Ensuring the Viability of the Rice and Corn Industry

June 14, 1979

LETTER OF INSTRUCTIONS NO. 874

FURTHER STRENGTHENING AND ENSURING THE VIABILITY OF THE RICE AND CORN INDUSTRY

WHEREAS, the Philippines has achieved full self-sufficiency and even surplus production in rice;

WHEREAS, arising out of vastly increased rice production, second-generation problems attendant to surplus, such as low palay prices, marketing, warehousing and storage, and bulk handling are slowly impinging of the industry;

WHEREAS, world uncertainties have placed added pressures on the industry;

WHEREAS, rice is the basic staple of almost all Filipinos and the rice industry by far is still the single largest industry in the economy; and cd

WHEREAS, the government is presently redirecting its resources to achieve full self-sufficiency in white corn for human and animal consumption and experts of yellow corn.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, with the powers vested in me by the Constitution, do hereby order the immediate implementation of the following measures in order to further strengthen and ensure the viability of the rice and corn industry. These will ease the tight financial and liquidity position of the industry.

1. The Minister of Finance shall extend for another two-year period beginning December 31, 1979, the suspension of the increase in taxes on the gross sales of rice and corn. cd

2. The Governor of the Central Bank shall increase the loan value of grains quedan financed under the grains quedan financing program of the National Grains Authority from 50% to 70%. The Central Bank, the DBP, the PNB, and NGA shall also find ways and means to provide millers and traders with initial working capital at the start to each harvest season.

3. The Development Bank of the Philippines and the Land Bank of the Philippines are hereby directed to set aside sufficient loanable funds for financing the improvement and/or replacement of old mills for new and efficient ones with minimum recovery rates of 62%.

4. The Philippine National Bank shall set aside P10 Million for loans to grains retailers duly affiliated with the Confederation of Filipino Rice and Corn Associations, Inc.

5. All new rice and corn mills shall be set up in areas chosen as sites for industrial purposes only as defined in the zonification program of the Ministry of Human Settlements. All existing rice and corn mills may remain in their present sites for as millers shall install adequate facilities for anti-pollution. acd

The following measures will cushion the increasing pressures of the fuel cost crunch.

1. The Ministry of Public Highways shall allow rice and corn haulers to load the equivalent of fourteen (14) tons net weight for six-wheeler trucks and twenty-five (25) tons net weight for ten-wheeler trucks.

2. The National Grains Authority shall make mandatory the use of steam boilers using rice husks as fuel in all new rice and corn mills to be installed. These new mills and existing ones that shall be converted to use steam boilers shall be granted financing at preferential terms by the DBP and the Land Bank.

This Letter of Instruction shall take effect immediately.

DONE in the City of Manila, this 14th day of June, in the year of Our Lord, Nineteen Hundred and Seventy-Nine.