RATIONALIZING AND STABILIZING THE EXPORT OF SUGAR AND FOR OTHER PURPOSES

• Number: Presidential Decree No. 579
• Sections: 11

Preamble

WHEREAS, the current worldwide shortage of sugar has brought

about an increasingly speculative interest in sugar which has further

induced uncertainty in its price especially in the world market;

WHEREAS, the uncertain fluctuations in the price of sugar

will expose the export of sugar to risky speculation which will depress

prices adversely affecting the profitability of the sugar industry and

the foreign exchange earnings of the country;

WHEREAS, in the interest of the national objective to

promote public welfare, the government should take a direct and active

role to protect the sugar industry and our national economy from the

deleterious effects of speculative ventures with respect to sugar;

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

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

do hereby decree and order:

Section 1

SECTION 1. The Sugar Quota Administration shall from time to

time and commencing from the crop year 1973-1974, re-allocate such

portion of the total sugar production per crop year for export to the

United States and world markets as may be necessary to safeguard the

sugar industry and the national economy against contingencies brought

about by the speculative interests in sugar. In addition to its powers

under existing laws, the Sugar Quota Administration shall have the power

to issue authorization for the export of sugar in accordance with the

re-allocations provided for in the preceding paragraph.

Section 2

SEC. 2. To carry out the objective of the Decree, the

Philippine Exchange Company, Inc. may be authorized by the President of

the Philippines to purchase sugar allocated for export to the U.S. and

world markets in a quantity and at price to be fixed in accordance with

the rules and regulations that shall be established by the Sugar Quota

Administration, the Philippine National Bank, and the Department of

Trade and approved by the President of the Philippines.

Section 3

SEC. 3. The Philippine National Bank shall finance these

purchases of sugar from the following sources of funds:

Foreign borrowings that the Bank is hereby authorized to

obtain, for and in behalf of the Philippine Exchange Company, Inc.;

Its available loanable funds that it shall lend to the

Philippine Exchange Company, Inc.; or

Proceeds from the rediscounting of loans or notes with the

Central Bank of the Philippines.

Section 4

SEC. 4. To effectively implement the provisions of the

preceding section, loans or advances by the Philippine National Bank to

the Philippine Exchange Company, Inc. for the purpose directed in this

Decree shall be exempt from the loan limits imposed in the charter of

the said Bank.

The Central Bank of the Philippines shall

rediscount the loans or notes referred to in paragraph (c) of the of the

preceding section and shall grant the authorization or approval for the

foreign borrowings that may be contracted by the Philippine National

Bank authorized under paragraph (a) thereof.

Foreign borrowings

obtained under these provisions shall be exempt from any and all taxes,

including withholding tax.

Section 5

SEC. 5. The Department of Trade

and the Sugar Quota Administration shall extend full cooperation and

assistance to the government agencies and entities herein mentioned in

order to attain the objectives of this Decree and shall furnish them

with such data and information as may be necessary for the effective

international marketing of sugar.

Section 6

SEC. 6. The sugar so purchased by the Philippine Exchange

Company, Inc. shall not be disposed of without the prior approval of the

President of the Philippines. The Philippine Exchange Company, Inc.

shall handle the export and shipment of such sugar to the U.S. and world

markets.

Section 7

SEC. 7. The proceeds of the sugar trading operations of

the Philippine Exchange Company, Inc. shall be used to pay its

liabilities to the Philippine National Bank, or to the foreign creditors

of the Philippine National Bank from whom financing has been obtained.

The Philippine Exchange Company, Inc. shall charge a commission

of two and one-half (2 1/2%) per cent of gross sales, of which one (1%)

per cent shall cover all its overhead expenses and the balance of one

and one-half (1 1/2%) per cent shall be set aside as a fund for the

"Sugar Development Program" of the Philippine National Bank.

After deducting its commission of two and one-half (2-1/2%) per cent of

gross sales, the balance of the proceeds of sugar trading operations for

every crop year shall be set aside by the Philippine Exchange Company,

Inc. as profits which shall be paid to a special fund of the National

Government subject to the disposition of the President for public

purposes.

Section 8

SEC. 8. The profits realized by the Philippine

Exchange Company, Inc. from the sugar trading operations authorized

under this Decree shall be exempt from any and all taxes imposed by the

National Government and its political subdivisions.

Section 9

SEC. 9. All laws, executive orders or administrative

orders, rules and regulations inconsistent with the foregoing provisions

are hereby repealed or amended accordingly.

Section 10

SEC. 10. This Decree shall take effect immediately.

Done in the City of Manila, this 12th day of November, in the

year of Our Lord, nineteen hundred and seventy-four.

(Sgd.)

FERDINAND E. MARCOS

President of the Philippines

By the President:

(Sgd.)

ALEJANDRO MELCHOR

Executive Secretary