7/29/2019 HB 1521

1/4

House Bill__ l_ _ 5 _ 2 _ 1 _

Republic of the Philippines

HOUSE OF REPRESENTATI VES

Quezon City, Metro Manila

FOURTEENTH CONGRESS

First regular session

Introduced by: HONORABLE DARLNENE R. ANTONINO-CUSTODIO

This bill seeks to extend the utilization period of the Agricultural Competitiveness

Enchancement Fund (ACEF) established under Republic Act No. 8178 from 2005 to2015, amending for the purpose the said Republic Act.

The commitment of the Philippines to international cooperation paved the way to

its becoming a signatory to the General Agreement on Tariffs and trade (GATT) and itsmembership in the World Trade Organization (WTO).

Under the Uruguay Round, we agreed to open our agricultural markets to otherWTO member-countries, promising, among others, a zero percent (0%) tariff rate on allagricultural products by 2004.

To fulfill this commitment, Congress passed Republic Act No. 8178 on March 28,1996 to among others-repeal seven (7) existing laws that either prohibited importationof agricultural products, or subjected such importation to stringent conditions. Thus,almost all agricultural products are now imported liberally into the country.

Aware that opening up the local market to agricultural imports would place our

farmers at a disadvantage, RA 8178 also provided for a gradual tariff quota scheme.

Under this scheme, the government has reduced the tariff rates for agricultural imports on

a yearly basis until it reaches 0% by the year 2004. This Tariff rate Quota (TRQ) schemeoperates by imposing a ceiling on the volume of specified agricultural imports.

Agricultural products imported within the ceiling enjoy a reduced tariff rate,compared to those imported in excess of the ceiling.

For instance, a total of 1,000 tons of beans are imported into the Philippines 300tons being the ceiling of these, 300 tons will enjoy a tariff rate of 35% while theremaining 700 tons will be subjected to a tariff of 80%.

This 35% rate is called the In-quota tariff. The 80% rate is the out-quota tariff.The ceiling imposed on the product is called the Minimum Access Volume (MA V).

But lowering the tariff rates for a certain volume of agricultural products also

means lowering their competitive prices. This places local farmers at a districtdisadvantage. Thus RA 8178 further attempted to provide a solution: funds generated by

7/29/2019 HB 1521

2/4

the in-quota tariffs would be pooled under the Agricultural CompetitivenessEnhancement Fund(ACEF).

According to official records, however, the in-quota duties of MAV tariffcollections of the Bureau of Customs, from 1996 to 1998, were not credited by theBureau of TreasurytotheACEF account, or Fund 183.Moreover, from1999to 2000, theBureau of Customs claims to havecollected an amount of only P250 Million out of anestimated collection target ofPl.73 Billion, based onthe actual MAV licenses issued bythe Departmentof Agriculture.

Congress was to have earmarked the ACEF funds for farm-to-market roads,irrigation facilities, and other projects, supposedly to cushionthe adverse impact on our

farmers of the availability of cheap agricultural imports. However, a subsequentAdministrative Order 39, issued in 1999, provided that funding for farmers' project besubjectedto thestringent requirementsof theACEF ExecutiveCommittee.

And yet, even if a project was approved by the Committee, funds werenot madereadily available, but subject to the tight schedule of the Department of Budget andmanagement (DBM).

As a result, utilization of the ACEF fund has been very low. Only P447 Millionpesos had been released thus far under the regular ACEF in 1999 alone. Customscollections amountedtoPl.3 Billion.

Thentoo, aprovision in RA 8178 limitstheACEF to a lifeof only nine(9) years.This means that therevenuecollections generatedfor theACEF account will revert to thegeneral Fund bytheyear 2005.

Thereis an urgent need, therefore, to extend theutilizationperiod of the ACEF toallow government to continue providing assistance that will enable farmers to survive,andperhapsprosper, under aliberalizedtraderegime.

Since low funds utilization defeats the very purpose for which the ACEF wasestablished, there is also an equally compelling need to assure that assistance from theACEF is mademoreaccessibletofarmersandthe agricultural sectoras awhole.

In view of the foregoing considerations, immediate approval of this bill IS,therefore, earnestly sought.

7/29/2019 HB 1521

3/4

Republic of the PhilippinesHOUSE OF REPRESENTATIVES

Quezon City

FOURTEENTH CONGRESSFirst Regular Session

HOUSr~~{L _1_5_2_1

Introduced by: HONORABLE DARLENE R. ANTONINO-CUSTODIO

AN ACTEXTENDING THE UTILIZATION PERIOD OF THE AGRICULTURALCOMPETITIVENESS ENHANCEMENT FUND, AMENDING FOR THE

PURPOSE REPUBLIC ACT NUMBERED EIGHTY -ONE HUNDREDS ANDSEVENTY -EIGHT, ENTITLED 4'AN ACT REPLACING QUANTITATIVE

IMPORT RESTRICTION ON AGRICULTURAL PRODUCTS, EXCEPT RICE,WITH TARIFFS, CREATING THE AGRICY ULTURAL COMPETITIVENESS

ENHANCEMENT FUND, AND FOR OTHER PURPOSES" AND FOR OTHER. PURPOSES.

Be it enacted by the Senate and the House of Representatives of the Philippines inCongress assembled

SECTION 1. Section 8 of Republic Act No. 8178, entitled "" AN ACTREPLACING QUANTITATIVE IMPORT RESTRICTION ON AGRICULTURALPRODUCTS, EXCEPT RICE, WITH TARIFFS, CREATING THE AGRICULTURALCOMPETITIVENSS ENHANCEMENT FUND, AND FOR OTHER PURPOSES" ishereby amended, to read as follows:

""Section 8. Agricultural Competitiveness Enhancement Fund. To

implement the policy enunciated in this Act, there is hereby created the

agricultural Competitiveness Enhancement Fund, hereinafter referred to as the

Fund. [ The proceeds of] THE FUND SHALL CONSIST OF ALL DUTIES

COLLECTED FROM importation of AGRICULTURAL PRODUCTS

UNDER THE minimum access volume (MAV) [ shall accrue to the GeneralFund and shall be deposited with the National Treasury] MECHANISM,

INCLUDING UNUSED BALANCE AND COLLECTIONS FROM

REPAY MENTS FROM L OAN BENEFICIARIES INCL UDING

INTERESTS, IF ANY. THE FUND SHALL BE AUTOMATICALLYCREDITED TO SPECIAL ACCOUNT 183 IN THE GENERAL FUND OF

THE NATIONAL TREASURY.

7/29/2019 HB 1521

4/4

The entire proceeds shall be set and earmarked by Congress for: irrigation,farm-to-market roads, post-harvest equipment and facilities, credit, research anddevelopment, other marketing infrastructure, provision of market information,retraining, extension services, M I CRO, SM AL L A ND M EDI UM SC AL E

ENTERPRISES (MSMSE) IN AGRICULTURE, AQUACULTURE AND

FISHERIES SECTORS; Y OUNG ENTERPRENEURS, OUT-OF-SCHOOLY OUTH, GRADUAT ES OF AGRI CUL TURE, FI SHERI ES, AND

REL ATED COURSES; AGRICUL TURE AND FI SHERY

COOPERATIVES ENGAGED IN ECONOMIC ENTERPRISES and otherforms of assistance and support to the agricultural sector.

The Committed of Agriculture and Food, Appropriations and Finance of

both Senate and the House of Representatives shall conduct a periodic review ofthe use of the Fund. The Fund shall [ have a life of nine (9) years] EXISTUNTIL THE YEAR 2015, after which all remaining balances shall revert to theGeneral Fund.

SEC.2. This Act shall take effect Fifteen (15) days after its publication in the

Official Gazette or in at least two (2) newspapers of general circulation.