AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NO. 3470, AS AMENDED, ENTITLED "AN ACT CREATING THE NATIONAL COTTAGE INDUSTRIES DEVELOPMENT AUTHORITY (NACIDA), UNDER THE DEPARTMENT OF COMMERCE AND INDUSTRY, PRESCRIBING ITS DUTIES, POWERS AND FUNCTIONS, AND APPROPRIATING FUNDS THEREFOR."

• Number: Presidential Decree No. 817
• Sections: 11

Preamble

WHEREAS, there is an imperative need to amend the NACIDA Law

in order to update its provisions and make it attuned with the modern

trends in the production and trading of cottage industry products;

WHEREAS, cottage industry products now rank as the

No. 6. dollar earner among the commodity exports of the

nation and deserve to be accorded more incentives for growth and

viability;

WHEREAS, it is necessary to encourage the establishment and

promotion of cottage industries in order to generate more employment

opportunities.

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 the amendment of Republic Act No. 3470, as

amended by Republic Act No. 5326.

Section 1

SECTION 1.—Section 1 of Republic Act No. 3470 is hereby

amended to read as follows:

"SECTION 1.—Within thirty days after the approval of this

Act, the President of the Philippines shall create a board known as the

National Cottage Industries Development Authority, hereinafter referred

to as the Board, under the Department of Trade, which shall be composed

of a chairman and three members, one of whom shall be a representative

of the private sector to be nominated by at least two (2) existing

recognized cottage industry chambers or associations: Provided,

That no person who is a candidate for a public elective office at the

time of his appointment or was such a candidate at the general or

special elections immediately preceding the same shall be eligible for

appointment as administrator, deputy administrator or member of the

board of directors. The Chairman and members of the Board, who shall be

appointed by the President of the Philippines, shall hold office for a

term of six years unless sooner removed or otherwise separated from the

service for causes provided by law, in which case a successor may be

appointed for the unexpired term. The chairman and members of the Board

shall be entitled to a per diem of P200.00 for each cession actually

attended by them: Provided, however, That in no case shall a

regular or special session exceed ten cessions monthly and that their

per diems shall not exceed P2,000 per month. They shall likewise receive

commutable transportation and representation expenses not exceeding

P1,000.00 monthly. The President of the Philippines shall appoint an

administrator and a deputy administrator cf the Board with a

compensation of P33,000.00 and P30,000.00 per annum, respectively. The

other officers and personnel of the Board shall be appointed by the

Administrator with the approval of the Board of Directors in accordance

with the Civil Service Law: Provided, That all such officers and

personnel shall be exempt from WAPCO rules and regulations, and

provided, further, that they shall receive, in addition to their regular

compensation, an incentive nay equivalent to ore month's salary for

every year of meritorious service rendered."

Section 2

SEC. 2.—Section 2, paragraph (d) of Republic Act No. 3470 is

hereby amended to read as follows:

"(d) To promote the standardization of cottage industries

products, prescribe rules and regulations governing the grading,

classifying and inspecting of cottage industries products especially

those for export: Provided, That notwithstanding the provisions

of any law, decree, letter of instructions or executive order, the

NACIDA shall establish an Accreditation Committee which shall be charged

with regulating and supervising the activities of persons, firms or

corporations engaged in the production or manufacture, trading locally

or exporting of cottage products or raw materials thereof."

Section 3

SEC. 3.—Section 4 of Republic Act No. 3470 is hereby

amended to read as follows:

"SECTION 4.—Powers and Duties of the Board of

Directors:

To fix the compensation and number of officers and employees

of the Board;

To approve the annual and/or supplemental budget of the Board

which may be submitted to it from time to time;

To administer the revolving marketing; fund; and

To enunciate the policies that shall guide the operations of

the Board;

Section 4

SEC. 4.—Section 7, second paragraph is hereby amended to

read as follows:

"Each of these institutes shall be headed by a Cottage

Industries Manager who shall be assisted by an Assistant Cottage

Industries Manager, both of whom shall be appointed by the

Administrator upon the recommendation of the Board of Directors, with

compensation of eighteen thousand poses and twelve thousand pesos per

annum, respectively."

Section 5

SEC. 5.—Section 11 of Republic Act No. 3470, as amended by

Section 6

SEC. 6.—Section 16, paragraph 1, as amended, is hereby

further amended to read as follows:

"SECTION 16.—The production, manufacture and sale of

cottage industry products shall be exempt from all taxes, except

specific and income taxes, for a period of five years from the date of

registration of the person or firm engaged in the production or

manufacture of cottage Industry products with the Board; Provided,

That seventy-five per cent of the total cost of raw materials utilized

in the production or manufacture of cottage industry products consist of

raw materials of Philippine origin: Provided, further, That the

latter requirement as to raw materials shall not apply to embroidery,

piggery, poultry, livestock and metal craft industries: Provided,

furthermore, That no exemptions from the percentage taxes on sales

shall be enjoyed for all sales in excess of four hundred thousand pesos

each year: Provided, finally, That the provisions of the law on

cooperatives shall not be affected by this Act."

Section 7

SEC. 7.—Such sums as may be necessary to carry out the

purposes of this Decree are hereby appropriated out of any funds in the

National Treasury not otherwise appropriated. Thereafter, the sum

necessary for said purposes shall be included in the annual General

Appropriations Decree.

Section 8

SEC. 8.—All laws, decrees, rules and regulations

inconsistent herewith are hereby repealed or modified accordingly.

Section 9

SEC. 9.—This Decree shall take effect immediately.

Done in the City of Manila, this 22nd day of October, in the

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

(Sgd.)

FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.)

ALEJANDRO MELCHOR

Executive Secretary

Section 1

Section 1 of Republic Act No. 5326 paragraph 1, is hereby further

amended to read as follows:

"SECTION 11.—Definition.—The term "cottage industry" as

used in this Act shall mean an economic activity carried on in the homes

or in other places for profit, with a capitalization of rot exceeding

P100,000 at the time of registration. The term shall also include

economic activities carried on by students of public and private

schools, within school premises, as a cooperative effort, under

supervision of a teacher or other person approved by and acting under

the supervision and control of school authorities, either as part of or

in addition to ordinary vocational training, provided all profits shall

accrue to the students working therein. It shall include the following:

(1) fiber crafts, such as making of abaca ropes and twines, buntal fiber

extracting and buri leaf braiding; (2) woodcraft such as making of

wooden slices, wooden fans, walking sticks (cares) and wood carving; (3)

hat weaving such as calasiao. buri, raffia, karagomoy, buntal and

bamboo hats, salakot and helmet; (4) mat weaving such as doormats,

sleeping mats made of buri, pandan, balilan, and salutan and other

similar materials; (5) metal craft such as making of jewelries, knives,

bolces, scissors, razors, silverwares, and brassworks; (6) ceramics such

as making of potteries, hallow blocks, tiles, firebricks, clay stoves

and other ceramic products; (7) shell craft such as making sea shell

buttons and coconut shell products; (8) bamboo and rattan crafts such as

making of hammocks, basketry, making of sawali and other bamboo and

rattan furniture and articles; (9) small agricultural hand tools such as

plow points; (10) toy craft such as making of dolls and toys; (11)

embroidery, dressmaking and tailoring industries; (12) needle craft

(including knitting and crocheting); (13) loom weaving such as making of

fish nets; making of mosquito nets, weaving of Ilocano cloth, Igorct

weaving, piña 'barong Pilipino' jusi and sinamay; (14) machine parts

manufacture such as wheels and stone mortars; (15) poultry including

duck raising and 'balut' making; (16) piggery; (17) home cigar making;

(18) food preservation and canning, including the making of vinegar

wine, lambanog, 'bagoong', pili or peanuts confectionery or coconut

candy (bucayo); (19) other related crafts such as making of brooms,

pandan, nito and buri bags, 'Karagomoy' bags, bead making,

guitar and other musical instruments; and (20) such other industries

done in the home with the aid of electrical gadgets and/or by hand

manipulations. All cottage industries shall be owned and operated by

Filipino citizens or by a corporation, partnerships or cooperative, at

least seventy-five per cent of the capital or investment of which is

owned by Filipino citizens. All members of its Board of Directors shall

be Filipino citizens.