Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

16" Congress
First Regular Session

274

House Bill No.

Introduced by HON. PRYDE HENRY A. TEVES

EXPLANATORY NOTE

‘The Philippines is primarily an agricultural country, specifically food crops. It is blessed
with fertile land, which is very conducive for planting almost all types of plants and trees which
yield food products. A vast majority of our country’s land area is utilized for growing various
crops.

As an agricultural country, the Philippines is expected to have a strong food security with
no threat of the lack of supply of food for the Filipino people and always be self-sustaining in
terms of food. Unfortunately, this expectation is not realized for a very long time already, until
today. There is always a danger in our food security and supply of food products that necessitates
us to import these food products from other countries.

Cereals such as rice, corn, wheat, sorghum, millet and the like comprise a great part of
our food production. However, to this date, only rice has received conerete support from the
State thru the Philippine Rice Research Institute (PRRI). The other cereals also need help from
the State in terms of research, development and extension activities. This is not to mention that
the appropriation for PRRI alone is clearly inadequate to support this major food industry.

PRRI of PhilRice was created by virtue of Executive Order 1061 issued by then President
Ferdinand Marcos on November 5, 1985. Since the passage of this E.O., PhilRice has been in the
forefront of national rice production programs, providing seeds, training, and technology to help
increase yields, farmers’ income and national rice production.

At the start of its creation, PhilRice extended priceless benefits to small Filipino farmers
and Local Government Units. However, through the years, the financial support by the
government to this institution, thru appropriation, greatly decreased. In 1997, the annual budget
for PhilRice stood at Php 193 Million, But in 2007, the annual budget plummeted to a lowly Php
162 Million. This decrease was caused by the State policy of reducing support to government
owned and controlled corporations by 10% per year since 1997. Hence, the financial condition of
PhilRice is discouraging. Worse, the volume of importation of com, wheat and other cereals
continue to increase. Therefore, without any positive measure from the legislature as soon as


possible, it is possible that the cereal industry will become a “dead” industry. This possibility
will be a big negative blow on the economy of the nation.

A legislative measure to create a government institution is always better than a mere
Executive Order in terms of mandate and strength of the institution,

This bill proposes to create the Philippine Cereals Research, Development and Extension
Institute (PHILCEREAL), under the Department of Agriculture, which will fully work on
research, development and extension (RD&E) activities for cereals in the country.

This bill aims to authorize the Institute to collect a certain percentage of the
competitiveness Enhancement Fund to finance its establishment and maintenance of research,
development and extension facilities and equipment. It also aims to establish by law a minimum
annual operating subsidy of Php 200 Million from the annual General Appropriations Act for the
salaries of scientists and other personnel. Further, to strengthen the practice of the Institute to
earn income from its seed production and distribution operations to finance its continuing staff
development program and its capital outlay and other investment requirements.

In view of the foregoing, the approval of this bill is highly sought.

q

PRYDE HENRY A. TEVES

va


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

16th Congress
First Regular Session

274

HOUSE BILL NO.

Introduced by: HON. PRYDE HENRY A. TEVES

AN ACT EXPANDING AND STRENGHTENING THE PHILIPPINE RICE RESEARCH
INSTITUTE AND RENAMING IT TO THE PHILIPPINE RICE AND CEREALS
RESEARCH AND DEVELOPMENT INSTITUTE (PhilRice)

Be it enacted by the Senate and House of Representatives in Congress assembled:

Section 1. Short Title. This Act shall be “The Philippine Rice and Cereals Research and
Development Institute (PhilRice) Act of 2013:.

Section 2. Establishment, The Philippine Rice Research Institute (PhilRice), a body
corporate established under Executive Order No. 1061, series of 1985, as amended, is hereby
expanded and strenghtened and shall hereinafter be renamed as the Philippine Rice and Cereals
Research and Development Institute or PhilRice, attached to the Department of Agriculture. The
PhilRice shall have its principal office at the Science City of Mufioz, Nueva Ecija, but may
establish other branches, offices, subsidiaries, or corporate offsprings within its central office or
elsewhere in the Philippines as may be necessary or proper for the accomplishment of its
purposes and objectives.

Section 3. Purposes and Objectives. PhilRice shall develop and implement in
coordination with its National Rice Research and Development Network, composed of State
Universities and Colleges, Research Centers and Development Institutions, a National Research
and Development Program for rice, corn, sorghum, millet and other cereals.

Section 4. Powers and Functions. In fartherance of its purposes and objectives, PhilRice
shall have the following powers and functions:

(a) To plan, approve, organize, fund, direct, monitor, evaluate, and unify all research
and development programs and activities for cereals in the country;


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To plan, approve, fund, direct, prioritize, rationalize and guide the establishment
and construction of research and development facilities for cereals in the country:

To develop, scout, adopt, verify, package and promote new technologies,
machinery, varieties, crop management and production procedures and processes
for cereals developed in the country or abroad;
To promulgate, organize, develop, implement and authorize training curricula and
training programs for farmers, seed growers, technicians and officials of local
government units, research, development, and others involved in the production
of cereals in the country;

To authorize or approve the release, publication and dissemination of research and
development results, findings and recommendations on cereals in the country;

To develop, approve and implement career, promotion, incentive and retirement
systems for scientists, researchers and managers involved in the research and
development programs for cereals in the country;

To train, qualify and disqualify accredited individuals or organized cereal seed
producers;

To set the wholesale and retail prices, and royalties for seeds of cereals produced
and traded in the country;

‘To adopt and use a corporate seal;

To sue and be sued in its corporate name;

To succeed by its corporate name;

To adopt its by laws and promulgate rules and regulations as may be necessary or
proper to implement the provisions of this Act;

To borrow money and obtain loans from all sources, whether government or
private, to finance its research and development programs and all its capital and
operating expenditures;

To enter into contracts and execute agreements of any kind or nature with any
person, firm, association or corporation, domestic of foreign;

To invest in, acquire, own, lease, mortgage, pledge, encumber, sell, assign,
convey, or exchange, real or personal property of whatever kind or nature, or any
interest therein; shares of stock, bonds, notes, securities and other evidences of
indebtedness by natural or juridical persons, whether domestic or foreign and
whether government or private;

To acquire from any governmental authority whether national or local, foreign or
domestic, or from any person, corporation, partnership, association, or entity,
charters, franchises, licenses, rights, privileges, assistance, or concessions,
financial or otherwise, as are necessary or proper for the attainment of the
purposes and objectives of this Act;

To receive from any public or private individual or entities whether foreign or
domestic, grants, donations and contributions as may be usefull, necessary or



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proper to carry out the purposes and objectives of this Act, and administer the
same in accordance with the terms of such grants, donations, and contributions;
To serve as the coordinating center of a national network of cereal research
stations located in the different agro-ecological regions of the country;

To plan and carry out research and development activities, in the areas of varietal
improvement, water, fertilizer, pest management, grain, quality, seed health, farm
mechanization or the overall integrated crop management;

To provide database and policy formulation that will stimulate and sustain cereal
production, marketing and consumption;

To organize, create and maintain subsidiaries, and other corporate offspring, and
own fully or partially any corporation and entity as may be necessary for the
effective realization of its purposes and objectives and the maximum delivery of
services, and to engage in any other lawful business whatsoever in pursuance of
the purposes and objectives of this Act;

To have one or more offices in the Philippines and to conduct its business and
exercise its powers throughout and in any part of the Republic of the Philippines;
To adopt an Early Retirement Incentive Plan (ERIP) and financial assistance for
the purpose of retirement of its own scientists, officials and employees;

To establish and maintain a provident fund to pay the medical, health, insurance
and retirement benefits of PhilRice scientists, officials and employees or their
dependents and heirs under such terms and conditions as it may prescribe, which
shall not be inconsistent with those provided under existing laws;

To submit, not later than June 30 of each year, an Annual Report on the
implementation and enforcement of this Act to the President of the Philippines
and to the Congress of the Philippines;

To impose and collect, through the Bureau of Customs, one percent (1%) levy on
all exportations of cereals from the country to be used to fund the R&D activities
of PhilRices

To constitute all its income, collections from levies and royalties, saving, and
other excess funds into a revolving fund to fund its R&D activities; and
To exercise all other powers of a corporation under the general corpora
insofar as such powers are not inconsistent with the provisions of this Act.

ion law,

Section 5. Board of Trustees. The corporate powers and functions of PhilRice shall be
vested in and exercised by a Board of Trustees, hereinafter referred to as the Board,
composed of the Secretary of Agriculture as ex officio Chairman, and eight (8) members
representing the different sectors in the cereal industry. Except for the ex-officio chair
who is appointed by the President of the Philippines, the members of the Board shall be
nominated and confirmed by a majority of its incumbent members through a transparent
and competitive nominating process. Each confirmed member shall hold office for a


maximum of five (5) years, provided that, the incumbent members of the Board shall
continue to act as members until their term has expired.

The Board shall meet regularly at least once a quarter or as often as the exigencies
of the service demand. The presence of at least five (5) members shall constitute
quorum, shall be necessary for the adoption of any resolution, rule, regulation, decision
or any other act of the Board.

‘The members of the Board, including the Chairman, shalll receive per diem, as the
Board may determine, for each Board meeting actually attended. The said members shall
also be entitled to reimbursable transportation and representation allowances in going to
and coming from Board Meetings and transacting official business for the Institute.

>, Section 6. Powers and Functions of ‘the Board. The Board shall exercise the following
powers and functions:

a. To define and approve the programs, plans, policies, procedures and
guidelines for the Institute in accordance with its purposes and objectives, and
to control the management, operation and administration of the Institute;

b. To approve the Institute's organizational structure, staffing pattern, operating
and capital expenditure, and financial budgets, prepared in accordance with
the corporate plan of the Institute;

c. To approve salary ranges, benefits, privileges, bonuses, and other terms and
conditions of service for all officers and employees of the Institute, upon
recommendation of the Director-General;

d. To appoint, transfer, promote, suspend, remove, or otherwise discipline any
subordinate officer or employee of the Institute, upon recommendation of the
Director-General;

fe. To-create such committee or committees and appoint the members thereof, as
may be necessary or proper for the management of the Institute or for the
attainment of its purposes and adjectives;

f. To determine the research priorities of the Institute consistent with the
framework of its purposes and objectives;

g. To promulgate the by laws, policies, guidelines and implementing rules and
regulations to effectively carry out the purposes and objectives of PhilRice
under this Act, and to revoke, amend or rescind such as may be necessary;

h. To approve the retail and wholesale prices as well as the royalties, fees and
other charges, for the production, marketing and distribution of foundation,
breeder, registered and certified seeds of cereals;

i. To impose the levy, fees and other charges to be imposed against all
importation of rice and other cereals, whether for consumption, manufacturing
or for seed purposes, into the country, as authorized herein; and


j. To exercise such other powers and perform such other functions and other
acts as may be necessary or proper for the attainment of the purposes and
objectives of this Act.

Section 7. Qualification, Appointment and Tenure of the Director-General and of other
Officials and Personnel, PhilRice shall be by a Director-General who shall be appointed
by the Board of Trustees, and shall serve for a term of five (5) years, renewable for
another term, based on outstanding performance.

The Director-General shall be assisted by Deputy-Directors-General with
established track records in research management and administration and other senior
officials, the number of which shall be fixed by the Board, in addition to the usual
supervisory and rank and file positions. The appointment of the Deputy Directors-
General and other senior and supervisory officials, and rank and file personnel shall be
issued by Director-General in accordance with the rules regulations promulgated by the
Board and Civil Service Commission. Their appointments shall be confirmed by the
Board.

Section 8. Powers, Functions and Duties of the Director-General. The Director:
of PhilRice shall be its Chief Executive Officer and shall be directly responsible to the
Board. He shall have the following powers, functions and duties:

a. To exercise over-all supervision and direction over the implementation of all
research and development programs of the Institute, and in general to
supervise and direct the management, operation and administration of the
Institute;

b. Within the limits of the authority delegated to him by the Board, to execute
contracts, incur obligations, acquire and dispose of assets and deliver
documentation behalf of the Institute;

c. To implement and enforce policies, decisions, orders, rules and regulations
adopted by the Board; and

d. To exercise such other powers and functions and perform such other duties as
may be authorized or assigned by the Board.

Section 9. Compensation of PhilRice Personnel. Since PhilRice shall derived its budget
from its income and levies provided in this law, the salaries of its officials and employees
shall be exempted from the Salary Standardization Law. The Board of Trustees shall
develop a compensation scheme to enable PhilRice to keep its critical mass of
outstanding scientists, researchers and staff. Keeping outstanding researchers and staff is
a vital component in any R&D institution. To further justify its exemption from Salary



Standardization Law, staff members of PhilRice shall also serve as mentors to
undergraduate and graduate students of various agricultural colleges and universities,
who seek internship or use of PhilRice R&D facilities, laboratories and operation system
for the conduct of their research theses or case studies.

In addition, to the salary structure, the Board of Trustees, shall also develop an
incentive system similar to those provided for under the DOST Scientific Career System
and Magna Carta for Science and Technology workers, a promotion system similar to the
system in the Philippine Association of State Universities and Colleges (PASUC).
standard life and medical insurance to permanent scientists and staff and their spouses
and children, retirement and other schemes and benefits for its scientists, officials and
personnel.

Section 10. Organization Structure and staffing pattern. PhilRice shall evolve an index of
positions, organization structure and staffing pattern consistent with the dynamic nature
of its R&D programs. Such staffing pattern and organization structure shall be approved
by the Board upon recommendation of the Director-General.

Section 11. Visiting Scientists, Research fellows and Associates. PhilRice shall, for the
purposes of this Act, obtain and secure the services of scholars, scientists, professional
and technical personnel from other agencies in Government or the private sector. Such
personnel may be hired as Visiting Scientists, Research Fellows and Associates to
conduct specialized studies and researches on rice and other cereals. Those so engaged by
PhilRice shall be issued appointments and shall be paid, as they hereby authorized to be
paid, such fees as determined by the Board in addition to whatever compensation or
emoluments they are receiving from their respective agencies.

Section 12. Lands, Buildings, Facilities and Equipment. PhilRice is hereby authorized to
own, sell and dispose buildings, facilities, and equipment as may be necessary or proper
to attain the purposes of this Act. It may also utilize facilities of any government agency
which is engaged directly or indirectly in the research and development of rice and other
cereals.

Section 13. Tax Exemptions. Philrice may receive donations, contributions or bequest of
property or services which shall be utilized only for the implementation of the program.
Such donations or bequest of property shall be exempt from donor's tax and such amount
of donations shall be deductible from the gross income of the donor in accordance with
the pertinent provisions of the NIRC of 1997, as amended; provided, that such donations
shall not be disposed of or sold.


Importations of capital equipment which is actually, directly and exclusively used
by PhilRice shall be exempt from taxes and custom duties.

All lands, buildings and improvements, actually, directly and exclusively
owned by PhilRice shall be exempt from real property tax.
Section 14. Power of Eminent Domain. PhilRice is hereby authorized to expropriate
lands, for cereal research, development, and extension purposes provided just
compensation is paid to the owners of the land. If the land belongs to the government or
is alienable, PhilRice shall be granted automatic title to the land;

Section 15. Exemption from the Comprehensive Agrarian Reform Law Coverage. All
lands, farms, plantations, whether directly or indirectly owned, used, utilized or
administered by PhilRice, and those that it may hereinafter acquire or utilize for research,
development and extension purposes, shall be exempt from the coverage of the
Comprehensive Agrarian Reform Law.

Section 16. Automatic Appropriations for PhilRice. There is hereby and henceforth
automatically appropriated for PhilRice a minimum amount of Two Hundred Million
pesos (PhP 200,000,000.00) annually to constitute its core funds to be released by the
DBM automatically to PhilRice. The core funds shall be used to finance the salarie
benefits and other mandatory expenditures and basic research activities of PhilRice.

Section 17. Revolving Fund of PhilRice. In addition to the annual budget of PhilRice,
there shall be established an annual Revolving Fund out of its income from its R&D
operations and the levies and royalties authorized herein, which shall be considered part
of the funds automatically released and appropriated to PhilRice. The Revolving Fund, to
be used for the purposes and objectives of this Act, shall be derived annually from the
following sources:

a. One percent (1%) levy on all importations of Cereals into the country, and two
(2%) percent levy on all exportations of cereals from the country to used to
fund the R&D activities of PhilRice.

b. Ten percent (10%) of the Agricultural Competitiveness Enhancement Fund

(ACEF) collection;

Five percent (5%) royalty on the cost of each bag of Registered seed

percent (2%) royalty on the cost of each bag of Certified seeds of the varieties

of cereals developed or the release of which are coordinated by PhilRice to be
used to fund the R&D activities of PhilRice;

d. Contributions, donations, grants of loans from domestic and/or foreign
sources to fund its special projects; and

and two



e. Income from seed production and distribution and other investments and
savings from its operations.

Section 18, Civil Service Laws. The official, scientist and employees of PhilRice shall be
subject to Civil Service Law, rules and regulations: Provided, that PhilRice may establish
its own qualifications standards, staff development program, career path, promotion
system, insurance, incentives and retirement schemes for its officials, scientists and
employees.

Section 19. Auditing. The Chairman of the Commission on Audit shall be the ex-officio
auditor of PhilRice. For this purpose, he or she may appoint a representative who shall be
the auditor of PhilRice, together with the necessary personnel to assist said representative
in the performance of his/her duties. The Auditor shall, as soon as practicable, but not
later than three (3) months after accounts have been submitted to audit, send the annual
report to the Board.

Section 20. Legal Counsel. PhilRice shall establish its own legal services group and hire
in-house counsel to take care of the handling of cases and other legal services in
coordination with the Office of the Counsel shall be the principal legal adviser and
consultant of the PhilRice.

PhilRice may refer to the Office of the Government Corporate Counsel cases for
legal action or trial, issues for legal opinions, preparation and review of contracts or
agreements and other matters requiring the services of a lawyer.

Section 21. Transfer of personnel, Assets and Liabilities. All permanent personnel,
records, appropriations, assets and liabilities previously held by PhilRice are hereby
transferred to the newly established PhilRice. The present Executive Director of PhilRice
shall serve as OIC ~ Director-General, until the Board of Trustees shall have appointed a
regular Director-General.

Section 22. Residual Powers. All powers and responsibilities of PhilRice not mentioned
and which are not inconsistent with this Act shall be assumed by PhilRice.

Section 23. Separability Clause. If, for any reason part of this Act may be declared
unconstitutional, the provisions not affected thereby shall remain in full force and effect.
Section 24. Repealing Clause. Executive Order No. 1061, series of 1985 and Executive
Order No. 60, series of 1986 are hereby repealed. Provisions of laws, decrees, executive
orders, rules and regulations contrary to or inconsistent with the provisions of this Act are
repealed, amended or modififed accordingly.


Section 25. Effectivity Clause. This Act shall take effect after fifteen (15) days following
its publication in the Official Gazette or in a national newspaper of general circulation.

Approved,