FOURTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
Third Regular Session 
SENATE 
:S. No. 3521 
) 
) 
) 
Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
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Majority of the local pioneer players in the footwear industry in the country started 
their business in Marikina City and Rizal province. Given the recent surge of typhoons 
and flood that badly hit these said provinces and hampered the livelihood of thousands 
of local residents in Marikina City and Rizal province, there is a need to pump-prime 
their local economy and provide local income opportunities to the small-scale family 
owned footwear manufacturers in our country. 
The local footwear industry is composed of 97 percent small-scale, family-owned 
enterprises which provide employment to at least 300,000 people creating 265 different 
components into the making of a pair ·of shoes from the glue to the nails, the heel, the 
raw hide, the leather, and the shoe, lace. From the 1950s to the 1980s, the Philippine 
footwear industry experienced a boom owing to strong local and international demand. 
During these years, many Filipinos wore locally-made shoes and carried locally-made 
leather handbags and purses. In the past, the local footwear industry also supported the 
growth of other small establishments such as restaurants and other eateries where 
workers would get their evening snacks. The allied downstream industries also benefit 
from the boom of the footwear in<:lustry, such as local tanneries which produce the 
processed leather or animal hide needed in the manufacture of shoes. During the mid-
1990s, the Philippines was a major shoe exporter to the United States and other 
countries. In 1994, the Philippines produced 10 million pairs of shoes enough to shoe 
the country. In 1997, the country's sflOe exports earned nearly $200 million. 
Today, the local footwear industry produces less than 5 million pairs of shoes 
which serves just 10 percent of the national requirement. About 80 percent is served by 
imports from China, which accounts for 40 percent of total imports. At present, 80 
percent of the Philippine market is dominated by imported shoes and leather products. 
Furthermore, the number of employees in the footwear industry, including those 
employed by the downstream allied sectors - from tannery to molding to adhesive 
producers - has dropped drastically to 5,000 from 300,000 in the 1980s to the 1990s. 
Unable to compete, many local footwear manufacturers have closed down given that 
exports in shoes are steadily falling. From 513 registered manufacturers in 1994, there 
are only 145 remaining in the country's shoe capita\. The average production locally 
manufactured shoes has dwindled from 105,000 pairs of shoes a year in 1994 to 42,000 
pairs in 2003. 
Compared to foreign shoe companies that have access to government subsidies 
with which to invest in improving their technologies, the local industry continues to use 
traditional low-tech methods, relying on the skills and ingenuity of Filipino shoemakers. 
The local shoemakers cannot compete on price alone as they are plagued with high 


production costs. About 75 percent of their manufacturing costs come from the sourcing 
and processing of raw materials such as leather hides, which they have to import since 
local tanneries were not developed ~nough to meet large-scale demand. It is estimated 
that around 80% of the components of finished local leather footwear for export are 
imported. 
This proposed measure see~s 
the creation of a National Footwear Training 
Academy (NFTA), under the direct supervision and control of the Department of Trade 
and Industry (DTI), which is envisioned to provide the highest quality training and 
research in the field of footwear production and its related downstream industries. The 
NFT A shall be a training institution committed to the pursuit of excellence through the 
provision of education, training, technology transfer and research and development 
(R&D) in the field of footwear industry. The Academy shall maintain a proactive 
environment wherein the latest methods and technologies in footwear production and 
tanning are applied to provide state-of-the-art and comprehensive training to develop 
the competitiveness of local manufacturers in the field of local footwear production. 
This measure also mandates Land Bank of the Philippines (LBP) to formulate a 
Local Footwear Industry Modernization Credit Facility and Loan Package Window which 
will provide a low interest loans for local footwear manufacturers and suppliers seeking 
to improve and modernize their production facilities, equipment and services in order to 
revive and make competitive the local footwear industry in the country. 
This proposed measure seeks to provide technical assistance mechanisms to the 
various key players in the local footwear industry in the country who are seeking to 
modernize and upgrade their production and manufacturing technologies and methods 
in order for them to be competitive in the marketplace. 
In view of the urgent need to pump-prime the economies of cities and provinces 
hit by the surge of typhoons and floods in our country, the passage of this measure is 
earnestly sought. 
.a,t: J 
MVuEL "LITO" M. LAPI9-' 
Senator 
( 


FOURTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
Third Regular Session 
SENATE 
S. No. 3521 
) 
) 
) 
Introduced by Senator Manuel "Lito" M. Lapid 
AN ACT 
ESTABLISHING A COMPREHENSIVE PROGRAM TO REVIVE THE LOCAL 
FOOTWEAR 
INDUSTRY IN· THE COUNTRY, 
ESTABLISHING THE 
NATIONAL FOOTWEAR TRAINING ACADEMY (NFTA), APPROPRIATING 
FUNDS THEREFORE AND FOIj OTHER PURPOSES 
Be it enacted by the Senate and .the House of Representatives of the Philippines 
in Congress assembled: 
. 
SECTION 
1. 
Short Title. - This Act shall be known as the "Local 
Footwear Industry Competitiveness Act of 2009". 
SEC. 2. 
Declaration of Policy. --
It is hereby declared the policy of the 
State to recognize the indispensable role of the private sector, encourage private 
enterprises, and provide incentives to needed investments. The State shall also 
stimulate and encourage the pursuit of creative endeavors by its citizens. 
Towards these ends, the S~ate shall exert efforts to strengthen the country's 
creative local industries through a business environment conducive to the development 
of creativity, ingenuity and innovativeness and geared towards a sustainable growth of 
our local industries. 
As such, the State shall provide the mechanisms to maintain, update, and 
improve the scientific knowledge, technical skill and competence of our production 
workers in the local footwear industry. 
Furthermore, the State shall give priority to research and development on the 
aspect of footwear industry in tlie country, using as practicable local indigenous 
resources to promote competitiven~ss and local employment. 
SEC. 3. 
Establishment of a National Footwear Training Academy 
(NFTA). - There is hereby established and created a National Footwear Training 
Academy (NFTA), hereinafter referred to as the "Academy", under the direct supervision 
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and control of the Secretary of the ,Department of Trade and Industry (DTI), which is 
envisioned to provide the highest quality training and research in the field of footwear 
production and its related downstream industries. 
The National Footwear Training Academy (NFTA) shall be a training institution 
committed to the pursuit of excell~nce through the provision of education, training, 
technology transfer and research and development (R&D) in the field of footwear. The 
Academy shall maintain a proactive environment wherein the latest methods and 
technologies in footwear production· and tanning are applied to provide state-of-the-art 
and comprehensive training to develop the competitiveness of manufacturers in local 
footwear production. 
SEC. 4. 
Objectives. - The Academy shall be established to serve the 
following objectives: 
a) 
To train and make competitive footwear manufacturing companies, 
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entrepreneurs, footwear distributors; suppliers and various stakeholders in the footwear 
industry and its related downstream industries; 
b) 
To serve as the primary training institution in the country in footwear 
production and manufacturing that will provide the enabling mechanisms to revive and 
make the industry competitive; 
c) 
To train key players fn the footwear industry and provide them with the 
latest footwear production technologies and methods; 
d) 
To serve as a Center for Excellence in the provision of comprehensive 
and state-of-the-art training and technical aSSistance; 
e) 
To serve as the primary research arm of the government in footwear 
science and manufacturing and serve as an authoritative source of information; 
f) 
To upgrade quality standards and cost efficiency in the production of 
footwears. 
SEC. 5. 
Powers and Functions. - The Academy shall have all legal powers 
appertaining to a juridical person, particularly the following: 
a) 
to sue and be sued; 
, 
b) 
to enter into contracts; 
c) 
to hold real and personal property as may be necessary for its mandated 
purposes; 
d) 
to mortgage, lease, sell, transfer, convey and otherwise dispose of the 
same; 
e) 
to solicit and receive public and private donations and contributions 
related to footwear production and manufacturing; 
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f) 
to accept and receive real and personal property by gift, devise or 
bequest; 
g) 
to levy and collect minimal dues and fees from its trainees for its services; 
h) 
to adopt a seal and to alter the same; 
i) 
to have offices and Conduct its affairs in the Metro Manila area and 
elsewhere; 
j) 
to make and adopt by-laws, rules and regulations not inconsistent with the 
laws of the Philippines; and 
k) 
to do all such acts and things as may be necessary or proper to carry into 
effect and promote the'purposes for which it was organized. 
The seal and emblem of the.,National Footwear Training Academy (NFTA) shall 
be kept in its national office. 
SEC. 6. 
Personal Conduct of Students and Faculty - The National 
Footwear Training Academy (NFTA) is a training and research institution that strives to 
maintain a safe and healthy environment and which promotes learning in a professional 
and challenging setting. Trainees are expected to exercise tolerance and to respect and 
celebrate differences among individuals. At no time will the academy tolerate: 
a) 
Harassment of any kind 
b) 
Racial, religious or sexual slurs 
c) 
Inappropriate language 
d) 
Damage to property 
e) 
Any action which jeopardizes the comfort, safety or health of others 
SEC. 7. 
NFTA Academic Board. - The academy shall have an Academic 
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Board composed of the Administrator, the Dean of the Corps of Professors, the Head 
Training Officer and the Heads of the Departments. 
The Administrator and Head Training Officer of the Academy shall be appointed 
by the President of the Republic of the Philippines. 
The Academic Board shall have the power to confer certificates and diplomas to 
, 
all trainees, upon the satisfactory completion of the approved course of studies, under 
such rules and regulations as the Secretary of the Department of Trade and Industry 
(DTI) may prescribe. 
Other diplomas that may be needed in the future will be conferred, provided that 
the Academic Board shall determine these degrees in consonance with the needs of the 
footwear industry in the country. The Academy shall develop these courses and the 
necessary expertise as the need arises. 
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SEC. 8. 
Sources of Funds. - The funds of the National Footwear Training 
Academy shall be derived from dues and assessments, donations, bequests, 
contributions of its students and trainees, as well as income from conventions, 
seminars, corporate trainings and ot~er fund raising activities. 
SEC. 9. 
Technical Assistance and Grants. - The Academy, subject to the 
approval of the Secretary of the Department of Trade and Industry (DTI), shalf establish 
a program to award grants and/or technical assistance to eligible entities, enterprises, 
entrepreneurs and corporations that' have submitted their application for the purpose of 
assisting key players in the footwear industry upgrade or modernize their facilities 
and/or production methods and technologies. 
The NFTA shall require from the proponents the following information: 
a) 
A description of the product lines of the intended beneficiary of the 
technical assistance grant; 
b) 
A description on how the technical assistance grants will improve quality 
of production and products manufadured by the intended beneficiary; and 
c) 
Any additional information that the NFTA may require, consistent with the 
provisions of this Act. 
SEC. 10. 
Appropriations. - There is hereby appropriated the amount of 
Php30,OOO,OOO for the construction and establishment of the National Footwear 
Training Academy (NFSA) which shall be incorporated in the General Appropriations of 
the Department of Trade and Indust~y (DTI). 
Thereafter, the improvements, personnel expense and 
other necessary 
expenses for the operation and maintenance of the Academy shall be included in the 
annual General Appropriations of the DTI. 
SEC. 11. 
Local Footwear Industry Modernization Credit Facility and 
Loan Package. - The Land Bank of the Philippines (LBP) is hereby mandated to 
formulate a Local Footwear Industr.y Modernization Credit Facility and Loan Package 
Window which shall provide low interest loans for local footwear manufacturers and 
suppliers seeking to improve and modernize their production facilities, equipment and 
services in order to revive and make competitive the local footwear industry in the 
country. 
Within six (6) months from th,e date of effectivity of this Act, the Land Bank of the 
Philippines is mandated to formulate the necessary guidelines, procedures and 
• 
requirements for the various stakeholders to avail of the Local Footwear Industry 
Modernization Credit Facility and Loan Package Window, as mandated under this Act. 
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SEC. 12. 
Implementing Rules and Regulations (/RR). - Within six (6) 
months from the date of effectivity of this Act, the Department of Trade and Industry 
(DTI) shall promulgate necessary implementing rules and regulations to implement the 
provisions of this Act. 
SEC. 13. 
Repealing Cla~se. - All Laws, decrees, executive orders, rules and 
regulations or parts thereof not consistent with the provisions of this Act are hereby 
repealed or modified accordingly. 
SEC. 14. 
Separability Clause. - If any provision or part of this Act, or the 
application thereof to any person or circumstance, is held unconstitutional or invalid, the 
remainder of this Act shall not be affected thereby. 
SEC. 15. 
Effectivity Clause. - This Act shall take effect fifteen (15) days 
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from the date of its complete publication in the Official Gazette or in at least two (2) 
newspapers of general circulation. 
Approved, 
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