WHEREAS, it
is the policy of the State to maximize the country's foreign exchange
earnings and conserve its foreign exchange resources;chanroblesvirtualawlibrary
WHEREAS, in implementation of the policy, the Government has adopted
various programs to encourage, promote, and assist the establishment of
commercial activities and industries geared towards the production of
goods and services, using indigenous raw materials and resources, which
are intended not only for the export market but also as substitutes for
essential goods and services imported into the country;chanroblesvirtualawlibrary
WHEREAS, in the line with the program, the government has declared the
establishment of a coco-chemical process plant in the Philippines as
one of its major industrial projects and directed the bank acquired for
the benefit of the coconut farmers of the Philippines under P.D. No.
755, acting as the Administrator of the Coconut Industry Investment
Fund ("CIIF"), to cause, as it did, the organization of United Coconut
Chemicals, Inc. ("UNICHEM"), a corporation owned and controlled by the
coconut farmers, which shall establish, operate and maintain in the
Philippines a process plant for the manufacture of chemicals consisting
initially of fatty acids, fatty alcohols and glycerine derived from
coconut oil ("coco-chemicals");chanroblesvirtualawlibrary
WHEREAS, the coco-chemicals to be produced by UNICHEM are direct
substitutes for chemicals derived from petroleum and natural gas
("petro-chemicals") which are utilized as raw materials feedstock for
the surfactant, the plasticizer, and other industries;chanroblesvirtualawlibrary
WHEREAS, the surfactant industry in the country, principally
manufacturers of soaps and detergents, presently utilize imported
petro-chemicals at a substantial foreign exchange expenditure, which
petro-chemicals, being non-biodegradable, pollute or lakes, rivers and
other bodies of water;chanroblesvirtualawlibrary
WHEREAS, it is the best interest of the State and for the public good
that the Government encourage, promote and assist the substitution of
coco-chemicals for petro-chemicals in the manufacture of soaps,
detergents and other consumer and industrial products;chanroblesvirtualawlibrary
WHEREAS, the greater and wiser use of coco-chemicals as a substitute
for petro-chemicals will induce the shift of the usage of coconut oil
from the edible market thereby minimizing, if not eliminating, the
violent fluctuation of the price of coconut oil as it competes in the
world market with other edible fats and oils.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, do hereby decree and order that:cralaw:red
Section 1. Declaration of Policy. — It is hereby
declared to be the policy of the State to establish, promote, and
assist the development of a coco-chemical industry in the country and
by way of implementing this policy, the Government has adopted, as one
of the major industrial projects of the country, the establishment and
operation of manufacturing facilities for the production of
coco-chemicals by the United Coconut Chemicals, Inc. ("UNICHEM") which
is owned and controlled by the coconut farmers of the
Philippines. chanroblesvirtualawlibrary
Section 2. Pioneer Enterprises. — Within the period
herein prescribed, enterprises established either by existing or new
companies which will utilize coco-chemicals as raw materials feedstock
in the manufacture, processing or production of goods, products, or
commodities are hereby declared pioneer enterprises in a preferred area
of investment and, upon due application with the Board of Investments
("BOI"), shall be granted all the benefits and incentives accorded to
such enterprises by the Omnibus Investments Code (P.D. No. 1789) and
other benefits and incentives as may hereafter be granted by law, rules
and regulations, on condition that they will continue to utilize
coco-chemicals as their raw material feedstock. To avail of the
benefits and incentives herein granted, the enterprise must be
registered with the BOI within ten (10) years from the effectivity of
this Decree, unless its is sooner determined by the BOI in the exercise
of its delegated powers that the particular area of investment herein
contemplated is adequately exploited.
Section 3. Investments by the Coconut Industry. — To
ensure that the country shall, within the shortest possible time, have
adequate manufacturing facilities for the production of consumer and
industrial goods wherein coco-chemicals constitute the principal raw
material or an ingredient as substitutes for petro-chemicals,
especially when private venture capital is unable or unwilling to make
the necessary investments, the bank acquired for the benefit of the
coconut farmers under P.D. No. 755, notwithstanding any law to the
contrary, is hereby authorized, by itself and/or through the Coconut
Industry Investment Fund (CIIF), UNICHEM, or the bank's affiliates and
subsidiaries, or other entities, to invest in enterprises and pilot our
experimental plants utilizing coco-chemicals as raw material feedstock
or ingredient, which enterprises shall be granted the same benefits and
incentives under Section 2 hereof. chanroblesvirtualawlibrary
Section 4. Foreign and Other Costs. — To induce and
facilitate the transfer of foreign technology required or necessary to
effect the substitution of petro-chemicals with coco-chemicals in the
manufacture of consumer and industrial products and minimize the costs
of coco-chemicals to consumers, the enterprises authorized to be
established under Section 3 hereof, including UNICHEM, are hereby
granted, in addition to the benefits that are granted to them under
Section 2 hereof and other laws, executive orders, rules and
regulations, the following exceptions and benefits for a period, unless
otherwise specified herein, of ten (10) years counted from the date
their respective registrations with the BOI: chanroblesvirtualawlibrary
(a) The fees and royalties paid to foreign persons or
entities for the supply of technology, know-how, services, materials,
and/or equipment for the construction, operation and administration of
the plants, including those for technical personnel, are hereby
declared exempt from any all assessable taxes, including but not
limited to contractor's and income taxes;chanroblesvirtualawlibrary
(b) All interest payable by such enterprises on their
foreign currency loans obtained from foreign banks, offshore banking
units, or foreign currency deposit units and local banks, as well as
commitment, management, and/or guarantee fees on such loans, are hereby
declared exempt from any and all assessable taxes including income
taxes and contractor's taxes; and
(c) Such enterprises are likewise hereby declared
exempt, for a period of ten (10) years from the commencement of their
commercial operations, from the payment of real property tax on their
respective land and plant machinery and equipment utilized for the
manufacture, or as a pilot or experimental plant for the production, of
coco-chemical and/or consumer and industrial products wherein
coco-chemicals constitute the raw material or is an ingredient in
substitution of petro-chemicals.
Section 5. Conditionally Prohibited Importation and
Use of Petro-Chemicals. — Upon certification to the BOI by the bank
acquired for the benefit of the coconut farmers under P.D. No. 755 that
UNICHEM, in accordance with its BOI certificate of registration, has
commenced commercial production of coco-chemicals which may utilized as
raw material feedstock by the surfactant industry, initially in the
manufacture of soaps and detergents, the importation and the use in the
Philippine detergents grade alcohols and their derivatives as may
hereafter be determined pursuant to Section 7 herein, are hereby
prohibited and shall be allowed only in the manner and in the instances
prescribed under Section 6 hereof.
Section 6. Manner of and Conditions for the
Importation of Petro-Chemicals. — To ensure an orderly and gradual
shift from the use of petro-chemicals to coco-chemicals and to
minimize, if not eliminate, illicit importations of petro-chemicals,
all importations of detergent grade alcohol and their derivatives, for
use in the manufacture and sale of detergents and soaps, and such other
petro-chemicals and their derivatives as may hereafter be determined
pursuant to Section 7 hereof, shall be made solely through and by
UNICHEM at its own expense, for resale at cost plus a reasonable return
to, and use by, manufacturers of detergents and soaps and other
industries that may hereafter be determined pursuant to Section 7
hereof, and only upon the occurrence and the duration of a shortage in
supply of coco-chemicals. chanroblesvirtualawlibrary
Section 7. Research in Other Usages of
Coco-Chemicals. — Pursuant to the provisions of Article III, Section 9,
of P.D. No. 1468, the bank acquired for the benefit of the coconut
farmers under P.D. No. 755 shall conduct, or cause to be conducted, the
appropriate researches and studies for the purpose of ascertaining the
order petro-chemicals and their derivatives which may be substituted
with coco-chemicals and their derivatives as raw materials feedstock or
ingredient. Upon submission of the results of such researches and
studies, the President of the Philippines may, by Executive Order,
include such other specific petro-chemicals and their derivatives in
the list of petro-chemicals the importation of which is banned and
regulated in accordance with the provisions hereof. chanroblesvirtualawlibrary
Section 8. Penalties. — Whenever any person or entity
violates any provisions of this Decree, or any rule or regulation
legally promulgated hereunder, the person or persons responsible for
such violation shall be punished by a fine of not more than P20,000.00
and imprisonment of the more than five (5) years, in addition to such
other penalties as may be provided by other laws. If the offender be a
corporation, partnership or juridical person, the penalty shall be
imposed on the officer or officers authorizing, permitting or
tolerating the violation. Any alien found guilty of any offense
hereunder shall, after having served his sentence, be immediately
deported and, in the case of a naturalized citizen, his certificate of
naturalization shall be cancelled. chanroblesvirtualawlibrary
Section 9. Effectivity. — This Decree shall take
effect immediately.
Done in the city of Manila,
this 18th day of May in the year of Our Lord, Nineteen Hundred
Eighty-Three.
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