AUTHORIZING ALIENS, AS WELL AS ASSOCIATIONS, CORPORATIONS OR PARTNERSHIPS OWNED IN WHOLE OR IN PART BY FOREIGNERS TO ENGAGE IN THE RICE AND CORN INDUSTRY, AND FOR OTHER PURPOSES

• Number: Presidential Decree No. 194
• Sections: 12

Preamble

WHEREAS, Republic Act No. 3018 was enacted into law in 1960

to nationalize the rice and corn industry;

WHEREAS, after thirteen (13) years of operation, the law

has to a great extent succeeded in transferring the rice and corn

industry in all its aspects to Filipinos and Filipino-owned entities;

WHEREAS, the existing law has created artificial restraints

in the national effort to develop the rice and corn industry;

WHEREAS, it is imperative to lift the prohibition especially

in cases where grains, including rice and corn and/or by-products

thereof, are used for direct consumption or as raw materials in the

manufacture or processing of their finished products; and

WHEREAS, there is need to encourage foreign investment on a

large scale to develop virgin lands for rice and corn;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers in me vested by the Constitution as

Commander-in-Chief of all the Armed Forces of the Philippines and

pursuant to Proclamation No. 1081, dated September 21, 1972, and General

Order No. 1, dated September 22, 1972, as amended, do hereby order and

decree:

Section 1

SECTION 1. An alien, association, partnership or

corporation, owned in whole or in part by Foreigners, may engage in the

rice and/or com industry.

Section 2

SEC. 2. As used in this Decree, the term "rice and/or corn

industry" shall include the following activities:

a. Acquiring by barter, purchase or otherwise, rice and com

and/or the by-products thereof, to the extent of their raw material

requirements when these are used as raw materials in the manufacture or

processing of their finished products.

b. Engaging in the culture, production, milling, processing

and trading, except retailing, of rice and corn: Provided, That

the designation of the area in the culture and production, as well as

the trading of the produce in the domestic or foreign markets, shall be

under the direction and control of the National Grains Authority.

Section 3

SEC. 3. The National Grains Authority may authorize the

alien or business organization mentioned in Section 1 hereof to engage

in the rice and/or corn industry, subject to the following conditions:

a. The National Grains Authority shall certify that there is

an urgent need for foreign investment in the undertaking and that the

same will not pose a clear and present danger of promoting monopolies or

combinations in restrain of trade.

b. The alien, association, corporation or partnership shall have

the necessary financial capability and technical competence.

c. The alien, association, corporation or partnership shall

submit a development plan acceptable to the National Grains Authority.

Section 4

SEC. 4. A minimum total investment in the undertaking shall

be established from time to time by the National Grains Authority.

Section 5

SEC. 5. In connection with the foreign equity

participation, at least 60% thereof shall be transferred to Filipino

citizens over a period to be established by the National Grains

Authority, at the time of approval of its authority to engage in the

industry, or phase out its operation within the same period.

Section 6

SEC. 6. The alien, association, corporation or

partnership shall register with the Securities and Exchange Commission

and the Board of Investments.

Section 7

SEC. 7. The National Grains Authority shall impose such

other reasonable conditions as may be deemed necessary.

Section 8

SEC. 8. The National Grains Authority in coordination

with the Department of Agriculture and Natural Resources and other

offices concerned shall issue such rules and regulations as may be

necessary to the implementation of the provisions of this Decree.

Section 9

SEC. 9. Any violation of this Decree or of the rules or

regulations issued pursuant thereto shall be punished with a fine of

not less than ten thousand pesos and not more than twenty-five thousand

pesos and imprisonment of not less than five years and not more than ten

years. If the violation is committed by a corporation or association,

the penalty shall be imposed upon the president, director or directors,

manager, managing partner, or other official thereof responsible for

such violation. Any alien violating or responsible for such violation of

this Act shall, upon completion of the service of sentence, be deported

without any further proceedings on the part of the Deportation Board.

Any government official or employee who aids, abets or connives with any

person in violating this Act shall, in addition to the penalty which

may be imposed upon him as a principal, be perpetually disqualified from

holding any public office.

Section 10

SEC. 10. All laws, executive orders and regulations

inconsistent with the provisions of this Decree are hereby repealed.

Section 11

SEC. 11. This Decree shall take effect upon its

approval.

Done in the City of Manila, this 17th day of May, in the year

of Our Lord, nineteen hundred and seventy-three.

(Sgd.) FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.) ALEJANDRO MELCHOR

Executive Secretary

In order to facilitate the implementation of this Presidential

Decree No. 194, the National Grains Authority issued Resolution No. 60,

dated June 11, 1973, prescribing the rules and regulations.