FIFTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
s.No._2_-7_0 
, 
. 
Introduced by Senator Antonio "Sonny" F. TriIIanes IV 
EXPLANATORY NOTE 
"., 
The cotton and fiber industries are vital in the Philippine export economy. However, over 
the years, the income produced by the fiber industry, both from domestic and foreign 
markets, had dramatically declined due to various problems such as high cost of 
production, disease infestation of abaca land, frequent rains and super typhoons, lack of 
planting materials and lack of infrastructure, and irregular harvesting of fiber as some 
farmers preferred to harvest other cash crops rather than abaca fiber. Total abaca fiber 
bailing in 2007 slowed down to 50,937 metric tons or 12.4% lower than the previous 
year's output of 58,160 MT owing mainly to the lackluster performance of almost all 
producing regions except Western Visayas and the Cordillera Administrative Region 
(CAR).' The country resorted to importation of cheap fabric amounting to about Pl.I6 
billion a year, thereby causing serious damage to local agricultural producers. 
, 
In the SaJIle vein, the cotton industry also suffered major blows due mainly to the decline 
of total production area from 10,000 hectares to only 4,200 as farmers shifted to other 
crops, ·as well as lack of budget for cotton research and development. Some of the 
problems that adversely affected productivity are the inadequate rainfall, high pest 
pressure, delayed release of production loans, and inadequate technical knowledge of 
farmers. The latter two factors affected the application of production inputs and led 
farmers to deviate from technological recommendations resulting to poor plant stand and 
uncontrolled pests.2 
The expansion and development of cotton and fiber production can provide income, 
increase the country's export opportunities and employment, and can be a major factor in 
the social and economic development of rural areas in the country. To immediately 
address the problems confronting the cotton and fiber industries, this bill seeks to create 
under the Office of the President the National Fiber Development Authority (NAFIDA). 
As a single entity directly under the control and supervision of the Office of the 
President, it will accelerate the execution of its programs, projects and activities. The two 
attached agencies of the Department of Agriculture, namely: the Fiber Industry 
Development Authority (FIDA), created by virtue of Executive Order No. 494, series of 
1991 and the Cotton Development Authority (CDA), created under Republic Act No. 
8486 shall be dissolved. Their functions, powers, responsibilities, assets and liabilities 
shall be absorbed by NAFIDA. 
In view of the foregoing, approval of this measure is earnestly sought. 
~Nt1-R-I-L-L-ANES 
Senator 
12007 Market Report: Abaca. Infonnation retrieved from: http://flda.da.gov.phl Retrieved on 17 June 2008. 
2 Philippine Cot/on Industry Situation: Crop Year 2004105. Information retrieved from: 
htto:/Icoda.da,goy.phlhomepage/situationer 2004 05.pho. Retneved on 17 June 2008. 
I 


FIFTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regldar Session 
) 
SENATE 
S. NO. 2'70 
Introduced by Senator Antonio "Sonny" F. Trillanes IV 
AN ACT 
CREATING 
THE 
NATIONAL 
FIBER 
DEVELOPMENT 
AUTHORITY 
(NAFIDA), DEFINING ITS POWERS AND FUNCTIONS, APPROPRIATING 
FUNDS THEREFOR, MODIFYING FOR THIS PURPOSE EXECUTIVE ORDER 
NO. 294 SERIES OF 1991 AND REPEALING REPUBLIC ACT 8486, AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Con&rress 
assembled: 
I 
SECTION 1. Short Title. - This Act shall be known as the "National Fiber 
2 
Development Act oj2010". 
3 
4 
SEC. 2. Declaration oj Policy. - It is hereby declared the policy of the State to 
5 
promote and develop agriculture as an important part of the Philippine economy. Toward 
6 
this end, the State shall provide full support to fiber and cotton industries through 
7 
appropriate technology and research, and adequate financial, production, marketing and 
8 
other support services. It shall also recognize the right of fiber and cotton fanners to 
9 
actively participate in the planning and management of programs concerning the said 
10 
industry .. 
1 1 
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SEC. 3. Creation of tile National Fiber Development Autllority (NAFIDA). -
13 
The National Fiber Development Authority (NAFIDA), hereinafter refened to as the 
14 
Authority, is hereby created under the Office of the President to carry out the provisions 
15 
of this Act. The Authority shall serve as the governments primary planning and 
16 
marketing agency responsible for the cotton and fiber industry. 
17 
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SEC. 4. Statement of Objectives. - This Act shall have the following objectives: 
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a) To promote the integrated development of the cotton and fiber industry in all its 
3 
aspects from research, production, processing, marketing and trade regulation to 
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make them globally competitive; 
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b) To sustain the growth of and demand for cotton and fiber and its by-products in both 
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domestic and international markets; 
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c) To fornmlate and enforce standard and regulatory measures in order to maintain good 
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quality cotton and fiber traded in the domestic and international markets; 
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d) To encourage and provide adequate incentives to investment in cotton and fiber 
J 0 
industries; 
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e) To improve farm productivity through the adoption of modem prescribed technology 
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so as to increase farmers' income; and 
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f) To encourage and promote the use oflocally produced cotton and fiber. 
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, 
IS 
SEC. 5. Powers and Functions. - The Authority shall have the following 
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a) To undertake and regulate research studies on all aspects of the cotton and fiber 
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industry, including its international markets; production, processing and marketing in 
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the domestic and international markets; 
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b) To administer and regulate in accordance with law, the licensing and registration and 
20 
shipment of cotton and fiber producers/manufacturers including the tagging, marking, 
21 
inspection, certification and shipment of their commercial products; 
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c) To recommend production technology to guide the cotton and fiber production 
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activities in the country; 
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d) To design and implement a specialized extension program and skills development 
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training or workshops to improve the technical and entrepreneurial capabilities of 
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fiber producers, ginners, classifiers, graders, traders, processors and exporters to 
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improve the quality of its commercial products; 
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e) To establish a monitoring system in coordination with the Department of Trade and 
2 
Industry and the Department of Agriculture for the assessment of cotton and fiber 
3 
supply and demand situation in both domestic and international market; 
f) To acquire 
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world-class machinery and tools for distribution to the farmers and 
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producers; 
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g) To identify and improve infrastructure in the locality in coordination with the 
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Department of Public Works and Highways and the Local Government Unit 
8 
concerned; 
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h) To provide assistance to small farmers in the marketing, promotions, and 
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advertisement of cotton and fiber products; 
II 
i) To undertake industry manpower development; 
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j) To assist farmers in sourcing funds for capital build-up; 
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k) To conduct regular consultations with the farmers, growers and other sectors involved 
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in the fiber and cotton industry; 
IS 
I) To accredit associations or confederations of cotton and fiber farmers, growers and 
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other associations involved with the cotton and fiber industries; and 
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m) To undertake all other functions as may be necessary to implement the objectives of 
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this Act. 
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SEC. 6. The Governing Board of the NAFlDA. - The corporate powers and 
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duties of the Authority shall be vested in, and exercised by, the Board to be appointed by 
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the President, composed of the following: 
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a) Three (3) representatives of the Government, one of whom shall be designated by the 
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President as Chairman; 
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b) Three (3) representatives from the fiber producers/manufacturers association upon the 
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recommendation of their respective confederations in Luzon, Visayas and Mindanao 
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duly accredited by the Authority; and 
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c) Three (3) representatives from the cotton farmers association upon there 
2 
commendation of their respective confederations in Luzon, Visayas and Mindanao 
3 
duly accredited by the Authority. 
4 
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SEC. 7. Power and Functions of tlte Board. - The Governing Board shall act as 
6 
the policy making body of the Authority to fonnulate policies, promulgate regulations 
7 
and prescribe rules to attain the purposes and objectives of this Act. 
• 
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SEC. 8. Term of office of tile members of tlte Governing Board. - Unless sooner 
10 
removed for cause by the President through the recommendation of their respective 
11 
association, appointed members of the Governing Board shall hold office for a period of 
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two '(2) years from the date of their appointments. 
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SEC. 9. Organization.- The Chief Executive Officer of the Authority shall be the 
15 
Administrator to be appointed by the President upon recommendation of the Board. He 
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shall be assisted by two (2) Deputy Administrators to be appointed by the President upon 
17 
recommendation of the Board. The Board shall determine and create the organizational 
18 
structure of the Authority and shall appoint all other officers of the Authority. 
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SEC. 10. Promulgation of Rules and Regulations. - The Governing Body shall 
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promUlgate rules and regulations for the full implementation of this Act within ninety 
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(90) days of its effectivity. Such rules and regulations shall take effect upon publication 
23 
in two (2) newspaper of general circulation and may be amended by the Board from time 
24 
to time as it may deem appropriate. 
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SEC. 11 Dissolution of tlte Fiber Industry Development AlltllOrity (FDA) lind 
• 
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tlte Cotton Development Autltority (CDA). - Subject to the provisions of existing laws, 
28 
the FiDer Industry Development Authority (FIDA) and Cotton Development Authority 
4 


(CDA), are hereby dissolved. All assets, liabilities, records, appropriation, properties, 
2 
facilities and equipment ofFIDA and CDA are hereby transferred to the Authority. 
3 
SEC. 12. Annual Report. - The Board, shall within three months after the end of 
4 
every fiscal year, submit its annual report to the President. The annual report shall include 
5 
a statement of the Board's accomplishments together with its plans and recommendations 
6 
to improve and develop the industry. 
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SEC. 13. Transitory Provisions. - Upon approval of this Act, the officers and 
9 
employees of the FIDA and the CDA shall continue to serve in a hold-over capacity, 
10 
perform their duties and responsibilities, and receive the corresponding salaries and 
II 
benefits, until a new staffing pattern shall have been approved by the governing Board. 
12 
The new position structure and staffing pattern of the Authority shall be approved 
13 
and implemented by the governing Board within one hundred twenty (J 20) days from the 
14 
approval of this Act, and authorized positions created thereunder shall be filled with 
I S 
regular appointments by the Board or by the Administrator, as the case may be. 
16 
Those incumbents whose positions are not included therein or are not reappointed 
17 
shall be paid retirement or separation benefits equivalent to two (2) months basic salary 
18 
for every year of their government service or the nearest equivalent fraction thereof 
19 
favorable to them on the basis of the highest salary which they respectively received in 
20 
the course of their employment in the government: Provided. That in no case shall the 
21 
benefit to be paid to any official or employee be less than Ten Thousand Pesos (PI 
22 
0,000.00): Provided, further, That any official or employee who has previously been 
23 
found guilty in an administrative proceeding and whose rank or salary has been reduced 
24 
shall be paid on the basis of his last salary. 
2S 
In addition to the benefits herein authorized, the covered officials and employees 
26 
shall be entitled to the return of GSIS personal contributions pertaining to the retirement 
27 
only and the payment of the corresponding share of the Government with the interest 
28 
earned pursuant to the existing rules and regulations of the GSIS. They shall likewise be 
29 
entitled to the commutation of unused vacation and sick leaves in accordance with 
5 


1 
existing mles and regulations: Provided, That those who retire after rendering 
2 
government services for thirty-one (31) years or more and avail themselves of the 
3 
incentive benefits provided in this Act shall be entitled to an additional ten percent (10%) 
4 
of the amount corresponding to what they receive from thirty-first year onward. 
5 
The application for retirement or voluntary separation shall be accepted unless the 
6 
services of the applicant shall be deemed necessary. 
7 
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SEC. 14. Notice or Consent Requirement - If any reorganizational change 
9 
authorized in this Act is of such substance or materiality as to prejudice third persons 
10 
Witll rights recognized by law or contract such notice to or consent of creditors is required 
11 
to be made or obtained pursuant to any agreement entered into with any such creditors, 
12 
such notice or consent requirement shall be complied with prior to the implementation of 
13 
such reorganizational change. 
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SEC. 15. Appropriations. - There is hereby authorized to be appropriated from 
16 
the National Treasury not otherwise appropriated, the sums necessary to carry into effect 
17 
the provisions of this Act: Provided, That thereafter, it shall be included in the annual 
18 
budget of the General Appropriations Act of the year following its enactment into Jaw 
19 
and every year thereafter. 
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SEC. 16. Separability Clause. - If for any reason, any provision of this Act is 
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declared invalid or unconstitutional, the remaining provisions not affected thereby shall 
23 
continue to be in full force and effect. 
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SEC. 17. Repealing Clause - Executive Order No. 494, Series of 1991 and 
26 
Republic Act No. 8486 are hereby modified and repealed, respectively. All other laws, 
27 
rules, regulations and other issuances or parts thereof contrary to or inconsistent herewith 
28 
are likewise repealed or modified accordingly. 
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I 
SEC. 18. Effectivity Clause. - This Act shall take effect fifteen (15) days 
2 
following its publication in the Official Gazette or in at least two (2) national newspapers 
3 
of general circulation. 
Approved, 
7