THIRTEENTH CONGRESS OF THE REPUBLIC 
First Regular Session 
OF THE PdlLlPPlNES 
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s. No. 
Introduced by Senator S.R. OsmeAa 111 
EXPLANATORY NOTE 
The cotton and fiber industries used to be regarded as major contributors 
to the Philippine economy. 
However, over the years, the income produced by 
the fiber industry, both from domestic and foreign markets, had dramatically 
declined 
abaca land, lack of planting materials and lack of infrastructure, 
The country 
resorted to importation of cheap fabric amounting to about Pl.16 billion a year, 
thereby causing serious damage to local agricultural producers. On the. other: 
hand, 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. 
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due to various problems such as high cost of production, infestation of 
The expansion and development of cotton and fiber production can 
increase the country's export earnings and can be a major factor in the social 
and economic development of rural areas in the country. 
To immediately address the problems confrontjng the cotton and fiber 
industries to save them from an impending extinction, 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 hasten the implementation 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 
(CDA), 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 requested. 
SERGIO OSMENA Ill 
Senator 


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THIRTEENTH CONGRESS OF THE REPUBLI 
) 
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First Regular Session 
b 
OF THE PHILIPPINES 
/ 
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. No. 
Introduced by Senator S. 
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 
Philippines in Congress assembled: 
SECTION 
1. 
Short Title. - This Act shall be known as the "National 
Fiber Development Act of 2004". 
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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 fhe Nafional Fiber Development Authority 
(NAFIDA). - The National Fiber Development Authority (NAFIDA), hereinafter 
referred to as the Authority, is hereby created under the Office of the President to 
carry out the provisions of this Act. 
The Authority shall serve as the 
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and fiber industry. 
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government's primary planning and marketing agency responsible for the cotton 
SEC. 4. 
Statement of Objectives. - This Act shall have the following 
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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; 
To sustain the growth of and demand for cotton and fiber 
and its by-products in both domestic and international 
markets; 
b) 
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; 
To improve farm productivity through the adoption of modern 
prescribed technology so as to increase farmers' income; 
e) 
and 
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To encourage and promote the use of locally produced 
cotton and fiber. 
SEC. 5. 
powers and functions: 
Powers and Functions. - The Authority shall have the following 
a) 
To undertake and regulate research studies on all 
aspects of the cotton and fiber industry, including its 
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international markets; 
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production, processing and marketing in the domestic and 
b) 
To administer and regulate in accordance with law, the 
licensing and registration and shipment of cotton and fiber 
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producers/manufacturers including the tagging, marking, 
inspection, certification and shipment of their commercial 
products; 
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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 of 
fiber producers, ginners, classifiers, graders, traders, 
processors and exporters to improve the quality of its 
commercial products; 
To establish a monitoring 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; 
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To identify and improve infrastructure in the locality in 
coordination with the Department of Public Works and 
Highways and the Local Government Unit concerned; 
h) 
To provide assistance to small farmers in the 
marketing, promotions, and advertisement of cotton and fiber. 
products; 
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To undertake industry manpower development; 
To assist farmers in sourcing funds for capital build-up; 
k) 
To conduct regular consultations with the farmers, 
growers and other sectors involved in the fiber and cotton 
industry; 
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To accredit associations or confederations of cotton 
and fiber farmers, growers and other associations involved 
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with the cotton and fiber industries; and 
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To undertake all other functions as may be necessary 
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to implement the objectives of this Act. 
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SEC. 6. 
The Governing Board of the NAFlDA. - The corporate 
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powers and duties of the Authority shall be vested in, and exercised by, the 
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Board to be appointed by the President, composed of the following: 
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(a) Three (3) representatives of the Government, one of whom shall be 
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designated by the President as Chairman; 
(b) Three (3) representatives from the 
fiber producers/manufacturers 
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association 
upon the 
recommendation of 
their 
respective 
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confederations in Luzon, Visayas and Mindanao duly accredited by 
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the Authority; and 
(c) Three (3) representatives from the cotton farmers association upon the 
recommendation of their respective confederations in Luzon, 
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Visayas and Mindanao duly accredited by the Authority . 
SEC. 7. 
Power and Functions of fhe Board. - 
The 
Governing 
Board shall act as the policy making body of the Authority to formulate policies, 
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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. - 
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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. *
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SEC. 9. 
Organization.- The Chief Executive Officer of the Authority 
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shall be the Administrator 
to be appointed by the 
President upon 
recommendation of the Board. 
He shall be assisted by 
two (2) 
Deputy 
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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. IQ. 
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 .
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be 
amended by the Board from time to time as it may deem appropriate. 
SEC. I I. 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 (CDA), are hereby dissolved. All assets, liabilities, 
records, appropriation, properties, facilities and equipment of FIDA and CDA are 
hereby transferred to the Authority . 
SEC. 12. 
Annual Reporl. - 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 
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Administrator, as the case may be. Those incumbents whose positions are not 
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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 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 Consent 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 
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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. 
SEC. 18. 
EffectMty Clause. - This Act shall take effect after fifteen 
(15) days following its publication in a national newspaper of general circulation 
or in the Official Gazette. 
Approved. 
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