R.A. 3470

REPUBLIC ACT No. 3470

AN ACT CREATING THE NATIONAL COTTAGE INDUSTRIES DEVELOPMENT AUTHORITY (NACIDA) UNDER THE DEPARTMENT OF COMMERCE AND INDUSTRY, PRESCRIBING ITS DUTIES, POWERS AND FUNCTIONS, AND APPROPRIATING FUNDS THEREFORE.

Section 1. Within thirty days after the approval of this Act, the President of the Philippines shall create a board known as the National Cottage Industries Development Authority, hereinafter referred to as the Board, under the Department of Commerce and Industry, which shall be composed of a chairman and four members, one of whom shall be the Chief of the Division of Home Industries of the Bureau of Public Schools: Provided, That no person appointed to this Board shall simultaneously serve as director of any government-owned or controlled corporation: Provided, further, That no person who is a candidate for a public elective office at the time of his appointment or was such candidate at the general or special elections immediately preceding the same shall be eligible for appointment as administrator, deputy administrator, member of the board of directors or director of regional institutes: Provided, further, That one of the members of the Board must come from the minority party to be nominated by the president of the said party. The chairman and members of the Board who shall be appointed by the President of the Philippines, with the consent of the Commission on Appointments, shall hold office for a term of six years unless sooner removed or otherwise separated from the service of causes provided by law, in which case a successor may be appointed for the unexpired term. The chairman and members of the Board shall be entitled to a per diem of twenty-five pesos for each session actually attended by them: Provided, however, That in no case shall the regular or special sessions exceed ten sessions monthly but under no circumstance shall a member receive more than five hundred pesos a month including privileges, allowances and expenses. The President of the Philippines shall appoint the Administrator of the Board with a compensation of fifteen thousand pesos per annum. There shall also be a Deputy Administrator to be appointed by the President with a compensation of twelve thousand pesos per annum. The other officers and personnel of the Board shall be appointed and their compensation fixed by the Board in accordance with the Civil Service Law and Rules and Salary Law.

Section 2. The National Cottage Industries Development Authority, shall perform the following duties:

Section 3. General Powers. The National Cottage Industries Development Authority is hereby authorized to make contracts; to lease or own real and personal property, and to sell or otherwise dispose of the same; to sue or be sued; to prescribe such rules and regulations as are necessary to carry out the functions vested it by this Act; to make such expenditure to carry out the purposes and functions of the Board; and to acquire and hold such assets resulting directly from operation authorized by the provisions of this Act, or as are essential or incidental to the proper conduct of such operations. The rules and regulations issued by the Board shall take effect fifteen days after their publication in a newspaper of general circulation in the Philippines.

Section 4. Powers and duties of the Board of Directors. The Board of Directors shall have the following powers and duties:

Section 5. Managing Head. The Head of the Technical Office of the Board shall be known as Administrator who, together with the Deputy Administrator, shall be appointed by the President with the consent of the Commission on Appointments.

Section 6. Powers and Duties of the Administrator. The Administrator shall have the following powers and duties:

Section 7. Regional Institutes. There shall be at least nine institutes suitably located in Northern Luzon, Central Luzon, Tagalog Region, Bicol Region, Western Visayas, Central Visayas, Eastern Visayas, Western Mindanao and Eastern Mindanao, which will be charged with the conduct of research, the determination of which cottage industry products shall be produced in specified regions or localities in a commercial manner, the standardization of products and such other functions as the Secretary of Commerce and Industry may fix in relation to the promotion of cottage industries.

Each of these institutes will be headed by a Director who will likewise be appointed by the President upon the recommendation of the Board with compensation of six thousand pesos per annum.

Section 8. Funds. The sum of four million pesos as initial fund for the National Cottage Industries Development Authority is hereby appropriated, out of any funds in the National Treasury not otherwise appropriated. Hereafter, the necessary amount to carry out the purposes of this Act shall be included in the annual General Appropriation Acts.

Section 9. Within one year after the organization of the National Cottage Industries Development Authority and from time to time thereafter, it shall furnish the Bureau of Supply with a list and samples of items produced by cottage industries and thereafter the Bureau of Supply shall give priority in the procurement of these cottage products for government use.

Section 10. The Development Bank of the Philippines shall allocate an amount of fifty million pesos of its available funds for loans to cottage industries under its program of loan assistance to industries: Provided, That a guaranty of mortgage or pledge on cottage industries products shall be considered sufficient in granting said loans. Likewise, the Philippine National Bank shall allocate an amount of fifty million pesos of its available fund for loans to cottage industries under the terms and conditions similar to that of the Development Bank of the Philippines. The loans to be granted under this section shall bear interest not exceeding four per cent annually. Real estate which has no Torrens Title May be accepted as security of the loans.

Section 11. Definition. The term "cottage industry" as used in this Act shall mean an economic activity in a small scale which is carried on mainly in the homes or in other places for profit and which is mainly done with the help of the members of the family. It shall include the following: (1) fiber crafts such as making of abaca ropes and twines, buntal fiber extracting and buri leaf braiding: (2) woodcraft such as making of wooden shoes, wooden fans, walking sticks (canes) and wood carvings; (3) hat weaving such as Calasiao, buri, rafia, buntal and bamboo hats, salakots and helmets; (4) mat weaving such as door, sleeping, buri, pandan, bailan and sabutan mats; (5) metal craft such as making of jewelries, knives, boloes, scissors, razors, silverwares, and brassworks; (6) ceramics such as making of potteries, hollow blocks, tiles, firebricks, clay stoves and other ceramic products; (7) shall craft such as making of sea shell buttons and coconut shell products; (8) bamboo and rattan craft such as making of hammocks, basketry, making of sawali and other bamboo and rattan furniture and articles; (9) small agricultural hand tools such as plow points; (10) toy craft such as making of dolls and toys; (11) embroidery industries; (12) needle craft (including knitting and crocheting); (13) loom weaving such as making of fish nets, making of mosquito nets, weaving of Ilocano cloth, Igorot weaving, pina "barong Filipino" jusi and sinamay; (14) machine parts manufacture such as wheels and stone mortars; (15) poultry including duck raising and "balut" making; (16) piggery; (17) home cigar making; (18) food preservation and canning, including the making of vinegar wine, "bagoong", "mazapan" pili, "tostado compitado" de pili, "bucayo", (19) small mining operations; (20) other related crafts such as making of broom, nito and buri bags, "karagomoy" bags, bead making, guitar and other musical instruments; and (21) such other industries done in the home with the aid of electrical gadgets and/or by hand manipulation. The cottage industries shall be owned and operated by Filipino citizens, or if a corporation, partnership or cooperative, at least seventy-five per cent of its capital and its stockholders and all members of its Board of Directors shall be Filipino citizens.

The term "cottage products" shall mean products produced by cottage industries and shall be labeled as "Cottage Products Made in the Philippines."

Section 12. Any person, corporation, partnership, or association who desires to avail of the benefits and assistance under this Act may register with the Board, and any such registered person or firm who fails to comply with the rules and regulations issued by the Board shall not be entitled to the assistance and benefits of this law, including but not limited to those provided in Section ten of this Act.

Section 13. Notwithstanding any provisions of law to the contrary, the export of any local raw materials which may be needed for the promotional of cottage industries herein provided shall be prohibited as long as local demands therefor have not yet been satisfied.

Section 14. Producers and Marketing Cooperatives. The Board shall stimulate the organization and establishment of producers and marketing cooperatives in coordination with the activities of the Cooperatives Administration Office and train and develop a competent management pool for the operation of producers and marketing cooperatives and cottage industries.

Section 15. The Reparations Commission shall give priority allocation for capital goods and fields of studies intended for cottage industry projects certified by the Board.

Section 16. The production, manufacture and sale of cottage products shall be exempt from all taxes for a period of five years from the date of registration of the person or firm engaged in the production or manufacture of cottage products with the Board.

Section 17. Any person who utilizes or abstains from the utilization of any funds borrowed under the provisions of this Act for any purpose or purposes other than those applied for in their loans shall be punished by imprisonment of one year and a fine of two thousand pesos.

Section 18. Repealing clause. All Acts, executive orders, administrative orders, proclamations, rules and regulations, or parts thereof, inconsistent with any of the provisions of this Act are repealed or modified accordingly.

Section 19. This Act shall take effect upon its approval.

Approved: June 16, 1962.