Creating the Sugar Regulatory Administration EO No. 18

Policy and objectives for sugar industry

Section 1 establishes State policy to promote the growth and development of the sugar industry through greater and significant participation of the private sector.
Section 1 also directs the State to improve the working condition of laborers.
Section 2 instructs that the Sugar Regulatory Administration (created under Section 2) shall carry out an orderly system covering production stability, marketing, and studies for policy formulation.
Section 2 requires the administration to aim for stable, sufficient and balanced production of sugar for local consumption, exportation and strategic reserves.

Creation and placement of SRA

Section 2 creates a Sugar Regulatory Administration under the Office of the President.
Section 2 provides that the administration exists to institute systems and programs that regulate and support production while allowing free market forces to prevail in sugar marketing.
Section 2 requires the administration to establish balanced relations between production and sugar requirements and set marketing conditions to stabilize prices at a level reasonably profitable to producers and fair to consumers.
Section 2 authorizes the administration to conduct relevant studies for formulation of policies and action programs.

Sugar Regulatory Administration powers

Section 3(A) authorizes the Sugar Regulatory Administration to recommend the establishment of a sugar production coefficient and a production quota attached to the land for “earn planter.”
Section 3(B) authorizes the administration to institute regulations for implementing, controlling and monitoring production quotas.
Section 3(C) authorizes the administration to establish domestic, export and reserve allocations.
Section 3(D) authorizes exploration and expansion of domestic and foreign markets for sugar and by-products to ensure mutual benefits to consumers and producers and maintain proper balance of production.
Section 3(E) authorizes the administration to institute, implement and regulate an orderly system of quedanning, disposition, and withdrawals of various forms of sugar from warehouses.
Section 3(F) authorizes evaluation and recommendation of new projects involving production of sugar and by-products and other products derived from sugarcane and sugar.
Section 3(G) authorizes issuance of permits and licenses and collection of corresponding fees and levies on processing and manufacture of sugar and by-products and other sugarcane-derived products.
Section 3(H) authorizes the administration to enter and execute routinary contracts necessary or incidental to attainment of its purposes with any persons, firms, public or private, and the Government of the Philippines.
Section 3(I) authorizes the administration to do all other acts and perform other functions necessary, incidental, or conducive to its purposes.

Sugar Board governance and composition

Section 4 vests all corporate powers of the Sugar Regulatory Administration in, and requires exercise through, the Sugar Board.
The Sugar Board is composed of an Administrator (acting as chairman) appointed by the President of the Philippines, and two (2) members appointed by the President upon the recommendation of the sugar industry.
One of the two members represents millers, and the other represents planters.
Section 4 requires the Sugar Board to meet in regular session once a month.
Section 4 authorizes special sessions when needed, called by the Chairman or by both private sector representatives.

Administrator and board tenure rules

Section 4 provides that the Administrator is the Chief Executive Officer of the Sugar Regulatory Administration.
Section 5 provides that the Administrator holds office at the pleasure of the President.
Section 5 provides that the two private sector members hold office for three (3) years unless sooner removed for cause.
Section 5 bars reappointment of the Members immediately upon termination of their respective terms of office.
Section 5 provides that any member appointed to a vacancy serves only for the unexpired term of the member he succeeds.

Sugar Board functions and rulemaking

Section 6(A) authorizes the Sugar Board to prescribe, amend, modify, or repeal rules and regulations governing the general business of the Board, subject to the approval of the President.
Section 6(B) authorizes the Board to establish policies on sugar and sugarcane production control, quedanning, withdrawals from sugar warehouses, and issuance of permits and licenses for processing and manufacture of raw sugar, refined sugar and other classes of sugar, including related issues under this Executive Order.
Section 6(C) authorizes the Board to enter into contracts, transactions, or undertakings necessary or incidental to its functions and objectives with natural or juridical persons and with foreign government institutions, private corporations, partnerships, or private individuals.
Section 6(D) authorizes the Board to fix compensation of the Administrator and other officers and employees, subject to approval of the Office of the President of the Philippines.
Section 6(E) authorizes the Board to approve the annual and/or supplemental budgets submitted by the Administrator.
Section 6(F) authorizes the Board to perform other duties assigned by the President, such as studies on particular issues regarding the sugar industry.

Personnel, merit, Civil Service, and COA audit

Section 7 mandates that in appointment and promotion of officers and employees, merit and efficiency shall serve as basis.
Section 7 prohibits prescribing or considering any political test or other qualifications for appointments or promotions.
Section 7 requires that any person appointed by the Sugar Regulatory Administration in violation of the political test/prohibition shall be removed from office by the Office of the President of the Philippines.
Section 8 subjects all officers and employees of the Sugar Regulatory Administration to Civil Service Law, rules and regulations, except positions declared by the Board as policy-determining, primarily confidential or technical in nature.
Section 8 requires that rules and regulations issued by the Office of Compensation and Position Classification apply to all officers and employees.
Section 9 requires the Chairman of the Commission on Audit to appoint a representative as Auditor of the Sugar Regulatory Administration and necessary personnel to assist.
Section 9 provides that salaries of the Auditor and personnel are determined and paid by the Commission on Audit.
Section 10 requires auditing of financial transactions in accordance with law, administrative regulations, and principles and procedures applicable to commercial corporate transactions, with an annual report submitted by the Auditor (through the Chairman of the Commission on Audit) to the Sugar Regulatory Administration, and copies furnished to the President.

Financing and use of levy proceeds

Section 11 provides that until otherwise provided as directed and ordered by the President, the Sugar Regulatory Administration continues to receive proceeds of levies, charges and other impositions granted by law, decree and/or executive order to the Philippine Sugar Commission.

Market liberalization and PHILSUMA authority limits

Section 12 limits the authority of Presidential Decree No. 1971 (February 21, 1985) and Presidential Decree No. 1984 (October 4, 1985) granted to Philippine Sugar Marketing Corporation (PHILSUMA) to cover only sugar as of crop year 1985-1986.
Section 12 provides that after that period, PHILSUMA authority ceases and free enterprise shall be observed in the marketing of domestic and export sugar.
Section 12 withdraws the exemption from Republic Act No. 1180, as amended by Presidential Decree No. 714, granted by Section 5, Presidential Decree No. 1984, to PHILSUMA.

Abolition of PHILSUCOM and transitional effects

Section 13 abolishes the Philippine Sugar Commission (PHILSUCOM).
Section 13 authorizes the Sugar Regulatory Administration to retain some of PHILSUCOM personnel as it deems necessary.
Section 13 provides that any public officer or employee separated due to PHILSUCOM’s abolition shall receive retirement and other benefits accruing under laws then in force, if entitled.
Section 13 requires that if there are lack of funds to support retirement and separation pay, a special fund shall be set aside by the Ministry of Budget for this purpose.
Section 13 transfers assets and records determined by the Sugar Regulatory Administration as required for its operation.
Section 13 provides that although PHILSUCOM is abolished, it continues as a juridical entity for three (3) years after the time it would have been abolished, solely for prosecuting and defending suits, settling and closing affairs, disposing and conveying property, and distributing assets, but not for continuing functions for which it was established, under the supervision of the Sugar Regulatory Administration.

Repeal, separability, and executive order supremacy

Section 14 repeals or modifies provisions of law, decrees, executive orders, or other issuances inconsistent with Executive Order No. 18.
Section 15 provides that if any provision of Executive Order No. 18 is held unconstitutional, the other provisions are not affected.