CREATING THE PHILIPPINE SUGAR COMMISSION

WHEREAS, the economic and social stability of the
Philippines depend in large measure upon the sustained growth and
development of the sugar industry;

WHEREAS, due to chronic imbalance in production, the sugar
industry is barely able to meet the requirements of the domestic and
United States export markets while foregoing entirely new opportunities
in the world market, notwithstanding the large investments made in new
milling facilities in recent years with government support;

WHEREAS, it has become necessary to organize a mechanism to
give sustained support to the sugar industry in all phases of its
operation and potentials, and moreover, to provide conditions needed for
its continued development and growth with the end in view of optimizing
its effectiveness as a factor for social and economic good; and

WHEREAS, our sugar limitation laws when enacted were based
on conditions existing in the years 1933 and 1935 and may no longer be
realistic and adequate to promote the development and stability of the
sugar industry;

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, and upon the
recommendation of the sugar planters, millers and traders of the
Philippines through their associations and cooperatives, do hereby
decree and order the creation of the Philippine Sugar Commission as
follows:

SECTION 1. Title of the Decree. — This Decree shall
be known as the Philippine Sugar Commission Decree.

SEC. 2. Declaration of Policy. — It shall be the
policy of the State to promote the integrated development and
stabilization of the sugar industry so that it can properly discharge
its economic and social responsibilities and contribute its share in the
development of the national economy.

SEC. 3. Philippine Sugar Commission. — In order to
carry out the foregoing policy, there is hereby created the Philippine
Sugar Commission hereinafter referred to as the Commission which shall
be organized within thirty (30) days after the issuance of this Decree.

The Commission shall be composed of one (1) Commissioner, who
shall serve as Chairman of the Commission and six (6) Associate
Commissioners.

The Chairman and all the members of the Commission
shall be appointed by the President of the Philippines. The members of
the Commission shall be Filipino citizens, with sufficient experience in
the sugar industry, and of proven honesty, integrity and recognized
competence.

The Chairman and members of the Commission shall hold
office for a term of four (4) years unless sooner removed for cause.

The Commissioner shall receive an annual compensation of fifty thousand
pesos (P50.000) and a commutable representation and transportation
allowance of one thousand pesos (1,000) pesos monthly. The Associate
Commissioners shall receive an annual compensation of forty thousand
pesos (P40,000) and a commutable representation and transportation
allowance of one thousand pesos (P1,000) pesos monthly.

The
Commission shall meet in regular session twice a month. It may be called
by the Chairman to a special session as the need arises.

SEC.
4. Powers and Functions. — The Commission shall have the
following powers and functions:

1. To establish policies pertaining to all phases of the sugar
   industry; and to inquire into other aspects of the sugar industry with a
   view to improving existing methods and systems;
2. To enter into contracts, transactions, or undertakings of
   whatever nature which are necessary or incidental to its functions and
   objectives with any natural or juridical person and with any foreign
   government, private corporations, partnerships, institutions, or private
   individuals;
3. To levy and collect charges, fees and contributions to
   finance its operation, for social amelioration of the workers in the
   industry, and for such other purposes as the Commission may determine.
   The amount of the fees, charges and contributions shall be subject to
   approval by the President;
4. To act as the single buying and selling agency of
   sugar on the quedan-permit level, in order to promote the
   effective merchandising and distribution of sugar;
5. To determine the floor-ceiling price of sugar which
   will insure the planters, millers, traders, wholesalers and retailers a
   fair return on their investments: Provided, That such
   floor-ceiling price of sugar for any crop year shall be the total
   anticipated cost of production per picul of sugar as determined by the
   Commission plus a corresponding reasonable margin of profit set by the
   Price Control Council or any other government agency authorized to
   regulate prices of commodities and services after taking into
   consideration the effects of devaluation and other economic factors
   affecting production, processing, marketing, transportation and other
   related expenses including the minimum wage for agricultural and
   industrial workers: Provided, further, That the floor-ceiling
   price established by the Commission shall be adjusted in direct relation
   to significant changes in the cost of production as determined by the
   Commission and the Consumers Price Index prepared by the Central Bank of
   the Philippines;
6. To promulgate rules and regulations to carry into effect the
   provisions of this Decree and impose penalties for the violation
   thereof;
7. To assume control and/or supervision of any sugar mill
   or refinery that has failed to meet its financial and other contracted
   obligations for two years or has become inefficient in its operation;
8. To organize cooperatives of sugar planters throughout
   the Philippines; and
9. To perform such other functions as are necessary and
   incidental to its purposes and objectives.

The Commission shall submit to the President of the Philippines
periodic reports of its survey, studies and investigations together with
its recommendations, for appropriate action.

SEC. 5. Chief
Executive Officer. — The Chairman of the Commission shall be its
Chief Executive Officer. The Chairman shall, on behalf of the
Commission, have the direction and control of the business of the
Commission.

Among others, as Executive Officer, the Chairman
shall have the following powers and

1. To prepare an organizational plan of the office and plantilla
   of personnel subject to the approval of the Commission;
2. To direct and manage the affairs and business of the
   Commission subject to its supervision and control;
3. To appoint necessary personnel and fix their salaries,
   which shall be exempt from the provisions of laws, rules and regulations
   on wage and position classification, except clerical and janitorial
   services, with the approval of the Commission.

In case of absence or temporary incapacity of the Chairman, the
Chairman shall designate from among the Commissioners an acting
Chairman.

SEC. 6. There shall be a Social Welfare Office
under the Office of the Chairman.

SEC. 7. Capitalization, Special Fund of the
Commission, Development and Stabilization Fund. — There is hereby
established a fund for the Commission for the purpose of financing the
growth and development of the sugar industry and all its components,
stabilization of the domestic market including the foreign market to be
administered in trust by the Commission and deposited in the Philippine
National Bank derived in the manner herein below cited from the
following sources:

1. Stabilization fund shall be collected as provided for in
   the various provisions of this Decree.
2. Stabilization fees shall be collected from planters
   and millers in the amount of two pesos (P2.00) for every picul produced
   and milled for a period of five (5) years from the approval of this
   Decree and one peso (P1.00) for every picul produced and milled every
   year thereafter: Provided, That fifty centavos (0.50) per picul
   of the amount levied on planters, millers and traders under Section 4
   (c) of this Decree will be used for the payment of salaries and wages of
   personnel, fringe benefits and allowances of officers and employees for
   the purpose of accomplishing the efficient performance of the duties of
   the Commission: Provided, further, That said amount shall
   constitute a lien on the sugar quedan and/or warehouse receipts
   and shall be paid immediately by the planters and mill companies, sugar
   centrals and refineries to the Commission.

SEC. 8. Audit Personnel. — The Chairman, Commission
on Audit, shall appoint his representative to the Commission and the
necessary personnel to assist him. The salaries of the auditor and his
personnel shall be determined and paid by the Commission. The affairs of
the Commission shall be audited in accordance with law and pertinent
rules and regulations. A report of audit for each fiscal year shall be
submitted by the auditor to the Chairman, Commission on Audit, to the
Commission and to the President of the Philippines.

SEC. 9. Financing. — Until otherwise provided,
the Commission shall continue to receive the proceeds of revenues and
other impositions as are now granted by the law to the Philippine Sugar
Institute and the Sugar Quota Administration.

SEC. 10. Transitory Provisions. — The Philippine
Sugar Institute and the Sugar Quota Administration are hereby abolished
and absorbed effective upon the organization of the Commission and all
their assets, liabilities and records shall be transferred to the
Commission. The Commission may retain the personnel of said agencies as
it may deem necessary. Those of the personnel who may not be retained
shall be entitled to retirement benefits, otherwise they shall be
granted gratuity to be determined by the Commission.

SEC. 11. Miscellaneous Provision. — All laws or
parts thereof inconsistent with the provisions of this Decree are hereby
repealed or modified accordingly.

SEC. 12. Effectivity. — This Decree shall take
effect immediately.

Done in the City of Manila, this 2nd day of February, in the
year of Our Lord, nineteen hundred and seventy-four.