Selective Exportation of Logs and Implementation of a Wood Industry Rationalization Program

July 12, 1985

LETTER OF INSTRUCTIONS NO. 1475

PROVIDING FOR THE SELECTIVE EXPORTATION OF LOGS AND THE IMPLEMENTATION OF A WOOD INDUSTRY RATIONALIZATION PROGRAM

WHEREAS, log exports provide the wood industry with the needed revenue for their working capital requirements;

WHEREAS, an immediate ban on log exports may result in shut-downs not only of logging firms but wood processing plants as well;

WHEREAS, an immediate ban on log exports may result in unemployment and industry wide dislocations;

WHEREAS, there is a need to upgrade and re-tool the country's wood processing capabilities to make them competitive in the world markets;

WHEREAS, there is a need to formulate and adopt a wood industry rationalization program;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution and pursuant to Presidential Decree No. 865 do hereby order the following:

1. Log exports shall be allowed on a limited and selective basis for a period of twelve (12) months commencing upon the effectivity of this Letter of Instructions.

2. Only timber licensees with finished wood products exports and those whose log exports support, or are in line with, government-approved trade agreements shall be qualified.

3. An equal volume of logs for export will be allowed for every cubic meter of finished wood products actually exported during the immediately preceding year: Provided, That the aggregate log export shall not exceed 25% of the total allowable cut.

4. Qualified log exporters should have satisfactory performance in timber management, reforestation, and forest protection.

5. Whenever the export prices of logs fall to unreasonably low levels or whenever public interest so requires, the President may, upon the recommendation of the Minister of Natural Resources, cancel log exportation or reduce the maximum allowable proportion for log exports.

6. A wood industry rationalization program to include the following activities should be formulated and implemented; cd

a) a mill-by-mill evaluation of the wood industry's processing capabilities and requirements for upgrading and re-tooling;

b) a comprehensive evaluation of international markets for processed wood products, including assessment of the technical specifications required by the buyers;

c) formulation and adoption of a financing program to finance the working capital requirements and capital investments for upgrading and re-tooling of wood processing mills.

7. All provisions of other Letters of Instructions and issuances inconsistent herewith are hereby repealed, amended or modified accordingly.

8. This Letter of Instructions shall take effect immediately.

DONE in the City of Manila, this 12th day of July, in the year of Our Lord, Nineteen Hundred and Eighty-Five.