FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 1031 
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Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
This bill seeks to revive the dwindling cacao industry of the country. 
Cacao is a small evergreen plant introduced by the Spaniards to the Philippines in 
1674 to 1680. Its seeds or beans are used to make cocoa and chocolate, which has 
medicinal uses as well as culinary purposes. 
Worldwide consumption of chocolate has been increasing three percent annually 
with new market demand growing .steadily in regions like Central Asia and Eastern 
Europe, especially in mainland China, India and various states of the Russian 
Federation. Major cocoa bean processors include: Hershey's, Nestle and Mars, all of 
which purchase cocoa beans via various sources. 
The very rich and fertile Philippine soil is very well suited in the production of cacao 
but, ironically, the country still imports a large amount annually. As of 2008 the country 
only has 1.5 million cacao trees producing around 6,000 metric tons annually, ranking 
18tl1 in the world among cacao-producing nations. Southern Mindanao is the country's 
largest cacao-producing region, particularly Davao Oriental with nearly 4,000 hectares 
planted to cacao trees, followed by the CALABARZON region, particularly Quezon and 
Cavite. 
With the world prices of cocoa beans shooting up to 3200 US dollars per metric ton 
last 2008 compared to 1007 US dollars in 2007, the Philippine cacao industry is 
expected to boost the exports of cacao beans and cocoa from the region, generating 
more dollar earnings and providing more livelihood and jobs for Filipinos. 
The legislation envisions the creation of a center that will have general powers and 
functions in line with the research and development of the Department of Agriculture-
Bureau of Agricultural Research (DA-BAR), Department of Science and Technology 
(DOST), Department of Trade and'industry (DTI), and the National Economic and 
Development Authority (NEDA). The Center will be in the forefront of educating and 
training all stakeholders in the cacao industry; conducting relevant researches, scientific 
study and feasible marketing strategies; extending technologies; and creating linkages 
with international organizations and other cacao development centers in other countries. 
In view of the foregoing, early passage of this bill is earnestly IGh! 
MANUfi<I~' M. LAPID 
Senator 
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FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 1031 
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Introduced by Senator Manuel "Lito" M. Lapid 
AN ACT 
CREATING A 
CACAO 
RESEARCH AND 
DEVELOPMENT CENTER, 
AUTHORIZING THE APPROPRIATION OF FUNDS THEREFOR, AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled: 
SEC. 1. 
Establishment of a Cacao Research and Development Center. - The 
Cacao Research and Development Center is hereby established. 
SEC. 2. Powers and Functions. - The Center shall have the following general powers 
and functions in line with the research and development programs of the Department of 
Agriculture - Bureau of Agricultural, Research (DA-BAR), Department of Science and 
Technology (DOST), Department of Trade and Industry (DTI), and National Economic 
and Development Authority (NEDA). 
a. Educate and train all stakeholders of the cacao industry; 
b. Conduct relevant researches, scientific study and feasible marketing strategies; 
c. Extend technologies; and 
d. Linkage with international organizations and other cacao development centers in 
other countries. 
SEC. 3. The Center shall have the specific powers and functions: 
a. Develop productive, high yielding, good quality varieties of cacao; 
b. Develop efficient, economic and productive cacao production technologies; 
c. Develop effective and sound cacao processing technologies for varieties "Forastero", 
"Criollo" and other outstanding varieties of cacao; 
d. Develop effective production systems for all cacao varieties; 
e. Establish and maintain germplasm collection and gene bank for qpcao; 
f. Develop effective and efficient marketing systems for cacao; 
g. Evolve productive cacao-based farming systems; 
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h. Develop and implement appropriate and suitable technology packages and effective 
technology transfer schemes, especially the conduct of training programs; 
i. Upgrade the skills of development facilitators, extensionists and farmers through 
trainings, seminars and workshop on cacao production and postharvest handling and 
processing; 
j. Establish national and international linkages for cacao research, development, 
extension and production activities; and 
k. Coordinate with other government/non-government agencies involved in the 
development of the cacao industry. 
SEC. 4. Qualifications of the Executive Director. - The Center shall be headed by an 
Executive Director who shall be responsible for the planning, implementation, and 
supervision of the Center's program of activities. The Executive Director shall possess 
the following qualifications: 
a. Must not be more than fifty (50) years of age; 
b. Must have completed substantial and relevant education and experience on cacao 
research and development; and 
. 
c. Must be of good moral character and has not been involved in a legal case involving 
moral turpitude. 
, 
All other officers and employees of the Center shall be appointed by the Executive 
Director consistent with the provisions of the Civil Service laws, rules and regulations. 
SEC. 5. Advisory Board. - The plans and programs of the Center shall be reviewed 
annually by the Advisory Board composed of: 
a. The Secretary of the Department of Agriculture as Chairman; 
b. The Secretary of the Department of Trade and Industry, as Vice Chairman; 
c. One (1) representative from a !,)on-governmental organization (NGO) working on 
cacao production, research and development and processing; 
d. One (1) representative from the group of cacao traders; 
e. One (1) representative from the group of cacao processors; and 
f. One (1) representative from the group of cacao growers. 
SEC. 6. Quorum. - The presence of at least four (4) members at the time of the meeting 
shall constitute the quorum: Provided, however, That the Chairman, in his/her absence, 
the Vice Chairman, shall preside. 
SEC. 7. The Center is hereby authorized to plan, construct, develop, improve, acquire, 
or lease buildings, farms, fields and other facilities, to purchase machineries, 
equipment, materials and supplies locally or abroad as may be necessary to carry out 
its functions and objectives. Moreover, the Center shall enjoy exemption from taxes and 
other duties in the importation of such machineries, development and extension 
programs, subject to the provisions' of the Tariff and Customs Code, the National 
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Internal Revenue Code and the provisions on Automatic Appropriations under the 
General Appropriations Act. 
SEC. 8. Appropriation. - The amqunt of Fifty Million Pesos (Php50,OOO,OOO.OO) is 
hereby authorized to be appropriated from the Special Activities Fund of the President 
of the Republic of the Philippines, or from any other sources that may be identified for 
the purpose. Thereafter, such sum required for its operation, maintenance, research, 
and development shall be included in the annual General Appropriations Act. 
SEC. 9. Revolving Fund. - Any and all savings and income of the Center shall 
constitute a revolving fund which shall not be reverted to the General Fund and which 
shall be used by the Center in the furtherance of its goals and objectives. 
SEC. 10. Repealing Clause. -All existing laws, rules and regulations or part thereof 
inconsistent with the provisions of this Act are hereby repealed, superseded or modified 
accordingly: Provided, however, That nothing in this Act shall amend, modify or repeal 
the provisions of Republic Act No. 7160, otherwise known as the Local Government 
Code. 
SEC. 11. Effectivity Clause. - This Act shall take effect after fifteen (15) days of its 
complete publication in the Official Gazette or in at least two (2) newspapers of national 
circulation. 
Approved, 
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