FOURTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
) 
SENATE 
/ 
Introduced by Senator Antonio “Sonny” F. Trillanes 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 infrastmcture, 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 P1.16 
billion a year, thereby causing serious damage to local agricultural producers. 
In the same 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.’ 
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 (CDAj, 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. 
Senator 
’ 2007 Markef Reporf: Abaca. Infomntion retrieved From: httu:Ilfidduov.uW. Retrieved on 17 June 2008. 
‘Philippine Coffonlndrrshy Sihrotion: Crop Year 2004/05. Information retrieved from: 
h t t u : / l o o d a . d a . n o v . ~ ~ ~ ~ ~ u ~ ~ ~ l ~ i ~ a t i o  
2004 05.uhp. Retrieved on 17 June 2008. 
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FOURTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
) 
SENATE 
S. No. 254 
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 I991 AND REPEALING REPUBLIC ACT 8456, AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Plitlrpprnes tn Congress 
assem bled: 
SECTION 1. Short Title. - This Act shall be known as the “National Fiber 
Development Act of 2008”. 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to 
promote and develop agriculture as an important part of the Philippine economy. Toward 
this end, the State shall provide full support to fiber and cotton industries through 
appropriate technology and research, and adequate financial, production, marketing and 
other support services. It shall also recognize the right of fiber and cotton farmers to 
actively participate in the planning and management of programs concerning the said 
industry. 
SEC. 3. Creation of the National Fiber Development Authority (NAFIDA). - 
The National Fiber Development Authority (NAFJDA), hereinafter referred to as the 
Authority, is hereby created under the Office of the President to cany out the provisions 
of this Act. The Authority shall serve as the governments priinaty planning and 
marketing agency responsible for the cotton and fiber industry 
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SEC. 4. Stntement of Objectives. - This Act shall have the following objectives: 
a) To promote the integrated development of the cotton and fiber industry in all its 
aspects from research, production, processing, marketing and trade regulation to 
make them globally competitive; 
b) To sustain the growth of and demand for cotton and fiber and its by-products in both 
domestic and international markets; 
c) To formulate and enforce standard and regulatory measures in order to maintain good 
quality cotton and fiber traded in the domestic and international markets; 
d) To encourage and provide adequate incentives to investment in cotton and fiber 
industries; 
e) To improve farm productivity through the adoption of modern prescribed technology 
so as to increase farmers' income, and 
fl To encourage and promote the use of locally produced cotton and fiber. 
SEC. 5. Powers and Fumtions. - The Authority shall have the following 
a) To undertake and regulate research studies on all aspects of the cotton and fiber 
industry, including its international markets, production, processing and marketing in 
the domestic and international markets; 
b) To administer and regulate in accordance with law, the licensing and registration and 
shipment of cotton and fiber producers/manufacturers including the tagging, marking, 
inspection, certification and shipment of their commercial products; 
c) To recommend production technology to guide the cotton and fiber production 
activities in the country; 
d) To design and implement a specialized extension program and skills development 
training or workshops to improve the technical and entrepreneurial capabilities o f  
fiber producers, ginners, classifiers, graders, traders, processors and exporters to 
improve the quality of its commercial products, 
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e) To establish a inonitoring system in coordination with the Department of Trade and 
Industry and the Department of Agriculture for the assessment of cotton and fiber 
supply and demand situation in both domestic and international market; 
f )  To acquire world-class machinery and tools for distribution to the farmers and 
producers; 
g) To identify and improve infrastructure in the locality in coordination with the 
Department of Public Works and Highways and the Local Government Unit 
concerned; 
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h) To provide assistance to small farmers in the marketing, promotions, and 
advertisement of cotton and fiber products; 
i) To undertake inddstry manpower development; 
j) To assist farmers In sourcing funds for capital build-up; 
k) To conduct regular consultations with the farmers, growers and other sectors involved 
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in the fiber and eotton industry; 
1) To accredit associations or confederations of cotton and fiber farmers, growers and 
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 
this Act. 
SEC. 6. The Governing Board of the NAFIDA. - The corporate powers and 
duties of the Authodity shall be vested in, and exercised by, the Board to be appointed by 
the President, composed of the following 
a) Three (3) represeptatives of the Government, one of whom shall be designated by the 
President as Chairman, 
b) Three (3) representatives from the fiber producers/manufacturers association upon the 
recommendation of their respective confederations in Lumn, Visayas and Mindanao 
duly accredited by the Authority; and 
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c) Three (3) representatives from the cotton farmers association upon there 
commendation of their respective confederations in Luzon, Visayas and Mindanao 
duly accredited by the Authority . 
SEC. 7. Power and Functions of the Board - The Governing Board shall act as 
the policy making body of the Authority to formulate policies, promulgate regulations 
and prescribe rules to attain the purposes and objectives of this Act. 
SEC. 8. Term of office of the members of the Governing Board - Unless sooner 
removed for cause by the President through the recommendation of their respective 
association, appointed members of the Governing Board shall hold office for a period of 
two ‘(2) years from the date of their appointments. 
SEC. 9. Organization- The Chief Executive Officer of the Authority shall be the 
Administrator to be appointed by the President upon recommendation of the Board. He 
shall be assisted by two (2) Deputy Administrators to be appointed by the President upon 
recommendation of the Board. The Board shall determine and create the organizational 
structure of the Authority and shall appoint all other officers of the Authority. 
SEC. 10. Promulgation of Rules and Regulations. - The Governing Body shall 
promulgate rules and regulations for the full implementation of this Act within ninety 
(90) days of its effectivity. Such rules and regulations shall take effect upon publication 
in two (2) newspaper of general circulation and may be amended by the Board from time 
to time as it may deem appropriate. 
SEC. 11 Dissolution of the Fiber Industry Development Authority (FDA) and 
the Cotton Development Authority (CDA). - Subject to the provisions of existing laws, 
the Fiber Industry Development Authority (FIDA) and Cotton Development Authority 
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(CDA), are hereby dissolved. All assets, Iiabilities, records, appropriation, properties, 
facilities and equipment of FDA and CDA are hereby transferred to the Authority. 
SEC. 12. Annual Report. - The Board, shall within three months after the end of 
every fiscal year, submit its annual report to the President. The annual report shall include 
a statement of the Board's accomplishments together with its plans and recommendations 
to improve and develop the industry. 
SEC. 13. Transitory Provisions. - Upon approval of this Act, the officers and 
employees of the FIDA and the CDA shall continue to serve in a hold-over capacity, 
perform their duties and responsibilities, and receive the corresponding salaries and 
benefits, until a new staffing pattern shall have been approved by the governing Board. 
The new position structure and staffing pattern of the Authority shall be approved 
and implemented by the governing Board within one hundred twenty (120) days from the 
approval of this Act, and authorized positions created thereunder shall be filled with 
regular appointments by the Board or by the Administrator, as the case may be. 
Those incumbents whose positions are not included therein or are not reappointed 
shall be paid retirement or separation benefits equivalent to two (2) months basic salary 
for every year of their government service or the nearest equivalent fraction thereof 
favorable to them on the basis of the highest salary which they respectively received in 
the course of their employment in the government: Provided, That in no case shall the 
benefit to be paid to any official or employee be less than Ten Thousand Pesos (PI 
0,000.00): Provided, further, That any official or employee who has previously been 
found guilty in an administrative proceeding and whose rank or salary has been reduced 
shall be paid on the basis of his last salary. 
In addition to the benefits herein authorized, the covered officials and employees 
shall be entitled to the return of GSIS personal contributions pertaining to the retirement 
only and the payment of the corresponding share of the Government with the interest 
earned pursuant to the existing rules and regulations of the GSIS. They shall likewise be 
entitled to the commutation of unused vacation and sick leaves in accordance with 
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existing rules and regulations: Provided, That those who retire after rendering 
government services for thirty-one (31) years or more and avail themselves of the 
incentive benefits provided in this Act shall be entitled to an additional ten percent (10%) 
of the amount corresponding to what they receive from thirty-first year onward. 
The application for retirement or voluntary separation shall be accepted unless the 
services of the applicant shall be deemed necessary. 
SEC. 14. Notice or Consenf Requirement - If any reorganizational change 
authorized in this Act is of such substance or materiality as to prejudice third persons 
with rights recognized by law or contract such notice to or consent of creditors is required 
to be made or obtained pursuant to any agreement entered into with any such creditors, 
such notice or consent requirement shall be complied with prior to the implementation of 
such reorganizational change. 
SEC. 15. Appropriations. - There is hereby authorized to be appropriated from 
the National Treasury not otherwise appropriated, the sums necessary to carry into effect 
the provisions of this Act: Provided, That thereafter, it shall be included in the annual 
budget of the General Appropriations Act of the year following its enactment into Jaw 
and every year thereafter. 
SEC. 16. Separability Clause. - If for any reason, any provision of this Act is 
declared invalid or unconstitutional, the remaining provisions not affected thereby shall 
continue to be in full force and effect. 
SEC. 17. Repealing Clause - Executive Order No. 494, Series of 1991 and 
Republic Act No, 8486 are hereby modified and repealed, respectively. All other laws, 
rules, regulations and other issuances or parts thereof contrary to or inconsistent herewith 
are likewise repealed or modified accordingly. 
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of general circulation. 
SEC. 18. Eflectlvity Clause. - This Act shall take effect fifteen (15) days 
following its publication in the Oficcial Gazette or in at least two (2) national newspapers 
Approved, 
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