FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
Third Regular Session 
) 
SENATE 
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S.B. No. 
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Introduced by Senator Gregorio B. Honasan II 
EXPLANATORY NOTE 
Section 1, Article XII of the 1987 Constitution provides that the goals of the 
national economy are sustained increase in the amount of goods produced by the 
nation for the benefit of the people, and an expanding productivity as the key to raising 
the quality of life for all, especially the under-privileged. 
The State shall promote 
industrialization and full employment based on sound agricultural development through 
industries that make full and efficient use of human and natural resources, and which 
are competitive in both domestic and foreign markets. However, the State shall protect 
Filipino enterprises against unfair foreign competition and trade practices. 
Sugarcane is the world's largest crop. The 2010 statistical data of the Food and 
Agricultural Organization of United Nations (FAO-UN) showed that sugarcane was 
cultivated on about 23.8 million hectares in more than 90 countries, with a worldwide 
harvest of 1.69 billion tones. In the 2009 FAO Top Ten Sugarcane World Producers 
Survey, the Philippines ranked 8th place. 
In the pursuit of our national goals, the Philippine government requires to provide 
maximum support to promote the integrated rationalization, development and 
stabilization of the sugar industry for its very significant contribution and share to the 
socio-economic growth and development of our country. 
The instability and fluctuations of the price of sugar (raw and refined) in the world 
market had resulted in the various phase of government's interference over the years. 
The apparent neglect of the development of the Sugar by-products further aggravated 
uncertainty in the future of the sugarcane industry. 
By 2015, the tariff on sugar shall be finally lifted. This scenario has spawned 
nurnerous reactions of uncertainty from the sugar planters, millers and consu mers alike. 
It is therefore, incumbent upon our policy-makers to institute measures, both by 
legislation and executive implementation of specific programs and projects that will 
cushion if not counter the possible destabilization effects of the 2015 "no-tariff" provision 
of the sugar cane industry as a whole. 
This bill therefore aims to revitalize and strengthen the Sugar cane Industry 
through a diversification, development, and financing program promoting the interests of 
sugarcane farmers/planters, mills workers and consumers as well as contributing to the 
food security objectives of the national government. 
Specifically, programs and projects to diversify sugar cane production involving 
not only raw and refined sugar but also its by-products namely begasse, molasses and 


filter mud, among others shall be identified, developed, promoted and implemented 
starting 2013. Additionally, funding for these programs and projects shall be assured 
through the establishment of a Sugar Development Fund. 
In view of the foregoing, approval of this bill is earnestly sou hI. 
GORIO B. HONASAN " 


FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
Third Regular Session 
) 
SENATE 
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SBN 
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_ 
Introduced by Senator Gregorio B. Honasan II 
AN ACT 
STRENGTHENING THE DEVELOPMENT OF THE SUGAR CANE INDUSTRY, 
ESTABLISHING 
THE 
SUGAR 
CANE 
INDUSTRY 
DEVELOPMENT 
FUND, 
AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1890, PROVIDING 
FUNDS THEREFOR 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 "Sugar Cane Industry 
Development Act of 2012'. 
SEC. 2. Declaration of Policy.- It is hereby declared the policy of the State to 
provide policy directions and support programs/projects for the sustained development 
and diversification of the sugarcane industry inasmuch as the industry provides 
employment and livelihood to a sizeable number of Filipinos in the agricultural sector, 
contributes significantly to the national economy as well as local economies of host 
provinces, and earns for the country foreign reserves from exports to other countries. 
This industry is vital for food sufficiency and energy security of the country. 
For the reasons stated, it is hereby further declared that the development and 
diversification of the sugarcane industry shall be directed primarily to the increase in 
incomes for the farmers, the enhancement of the productivity of sugar planters and 
sugar mills and the improvement in marketing and training practices in terms of 
administrative, poliCy directives and financial assistance to the sugarcane industry in 
support of the food security objectives and environmental concerns of the national 
government. 
SEC. 3. Development of the Sugar Cane Industry.-
The main focus of the 
development of the sugar cane industry shall be on the following measures, programs 
and projects: 


A. 
Industry-wide development 
1. 
In general, the transformation of sugarcane industry from the 
limited "raw and refined sugar production" into a diversified industry producing 
not mainly raw and refined sugar, but also power, waste disposition and other 
possible biochemical products primarily through integration of by-products 
production with sugar processing; 
2. 
The establishment of Special Economic Zones for Sugarcane 
Industry pursuant to Republic Act No. 7616 (Special Economic Zone Act of 
1995), and/or the designation and establishment of nuclear arms/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, and 6 and 7 of Republic Act 
No. 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 investment 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 instruction 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; and 
8. 
The sustained supporVconducVsponsorship of research and 
development on the sugar cane industry including, among others, high yielding 
varieties, farm implements, farm methodologies, by-products profitability and 
marketing/promotion 
techniques, 
new 
manufacturing 
chemical 
and 
biotechnologies for bagasse, molasses and other by-products, weather 
monitoring and soil fertility mapping; 


B. 
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 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; 
3. 
The export of refined sugar to the world market shall be subjected 
to VAT zero percent rate from the time it is withdrawn or release from the sugar 
mull/refinery including refined sugar withdrawn for constructive export to CBW 
warehouse of food processors that are duly licensed and registered with SRA; 
4. 
The waste water 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. 
C. 
Fund Management 
1. The management and proper utilization and disposition of the 
Sugarcane Industry Development Fund established under Section 4 of this Act, 
with special emphasis on the industry's contribution to the food security program 
of the national government. 
SEC. 4. Establishment of Sugar Cane Industry Development Fund. 
1. There is hereby established a Sugar Cane Industry Development Fund, 
hereinafter referred to as "Sugar Fund" to support the implementation of the 
development strategy identified in Section 3 of this Act. The Sugar Fund shall be held 
in trust by the Philippine Sugar Corporation created under Presidential Decree 1890. 
2. 
Initially, the Sugar Fund shall be utilized for the following specific purposes: 
a. Finance the 
establishment of 
Special 
Economic Zones, 
nuclear 
farms/Agro-Industrial Districts as provided for in Section 4 (2.a) of this Act; 
b. Provide financial assistance 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; 
c. Provide financial conduiting/resources for industries harnessing the 
d. 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; 
e. 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 it by-products and co-products 
particularly in the area of renewable energy and biochemical industry; 
f. Training of mill personnel on current technologies on efficiency, 
productivity and diversification; 
g. 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 No. 6982 (Strengthening the Social 
Amelioration Program in the Sugar Industry); 
h. Scholarships for deserving university/college students taking relevant 
degrees to the sugar cane industry; and 
i. 
The Sugar Fund shall be constituted and collected from the proceeds of 
fifteen percent (15%) of: 
1. The Value Added Tax (VAT) on the sale and importation of 
refined sugar, and sugar cane by-products; and 
2. 
The total tariff collected on the importation of raw sugar 
(AHTN 1701.11.00), refined sugar (AHTN 1701.99 and its subheadings), 
and premix sugar (AHTN 1701.91.00 and 2106.90.52). 
All the proceeds collected from the above sources shall be remitted in full 
by the Department of Finance to a separate trust fund maintained by the 
Philippine Sugar Corporation (PhiISuCor), created under p.o. 1890, on or 
before August 1 of every year; 
SEC. 5. 
Separability Clause.-
If any provision of this Act is declared 
unconstitutional, the validity of the remaining provisions hereof shall remain in full force 
and effect. 
SEC. 6. Repealing Clause.- All laws, decrees, executive orders and rules and 
regulations or part or parts thereof inconsistent with any provision of this Act are hereby 
repealed, modified or amended accordingly. 
SEC. 7. 
Effectivity. - This Act shall take effect fifteen (15) days after its 
complete publication in the Official Gazette or in at least two (2) newspapers of general 
circulation. 
Approved,