THIRTEENTH CONGRESS OF THE REPUBLIC) 
TIME: * : , d e  
OF THE PHILIPPINES 
1 
First Regular Session 
1 
SENAT$!, 
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Introduced by Senator Miriam Defensor Santiago 
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EXPLANATORY NOTE 
The Constitution, Article 12, Section 1, provides that: 
The goals of the national economy are a more equitable 
distribution of opportunities, income, and wealth; a sustained increase in 
the amount of goods and services 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 underprivileged. 
The dependence of the Philippines on imported petroleum creates a major 
strategic vulnerability for the nation, with majority of the energy supply of the country 
reliant on foreign sources. From economically damaging Arab oil embargoes of '1973- 
1974 and 1979 to the current recession precipitated by rising oil prices which began in 
1999, the economic stability of the Philippines has too often been shaken by economic 
forces outside its borders. 
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This bill seeks to shift Philippines' dependence away from foreign petroleum as 
an energy source toward alternative, renewable, and domestic agricultural sources. Its 
aim is to convert the current petroleum trade deficit to a trade balance by replacing 
foreign sources of supply with steady increases of bio-based fuels through domestic 
production. 


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THIRTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
1 
First Regular Session 
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S E N A T E  
S.B. No. 3 5 87 
Introduced by Senator Miriam Defensor Santiago 
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AN ACT 
TO PROVIDE FOR A BIOFUEL FEEDSTOCKS ENERGY RESERVE, AN TO 
AUTHONZE THE SECRETARY OF AGNCULTURE! TO MAKE AND 
GUARANTEE LOANS FOR THE PRODUCTION, DISTRIBUTION, 
DEVELOPMENT, AND STORAGE OF BIOFUELS 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Title. - This Act shall be lcnown as the ”Biofuels Energy 
Independence Act.” 
SECTION 2. Definition ofTerms. - as used in this Act, the term: 
(1) “Biofuels” - are fuels produced from dry organic matter or combustible oils 
produced by plants. This may include alcohol (from fermented sugar), black liquor from 
the paper manufacturing process, wood, soybean oil, etc. 
(2) “Petroleum” - otherwise known as crude oil. It is a thick, flammable, yellow- 
to-black mixture of gaseous, liquid, and solid hydrocarbons that occurs naturally beneath 
the earth’s surface which can be separated into fractions including natural gas, gasoline, 
naphtha, kerosene, fuel 
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. and lubricating oils, paraffin wax, and asphalt and is used as raw 
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material for a wide variety of derivative products. 
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(3) “Feedstocks” - the actual crops to be used in energy generation, 
(4) 
“Ethanol” - otherwise known as ethyl alcohol. It is made through 
fermentation and then distillation of starch and sugar crops such as maize, sorghum, 
potatoes, wheat, sugar-canes, even cornstalks, fruit and vegetable waste. 
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(5) 
“Biodiesel” - any liquid biofuel suitable as a diesel fuel substitute o diesel 
fuel additive or extender. It is typically made from oils such as soybeans, rapes ed, or 
sunflowers, or from animal tallow. It can also be made from hydrocarbons derived from 
agricultural products such as rice hulls. 
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(6) "COz" - means carbon dioxide. 
(7) "Secretary" - refers to the Secretary of Agriculture. 
domestic surpluses of bio-based oils to enhance the nation's energy security. 
(b) In the short term, biofuels can supply at least one-fifth :US) of 
(b) Ethanol reduces tailpipe carbon monoxide emissions 
much as thirty percent (30%). 
by as 


(c) Ethanol reduces exhaust volatile organic compounds emissions 
by twelve (12%) percent. 
(d) Ethanol reduces toxic emissions by thirty percent (30%). 
(e) Ethanol reduces particulate emissions, especially fine 
particulates that pose a health threat to children, senior citizens, and those with 
respiratory ailments. 
(f) Biodiesel contains no sulfur of aromatics associated with air 
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pollution.- . 
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(g) The use of biodiesel provides a seventy eight point five percent 
(78.5%) percent reduction in CO2 emissions compared to petroleum diesel and when 
burned in a conventional engine provides a substantial reduction of unburned 
hydrocarbons, carbon monoxide, and particulate matter. 
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SECTION 4. Loans and Loan Guarantees. - 
(1) IN GENERAL- The Secretary may make and guarantee loans or the 
production, distribution, development, and storage of biofuels. 
(2) ELIGIBILITY- 
(a) IN GENERAL- Except as provided in paragraph (2), an applicant for a 
loan or loan guarantee under this section shall be eligible to receive such a loan or 
loan guarantee if-- 
(i) the applicant is a farmer, member of an association of farmers, 
member of a farm cooperative, municipal entity, or nonprofit corporation, 
and 
(ii) the applicant is unable to obtain sufficient credit elsewhere to 
finance the actual needs of the applicant at reasonable rates and terms, 
taking into consideration prevailing private and cooperative rates and 
terms -. in the community in or near which the applicant resides for loans for 
similar purposes and periods of time. 
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(b) 
LOAN 
GUARANTEE ELIGIBILITY PRECLUDES 
LOAN 
ELIGIBILITY- An applicant who is eligible for a loan guarantee under this 
section shall not be eligible for a loan under this section. 
(iii) LOAN TERMS- 
(aa) INTEREST RATE- Interest shall be payable on a loan 
under this section at the rate at which interest is payable on 
obligations issued by the Philippines for a similar period of time. 
(bb) REPAYMENT PERIOD- A loan under this section 
shall be repayable in not less than five (5) years and not more than 
under this section. 
(cc) PAYMENTS- The Secretary shall .make loan:: .under 


SECTION 5. Biojids Feedstoelm Energy Reserve Program. - 
(1) IN GENERAL- The Secretary of Agriculture may establish and adm 
reserve of agricultural commodities for the purpose of-- 
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.ister a 
(a) providing feedstocks to support and further the production of energy 
from biofuels; and 
(b) supporting the biofuels energy industry when production is at risk of 
declining due to reduced feedstocks or significant commodity price increases 
SECTION 6. Purchases. - 
(1) IN GENERAL- The Secretary may purchase agricultural commodities 
at commercial rates, subject to subsection (b), in order to establish, maintain, or enhance 
the Biofuels Feedstocks Energy Reserve when-- 
(a)(i) the commodities are in abundant supply; and 
(ii) there is need for adequate carryover stocks to ensure a reliable 
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supply of the commodities to meet the purposes of the reserve; or 
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(b) it is otherwise necessary to fulfill the needs and purposes of the 
biofuels energy reserve program. 
(2) LIMITATION- The agricultural commodities purchased for the 
(a) of the type and quantity necessary to provide not less 
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Biofuels Feedstocks Energy Reserve shall be-- 
year's utilization for renewable energy purposes; and 
(b) in such additional quantities to provide incentives for research 
and development of new renewable fuels and bio-energy initiatives 
SECTION 7. Release Of Stocks. - 
(1) IN GENERAL- Whenever the market price of a commodity held in the 
Biofuels Feedstocks Energy Reserve exceeds one hundred percent (100%) of the 
economic cost of producing the commodity (as determined by the Economic Research 
Service using the best available information, and based on a 3-year moving average), the 


Secretary shall release stocks of the commodity from the reserve at cost of acquisition, in 
amounts determined appropriate by the Secretary. 
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SECTION 8. Storage Payments. - 
(11 
IN GENERAL- The Secretary shall provide for the storage of 
agricultural commodities purchased for the Biofuels Feedstocks Energy Reserve by 
making payments to producers for the storage of the commodities. The payments shall-- 
(a) be in such amounts, under such conditions, and at such times as 
the Secretary determines appropriate to encourage producers to participate 
in the program; and 
(b) reflect local, commercial storage rates, subject to appropriate 
conditions concerning quality management and other factors. 
(2) ANNOUNCEMENT OF PROGRAM- 
(a) TIME OF ANNOUNCEMENT- The Secretaty shall announce 
the terms and conditions of the storage payments for a crop of commodity by such dates 
of h a r v a  time for each crop. 
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(b) CONTENT OF ANNOUNCEMENT- In the announcement, the 
Secretary shall specify the maximum quantity of a commodity to be stored in the 
Biofuels Feedstocks Energy Reserve that the Secretary determines appropriate to 
promote the orderly marketing of the commodity, and to ensure an adequate 
supply for the production of biofuels. 
(3) RECONCENTRATION- The Secretary may, with the concurre ce of I 
the owner of a commodity stored under this program, reconcentrate the commodity stored 
in commercial warehouses at such points as the Secretary considers to be in the public 
interest, taking into account such factors as transportation and normal marketing patterns. 
The Secretary shall permit rotation of stocks and facilitate maintenance of quality under 
regulations that assure that the holding producer or warehouseman shall, at all times, 
have available for delivery at the designated place of storage both the quantity and quality 
of the commodity covered by the producer's or warehouseman's commitment. 


(4) MANAGEMENT- Whenever a commodity is stored under this section, 
the Secretary may buy and sell at an equivalent price, allowing for the customary location 
and grade differentials, substantially equivalent quantities of the commodity in different 
locations or warehouses to the extent needed to properly handle, rotate, distribute, and 
locate the commodity. The purchases to offset sales shall be made within 2 mar t days 
following the sales. The Secretary shall make a daily list available showing th .
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price, . 
location, and quantity of the transactions. 
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(5) REVIEW- In announcing the terms and conditions under which 
storage payments will be made under this section, the Secretary shall review standards 
concerning the quality of a commodity to be stored in the Biofuels Feedstocks Energy 
Reserve, and such standards should encourage only quality commodities, as determined 
by the Secretary. The Secretary shall review inspection, maintenance, and stock rotation 
requirements and take the necessary steps to maintain the quality of the commodities 
stored, in the reserve. 
SECTION 9. Appropriations. - To carry out the provisions of this Act, such 
amount as may be necessary is hereby authorized to be appropriated from the National 
Treasury. 
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SECTION 10. Regulations.- Not later than 60 days after the date of the enactment 
of this Act, the Secretary shall promulgate and issue such regulations as are necessary to 
carry out the provisions of this Act. 
SECTION 11. Separability Clause. - If any provision or part hereof, 's held 
invalid or unconstitutional, the remainder of the Act or the provision not o erwise 
affected shall remain valid and subsisting. 
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SECTION 12. Repealing CZuuse. - Any law, presidential decree or issuance, 
executive order, letter of instruction, administrative order, rule or regulation contrary to, 
or inconsistent with the provisions of this Act is hereby repealed, modified or amended 
accordingly. 
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SECTION 13. Eflectivity Clause. - This Act shall take effect fifteen (15) days 
after its publication in at least two (2) newspapers of general circulation. 
Approved, 
IJP Antes 
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