EVEPRE, “ON

> RECEIVED
EIGHTEENTH CONGRESS OF THE ) - CATES Caan }
REPUBLIC OF THE PHILIPPINES | <, TIMEs_9y i
First Regular Session } > BY:
ys
HOUSE OF \TIVES
H.B.No.

Introduced by Representative TEODORICO “NONONG” T. HARESCO, JR.

EXPLANATORY NOTE

Located along the typhoon belt and the ring of fire of the Pacific, the Philippines is a
country prone to disasters. The geographical characteristic of the country makes it
susceptible to natural calamities—with more than 50 active volcanoes on its setting and an
average of 20 typhoon landing on its territory. It is due to this inbred fact that a bolstered
and robust disaster preparedness is vital.

Countries such as Canada, Switzerland and the United States of America came up with
measures to efficiently respond to disasters, either natural or man-made, by creating
emergency strategic stockpiles specifically designed to guarantee the supply of essential
goods and services in times of serious shortages brought about by emergency situations.
Stockpiling is the solution forged by these countries to thwart shortages of goods and
equipment in times of emergency such as the currently worsening state of the global
pandemic COVID-19.

This bill aims to solve the problem of access to critical supplies in times of natural
disasters by stockpiling critical and strategic materials and the use of such supplies to
address urgent need by amending the Philippine International Trading Corporation Law,
adopting in its charter its additional role of being the Stockpile Supply-Chain Manager for
the government to make it the new Philippine International Trading and Critical Materials
Stockpile Corporation.

This bill also promotes local economy by undertaking to encourage the conservation
and development of sources of such materials within the Philippines to decrease and
preclude, whenever possible, a dangerous and costly dependence by the Philippines upon
foreign sources or a single point of failure for supplies of such materials in times of national
emergency.

In view of the foregoing, the earnest passage of this bill is sought.

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TEODRORICO “NONONG” HARESCO. IR.



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EIGHTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES )
First Regular Session }
HOUSE OF REPRESENTATIVES
HB. No. tite

Introduced by Representative TEODORICO “NONONG” T. HARESCO, JR.

ANACT
AMENDING PRESIDENTIAL DECREE NO. 252 OTHERWISE KNOWN AS THE
“PHILIPPINE INTERNATIONAL TRADING CORPORATION LAW”, AS AMENDED BY
PRESIDENTIAL DECREE NO. 1071 OTHERWISE KNOWN AS “REVISING THE CHARTER
(OF THE PHILIPPINE INTERNATIONAL TRADING CORPORATION”

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

SECTION 1. Section 2 of the Revised Charter of the Philippine International Trading
Corporation is hereby amended as follows:

“SECTION 2. Name, Domicile and Place of Business. - There is hereby created a body
corporate to be known as the {Philippine International Trading Corporation} PHILIPPINE
INTERNATIONAL TRADING AND CRITICAL MATERIALS STOCKPILE CORPORATION,
hereinafter referred to as the Corporation, which shall henceforth exist for fifty years and
shall have its principal office in Metro Manila.”

‘SEC. 2. Section 3 of the Revised Charter of the Philippine International Trading Corporation
is hereby amended as follows:

“SECTION 3. Capitalization. ~ The authorized capital stock of the Corporation shall be {swe
hundred-million-pesos-(P200,000,000,00}) ONE BILLION PESOS (P1,000,000,000) to be
divided into {two-million-{2,000,000}} TEN MILLION shares at par value of one hundred
pesos (P100.00) per share to be subscribed as follows:

THIRTY PERCENT (30%) representing feight-hundred-thousand {800,000} THREE
MILLION (3,000,000) shares valued at feighty-million-pesos-(P80,000,000.00}} THREE
HUNDRED MILLION by the Republic of the Philippines; TWENTY PERCENT (20%)
representing ftwo-hundred-thousand-{200,000}} TWO MILLION shares valued at ftwenty
million-pesos-{P20,000,000.00}} TWO HUNDRED MILLION PESOS (P200,000,000) by the
Development Bank of the Philippines; TWENTY PERCENT (20%) representing {two
hundred-theusand-{200,000}} TWO MILLION SHARES valued at ffwenty-million-pesos
P20,000,000,00}} TWO HUNDRED MILLION (P200,000,000) by the {Philippine National
Bank} LAND BANK OF THE PHILIPPINES; and the remaining THIRTY PERCENT (30%)
representing feight-hundred-thousand-{800,000}} THREE MILLION (3,000,000) shares
valued at feightymiltion—pesos—{P80,000,000.00}}-THREE HUNDRED MILLION by
NATIONAL DEVELOPMENT COMPANY at not less than the par value. For the total


Sewmragovusons

SSFFSSSSSSSSRAESSSSYRNRRRBSLBSssaazrsse

"subscription of the Republic of the Philippines, the amount of [forty-million—pesos
‘€P49,000,000.00)] THREE HUNDRED MILLION is hereby appropriated out of the funds in
the National Treasury which amount or any portion thereof shall be released to the
Corporation upon the approval of the President of the Philippines: Provided, that, the
subscription of the DEVELOPMENT BANK OF THE PHILIPPINES and the [Philippine
National Bank] LAND BANK OF THE PHILIPPINES shall be paid to the Corporation at such
time and for such amounts as shall be requested by the Board of Directors of the
Corporation: PROVIDED FURTHER that given the current shareholdings of the NATIONAL
DEVELOPMENT COMPANY in the Corporation, the balance due on the subscription of THE
NATIONAL DEVELOPMENT COMPANY shall be paid to the Corporation at such time as shall
be requested by the Board of Directors of the Corporation. (PROVIDED, FURTHER,-THAT,

SEC. 3, Section 5 of the Revised Charter of the Philippine International Trading Corporation
is hereby amended as follows:

“SECTION 5. Purposes of the Corporation. - The Corporation is hereby authorized:
XXX
(t) TO ACT AS THE SUPPLY-CHAIN MANAGER IN THE STOCKPILING OF STRATEGIC AND

CRITICAL MATERIALS AS MAY BE DETERMINED BY THE PRESIDENT OF THE
PHILIPPINES; TO ACQUIRE AND RELEASE SUCH MATERIALS AS DIRECTED BY THE


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PRESIDENT OF THE PHILIPPINES IN THE INTEREST OF THE PUBLIC IN RESPONSE OR
IN PREPARATION OF ANY CONCEIVED NATIONAL EMERGENCY:

(u) TO DO ALL SUCH OTHER THINGS AS ARE INCIDENTAL OR APPURTENANT TO OR
GROWING OUT OF OR CONNECTED WITH THE AFORESAID BUSINESS OR POWERS OF
‘THE CORPORATION OR ANY PART THEREOF OR CONDUCIVE TO THE ATTAINMENT OF
ITS CORPORATE PURPOSES AND OBJECTS.”

SEC. 4, Section 7 of the Revised Charter of the Philippine International Trading Corporation
is hereby amended as follows:

“SECTION 7. Composition of Board of Directors. - The powers and functions of the
Corporation shall be exercised by the Board of Directors which shall be composed of the
following:

“{a) The Secretary of the Department of Trade AS THE CHAIRMAN;
“(b) The President of the Corporation AS THE VICE-CHAIRMAN;

“(c) The Director-General of the National Economic and Development Authority;

“(d) The Chairman of the Board of Investments;

“(e) The Secretary of the Department of Agriculture;

“(f) The Secretary of the Department of Natural Resources;

“(g) THE SECRETARY OF DEPARTMENT OF HEALTH;

“(il The Ghairman-of the Board-of Governors- PRESIDENT of the Development Bank of the
Philippines;

“(0 The President of the {Philippine National Bank} LAND BANK OF THE PHILIPPINES;

“() THE GENERAL MANAGER OF THE NATIONAL DEVELOPMENT COMPANY;

“(K) A Representative from the Office of the President;

“(L) A REPRESENTATIVE FROM THE PRIVATE SECTOR;

‘SEC. 5. A new Title is inserted after Section 7, which shall be as follows:
“STOCKPILING OF STRATEGIC AND CRITICAL MATERIALS”

SECTION 7. STRATEGIC AND CRITICAL MATERIALS STOCKPILE DIVISION. - THERE SHALL
BE CREATED WITHIN THE PHILIPPINE INTERNATIONAL TRADING AND CRITICAL
MATERIALS STOCKPILE CORPORATION A DIVISION IN-CHARGE OF STOCKPILING OF
STRATEGIC AND CRITICAL MATERIALS AS MAY BE DETERMINED BY THE PRESIDENT OF
‘THE PHILIPPINES.

THE PHILIPPINE INTERNATIONAL TRADING AND CRITICAL MATERIALS STOCKPILE
CORPORATION SHALL ENSURE ROTATION AND REPLENISHMENT OF STOCKS. IT SHALL
ALSO ENSURE THAT THERE EXISTS AT ALL TIMES A STEADY, AVAILABLE AND ADEQUATE
‘SUPPLY OF SUCH MATERIALS ESSENTIAL IN RESPONDING TO PANDEMICS, NATURAL
DISASTERS AND OTHER NATIONAL EMERGENCIES. FOR THIS PURPOSE, PROCUREMENT
OF THE SAID MATERIALS SHALL BE CONSIDERED AS PROCUREMENT OF STOCKS IN
‘TRADE OF THE CORPORATION IN THE REGULAR COURSE OF BUSINESS AS A TRADING
COMPANY AND SHALL THEREFORE BE EXEMPTED FROM THE COVERAGE OF R.A. 9184
AND ITS IMPLEMENTING RULES AND REGULATIONS. TO THE EXTENT POSSIRLF. THE


a ba trukA TUN SHALL LIKEWISE ADUPT COUNTERTRADE AS A MODE OF PROCUREMENT.

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/STOCKPILING OF CRITICAL MATERIALS.

SECTION 8. MATERIALS CONSTITUTING THE STOCKPILE. - THE PRESIDENT OF THE
PHILIPPINES SHALL DETERMINE FROM TIME TO TIME (1) WHICH MATERIALS ARE
STRATEGIC AND CRITICAL FOR THE PURPOSES OF THIS ACT; (2) THE QUALITY AND
QUANTITY OF EACH SUCH MATERIAL TO BE ACQUIRED FOR THE PURPOSES OF THIS ACT
AND; (3) THE FORM IN WHICH EACH SUCH MATERIAL SHALL BE ACQUIRED AND STORED.

STRATEGIC AND CRITICAL MATERIALS SHALL MEAN ESSENTIAL MEDICAL AND/OR LIFE
SAVING SUPPLIES NEEDED IN TIMES OF PANDEMICS SUCH AS FACE MASKS, BODY BAGS,
PERSONAL PROTECTIVE EQUIPMENT AND SIMILAR SUPPLIES OR EQUIPMENT.

THE PRESIDENT OF THE PHILIPPINES SHALL CALL ON AND SEEK COUNSEL FROM THE
SECRETARIES OF THE DEPARTMENT OF NATIONAL DEFENSE, DEPARTMENT OF
AGRICULTURE, DEPARTMENT OF ENERGY, DEPARTMENT OF HEALTH, AND DIRECTOR
GENERAL OF THE FOOD AND DRUG ADMINISTRATION ON THE DETERMINATION OF THE
MATERIALS TO BE STOCKPILED AND THE AMOUNTS THEREOF.

THE QUANTITY OF ANY MATERIAL TO BE STOCK PILED UNDER THIS ACT MAY BE
CHANGED ONLY AS PROVIDED IN THIS SECTION OR AS OTHERWISE PROVIDED BY LAW.

‘SECTION 9. DISPOSAL AUTHORITY. ~ MATERIALS IN THE STOCKPILE MAY BE RELEASED
FOR USE, SALE, OR OTHER DISPOSITION:

(2) ON THE ORDER OF THE PRESIDENT OF THE PHILIPPINES , AT ANY TIME THE
PRESIDENT DETERMINES THE RELEASE OR DISPOSAL OF SUCH MATERIALS IS
REQUIRED FOR PURPOSES OF DISASTER PREPAREDNESS AND RELIEF; PROVIDED,
HOWEVER, THAT NOTHING HEREIN SHALL PROHIBIT THE CORPORATION FROM
DISPOSING OR TRADING IN STOCK MATERIALS TO ENSURE ROTATION,
REPLENISHMENT AND FRESHNESS OF STOCKS IN SUCH MANNER AS PROVIDED BY
LAW.

(2) IN TIME OF WAR DECLARED BY THE CONGRESS OR DURING A NATIONAL
EMERGENCY, ON THE ORDER OF ANY OFFICER OR EMPLOYEE OF THE PHILIPPINES
DESIGNATED BY THE PRESIDENT TO HAVE AUTHORITY TO ISSUE DISPOSAL ORDERS
UNDER THIS SUBSECTION, IF SUCH OFFICER OR EMPLOYEE DETERMINES THAT THE
RELEASE OF SUCH MATERIALS IS REQUIRED FOR PURPOSES OF THE NATIONAL
DEFENSE OR DISASTER PREPAREDNESS AND RELIEF; AND

(3) ON THE ORDER OF THE SECRETARY OF DEFENSE IF THE PRESIDENT HAS
DESIGNATED THE SECRETARY TO HAVE AUTHORITY TO ISSUE RELEASE ORDERS
UNDER THIS SUBSECTION AND, IN THE CASE OF ANY SUCH ORDER, IF THE SECRETARY
DETERMINES THAT THE RELEASE OF SUCH MATERIALS IS REQUIRED FOR USE,
MANUFACTURE, OR PRODUCTION FOR PURPOSES OF NATIONAL DEFENSE OR
DISASTER PREPAREDNESS AND RELIEF.

ANY ORDER OF DISPOSAL, OTHER THAN FOR REASONS OF ROTATION OR
REPLENISHMENT, SHALL BE PROMPTLY REPORTED BY THE PRESIDENT, OR BY THE


OFFICER OR EMPLOYEE ISSUING SUCH ORDER, IN WRITING, TO THE COMMITTEE ON
GOVERNMENT CORPORATIONS AND PUBLIC ENTERPRISE AND COMMITTEE ON DEFENSE
OF BOTH SENATE AND HOUSE OF REPRESENTATIVES.

SECTION 10. ADVISORY COMMITTEES. - THE PRESIDENT MAY APPOINT ADVISORY
COMMITTEES COMPOSED OF INDIVIDUALS WITH EXPERTISE RELATING TO MATERIALS
IN THE STOCKPILE OR WITH EXPERTISE IN STOCKPILE MANAGEMENT TO ADVISE THE
PRESIDENT WITH RESPECT TO THE ACQUISITION, TRANSPORTATION, PROCESSING,
REFINING, STORAGE, SECURITY, MAINTENANCE, ROTATION, AND DISPOSAL OF SUCH
MATERIALS UNDER THIS ACT. THE COMMITTEE SHALL BE ENTITLED TO PER DIEMS IN
ACCORDANCE WITH THE RULES AND REGULATIONS OF THE GOVERNANCE COMMISSION
FOR GOCCS (GCG).

SECTION 11. REPORT TO CONGRESS. ~ NOT LATER THAN FEBRUARY 15 OF EACH YEAR,
THE PRESIDENT SHALL SUBMIT TO THE CONGRESS AN ANNUAL WRITTEN REPORT
DETAILING OPERATIONS UNDER THIS ACT. EACH SUCH REPORT SHALL INCLUDE—

(1) INFORMATION WITH RESPECT TO FOREIGN AND DOMESTIC PURCHASES OF
‘STOCKPILED CRITICAL MATERIALS DURING THE PRECEDING FISCAL YEAR;

(2) INFORMATION WITH RESPECT TO THE ACQUISITION AND DISPOSAL OF
STOCKPILED CRITICAL MATERIALS UNDER THIS ACT THROUGH COUNTERTRADE
DURING SUCH FISCAL YEAR;

(3) SUCH OTHER PERTINENT INFORMATION ON THE ADMINISTRATION OF THIS ACT
AS WILL ENABLE THE CONGRESS TO EVALUATE THE EFFECTIVENESS OF THE
PROGRAM PROVIDED FOR UNDER THIS ACT AND TO DETERMINE THE NEED FOR
ADDITIONAL LEGISLATION.

SECTION 12. SOURCE OF MATERIALS. - CONSISTENT WITH THE COUNTRY’S OBLIGATIONS:
UNDER INTERNATIONAL TREATIES OR AGREEMENTS, MATERIALS MAY BE OBTAINED
FROM DOMESTIC OF FOREIGN SOURCES AND THE PROCUREMENT THEREOF SHALL BE
OPEN TO ALL ELIGIBLE SUPPLIERS, MANUFACTURERS AND DISTRIBUTORS. HOWEVER IN
‘THE INTEREST OF AVAILABILITY, EFFICIENCY AND TIMELY DELIVERY OF MATERIALS,
‘THE CORPORATION SHALL ENCOURAGE THE DEVELOPMENT OF DOMESTIC SOURCES
FOR STRATEGIC AND CRITICAL MATERIALS TO ENSURE STEADY, AVAILABLE AND
ADEQUATE SUPPLY OF SUCH MATERIALS FSSENTIAI, IN RESPONDING TO PANDEMICS,
NATURAL DISASTERS AND OTHER NATIONAL EMERGENCIES, AND IN SUCH MANNER AS.
MAY BE ALLOWED BY LAW, TO INCLUDE THE ADOPTION OF COUNTERTRADE AND
INDUSTRIAL COOPERATION UNDER E.0. 120 S. 1993 TO AUGMENT STOCKPILING AND
AVAILABILITY OF CRITICAL MATERIALS

(2) BY PURCHASING, OR MAKING A COMMITMENT TO PURCHASE, EITHER DIRECTLY
OR THROUGH COUNTERTRADE, STRATEGIC AND CRITICAL MATERIALS OF DOMESTIC
ORIGIN WHEN SUCH MATERIALS ARE NEEDED FOR THE STOCKPILE;

(2) BY CONTRACTING WITH DOMESTIC FACILITIES, OR MAKING A COMMITMENT TO.


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REFINING IS NECESSARY TO CONVERT SUCH MATERIALS INTO A FORM MORE
‘SUITABLE FOR STORAGE AND SUBSEQUENT DISPOSITION;

(3) BY IDENTIFYING EXISTING DOMESTIC FACILITIES AND DOMESTICALLY PRODUCED
STRATEGIC AND CRITICAL MATERIALS TO MEET THE REQUIREMENTS OF DEFENSE
AND ESSENTIAL CIVILIAN INDUSTRIES IN TIMES OF NATIONAL EMERGENCY WHEN
EXISTING DOMESTIC SOURCES OF SUPPLY ARE EITHER INSUFFICIENT OR
VULNERABLE TO SINGLE POINTS OF FAILURE; AND

(4) BY CONTRACTING WITH DOMESTIC FACILITIES TO RECYCLE STRATEGIC AND
CRITICAL MATERIALS, THEREBY INCREASING DOMESTIC SUPPLIES WHEN SUCH
MATERIALS WOULD OTHERWISE BE INSUFFICIENT TO SUPPORT DEFENSE AND
ESSENTIAL.

SECTION 13, INSTITUTIONAL LINKAGES. PHILIPPINE INTERNATIONAL TRADING AND
CRITICAL MATERIALS STOCKPILE CORPORATION SHALL MAINTAIN AND DEVELOP
INSTUTIONAL LINKAGES/PARTNERSHIP WITH GOVERNMENT AND NON-GOVERNMENT
INSTITUTIONS INCLUDING BUT NOT LIMITED TO THE DEPARTMENT OF SOCIAL
WELFARE AND DEVELOPMENT, PHILIPPINE RED CROSS, NATIONAL DISASTER RISK
REDUCTION AND MANAGEMENT COUNCIL AND SIMILAR INSTITUTIONS, CONCERNING
‘THE UTILIZATION AND DISTRIBUTION OF MATERIALS IN THE STOCKPILE.

SEC. 6. Subsequent sections are hereby renumbered accordingly.

SEC. 7. Separability Clause. - If any provision of this Act is declared unconstitutional, such

sections or parts not affected thereby shall remain in full force and effect.

SEC. 8. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication in

the Official Gazette or in at least two (2) national newspaper of general circulation.

Approved,