QuestionsQuestions (PRESIDENTIAL DECREE NO. 1063)
PD No. 1063 amends PD No. 350 to strengthen the Philippine Cotton Corporation (PCC), expand its resources, and adjust its powers, governance, capitalization, financing, and guarantees to better implement the national cotton development program.
PD No. 1063 adds powers allowing PCC (i) to administer funds—including trust funds—set up or provided by the national government or any public/private domestic/foreign institution in connection with the national cotton development program; and (ii) to accept donations and grants from governments and private entities (local/foreign) and administer them according to their terms consistent with the cotton development program.
PD No. 1063 deletes PD No. 350’s provision stating that PCC would be a joint venture between the government and private sector on a 60-40 ownership ratio, with representation specified through the Department of Agriculture and Natural Resources and private textile millers.
PD No. 1063 deletes the original capital subscription and paid-up details in PD No. 350 and replaces them indirectly by deleting the specific 100M authorized / 1M paid-up and revised subscription breakdown, reflecting a changed approach to PCC capitalization under the amended framework.
PD No. 1063 deletes PD No. 350’s provisions on initial contributions of P600,000 (60%) government and P400,000 (40%) private sector, and the requirement to maintain the 60-40 ownership ratio at all times.
It deletes the rule that government contributions would be paid from funds held in trust by the Philippine Textiles Research Institute (PTRI), and that private contributions would be made by cotton-consuming textile millers through the Textile Millers Association of the Philippines, prorated by actual cotton consumption.
The government sector is represented by the incumbent Secretary of Agriculture, the Director of PTRI, and four other government members appointed by the Secretary of Agriculture from the government service.
Two members from the textile industry: (1) the President of the Textile Millers Association of the Philippines (TMAP) and (2) another nominated by the TAMP Board; plus three other members elected by the stockholders.
PD No. 1063 amends the rule so that the chairman and vice-chairman of the Board are elected by the members, rather than having the Secretary of Agriculture and Natural Resources as the chairman.
The corporation’s administration is directed by a qualified General Manager who must come from the private sector and is appointed by the Board.
The corporation will be headed by a President appointed by the Board from among qualified individuals in the private sector; the Board may also create positions such as Executive Vice-President and/or General Manager and other vice-presidential positions as deemed necessary.
It authorizes PCC to approach domestic and international sources of financing—both multilateral and bilateral—for assistance either as grants or loans, or both.
PTRI must make available as a grant to PCC not later than 30 days after the beginning of each fiscal year a minimum sum of P500,000 for additional financing of R&D or feasibility studies, without prejudicing PCC’s efforts to secure other financing.
PTRI is authorized to invest the Special Textile Research Fund in financial instruments (including commercial papers) that yield sufficiently high earnings to enable the organization to assist PCC and other research projects contemplated by R.A. 4086.
Except the Central Bank, government-owned or controlled financial institutions are empowered to guarantee acceptance credits, loans, transactions, undertakings, or obligations of any kind incurred by PCC in favor of any domestic or foreign person/entity.
If the Board deems it necessary, PCC may issue bonds in Philippine currency or convertible foreign currency by resolution stating the bond purpose; however, validity requires approval by the President of the Philippines upon recommendation of the Secretary of Finance, and the Republic of the Philippines guarantees payment of both principal and interest.
Investment by banking institutions in such PCC bonds is deemed investment in agricultural credit, in compliance with the provisions of PD No. 717 and its implementing rules and regulations.
The Republic of the Philippines guarantees payment of all PCC obligations incurred with any government-owned or controlled financial institution, and will pay principal and interest if PCC fails to do so.
It repeals or modifies all laws, executive orders, administrative orders, proclamations, decrees, or parts thereof inconsistent with any provisions of PD No. 1063.
It takes effect immediately.