
PHILCEREAL shall have an incentive system similar to those provided for under 
the Magna Carta for Science and Technology Workers, a promotion system similar 
to the system in the Philippine Association of State Universities and Colleges 
(PASUC), retirement and other schemes and benefits for its scientists, officials and 
personnel on top of those provided under the Salary Standardization Law. 
SEC. 10. Organization Structure and StafsiyL8 Paitem. - PHILCEREAL shall 
evolve an index of positions, organization structure and staffing pattern consistent 
with the dynamic nature of its RD&E programs. Such staffing pattern and 
organization structure shall be approved by the Board upon recommendation of 
the Director-General. 
SEC. 11. Visiting Scientists, Research Fellows and Associates. - 
PHILCEREAL shall, for the purposes of this Act, obtain and secure the services of 
scholars, scientists, professional and technical personnel from other agencies in 
Government or the private sector. Sich personnel may be hired as Visiting 
Scientists, Research Fellows and Associates to conduct specialized studies and 


researches on cereals. Those so engaged by PHILCEREAL shall be issued 
appointments and shall be paid, as they are hereby authorized to be paid, such fees 
as determined by the Board in addition to whatever compensation or emoluments 
they are receiving from their respective mother agencies. 
SEC. 12. Lands, Buildings, Facilities and Equipment. - PHILCEREAL is 
hereby authorized to own, sell and dispose lands; plan, construct, build, own, 
lease, sell or dispose buildings, facilities and equipment as may be necessary or 
proper to attain the purposes of this Act. It may also utilize facilities of any 
government agency which is engaged directly or indirectly in the research, 
development and extension of cereals. 
SEC. 13. Tax Exemption. - PHILCEREAL is further authorized to purchase 
equipment, materials and articles, either locally or abroad, as may be necessary or 
proper to carry out its purposes and objectives under this Act, and shall be exempt 
from the payment, whether directly or indirectly, of any and all forms of taxes, 
duties, fees and charges imposed by any governmental authority, whether national 
or local, on any and all such importation of equipment, materials, articles and 
services. 
All real and personal properties registered to PHILCEREAL and those 
whose beneficial use is granted to it by law, contract, grant or transfer, whether 
from the government, public or private sectors, shall be fully exempt from all 
forms of taxes, duties and fees, including but not lirnited to, realty taxes, transfer 
taxes, gains taxes, value added taxes, customs duties and fees, import and export 
taxes, and such other forms of tax and revenue imposed by or due to the 
government and/or any of its agencies or political subdivisions. The exemption 
herein mentioned shall supersede all existing laws and regulations. 
Any provision of law notwithstanding, any donation, contribution, bequest, 
subsidy or financial aid which may be made to PHILCEREAL shall be exempt 


from taxes of any kind and shall constitute allowable deductions in full from the 
income of the donors or the grantors for income tax purposes. 
SEC. 14. Power of Eminent Domain. - PHILCEREAL is hereby authorized 
to expropriate lands, for cereals research,. development and extension purposes 
provided just compensation is paid to the owners of the land. If the land belongs 
to the government or is inalienable, PHILCEREAL shall be granted automatic title 
to the land. 
SEC. 15. Exemption from the Comprehensive Agrarian Reform Law 
Coverage. - All lands, farms, plantations, whether directly or indirectly owned, 
used, utilized or administered by PHILCEREAL, and those that it may hereinafter 
acquire or utilize for research, development and extension purposes, shall be 
exempt from the coverage of the Comprehensive Agrarian Reform Law. 
SEC. 16. Automatic Appropriations for PHILCEREAL. - There is hereby 
and henceforth automatically appropriated for PHILCEREAL a minimum amount 
of Two hundred million pesos (f200,000,000.00) annually to constitute its core 
funds to be released by the DBM automatically to PHILCEREAL. The core funds 
shall be used to finance the salaries, benefits and other mandatory expenditures 
and basic research activities of PHILCEREAL. 
SEC. 17. Revolving Fund of PHILCEXEAL. - In addition to the annual 
budget of PHILCEREAL, there shall be established an annual Revolving Fund 
which shall be considered part of the funds automatically released and 
appropriated to PHILCEREAL. The revolving fund, to be used for the purposes 
and objectives of this Act, shall be derived annually from the following sources: 
a) Ten percent (10%) of the Competitiveness Enhancement Fund, to finance 
the establishment and maintenance of PHILCEREAL'S research, development and 


extension facilities and equipment; 
I 
, 
b) Five percent (5%) of the total amount of customs duties and other charges 
~ imposed by the government on the annual importation of cereals, to finance the 
, 
, building of laboratories and other major capital outlay; 
c) Five percent (5%) of the ten percent allotted for the annual research and 
~ development budget under R.A. 8435, to support projects implemented with the 
1 
, Local Government Units; 
d) Contributions, donations, grants of loans from domestic and/or foreign 
sources to fund its special projects; and 
e) Income from seed production and distribution and other investments and 
savings from its operations to fund the staff development program incentives, 
promotions, insurance and retirement benefits of scientists, officials and personnel. 
SEC. 18. Civil Service Laws. - The officials, scientists, and employees of 
PHILCEREAL shall be subject to Civil Service Law, rules and regulations: 
Provided, That PHILCEREAL may establish its own qualifications standards, staff 
development program, career path, promotion system, insurance, incentives and 
retirement schemes for its officials, scientists and employees. 
SEC. 19. Auditing. - The Chairman of the Commission on Audit shall be the 
ex officio auditor of PHILCEREAL. 
For this purpose, he may appoint a 
representative who shall be the auditor of the PHILCEREAL, together with the 
necessary personnel to assist said representative in the performance of his duties. 
The Auditor shall, as soon as practicable, but not later than three months 
after accounts have been submitted to audit, send the annual report to the Board. 
SEC. 20. Legal Counsel. - The PHILCEREAL shall establish its own legal 
services group and hire in-house counsel to take care of the handling of cases and 


other legal services in coordination with the Office of the Government Corporate Counsel. 
The Government Corporate Counsel shall be the principal legal adviser and consultant of 
the PHILCEREAL. The PHILCEREAL may refer to the Office of the Government 
Corporate Counsel cases for legal action or trial, issues for legal opinions, preparation and 
review of contracts or agreements and other matters requiring the services of a lawyer. 
SEC. 21. Transfer of Personnel, Assets and Liabilities. - All permanent personnel, 
records, appropriations, assets and liabilities of the PhilRice are hereby transferred to 
PHILCEREAL. 
The incumbent Director-General of PhilRice shall be the officer-in-charge of 
PHILCEREAL pending the appointment of its Director-General. 
SEC. 22. Residual Powers. - All powers and responsibilities of PhilRice not 
mentioned and which are not inconsistent with this Act shall be assumed by 
PHILCEREAL. 
SEC. 23. Separability Clause. - If, for any reason part of this Act may be declared 
unconstitutional, the provisions not affected thereby shall remain in full force and effect. 
SEC. 24. Repealing Clause. - Executive Order No. 1061, series of 1985 and 
Executive Order No. 60, series of 1986 are hereby repealed. Provisions of laws, decrees, 
executive orders, rules and regulations contrary to or inconsistent with the provisions of 
this Act are repealed, amended or modified accordingly. 
SEC. 25. Eflectivity Clause. - This Act shall take effect after fifteen (15) days 
following its publication in the Official Gazette or in a national newspaper of general 
circulation. 
Approved,