Presidential Decree No. 1192




M a n i l a



WHEREAS, under Presidential Decree No. 368, as amended, the Philippine Sugar Commission is expressly charged with the promotion of the integrated development and stabilizing of the sugar industry.

WHEREAS, it is imperative that the Philippine Sugar Commission and its affiliated corporations be granted adequate powers and incentives to enable it to attain expeditiously and efficiently its declared objectives.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby decree and order the following:

Section 1. Sec. 3 of Presidential Decree No. 388 is hereby amended by adding the following:

"The administrative supervision of the Philippine Sugar Commission shall be under the direct general supervision of the President."

Sec. 2. Sec. 4 of Presidential Decree No. 388, as amended, is hereby further amended to read as follows:

"(a) To establish policies pertaining to all phases of the sugar industry; and to inquire into other aspects of the sugar industry with a view to improving existing methods and system;

"(b) To enter into contracts, transactions or undertakings of whatever nature, with or without public bidding, which are necessary or incidental to its functions and objectives with any natural or juridical person and with any foreign government, private corporations, partnerships, institutions, or private individuals, including but not limited to buying, selling, trading, loading, unloading, transportation, vessel-charters, warehousing, marketing, processing or reprocessing of sugar, by-products and derivatives; acquisition by lease, purchase or other modes, of materials, supplies, equipment and facilities relative thereto and for the cultivation, production, transportation and processing of sugar cane and related products;

"(c) To levy and collect charges, fees and contributions to finance its operation for social amelioration of the workers in the industry, and for such other purposes as the Commission may determine. The amount of the fees, charges and contributions shall be subject to the approval of the President;

"(d) To act as the single buying and selling agency of sugar on the quedan-permit level, in order to promote the effective merchandising and distribution of sugar;

"(e) To determine from time to time the floor-ceiling price of sugar which will giver the planters, millers, traders, wholesalers, and retailers a fair return on their investments; Provided, That in determining the floor-ceiling price, the Commission shall take into account the total anticipated cost of production per picul of sugar plus a corresponding reasonable margin of profit set by the Price Control Council or any other government agency authorized to regulate prices of commodities and service after taking into consideration the effects of devaluation and other economic factors affecting production, processing, marketing, transportation and other related expenses including the minimum wage for agricultural and industrial workers; Provided, that the floor-ceiling price established by the Commission shall be adjusted in direct relation to significant changes in the cost of production as determined by the Commission and the Consumers Price Index prepared by the Central Bank of the Philippines; Provided, however, that the determination of the ceiling price shall be subject to prevailing world market prices with respect to export sugar and prevailing domestic prices with respect to domestic sugar;

"(f) To borrow money from local and foreign sources as may be necessary for its operations;

"(g) To invest its funds as it may be deem proper and necessary in any activity related to sugar production and trading, including in any bonds or securities issued and guaranteed by the Government of the Philippines;

"(h) To purchase, hold, alienate, mortgage, pledge or otherwise dispose of the shares of the capital stock of, or any bond, or security of other corporations or associations of this or any other country, and while the owner of said stock, to exercise all the rights of ownership, including the right to vote thereon;

"(i) To hold lands and acquire rights over agricultural lands in excess of the areas permitted to private corporations, associations and persons by statute;

"(j) To engage in export and import business of sugar and its derivatives, as well as in related activities;

"(k) To acquire assets, real or personal, or interests therein, and encumber or otherwise dispose the same as it may deem proper and necessary in the conduct of its business;

"(l) Subject to existing regulations, if it deems necessary, to establish and maintain such communication system, whether by radio, telegraph or any other manner, without the need of a separate franchise therefor;

"(m) To determine its organizational structure, and the number and salaries of its officers and employees, and engage the services of consultants under such terms and conditions with such remuneration or allowances commensurate with their assignment and expertise as may be competitive with rates in private undertakings, as the Commission may decide;

"(n) To establish and maintain offices, branches, agencies, subsidiaries, correspondents or other units anywhere as may be needed by the Commission and reorganize or abolish the same as it may deem proper;

"(o) To promulgate rules and regulations to carry into effect the provisions of this Decree and impose penalties for the violation thereof;

"(p) To assume control and/or supervision of sugar mill or refinery that has failed to meet its financial and other contracted obligations for two years or has become inefficient in its operation;

"(q) To organize, register, regulate and maintain exclusive control and supervision over sugar planters and sugar producers marketing cooperatives and to restore those existing under laws before their repeal by the provisions of Presidential Decree No. 175; Provided, however, that all acts, rulings and orders of the Sugar Quota Administration during the time the Commission under Presidential Decree No. 388 was not officially constituted shall be given force and effect;

"(r) To allow sugar planters and/or sugar producers marketing cooperatives to enjoy privileges and incentives heretofore granted under laws of their creation before their repeal by the provisions of Presidential Decree No. 175, and those granted by all government agencies to business organization under existing laws; Provided, that the requirements imposed therein are complied with; Provided, further, that pre-existing sugar planters and/or sugar producers marketing cooperatives shall be entitled to the same attributes and grant of privileges and incentives at those created under existing laws; and, Provided, finally, That these pre-existing sugar planters and/or sugar producers marketing cooperatives shall apply or petition for re-registration with the Commission with a period of six (6) months from the date of promulgation of this Decree, and its existence shall be deemed to continue until the application or petition is approved or denied.

"(s) To determine the manner and extent by which powers, privileges and incentives provided by existing laws shall be exercised or enjoyed by sugar planters and/or sugar producers marketing cooperatives; Provided, that the Commission shall promulgate rules and regulations to govern the promotion, organization, registration, re-registration, control and supervision of all sugar planters and sugar producers marketing cooperatives;

"(t) To suspend the operation or cancel the registration of any sugar planters and/or sugar producers marketing cooperatives after hearing and when in its judgment based on findings, such cooperative is operating in violation of this Decree, rules and regulations, existing laws as well as the by-laws of the sugar cooperatives;

"(u) To finance the activities of the sugar industry, or any of its component elements, where such assistance is needed and conducive to the progress of the industry in all its phases;

"(v) To organize affiliate corporations for the purpose of carrying out any of the above functions. An affiliate corporation as used herein is a private corporation in which the Commission, through its officers, owns and/or controls by itself or jointly with one or more Government agencies or Government-owned or controlled corporations at least seventy-five percent (75%) of the issued and outstanding shares of stock entitled to vote. For this purpose, the Commission may use its funds for the capital requirements of the affiliate corporations;

"(w) To perform such other functions as are necessary and incidental to its purposes and objectives."

The Commission shall submit to the President of the Philippines periodic reports of its survey, studies and investigations, together with its recommendations, for appropriate action.

Sec. 3. A new provision is hereby inserted after Sec. 5 to be known as Sec. 6, as follows:

"Sec. 6. Loans and Other Indebtedness. The Commission and any of its affiliate corporations may borrow from local or foreign sources by contracting loans, other forms of credit accommodations, and floating bonds or debentures.

"Local borrowings from private commercial banks shall be subject to the standard banking requirements. Loans, credits, and indebtedness contracted from government financing institutions shall be exempt from any guarantee requirement from the National Government through the Secretary of Finance.

"The Commission as well as any affiliate corporation, when specifically authorized by the President of the Philippines, is hereby authorized to contract loans, credits, any convertible foreign currency or capital goods, and indebtedness from time to time from foreign governments, or any international financial institutions or fund sources, or any other entities on such terms and conditions it shall deem appropriate for the accomplishment of its purposes and to enter into and execute agreements and other documents specifying such terms and conditions.

The Republic of the Philippines, through the President of the Philippines or his duly authorized representative, may guarantee, absolutely and unconditionally, as primary obligor and not as surety merely, the payment of the loans, credits and indebtedness secured by the Commission or any of its affiliate corporations, as provided above, which may be over and above the amount which the President of the Philippines is authorized to guarantee under Republic Act Numbered Sixty One Hundred Forty-Two, as amended, as well as the performance of all or any of the obligations undertaken by the Commission or its affiliate corporations in the territory of the Republic of the Philippines pursuant to loan agreements entered into with foreign governments or any international financial institutions or fund sources.

"The loans, credits and indebtedness contracted under this subsection and the payment of the principal, interest and other charges thereon, as well as the importation of machinery, equipment, materials, supplies and services, by the Commission or any of its affiliate corporations as defined herein, paid from the proceeds of any loan, credit or indebtedness incurred under this Act, shall also be exempt from all direct and indirect taxes, duties, fees, imposts and all other charges and restrictions, including import restrictions previously and presently imposed, and to be imposed by the Republic of the Philippines, or any of its agencies and political subdivisions."

Sec. 4. Sections 6, 7, 8, 9, and 10 of Presidential Decree No. 388 are hereby renumbered as Sections 7, 8, 9, 10 and 11.

Sec. 5. Section 11 of Presidential Decree No. 388 is hereby renumbered as Section 12 and amended to read as follows:

"Sec. 12. All laws including Presidential Decree Nos. 579, and 788 and Letter of Implementation No. 36 and parts thereof inconsistent with the provisions of this decree are hereby repealed or modified accordingly.

Sec. 6. A new provision is hereby inserted after Section 11, renumbered Section 12, to be known as Section 13, to read as follows:

"Sec. 13. The Philippine Sugar Commission is exempted from the coverage of Presidential Decrees 711 and 985."

Sec. 7. This Decree shall take effect immediately.

DONE in the City of Manila, this 2nd day of September in the year of Our Lord, nineteen hundred and seventy-seven.

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