TO:	Chairman Blas P. Ople Cottage Industry Development Council
	Minister Jaime C. Laya Budget Commission
	Executive Director Mario II. Reyes Cottage Industry Development Enterprises

WHEREAS, under Letter of Instructions No. 122, issued on September 35 1973, to the Chairman of the Cottage Industries Development Council, the Commissioner of the Budget and the Executive Director of Cottage Industries Development Enterprises, the sum of P5 Million was released for the stockpiling of critical raw materials of cottage industries which are to be sold to NACIDA registered cottage industries producers at nominal prices to ensure a steady and continued supply thereof for the operation of such cottage industries;

WHEREAS, the national program thrust is for the establishment of more market-oriented, labor intensive, rural-based enterprises, typified by cottage industries;

WHEREAS, the projected value of export in 1979, for cottage industries products, is P2.36 Billion, the raw materials component of which is estimated at P768 Million;

WHEREAS, of the estimated raw material value of P768 Million about 10% or P76 Million thereof which may be classified as critical, are traded by a limited number of indentors who could manipulate the supply and price of the items to the detriment of cottage industries producers;

WHEREAS, there is a need to intensify government support of enterprises engaged in cottage industries, particularly those which are expected to be established under the National Job Creation Program of the Ministry of Human Settlements, to insure their continued viability;

WHEREAS, this intensified government support for the cottage industry sector, calls for an expanded coverage of LOI 122 and for the augmentation of the funding for the purpose, in order to make the stockpiling effort adequate and substantial enough to make a meaningful impact on the industry, especially those established in depressed, as well as calamity-affected areas.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President and Prime Minister of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby direct:

1. The Chairman of the cottage Industry Development Council and the Executive Director of the Cottage Industry Development Enterprise, to include in the coverage of LOI 122, the procurement, by local purchase or importation, if not locally available, of critical raw materials of cottage industries, aid of selected tools, equipment, machineries and parts needed by cottage industries, as determined by the Administrator of the National Cottage Industries Development Authority, in consultation with the cottage industry sector particularly the Philippine Chamber of Handicraft Industries.
   
   Importations pursuant to LOI 122, as amended by this Letter of Instructions, shall be exempt from the payment of customs duties and all taxes, the provisions of existing laws to the contrary notwithstanding, including Section 23 of Presidential Decree No. 1177 and Presidential Decree No. 1352, as amended, provided, that such importations are not locally available in sufficient quantity, quality, and at competitive prices, as certified by the Board of Investments.
   
   
2. The Minister of the Budget, to release an initial amount of Fifteen Million Pesos (P15,000,000.00) to the Cottage Industry Development Enterprise, from the Special Activities Fund of the President, to augment the fund released under LOI 122, for buying and selling critical raw materials, tools, equipment, machineries and parts needed by cottage industries, and for expenses for transportation, warehousing, financing and other capital outlay, to carry out the objectives of Letter of Instructions No. 122, as amended by this Letter of Instructions, provided, that this fund and all incomes derived from the use of the same, shall constitute a revolving, fund for the purpose established herein, exempt from the provisions of Presidential Decree No, 711; provided further, that a portion of this fund, as determined by the Administrator of the National Cottage Industry Development Authority (NACIDA) in consultation with the cottage industry sector, particularly we Philippine Chamber of Cottage Industries, shall be made available for loans to NACIDA accredited producers for the Procurement of critical raw materials, tools, equipment, machineries and spare parts of cottage industries in support of Presidential Memorandum Circular No. 1059, according to Guidelines prescribed by the Central Bank of the Philippines.

The provisions of Letter of Instructions 122 inconsistent with the provisions of this Letter of Instructions are hereby correspondingly amended or superseded.

Done in the City of Manila, this day 8th of February, in the year of Our Lord, nineteen hundred and seventy-nine.