SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S.B. No. 2233 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
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RECEIVED IIY; --f' 
Being an integral part of our country's exports, the sugar industry has always 
merited 
attention 
from 
the 
Philippine 
government. 
The 
Philippine 
Sugar 
Administration was first established in 1937 and was renamed as the Sugar Quota 
Administration in 1957, yet various Presidential Decrees and Executive Orders have 
further addressed fluctuations in sugar prices over the years. 
Still, the "no-tariff" provision on sugar products, which is to be implemented in 
2015, has raised concerns from sugarcane farmers and planters, millers, and consumers 
alike. The growing sentiment among stakeholders is that the measures in place will do 
nothing to combat the potentially destabilizing effect of the said provision on the entire 
sugarcane industry. 
This looming threat to the sugarcane industry is likewise exacerbated by the 
current lack of initiatives to develop its by-products such as bagasse, molasses and filter 
mud among others. Rather than limiting sugarcane production to raw and refined 
sugar, proper utilization of by-products can generate additional income for the 
industry, mitigating the impact of the "no-tariff" provision. 
Thus, this bill seeks to strengthen the sugarcane industry through a Sugarcane 
Industry Development Fund and industrial diversification projects. With adequate 
financing programs, the development of the industry can expand to include its by-
products as marketable items. Considering the role of sugar in food security, more 
stringent regulations on the management of sugarcane products must be implemented. 
In view of the foregoing, the early passage of this bill is earnestly sought. 
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Senator 


SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S.B. No. 2233 
Introduced by Senator Loren Legarda 
AN ACT 
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HAY 19 P5:11 
STRENGTHENING THE SUGARCANE INDUSTRY BY ESTABLISHING THE 
SUGARCANE 
INDUSTRY 
DEVELOPMENT 
FUND, 
PROVIDING 
FUNDS 
THEREFOR AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SECTION l.Short Title. - This Act shall be known as the "Sugarcane Industry 
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Development Act of 2014" . 
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SEC. 2.Declaration of Policy. - It is hereby declared the policy of the State to provide 
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policy directions and support programs/projects for the sustained development and 
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diversification of the sugarcane industry inasmuch as the industry provides 
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employment and livelihood to a sizeable number of Filipinos in the agricultural sector, 
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contributes significantly to the national economy as well as local economies of host 
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provinces, earns for the country foreign reserves from exports to other countries, and is 
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vital for food sufficiency and energy security of the country. 
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For the reasons stated, it is hereby further declared that the development and 
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diversification of the sugarcane industry shall be directed primarily to the increase in 
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incomes of the farmers, the enhancement of the productivity of sugar planters and 
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sugar mills and the improvement in marketing and trading practices in terms of 
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administrative, policy directives and financial assistance to the sugarcane industry in 
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support of the food security objectives and environmental concerns of the national 
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government. 
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SEC. 3.Development of the Sugar Cane Industry. - The main focus of the development 
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of the sugarcane industry shall be on the following measures, programs and projects: 
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A. 
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Industry-wide Development 
1. 
The transformation of sugarcane industry from the limited "raw and 
refined sugar production" into a diversified industry producing not only 
raw and refined sugar, but also power, waste disposition and other 
possible biochemical products primarily through integration of by-
product production with sugar processing; 


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B. 
2. 
The establishment of Special Economic Zones for Sugarcane Industry 
pursuant to R.A. No. 7916 (Special Economic Zone Act of 1995), and/or 
the designation and establishment of nuclear farms/ Agro-Industrial 
Districts for Sugarcane Industry to be entitled to the existing fiscal 
incentives under Book VI of Executive Order No. 226, otherwise known as 
the Omnibus Investments Code of 1987, as well as Sections 4,5, 6 and 7 of 
R.A. 10000 (The Agri-Agra Reform Credit Act of 2009), promoting, among 
others, block/ corporate farming to achieve economies of scale; 
3. 
The development of programs that are environment friendly and will 
attract inveshnent in the development, production, or manufacture of 
products derived from sugarcane, sugar, molasses, cane juice, crop waste, 
bagasse, filter mud and other by-products and co-products of sugarcane 
milling; 
4. 
The institution of marketing programs that will lead to expansion of 
markets for sugarcane and by-products; 
5. 
The building and/ or improvement of existing trans-loading ports for 
export or coast-wide transport of sugar and its by products in key sugar 
producing areas through various programs or projects of other 
government agencies such as NEDA, DOTC and PPA; 
6. 
The development of a sugar cane industry that shall benefit sugar farmers, 
planters and mill workers; 
7. 
The 
encouragement 
and 
intensification 
of 
farm 
productivity 
improvement, including but not limited. to farm mechanization, organic 
farming, fertilization, irrigation, intensified inter-cropping, and dispersal 
of planting materials and improved high yielding varieties; 
8. 
The 
sustained 
support/ conduct/ sponsorship 
of 
research 
and 
development on the sugar cane industry including, among others, high 
yielding varieties, farm implements, farm methodologies, by-product 
profitability and marketing/ promotion techniques, new manufacturing 
chemical and biotechnologies for bagasse, molasses and other by-
products, weather monitoring and soil fertility mapping; 
Regulation of Sugar Industry 
1. 
The effective monitoring of the withdrawal, transfer, transport and 
movement of sugar and premixes; provided, that, all sugar warehouses 
and storage facilities are required to register with SRA. 
2. 
The institutio.n of electronic quedanning, expansion of quedanning to 
molasses and the implementation of the quedan system under Republic 
Act No. 2137 (Warehouse Receipts Law). 
3. 
The classification of imported sugar and premixes as either "C", "D", or 
"E" when imported at a time when there is a sufficiency sugar stocks; 
provided, that the Bureau of Customs (BOC) shall not release imported 
sugar and premixes without requisite SRA clearances and classification; 


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C. 
4. 
The export of refined sugar to the world market shall be subjected to VAT 
zero percent rate from the time it is withdrawn or released from the sugar 
mill/refinery, including refined sugar withdrawn for constructive export 
to Customs Bonded Warehouse (CBW) of food processors that are duly 
licensed and registered with SRA; 
5. 
The wastewater discharge of mills that meet the standard of the 
Department of Agriculture on safe re-use of waste water for irrigation and 
other agricultural purposes shall not be imposed any discharge fee. 
Fund Management 
1. The management and proper utilization and disposition of the Sugarcane 
Industry Development Fund established under Sec. 4 of this Act, with special 
emphasis on the industry's contribution to the food security program of the 
national government. 
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SEC. 4.Establishment of Sugarcane IndustnJ Development Fund. 
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A. 
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A Sugarcane Industry Development Fund, hereinafter referred to as the "Sugar 
Fund",is hereby established to support the implementation of the development 
strategy identified in Sec. 3 of this Act. The Sugar Fund shall be held in trust by 
the Philippine Sugar Corporation created under P.D. 1890. 
Initially, the Sugar Fund shall be utilized for the following specific purposes: 
1. 
Finance the 
establishment of Special 
Economic 
Zones, 
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farms/ Agro-Industrial Districts as provided for in Sec 4 (2. a) of this Act; 
2. 
Provide financial assistance in the form of loans, guarantees and other 
suitable credit commodities or arrangements (e.g. Farmers Trust, Special 
Purpose Vehicles) to the sugar farmers, planters and mills covering. 
purchase of seedlings, cane varieties, pesticides and fertilizer; acquisition 
of farm machinery and equipment; construction of farm to market roads; 
and construction or building of irrigation or water impounding facilities 
and water distribution networks; 
3. 
Provide financial conduiting/resources for industries harnessing the 
efficient use of the energy potential of the sugar cane (e.g. the Ethanol 
program) and utilization of farm wastes (e.g. bagasse as raw material for 
pulp and paper, boards and furfural and animal feeds) and other by-
products using chemical and biotechnologies; 
4. 
Conduct researches or feasibility studies to improve efficiency and 
productivity of farms and mills, identify areas for diversification, identify 
and develop other markets for sugar and its by-products and co-products, 
particularly in the area of renewable energy and biochemical industry; 
5. 
Training of mill personnel on current technologies on efficiency, 
productivity and diversification; and 


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B. 
6. 
Finance socio-economic programs for sugar farmers and mill workers 
including but not limited to livelihood programs and trainings in addition 
to the programs under Republic Act 6982 (Strengthening the Social 
Amelioration program in the sugar industry) 
The Sugar Fund shall be constituted out of the existing funds and appropriations 
for the agriculture and fisheries modernization such as: 
1. 
The Agricultural Competitiveness Enhancement Fund (ACEF) - The DA, 
in consultation with the Congressional Oversight Committee on 
Agriculture and Fisheries Modernization (COCAFM), shall allocate 
annually from year 2013-2015 or until all ACEF funds are exhausted, and. 
shall continue with any extension thereof, a portion of ACEF to fund the 
infrastructure support projects of the sugarcane industry such as farm-to-
mill roads and irrigation, product development, and research and 
development projects to include all its subsectors, namely, the farm sector, 
sugar sector, bioethanol sector, power generation sector and farm/mill 
support industries sector such as recipients or beneficiaries of funding 
support; 
2. 
The General Appropriations for the Agriculture Sector - the DA shall 
provide allocation to the sugarcane industry and all its subsectors from its 
annual General Appropriations Act (GAA) or from the Agriculture and 
Fisheries 
Modernization Act 
(AFMA) 
funds and 
prioritize 
the 
programs/projects of the sugarcane industry in its annual expenditure 
prioritization plan for ten successive fiscal years (FY 2014-FY2023). 
3. 
All sugar-producing local government units (LGVs) shall allocate a 
portion of their Incremental Reformed-Value-Added Tax-Internal 
Reveneue Allotment (R-VAT-IRA) for the infrastructure and Research, 
Development & Extension (RD&E) projects of the sugarcane industry to 
include all its subsectors stated in Section 4.c.1. 
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SEC. 5.Board of Directors of the Philippine Sugar Corporation. - The powers and 
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functions of the Philippine Sugar Corporation (PHILSVCOR), created under 
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Presidential Decree No. 1890, shall be exercised by a Board of Directors referred to as 
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the "Board" which shall be composed of eleven (11) members, as follows: 
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" SECTION 8. Board of Directors, Composition. - The powers and functions of 
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the Corporation shall be exercised by a Board of Directors, hereinafter referred 
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to as the 'Board', which shall be composed of eleven (11) members, as follows: 
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(a) The Administrator of the Sugar Regulatory Administration (SRA) as 
Chairperson; 
(b) the President of the Philippine Sugar Corporation (PHISVCOR) as Vice 
Chairperson; and 
(c) the remaining nine (9) members nominated by SRA, of which five (5) 
shall come from the sugar farmers sector and four (4) from the sugar 
millers sector. 


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Except for Ex-Officio members of the board, the appointment and qualification of 
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the other members of the Board shall be in accordance with R.A. no. 10149 or the 
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'GOCC Governance Act of 2011'." 
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SEC. 6.Implementing Agency. - The Sugar Regulatory Administration (SRA) shall 
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formulate a Ten-year Sugarcane Industry Development Program (SIDP 2014-2023) that 
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shall be reviewed and updated annually, in consultation with the major stakeholders of 
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the sugarcane industry and its subsectors which shall serve as basis for the program/ 
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project proposals that shall be submitted to the COCAFM, the DA and the LGUs for 
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funding as provided for in Sections 4.c.1, 4.c.2 and 4.c.3. 
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SEC. 7.Transitory Provisions. - Upon the effectivity of this Act, the positions in the 
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Board of Directors of PHILSUCOR shall be deemed vacant, and the President shall 
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appoint new members based on the provision of this Act, provided, however, that the 
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members of the Board shall hold over until the new members are appointed. 
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SEC. 8.Separability Clause.- If any provision or part thereof of this Act is declared 
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unconstitutional, the validity of the remaining provisions hereof shall remain in full 
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force and effect. 
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SEC. 9.Repealing Clause.- All laws, decrees, executive orders and rules and regulations 
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or part or parts thereof inconsistent with any provision of this Act are hereby repealed, 
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modified or amended accordingly. 
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SEC. 10.Effectivity Clause. - This Act shall take effect fifteen (15) days after its complete 
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publication in the Official Gazette or in at least two (2) newspapers of general 
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circulation. 
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Approved,