Policy basis and purpose
- Fish is treated as a basic component of the Filipino diet and an essential source of protein.
- The Letter of Instructions recognizes that fish supply and prices fluctuate wildly due to seasonality, inefficiencies in the fish marketing system, and lack of adequate institutional credit for fish producers and fish traders.
- The Letter of Instructions mandates concerted action by the government and the private sector to stabilize fish production, streamline fish marketing, and provide adequate production and marketing credit.
Core procurement and pricing actions
- Food Terminal, Inc. (FTI) and the Philippine Fish Marketing Authority (PFMA) must undertake the direct procurement of a significant portion of the total volume of fish traded daily in the Metro Manila area.
- FTI and PFMA must sell such procured fish through selected traders and/or retailers to reduce and/or stabilize fish supply and prices.
PFMA, marketing, and accreditation measures
- The Ministry of the Budget must place the compensation and position structure of PFMA under the same classification as government corporations.
- The PFMA must immediately improve its facilities in Navotas Fishing Fort and Fish Market, including completing its terminal road network and providing lighting facilities in its newly-constructed wing.
- The PFMA must immediately undertake the accreditation of all fish producers and traders operating in the Navotas Fishing Port and Fish Market, using credit-worthiness as the one major criterion.
- The PFMA, jointly with Market Administrators in public markets, must undertake the accreditation of all fish retailers in the public and private markets of Metro Manila.
- The Ministry of Finance, through Market Administrators under its supervision, and the Metro Manila Commission must assist the PFMA in the proper accreditation of fish retailers and must assist agencies involved in the financing of market vendors.
Cooperatives and alternative market channels
- The Ministry of Local Governments and Community Development (MLGCD), through its Bureau of Cooperative Development, must step up the organization of cooperatives among market vendors.
- The Bureau of Cooperative Development must coordinate the participation of all market vendor cooperatives and consumer cooperatives in the stabilization of fish supply and prices.
- The Cooperative Marketing System of the Philippines (CMSP) must engage in the marketing of fish at reasonable prices to marketing and consumer cooperatives.
- The existing “Super Palengke” must increase their volumes of fish to be sold at reduced prices.
Fish import contingency and ad-hoc committee
- A special ad-hoc committee, headed by the Managing Director of FTI, must be created to prepare and submit to the President recommendations and guidelines for the importation of frozen fish.
- The importation guidelines must be intended to supply the requirements of local fish canners, hotels and restaurants, and other institutions.
- The committee must be composed of a representative of local fish canners, importers of canned fish, tin-plate manufacturers, fishing vessel operators, the Central Bank, and the PFMA.
- The importation mechanism is directed to help ease pressure of demand on fish supplies and prices during the lean months.
Credit policy, collateral rules, and rediscounting
- Market Administrators must allow the use of market stalls and/or market “puestos” as collaterals for working capital loans under the program.
- Market Administrators must respect claims of financial institutions on the use of market stalls or puestos in the event of foreclosure of the collateral.
- The Central Bank of the Philippines must qualify for a rediscounting rate of 4% all working capital loans granted by government financial institutions and private banks to:
- fish producers (including fishing vessel operators, fishpond and fishpen operators),
- fish traders,
- fish market vendors/retailers and market vendors’ credit cooperative,
- FTI, PFMA, and CMSP,
- that are covered by promissory notes with an interest rate not to exceed 12% per annum plus 2% service charge.
- The Central Bank must seek ways and means to provide rediscounting facilities for medium and long-term loans under the program.
- The Central Bank must encourage active participation of private commercial banks, development banks, and rural banks in financing fish producers and traders, particularly market vendors.
Land Bank guarantee funds and coverage
- The Land Bank must immediately set up a Guarantee and Loan Fund for the last quarter of 1979 totaling P20,000,000:
- P1,500,000 to guarantee loans granted by PNB to fish producers,
- P5,250,000 to guarantee loans granted by PNB to FTI and PFMA for their fish marketing operations,
- P10,750,000 to guarantee loans granted by private banks to market vendors.
- For 1980, the Land Bank must set up a Guarantee and Loan Fund of P80,000,000, broken down as:
- P6,000,000 to guarantee loans granted by PNB to fish producers,
- P21,000,000 to guarantee loans granted by PNB to FTI and PFMA for fish marketing operations,
- P43,000,000 to guarantee loans granted by PNB to fish traders,
- P10,000,000 to guarantee loans granted by private banks to market vendors.
- The Land Bank Guarantee and Loan Fund must cover 80% of the value of all working capital loans under the program.
- The Land Bank must facilitate the processing of all claims against its Guarantee and Loan Fund and must institute procedures to encourage PNB and private banks to extend adequate credit under the program.
Philippine National Bank credit lines and operational banking
- The Philippine National Bank (PNB) must provide credit lines totaling P82,000,000 as follows:
- P23,000,000 for FTI for fish trading,
- P3,000,000 for the PFMA.
- The program must include P20,000,000 for working capital requirements of fish producers on a non-collateral basis.
- The program must include P36,000,000 for working capital requirements of fish traders.
- PNB must open a branch at the Navotas Fishing Port and Fish Market immediately and must temporarily set up a mobile bank prior to the operation of that branch.
Government appropriations for implementation
- The Ministry of the Budget must appropriate and release P35,000,000 for the last quarter of 1979 as follows:
- P20,000,000 for the Land Bank of the Philippines as a Guarantee and Loan Fund covering loans granted by PNB and private banks, including loans to FTI and PFMA,
- P3,250,000 as Corporate Equity Investment in PFMA, with P1,250,000 for operating funds and P2,000,000 for completion of terminal road network and lighting facilities in the Navotas Fish Market,
- P6,250,000 as Corporate Equity Investment in FTI, with P1,250,000 for operating requirements and P5,000,000 for capital outlays to support marketing operations,
- P1,500,000 for the Bureau of Fisheries and Aquatic Resources, with P1,000,000 to locate spawning grounds of bangus fry and prawn fry, and P500,000 for regular surveys of fishing grounds,
- P4,000,000 for the Cooperatives Development Fund of the MLGCD, to be used for trading operations and relending to CMSP under the program.
- Funding for the Program must come from the Special Activities Fund, Corporate Equity Fund, Social Pricing and Development Fund, and from other funds and savings of the national government otherwise appropriated.
- For 1980, the Ministry of the Budget must appropriate and release P93,000,000 as follows:
- P80,000,000 for the Land Bank of the Philippines as a Guarantee and Loan Fund covering loans granted by PNB and private banks, including loans to FTI and PFMA,
- P5,000,000 for PEMA for current operative expenditures under the program,
- P5,000,000 for FTI for current operating expenditures under the program,
- P3,000,000 for the Bureau of Fisheries and Aquatic Resources for current operating expenditures for surveys under the program.
Audit, financing support, and credit administration
- The Commission on Audit must draw up flexible audit procedures to enable FTI, PFMA, and CMSP to match private sector purchasing and marketing practices, including allowing:
- immediate cash payments, and
- verbal commitments for the sourcing and marketing of fish.
- The Development Bank of the Philippines must accelerate:
- negotiations of its Third fisheries Credit Project for medium and long-term financial needs of fish producers (including fishing vessel operators, fish pond operators, and fish pen operators), and
- implementation of the Asian Development Bank-assisted fish pen development project in Laguna de Bay.
Fisheries research, spawning grounds, and fish nurseries
- The Ministry of Natural Resources must set up a permanent unit in the Bureau of Fisheries and Aquatic Resources (BFAR) to conduct regular identification, classification, evaluation, and monitoring of fishing areas throughout the country.
- The permanent unit in the BFAR must immediately undertake a survey to locate bangus and prawn spawning grounds to help alleviate lack of bangus and prawn fry.
- The Ministry of Agriculture must accelerate implementation of its rice-fish or “Palay-Isdaan” project to cover more areas rapidly.
- The Ministry of Agriculture must be authorized, in coordination with BFAR, to establish fish nurseries all over the country.
Import duties, vessel quotas, and licensing streamlining
- The National Economic and Development Authority (NEDA) must immediately conduct hearings to reduce import duties on fishing vessels from 30% down to 10% ad valorem, and to increase import duties on yachts and other pleasure vessels from 30% to 50% ad valorem.
- The Maritime Industry Authority (MARINA) must increase the quota for importation of second-hand fishing vessels over 10 years old from 20 vessels to 40 vessels per year.
- MARINA must create and head an ad-hoc committee involving all agencies involved in processing applications, registration, and licensing of joint fishing ventures with foreign entities to cut down the number of steps in the licensing procedure and hasten entry of new fishing ventures and commissioning of additional fishing vessels.
Security and program coordination
- The Southwest Command must provide, based on consultations with fishing vessel operators, the security measures required to enable fishermen to operate safely in Southern Mindanao and Southern Palawan waters.
- The Presidential Action Committee on Food, to be created under a companion Letter of Instructions, must coordinate, supervise, and monitor activities of the above-named agencies to ensure stabilization of fish supply and prices.
Repeal and amendment clause
- All provisions of other Letters of Instructions inconsistent with this order are repealed and/or amended accordingly.