Policy and declared purpose
- Section 2 declares State policy to promote the integrated growth and development of the food industry.
- The policy requires the food industry to function as an institution conscious of its social responsibilities.
- The policy mandates the industry be capable of maintaining an adequate and continuous food supply.
- The policy directs the industry to contribute its proper share to the economy.
Reconstitution and attachment of NFA
- Section 3 transfers the National Grains Authority into the National Food Authority.
- The National Food Authority is established as a government corporation.
- The National Food Authority is attached to the Office of the President.
Scope: what “Food Industry” covers
- Section 4 defines “Food Industry” to include, in addition to those enumerated in Section 2 of Presidential Decree No. 4, as amended, raw/fresh and/or manufactured/processed/packaged food products.
- The expanded coverage is applied to the National Food Authority’s functions over basic food commodities.
Applicable framework and council governance
- Section 5 applies the provisions of Presidential Decree No. 4, as amended by Presidential Decree Nos. 699 and 1485 to the National Food Authority.
- Section 5 also provides that the provisions apply to the other food commodities within Section 4, as determined by the National Food Authority Council.
- Section 6 establishes the National Food Authority Council as the governing body.
- Section 6 provides that the Council consists of:
- The Minister of Human Settlements
- The Administrator, National Food Authority
- The Minister of Agriculture
- The Minister of Finance
- The Minister of Industry
- The Minister of Trade
- The Governor, Central Bank of the Philippines
- The Chairman, Development Bank of the Philippines
- The President, Philippine National Bank
- The President, Land Bank of the Philippines
- A Representative of the Office of the President
- Section 6 provides that:
- The Chairman shall be the Minister of Human Settlements
- The Vice-Chairman shall be the Administrator
- The Administrator is appointed by the President of the Republic of the Philippines
- Section 6 requires regular Council meetings at least once a month, with dates determined by the Chairman.
- Section 6 permits special meetings by the Chairman for urgent matters.
- Section 6 sets Council compensation at per diem of not less than EIGHT HUNDRED PESOS (P800.00) for each meeting actually attended, plus other remuneration as determined by the Council.
- Section 6 provides that management is vested in an administrator with the rank of a Minister.
- Section 6 provides that the administrator is assisted by two (2) Deputy Administrators and such Assistant Administrators as the Council may determine.
Expanded powers and exemptions of the NFA
- Section 7 provides that the National Food Authority has additional powers, functions, and exemptions in addition to those under Presidential Decree No. 4, as amended.
- Section 7 authorizes the Authority to acquire ownership (by purchase or otherwise) and/or invest, hold, sell, or otherwise dispose of stocks, bonds, interests, or obligations/evidence of indebtedness of any corporation, public or private, domestic or foreign.
- Section 7 authorizes the Authority to register, license, and supervise persons (natural or juridical) engaged in wholesale, retail, processing, manufacturing, storage, transporting, packaging, importation, exportation of food products/commodities, and other related food activities.
- Section 7 authorizes the Authority to prescribe, impose, and collect fees, charges and/or surcharges, subject to approval of the President of the Philippines upon recommendation of the Council.
- Section 7 authorizes the Authority to import/export (or cause importation/exportation) of food products/commodities and/or raw materials, equipment, and facilities needed in the manufacture/processing of food commodities as determined by the Council and approved by the President of the Philippines.
- Section 7 authorizes the Authority to establish or cause the establishment of branches or agencies, domestic or foreign, when deemed necessary by the Council.
- Section 7 authorizes the Authority to engage in production, manufacturing, processing, and/or packaging of food products/commodities as necessary to carry out its functions, as approved by the President of the Philippines.
- Section 7 authorizes the Authority to establish or restructure its internal organization and to fix remunerations and fringe benefits of officers and employees, subject to pertinent compensation law and regulations.
- Section 7 authorizes the creation of a “Provident Fund” financed by contributions made by both the Authority and its officers and employees, to provide retirement and other benefits under terms and conditions fixed by the Council.
- Section 7 provides that subsidiaries and entities subsequently acquired or created by law, and those owned/controlled/organized by the Authority, shall enjoy the tax exemptions and other privileges and rights of the Authority when specifically approved by the President of the Philippines.
Specific transfer: Food Terminal, Inc.
- Section 8 transfers to the Authority the investments and loans and related obligations incurred by the Human Settlements Development Corporation in Food Terminal, Inc.
- Section 8 provides that the transfer is based on a valuation approved by the President of the Philippines upon recommendation of the Commission on Audit.
- Section 8 provides that the terms of payment for net assets transferred shall be mutually agreed upon.
Capitalization, ownership, and funding channels
- Section 9 sets the Authority’s authorized capital stock at five billion pesos, divided into fifty million shares of par value of one hundred pesos each.
- Section 9 provides that the shares shall be wholly subscribed and paid by the national government, local government units, or other government-owned or controlled corporations.
- Section 9 provides that the accumulated capital stock and surpluses of the National Grains Authority are evaluated and form the initial paid-in capital of the Authority.
- Section 9 directs the national government to make additional equity investments into the Authority out of funds appropriated in the General Appropriations Act and other appropriations laws as may be approved by the President based on the Authority’s fund requirements and Treasury availability.
- Section 10 provides that official development assistance channeled through the Authority, including food aid, is recorded in the Authority’s books as paid-in capital when received as loans.
- Section 10 provides that when otherwise approved by the President, official development assistance received may be recorded as subsidies to the Authority.
- Section 10 provides that national government payments on loans drawn for or by the Authority are recorded as payments of equity, unless otherwise approved by the President, in which case they are recorded as subsidies.
- Section 10 authorizes the national government to subsidize the operations of the Authority from funds appropriated in the annual appropriations acts, in an amount and at times approved by the President.
- Section 10 directs that funding and organizational provisions in B.P. No. 80 for national food programs, including special financing program seed fund, cooperatives loans, and livelihood projects in the Ministry of Agriculture, Office of the President, and Ministry of Human Settlements, are reviewed by the Council.
- Section 10 requires the Council to recommend to the President appropriations transfers and realignment of responsibilities to align with the purposes of the Decree.
- Section 10 provides that appropriations transferred form part of the equity investment into the Authority.
- Section 10 requires the review to be conducted with participation of the Chairman, Presidential Commission on Reorganization, and the Minister of the Budget.
- Section 10 empowers the Authority to negotiate with government and domestic private lending institutions for credit facilities at preferential rates.
- Section 10 provides that the Control Bank of the Philippines shall rediscount local procurement and importation of papers of the National Food Authority under terms and conditions determined by the Monetary Board, including preferential treatment as to interest rate, maturity and loan value.
- Section 11 provides that the Authority is guaranteed by the government of the Philippines upon approval of the President of the Philippines.
Internal organization, regulations, and legal effects
- Section 12 requires the Authority to promulgate rules and regulations necessary to implement and carry out the Decree.
- Section 12 provides that rules and regulations take effect fifteen (15) days after publication once in at least one daily newspaper of general circulation.
- Section 13 provides a repealing clause: all laws, orders and proclamations, rules and regulations, or parts thereof, inconsistent with this Decree are repealed, amended, or modified accordingly.
- Section 14 provides a separability clause: if any part, section, or provision is held invalid or unconstitutional, the remainder is not affected.
- Section 15 reiterates that the Decree takes effect immediately.