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Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

2363
HOUSE BILL NO.

Introduced by Representative Manuel Luis T. Lopez

EXPLANATORY NOTE

During the Hearing of the House Committee on Agriculture and Food held on
February 20, 2018, this Honorable Representation revealed the existence of 13 Tondo-
based companies, which allegedly operate a rice cartel in Metro Manila. Further, the 13
companies namely: Evergreen, Rising Sun, GRC, CGG, Expo, ARNS, Working Gold, Leoneco,
PMT, Hype Rice, LM Rice Cereal, MML Grain Center and Grandio, all own bodegas or
warehouses along Dagupan Street in Tondo, Manila.

This revelation came about due to the sudden increase in the price of NFA Rice in
the market. The NFA claimed that it failed to meet the required ‘buffer stock’ as mandated
by the Legislative-Executive Development Advisory Council and thus there was a need to
import rice. This prompted this Honorable Representation to look no further than in his
own district in order to disprove the alleged rice shortage. From an initial survey of the
area, it can be easily seen that there is abundant supply of rice. Worse, there are sacks of
rice from the NFA.

Thus, this Bill seeks to penalize the act of hoarding, profiteering, engaging in cartel
operations and price manipulation of rice. The adverse effects of these acts are mostly felt
by the lower income households and individuals who consider rice as their staple food
source. Instead of protecting their welfare, these unscrupulous traders take advantage of
them for their own monetary benefit.

This bill was first filed in the 17% Congress by this representation and has been
pending in the Committee on Justice since March 21, 2018.

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



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session

2363
HOUSE BILL NO.

Introduced by Representative Manuel Luis T. Lopez

AN ACT
PENALIZING THE HOARDING, PRICE MANIPULATION OF RICE AND ENGAGING IN
CARTEL OPERATIONS IN ORDER TO INFLUENCE THE DEMAND AND SUPPLY OF RICE
IN THE COUNTRY

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

SECTION 1. Short Title. - This Act shall be known as the “Rice Security and
Stability Act of 2019.”

SEC. 2. Declaration of Policy. - The 1987 Constitution provides that “the State
shall promote a just and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through policies that
provide adequate social services, promote full employment, a rising standard of living,
and an improved quality of life for all.”

Further, the Constitution states that “The State shall promote comprehensive rural
development and agrarian reform."

Finally, it is the recognized policy of the State to promote the productivity of the
agriculture sector and to protect farmers from unscrupulous traders and importers, who
alone or in cooperation with others directly or indirectly manipulate the price and supply
of rice in the Country which affects the food security of the State.”

Consistent with these principles, it is the duty of the State to ensure that the
welfare and interests of its citizens is protected.

SEC. 3. Definition of Terms. - As used in this Act, the following terms are defined
as follows:
a. Rice- refers to polished/ husked rice, crops, palay in its original state and
whether it has undergone processing and milling.

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b. Person- refers to a natural or juridical person engaged in the production,
manufacture, importation, storage, transport, distribution, sale or other
methods of disposition of rice.

SEC. 4. Coverage. - This Act shall apply to all persons engaged in the production,
manufacture, importation, storage, transport, distribution, sale or other methods of
disposition of rice.

SEC. 5. Prohibited Acts. - The following shall be punishable under this Act, to wit:

a. Hoarding- refers to the undue accumulation by a person or combination of

persons of rice beyond his or their normal inventory levels or the
unreasonable limitation or refusal to dispose of, sell or distribute the stocks
of rice to the general public or the unjustified taking/ purchasing of rice from
the National Food Authority ("NFA"). There shall be prima facie evidence of
hoarding when a person has stocks of rice thirty percent (30%) higher than
his usual inventory and unreasonably limits, refuses or fails to sell the same
to the general public at any given time. The determination of a person's usual
inventory shall be reckoned from the third month immediately preceding
before the discovery of the stocks in case the person has been engaged in the
business for at least three (3) months; otherwise, it shall be reckoned from
the time he started his business.

. Profiteering- refers to the sale or offering for sale of rice at a price grossly in

excess of its market value. There shall be prima facie evidence of profiteering
whenever the rice being sold: (a) is adulterated or diluted through the mixing
of commercial rice with NFA rice or any combination thereof; or (b) whenever
a person raises the price of rice for sale to the general public by more than
five percent (5%) of its price in the immediately preceding month:

. Cartel- refers to any combination of or agreement between two (2) or more

persons engaged in the production, manufacture, processing, storage, supply,
distribution, marketing, sale or disposition of rice designed to artificially and
unreasonably increase or manipulate its price. There shall be prima facie
evidence of engaging in a cartel whenever two (2) or more persons perform
uniform or complementary acts among themselves which tend to bring about
artificial and unreasonable increase in the price of rice or when they
simultaneously and unreasonably increase prices on their competing
products thereby lessening competition among themselves.

|. Price Manipulation- is any act committed by any person engaged in the

production, manufacture, importation, storage, transport, distribution, sale or
other methods of disposition of rice, which seeks to control and influence the
price of rice at any given time.

SEC. 6. Penalties. - A fine of Fifty Million Pesos (P50,000,000) and imprisonment
for a period not less than six (6) years but not exceeding twelve (12) years shall be
imposed on any person who commits any of the prohibited acts.

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A fine of One Hundred Million Pesos (P100,000,000) and imprisonment for a
period not less than twelve (12) years but not exceeding twenty (20) years shall be
imposed on any person for a violation of this Act for the second offense.

In addition, a single violation of this Act shall result in the revocation ofall licenses,
permits and registration given to any person as well as the confiscation and forfeiture of
all rice products in favor of the National Government.

SEC. 7. Disposal of Confiscated Rice. - All rice products confiscated and forfeited
in favor of the National Government shall be appropriated for the immediate distribution
primarily to those areas which are in need of relief, including but not limited to those
areas hit by calamities and/or in war conflict zones. Any excess shall be sold in duly
accredited market places by representatives of the DA and the NFA. All proceeds of which
will be remitted to the National Treasury to be utilized solely for the development and
production of the local rice farmers.

SEC. 8. Implementing Rules and Regulations and Standard Forms. - Within
sixty (60) days from the promulgation of this Act, the necessary rules and regulations for
the proper implementation of its provisions shall be formulated by the Department of
Agriculture ("DA") in coordination with the National Food Authority ("NFA").

SEC. 9. Repealing Clause. - All laws, ordinances, executive orders, administrative
orders, rules, regulations, decrees, and other issuances or parts thereof, which are
inconsistent with the provisions of this Act are hereby revoked, repealed, or modified
accordingly.

SEC. 10. Separability Clause. - If any provision of this Act is held unconstitutional
or invalid, the other provisions not affected thereby shall continue in operation and
remain in full force and effect.

SEC. 11. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
publication in a newspaper of general circulation or the Official Gazette.

Approved,

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