Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
First Regular Session
HOUSE BILLNo.   8326
I:rfulorfur!erd tlry   FZEPFIESENTJ[nvE JOSELITO "JOEL"  S. SdlcDdiLAN
First District North Cotabato
EXPLANATORY NOTE
Oil Palm,  rE;/ae/5 gu/men5/sJac:7.) a perennial crop with a productive lifespan of up to 30
years,   which   has  originated   in  Tropical  AfricaL      is   now   considered   as  a   significant
agricultural  product,  superior from other oil crops as it could yield  up to five (5) tons per
hectare2.   Its has various uses in the  food,  non-food and bio-fuel industries.    Palm Oil, a
vegetable oil  is now   produced and consumed  in  large quantity. The demand for palm oil
is global, and is, forecast that it shall become the world's most produced, consumed and
internationally traded edible oil3.   In  2012, the global  productioii  is 58,073,000  MT which
is  41.80%  in  the  world  production  of  vegetable  oils,  and  production  is  dominated  by
Indonesia and  Malaysia with over 90% total  production4.  In relation to this proposed  bill,
it would  be also  worthy to  mention the Key Drivers of Malaysian  Palm Oil Sector   which
consist  of:    Area  Focus,  Human  Resources  focused  on  Training  on  R  &  D  personnel,
Technology which  focused  on Adopt  Process and  R & D Technology and  LQfalization  Qf
Machinery, Infrastructure and Tax and Regulatory Agencies.   In Indonesia,  one of its Key
Drivers of Palm Oil Industry is the government's  provision of substantial long-term capital
and subsidies to smallholder farmers to ensure they have the ability to participate in the
industry.  As a result, Indonesia's smallholder oil palm area grew 2 million hectares jn since
2000, and now accounts for 44% of the total oil palm area in the country.
In  the  Philippines,    Palm  Oil  production  area  has  been  gradually    in  increasing    rate  of
7.62%  per annum according to the data from the Bureau of Agricultural  Statistics, from
38,599 hectares in 2008;   53,014.75   hectares    in December  2012,    62,671.39 hectares
jn 2018 and 63,380,85   in December 2022.   There are eight regions jncludjng the BARMM
which  are engaged  in  Palm Oil  planting,       where   SOCCSKSARGEN  Region  (Region XII)
dominates with   21,521  hectares total  area  planted as of December 2022,   followed  by
CARAGA  Region with 17,475.57 hectares  total area planted as of December 2022. Other
oil  palm  producing  regions are as follows:   Region  IV-B (MIMAROPA) - 5,920   hectares,
Region  VII  (Central  Vlsayas)  -  5,869.00  hectares,    Region  IX  (Western  Mindanao)  -
3,840.22 hectares,   Region X ( Northern  Mindanao) -3,280  hectares BARMM  -2,455.00,
and Region XI ( Southern Mindanao) - 1,334.00  hectares.     Oil Palm production is largely
plantation-base   and   at   present,   Filipinas   Palm   Oil   Plantation,   Inc.   (FPPI)   ,   Agumil
Philippines,  Inc  (AGPI)  ,  Kenram  Palmoil  Industries,  Inc.  (KPII)      and  A  Brown  Energy
Resources Development (ABERDI)   are the major players in the continuing expansion of
Oil  Palm in the Philippines.


In  2020,   Philippines has existing eleven   (11)   palm oil  mills   with total  rated capacity of
276   metric tons FFB per hour, owned by five (5) companies:   1) Agumil Phil.  Inc. (AGPI),
2)  PALM  Inc.,   3) a.  Brown  Energy Resources Devt,  Inc.  (ABERDI), 4)  Kenram  Industrial
and  Development,  Inc.  (KIDI),  and  5)  Filipinas Palm Oil  Plantation,  Inc.  (FPPI)J AC Garcia
Palm  Oil  Mill  Corp.,  Univanich  Carmen  Palm  Oil  Mill,  Palm Asia  Milling  Inc.  and Caraga Oil
refining Inc.  (CORI).
Yet,  the  Philippines    has  one  of the  lowest  farm  productivity  in  Asia.    The  challenges
surrounding  the  industry  is     huge.     There  is  inadequate  government  support.     The
Philippine Coconut Authority (PCA) assigned to develop oil palm has only an annual Budget
of P43.0 million allocated to it.
There  is  lack  of comprehensive  suitability  assessment   for  areas  identified  for  palm  oil
plantation,   and some have no tenurial  instruments to support,     road networks   leading
to  small  holders oil  palm  areas have yet to  be fully   developed   and   improved  for their
produce to  be easily and fastly delivered/transported to the  milling  place.   There   is  no
coordinated     information  and  education  campaign  program  which  could  support  and
promote the industry, as well as counter the negative information on the effect of oil palm
farming   to the environment.   Around  15,000 hectares of old   palm   oil trees in the lands
of small holders need replanting.
On  nursery establishments,  the operators of these  nurseries  have total  dependence  on
quality  seeds  from     Thailand,   Malaysia,  Indonesia  and  Latin  America8  which  is  very
expensive,     There  are  existing   unac€redited  F1/F2  nurseries,   and  these  need  strict
implementation on quarantine, certification and accreditation rules in order to standardize
the quality of planting materials.  On the other hand,  the Philippine Coconut authority has
technology to produce hybrid planting materials without importing the parent   materials,
but  could  not  work  on  the  production  of  hybrid  planting  materials  due  to  budgetary
limitation.
In  terms  of  post  harvest  operation,    the  thirteen  (13)    milling  facilities  has  combined
capacity of 276  MT of  FFB per hour which can guarantee that there are enough processing
facilities for oil  palm.      However during  peak milling  months,    long  queue of FF  haulers
cannot   be avoided,   that manipulation Of FFB price by millers most   often happened to
the  disadvantage Of the  planters/farmers.    In  most cases,  it's the   smallholder growers
who   suffered   post harvest losses due to the distance of their farms to the mills and the
high cost of transportation to bring their produce to the milling facility.
For the  last seven years (  2011-2018),   the  importation  of vegetable  oil  in the form  of
palm oil increased from 400 to over 1320 million MT , valued at  over US$  1.0 billion which
means, the demand for palm oil is great and   economic  opportunity is   promising.
The Philippines has a wide potential area for production of oil palm.  The   industry has   in
place   production  technology  and   best  practices  that  can   be  adopted   by  the  small
holders/small  growers  and  new  investors.  There  are  technical  expertise  on  oil  palm
production  givailable  in  the   governrrient and    in  Private  sector  which  they  can  willingly
share.
At   present the   Philippine   Palm Oil   Development   Council,  Inc.,  (PPDCI)   serves as the
key driver of the country's oil palm  agri-business development.    Actively supporting  the
PPDCI    i§ the Department of Trade and Industry -Caraga Regional Qffife  since many of


the  issues and  concerns in coordinating with the   stakeholders  in   the  palm oil  indusrry
could  not  be  singly  handled  by them.    However,  it  is  the  desire  of the  stakeholders  ,
planters/farmers  that    the    industry  be  fully  developed  /  supported,    as  its  economic
potential/contribution  to  the  country's  gross  domestic  product    is    high  and  also  easily
accessible to the small  holders.   It has been their express request   to have   a separate
government  agency  to   solely   look   into/   explore  /   coordinate
development of palm oil.
and  manage     the


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
First   Regular Session
House  Bill  No.
Introduced by Representative Joselito "Joel" S.   Sacdalan, First District, North Cotabato
AN ACT
CREATING THE PHILIPPINE PALM OIL DEVELOPMENT AUTHORITY TO
PROMOTE AND DEVELOP THE PHILIPPINE OIL PALM INDUSTFIY, AND
APPROPRIATING   FUNDS  THEREFOR  AND FOR OTHER PURPOSES.
Be it enacted by the House of Representatives and Senate of the Philippines in Congress
assembled:
SECTION  1.    77.£fe, -This Act shall  be  known as the "Philippine  Palm  Oil  Development
Act" of 2023;
SECTION. 2.  Oca/araffo# afro/i.q/, -It is hereby declared to be the policy of the State
to enhance the integrated development of the palm oil industry to create employment and
livelihood opportunities,  overcome  poverty,  promote  people's prosperity and ensure  long
term  productivity and sustainability in agriculture and industry sector.
The government in partnership with the private sector shall undertake to accelerate the
development of the Palm Oil industry through the following;
(a)  Expanding the area of oil  palm  plantation and  improving the  productivity and  quality
of the oil palm farms.
(b)  Enhancing  the  competitiveness,   productivity  and  efficiency  of  the  crude  palm  oil
processing plants and refineries.
(c)  Promoting  government  and  private  partnership  to  push  forward  the  programs  and
projects that will optimize the benefits of the oil palm  farmers and all the operators in
the value chain.
SECTION 3. Creation of a Philippine Palm oil Development Autliority - In support
of  this  State  poliey,  the  Philippine  Palm  Oil  Development  Authority  (PPODA)  is  hereby
created as a public corporation to implement and attain the above-mentioned   policy. The
PPODA shall be under the direct supervision of the Office of the President.


SECTION  4.  Principal  Office  -  The  PPODA  shall  maintain  its  principal  office  in  the
Mindanao Area where the majority of the oil palm plantations and crude palm oil mills are
located.  It may establish other branch offices within the Philippines as may be necessary
to effectively and efficiently implement and attain its mandate.
SECTION 5. Powers and Functions -The PPODA shall have the following powers and
functions:
a) To formulate policies,  plans and program for the development of the palm oil industry
considering all aspects in the value chain.
b)  To  develop  the  capability  of  producing  high  breed  seeds  (F1)  through  research  or
government to government collaboration in order to enhance and support the expansion
and replanting of the oil palm plantations.
c) To  establish,  operate  and  maintain  development and  research  centers,  to  undertake
extensive research in the control and eradication of oil palm pests and diseases.
d)  To  regulate  the  marketing  of  palm  oil  and  its  by-products  by  establishing  product
standards for domestic trade and export market.
e) To enter into, make and execute contracts of any kind as may be necessary or incidental
to the attainment of its purposes and, generally, to exercise all the powers necessary to
achieve the purposes and objectives for which it is organized;
f)  To  exercise  such  other  powers  as  may  be  necessary  and  proper  for  the  effective
implementation of this law and its implementing rules and regulations.
SECTION 6. Governing Board. - The corporate powers and duties of the PPODA shall
be  vested  in  and  exercised  by  Board  Of  seven  (7)  members  to  be  appointed  by  the
President, as follows:
a) Secretary of Agriculture;
b) Secretary of Trade and Industry;
c) Three members recommended by the Philippine Palm Oil Development Council Inc.
d) One member recommended by the oil palm farmers' cooperative;
e) One member recommended by crude palm oil millers and refineries;
The chairman and vice chairman of the Board shall come from the government sector and
shall  be appointed by the President of the Philippines.
SECTION 7. The Governing Board shall have the following powers and duties:
a) To direct and manage the affairs of the PPODA;
b) To prepare and adopt annual budget;


c) Formulate policies and initiate programs and projects for the development of the
Philippine  palm oil  industry;
d)Evaluatetheimplementation,efficiencyandeffectivenessoftheprogramsandprojects.
d)  To  establish  the  internal  organization  of the  PPODA    and  fix  the  salaries  and  other
compensation of its officers and employees.
SECTION 8. Meeting and Quorum. -The Board shall meet once every quarter as often
as the exigencies of the service may demand. The presence of at least four members shall
constitute a quorum, and the vote of four members shall be necessary for the adoption of
any rule, resolution or decision or any other act of the Board.
SECTION 9. Compensation Of the Members Of the Board]  - The members of the
Board shall  receive per diem of five thousand pesos for each meeting actually attended;
Provided,  that such  per diems  shall  not exceed  twenty thousand  during  any  month  for
each  member;  Provided,  further,  that no other allowance or any form  of compensation
shall  be  paid them,  except actual  expenses  in  travelling to and from their residences to
attend board meetings.
SECTION 10. Executive Officers and Personnel. - The chief executive officer of the
PPODA shall be the Executive Director assisted by such Deputy Executive Director as the
Board  may  prescribe,  all  of  whom  shall  be  appointed,  or  removed,  by  the  Board  and
delegated with such powers and duties as it may prescribe.
All officers and employees of the PPODA shall be selected and appointed by the Board on
the basis of merit and fitness.
SECTION  11.  PPODA   Technical  Working  Group.  The  PPODA    technical  working
group is hereby recognized as partner of the government in pursuing the development of
the  industry.  The  TWG,  composed  of  national  government  agencies,  local  government
units, academe,  government financial institutions, and private sector, shall be responsible
for:   (a)   coordinating,   monitoring  the   implementation   of,   and   updating   the   oil   palm
roadmap; and (b) coordinating and monitoring of activities of all  members of the working
group with respect to the overall development of the industry
SECTION 12. Departments. - The Board may establish such departments as it may be
convenient for the discharge of its duties;
SECTION.  13.   Oofwt.tr-on of renrra  - As  used  in  this Act,  the  following  terms are
defined as follows:
(a)   ``Philippine Palm Oil   Development Authority"  refers to the government
institution created by virtue of this act.
(b)  Palm Oil - oil  produce resulting from the  milling or crushing of oil  palm fresh
fruit bunches.
(c)  Oil Palm -refer to the plant species botanically known as fi/aek5 g"/#eem5x5
Jacq'


(d) Oil Palm Fl  hybrid -refers to a cross between a dura (mother) and pesifera
pollen source which produce the commercial type Fl hybrid seed tenera.
(e) Palm Oil by-products - products coming out of the processing of FFB of oil
palm such as empty fruit bunches,
(f)  Biomass - refers to the overall organic production of the plants which consist
of the fruits and by-products in processing, the leaves and the stem.
(g) Oil  Palm based industries -refer to industries utilizing palm oil as a
component input.
(h) Oil Palm farmer -a farmer engaged in oil palm farming
(i)   Oleo-chemicals -chemicals derived from the production of oil  palm and use
for cosmetic,  medicine, etc.
0)   Biofuel -fuel produce from using palm oil as a component.
(k) Small Landholder Farmer - a farmer cultivating an area of five ha or less.
(I)   Big Landholders Oil Palm farmers - an oil palm farmer with more than five ha
(in)  Palm Oil  Millers -engage in the primary processing of FFB to palm oil and
other by-products.
SECTION 14.  Annual Report.  The PPODA shall submit report to the President and to
both  Houses  of  Congress.  The  report  should  provide  detailed  status  of  the  Oil  Palm
Industry of the country, including the progress and impact of relevant government policies
and programs.
SECTION  15.   Implementing FLules and Regulations.   Within sixty (60) days from
the  date  of the  effectivity of this  act,  the  PPODA,  in  consultatiori  with other c©ncemed
agencies   and   sectors   shall   promulgate   the   rules   and   regulations   for   the   proper
implementation of this Act,
SECTION  16.   Funding.     For the  initial  implementation  of this Act,  funding  shall  be
sourced  from the different cooperating agencies:   Department of Agriculture, Department
of   Trade   and   Industry   and   other   involved   cooperating   agencies.   Thereafter,   the
succeeding     appropriation     in     the     initial              amount     of    one     hundred     million
(Php100,000,000.00) pesos shall be included in the annual general appropriations act.
SECTION  17. Separabjljty clause.   If any provision of this Act js declared jnvaljd or
unconstitutional, the other provisions not affected by such declaration shall  remain in full
force and effect.
SECTION  18.  Repealing Clause.  All  laws,  executive and  administrative orders,  rules
and regulations inconsistent with this act are hereby repealed or amended accordingly.
SECTION 19. Effectivity. This act shall take effect  fifteen (15) days after the publication
in the Official Gazette  or in two (2) newspapers of general circulation.
Approved,