Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

Fifteenth Congress
First Regular Session
pe 5¥
House Bill No.

Introduced by Rep. PRYDE HENRY A, TEVES

EXPLANATORY NOTE

The Philippines is primarily an agricultural country, specifically food crops. It is
blessed with fertile land, which is very conducive for planting almost all types of plants
and trees which yield food products. A vast majority of our country’s land area is
utilized for growing various crops.

As an agricultural country, the Philippines is expected to have a strong food
security with no threat of the lack of supply of food for the Filipino people, and always
be self-sustaining in terms of food. Unfortunately, this expectation is not realized for a
very long time already until today. There is always a danger in our food security and

supply of food products that necessitates us to import these food products from other
countries.

Cereals such as rice, corn, wheat, sorghum, millet, and the like comprise a great
part of our food production. However, to this date, only rice has received concrete
support from the state through the Philippine Rice Research Institute (PRRI). The other
cereals also need help from the State in terms of research, development, and extension
activities, This is not to mention that the appropriation for PRRI alone is clearly
inadequate to support this major food industry.

PRRI or PhilRice was created by virtue of Executive Order 1061 issued by then
President Ferdinand Marcos on November 5, 1985. Since the passage of this E. 0.,
PhilRice has been in the forefront of nationa! rice production programs, providing seeds,

training, and technology to help increase yields, farmers’ income, and national rice
production,

At the start of its creation, PhilRice extended priceless benefits to small Filipino
farmers and Local Government Units. However, through the years, the financial support
by the government to this institution, through appropriation, greatly decreased. In
1997, the annual budget for PhilRice stood at Php193 million. But in 2007, the annual
budget plummeted to a lowly Php162 million. This decrease was caused by the State
policy of reducing support to government-owned-and-controlled corporations (GOCCs)
by 10% per year since 1997. Hence, the financial condition of PhilRice is discouraging.


Worse, the volume of importation of corn, wheat, and other cereals continue to
increase. Therefore, without any positive measure from the legislature as soon as
possible, it is possible that the cereal industry will become a “dead” industry. This
possibility will be a big negative blow on the economy of the nation.

A legislative measure to create a government institution is always better than a
mere Executive Order in terms of mandate and strength of the institution.

This bill proposes to create the Philippine Cereals Research, Development and
Extension Institute (PHILCEREAL), under the Department of Agriculture, which will fully
work on research, development, and extension (RD & E) activities for cereals in the
country.

This bill 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. It also aims to establish
by law a minimum annual operating subsidy of Php200 million from the Annual General
Appropriations Act (GAA) for the salaries of scientists and other personnel. Further, to
strengthen the practice of the Institute to earn income from its seed production, and
distribution operations to finance its continuing staff development program and its
capital outlay and other investment requirements.

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

PRYDEWMENRY A. TEVES
3° distfct, Oriental Negros



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Fifteenth Congress
First Regular Session

Q
HOUSE BILL NO.

Introduced by: HON. PRYDE HENRY A. TEVES

AN ACT EXPANDING AND STRENGHTENING THE PHILIPPINE RICE
RESEARCH INSTITUTE AND RENAMING IT TO THE PHILIPPINE
RICE AND CEREALS RESEARCH AND DEVELOPMENT INSTITUTE

(PhilRiGe)

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

Section 1. Short Title. This Act shall be “The
Philippine Rice and Cereals Research and Development
Institute (PhilRice) Act of 2009:.

Section 2. Establishment. The Philippine Rice
Research Institute (PhilRice), a body corporate
established under Executive Order No. 1061, series of
1985, as amended, is hereby expanded and strenghtened
and shall hereinafter be renamed as the Philippine Rice
and Cereals Research and Development Institute or
PhilRice, attached to the Department of Agriculture.
The PhilRice shall have its principal office at the
Science City of Mufoz, Nueva Ecija, but may establish
other branches, offices, subsidiaries, or corporate
offsprings within its central office or elsewhere in


(x)

(aa)

(bb)

other lawful business whatsoever in pursuance
of the purposes and cbjectives of this Act;

To have one or more offices in the Philippines
and to conduct its business and exercise its
powers throughout and in any part of the
Republic of the Philippines;

To adopt an Early Retirement Incentive Plan
(ERIP) and financial assistance for the purpose
of retirement of its own scientists, officials
and employees;

To establish and maintain a provident fund to
pay the medical, health, insurance and
retirement benefits of PhilRice scientists,
officials and 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;

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;

To impose and collect, through the Bureau of
Customs, one percent (1%) levy on all
exportations of cereals from the country to be
used to fund the R&D activities of PhilRice;

To constitute all its income, collections from
levies and royalties, saving, and other excess
funds into a revolving fund to fund its R&D
activities; and

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.


(q)

(x)

(s)

(t)

(u)

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, or
concessions, financial or otherwise, as are
necessary or proper for the attainment of the
purposes and objectives of this Act;

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;

To serve as the coordinating center of a
national network of cereal research stations
located in the different agro-ecological
regions of the country;

To plan and carry out research and development
activities, in the areas of varietal
improvement, water, fertilizer, pest
management, grain, quality, seed health, farm
mechanization or the overall integrated crop
management;

To provide database and policy formulation that
will stimulate and sustain cereal production,
marketing and consumption;

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



the Philippines as may bé necessary or proper for the
accomplishment of its purposes and objectives.

Section 3. Purposes and Objectives. PhilRice shall
develop and implement in coordination with its National
Rice Research and Development Network, composed of
State Universities and Colleges, Research Centers and
Development Institutions, a National Research and
Dvelopment Program for rice, corn, sorghum, millet and
other cereals.

Section 4. Powers and Functions. In furtherance of
its purposes and objectives, PhilRice shall have the
following powers and functions:

(a) To plan, approve, organize, fund, direct,
monitor, evaluate, and unify all research and
development programs and activities for cereals
in the country;

(b) To plan, approve, fund, direct, prioritize,
rationalize and guide the establishment and
construction of research and development
facilities for cereals in the country;

(c) To develop, scout, adopt, verify, package and
promote new technologies, machinery, varieties,
crop management and production procedures and
processes for cereals developed in the country
or abroad;

(d) 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 others involved in
the production of cereals in the country;

(e) To authorize or approve the release,
publication and dissemmination of research and



(g)

(i)
)
(k)
(1)

(m)

(n)

development results, findings and
recommendations on cereals in the country;

To develop, approve and implement career,
promotion, incentive and retirement systems for
scientists, researchers and managers involved
in the research and development programs for
cereals in the country;

To train, qualify and disqualify accredited
individuals or organized cereal seed producers;
To set the wholesale and retail prices, and
royalties for seeds of cereals produced and
traded in the country;

To adopt and use a corporate seal;

To sue and be sued in its corporate name;

To succeed by its corporate name;

To adopt its by laws and promulgate rules and
regulations as may be necessary or proper to
implement the provisions of this Act;

To borrow money and obtain loans from all
sources, whether government or private, to
finance its research and development programs
and all its capital and operating expenditures;
To enter into contracts and execute agreements
of any kind or nature with any person, firm,
association or corporation, domestic of
foreign;

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;


Section 5. Board of Trustees. The corporate powers
and functions of PhilRice shall be vested in and
exercised by a Board of Trustees, hereinafter
referred to as the Board, composed of the Secretary
of Agriculture as ex officio Chairman, and eight
(8) members representing the different sectors in
the cereal industry. Except for the ex-officio
chair who is appointed by the President of the
Philippines, the members of the Board shall be
nominated and confirmed by a majority of its
incumbent members through a transparent and
competitive nominating process. Each confirmed
member shall hold office for a maximum of five (5)
years, provided that, the incumbent members of the
Board shall continue to act as members until their
term has expired.

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 five (5)
members shall constitute 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. 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.

Section 6. Powers and Functions of the Board. The
Board shall exercise the following powers and
functions:


a. To define and approve the programs, plans,
policies, procedures and guidelines for the
Institute in accordance with its purposes
and objectives, and to control the
Management, operation and administration of
the Institute;

b. To approve the Institute’s organizational
structure, staffing pattern, operating and
capital expenditure, and financial budgets,
prepared in accordance with the corporate
plan of the Institute;

c. To approve salary ranges, benefits,
privileges, bonuses, and other terms and
conditions of service for all officers and
employees of the Institute, upon
recommendation of the Director-General;

dad. To appoint, transfer, promote, suspend,
remove, or otherwise discipline any
subordinate officer or employee of the
Institute, upon recommendation of the
Director-General;

e. To create such committee or committees and
appoint the members thereof, as may be
necessary or proper for the management of
the Institute or for the attainment of its
purposes and adjectives;

£. To determine the research priorities of the
Institute consistent with the framework of
its purposes and objectives;

g. To promulgate the by laws, policies,
guidelines and implementing rules and
regulations to effectively carry out the
purposes and objectives of PhilRice under
this Act, and to revoke, amend or rescind
such as may be necessary;


h. 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;

i. To impose the levy, fees and other charges
to be imposed against all importation of
rice and other cereals, whether for
consumption, manufacturing or for seed
purposes, into the country, as authorized
herein; and

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.

Section 7. Qualification, Appointment and Tenure of
the Director-General and of other Officials and
Personnel. PhilRice shall be by a Director-General
who shall be appointed by the Board of Trustees,
and shall serve for a term of five (5) years,
renewable for another term, based on outstanding
performance.

The Director-General shall be assisted by
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 Director-
General in accordance with the rules regulations
promulgated by the Board and Civil Service


Commission. Their appointments shall be confirmed
by the Board.

Section 8. Powers, Functions and Duties of the
Director-General. The Director-General of PhilRice
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 documentation behalf of
the Institute;

6.."Te 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.

Section 9. Compensation of PhilRice Personnel.
Since PhilRice shall derived its budget from its
income and levies provided in this law, the
salaries of its officials and employees shall be
exempted from the Salary Standardization Law. The
Board of Trustees shall develop a compensation
scheme to enable PhilRice to keep its critical mass
of outstanding scientists, researchers and staff.


Keeping outstanding researchers and staff is a
vital component in any R&D institution. To further
justify its exemption from Salary Standardization

Law, staff members of PhilRice shall also serve as
mentors to undergraduate and graduate students of
various agricultural colleges and universities, who
seek internship or use of PhilRice R&D facilities

laboratories and operation system for the conduct

of their research theses or case studies.

In addition, to the salary structure, the Board

of Trustees, shall also develop an incentive system
similar to those provided for under the DOST
clentific Career System and Magna Carta for
=nce and Technology workers, a promotion system
similar to the system in the Philippine Association
of State Universities and Colleges (PASUC),
standard life and medical insurance to permanent
scientists and staff and their spouses and
children, retirement and other schemes and benefits
for its scientists, officials and personnel.

Section 10. Organization Structure and staffing

pattern, PhilRice shall evolve an index of
positions, organization structure and = staffing
pattern consistent with the dynamic nature of its
R&D programs. Such staffing pattern and

organization structure shall be approved by the
Board upon recommendation of the Director-General.

Section 11. Visiting Scientists, Research fellows
and Associates. PhilRice 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



rivate sector. Such personnel may be hired as
Visiting Scientists, Research Fellows and
Associates to conduct specialized studies and
researches on rice and other cereals. Those so
engaged by PhilRice shall be issued appointments
and shall be paid, as they 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 agencies.

Section 12 Lands, Buildings, Facilities and
Equipment. PhilRice is hereby authorized to own,
sell and dispose buildings, facilities, and
equipment as may be necessary or proper to attain
th purposes of this Act. It may also utilize
facilities of any government agency which is
engaged directly or indirectly in the research and
development of rice and other cereals.

Section 13. Tax Exemptions. Philrice may receive
donations, contributions or bequest of property or
services which shall be utilized only for the
implementation of the program. Such donations or
bequest of property shall be exempt from donor’s
tax and such amount of donations shall be
deductible from the gross income of the donor in
accordance with the pertinent provisions of the
NIRC of 1997, as amended; provided, that such
donations shall not be disposed of or sold.

Importations of capital equipment which is
actually, directly and exclusively used by PhilRice
shall be exempt from taxes and custom duties.


All lands, buildings and improvements,
actually, directiy and exclusively owned by
PhilRice shall be exempt from real property
tax.

Section 14. Power of Eminent Domain. PhilRice is
hereby authorized to expropriate lands, for cereal
vesearch, development, and extension purposes
provided just compensation is paid to the owners of
the land. If the land belongs to the government or
is alienable, PhilRice shall be granted automatic
title to the land;

ction 15. Exemption from the Comprehensive
Agrarian Reform Law Coverage. All lands, farms
plantations, whether directly or indirectly owned,
used, utilized or administered by PhilRice, 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.

Section 16. Automatic Appropriations for PhilRice.
There is hereby and henceforth automatically
appropriated for PhilRice a minimum amount of Two
Hundred Million pesos (PhP 200,000,000.00) annually
to constitute its core funds to be released by the
DBM automatically to PhilRice. The core funds shall
be used to finance the salaries, benefits and other
mandatory expenditures and basic research
activities of PhilRice.

Section 17. Revolving Fund of PhilRice. In addition
to the annual budget of PhilRice, there shall be
established an annual Revolving Fund out of its
income from its R&D operations and the levies and


royalties authorized herein, which shall be
considered part of the funds automatically released
and appropriated to PhilRice. The Revolving Fund
to be used for the purposes and objectives of this
Act, shall be derived annually from the following
sources:

»

.One percent (1%) levy on all importations of
Cereals into the country, and two (2%)
percent levy on all exportations of cereals
from the country to used to fund the R&D
activities of PhilRice.
b.Ten percent (10%) of the Agricultural
Competitiveness Enhancement Fund (ACEF)
collection;
c.Five percent (5%) royalty on the cost of
each bag of Registered seeds, and two
percent (2%) royalty on the cost of each bag
of Certified seeds of the varieties of
cereals developed or the release of which
are coordinated by PhilRice to be used to
fund the R&D activities of PhilRice;
.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.

Section 18. Civil Service Laws. The official,
scientist and employees of PhilRice shall be
subject to Civil Service Law, rules and
regulations: Provided, that PhilRice may establish
its own qualifications standards, staff development
program, career path, promotion system, insurance,


incentives and retirement schemes for its
officials, scientists and employees.

Section 19. Auditing. The Chairman of the
Commission on Audit shall be the ex-officio auditor
of PhilRice. For this purpose, he or she may
appoint a representative who shall be the auditor
of PhilRice, together with the necessary personnel
to assist said representative in the performance of
his/her duties. The Auditor shall, as soon as
practicable, but not later than three (3) months
after accounts have been submitted to audit, send
the annual report to the Board.

Section 20. Legal Cou 1. PhilRice 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 Counsel shall be the principal legal
adviser and consultant of the PhilRice.

PhilRice 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.

Section 21. Transfer of personnel, Assets and
Liabilities. All permanent personnel, records,
appropriations, assets and liabilities previously
held by PhilRice are hereby transferred to the
newly established PhilRice. The present Executive
Director of PhilRice shall serve as OIC - Director-
General, until the Board of Trustees shall have
appointed a regular Director-General.


Ss

ction 22. Residual Powers. All powers and
responsibilities of PhilRice not mentioned and
which are not inconsistent with this Act shall be
assumed by PhilRice.

Section 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.

Section 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
modififed accordingly.

Section 25. Effectivity 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,