WHEREAS, in the interest of optimizing benefits for the sugar produces, there has been adopted a new policy of free enterprise trading for the sugar industry;

WHEREAS, the sugar industry, in view of depressed world prices and severe cutbacks in credits, has been reeling from the effects of adverse conditions affecting the welfare of many Filipinos in many parts of the country;

WHEREAS, the current crisis in the sugar industry amounts to a grave emergency which affects the stability of the nation and requires immediate action;

WHEREAS, the issuance of this decree is an essential and necessary component of the national economic recovery program formulated to meet and overcome the emergency;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the power vested in me by the Constitution, do hereby order and decree:

SECTION 1. Second paragraph of Section 2 of Presidential Decree No. 1971, is hereby amended to read as follows:

"X X X X X X X X X

“The Commission shall be composed of a Chairman and twelve (12) Commissioners. The Minister of Trade and Industry, Minister of Agriculture and Food, Governor of the Central Bank, Minister of Labor and Employment, Minister of Finance, Director-General of National Economic and Development Authority and Director-General of the National Science and Technology Authority, or their duly designated representatives, shall be ex-officio members of the Commission. The other six Commissioners, who shall be Filipino citizens, shall be the elected representatives of the sugar producers; Provided, however, That four (4) of the six Commissioners shall be elected by the planters and the other two (2) shall be elected by the millers; Provided, further, that the four representatives of the planters shall be elected from among themselves through an election by the various planters associations, and the two representatives of the millers shall likewise be elected from among themselves through an election by the individual milling companies which were operating during the crop year 1983-1984; Provided, finally, That the Chairman of the Commission shall be elected by all the Commissioners from among the six elective Commissioners.''

SEC. 2. Sub-section (d) of Section 3 of Presidential Decree No. 1971, is hereby amended to read as follows:

"X X X X X X X X X

"(d) To cause the organization of a marketing agency that shall be solely responsible for the export marketing of sugar and shall also be engaged in the domestic traders of sugar together with the other private sector marketing/trading companies with the objective of maintaining the government-approved liquidation price for the benefit of all planters and millers."

SEC. 3. Section 6 of Presidential Decree No. 1971, is hereby amended to read as follows:

        SEC. 6. In furtherance of the purposes and objectives of this decree, the Commission shall cause the phasing out of the National Sugar Trading Corporation (NASUTRA) as soon as possible but not later than December 31, 1985. Further, the Commission shall cause the organization of a private corporation to be called the Philippine Sugar Marketing Corporation (PHILSUMA) as soon as possible but not later than December 31, 1985. PHILSUMA will be the sole marketing agency for sugar exports and will, in addition, engage in domestic trading of sugar on a nonexclusive basis. PHILSUMA will be offered for subscription to sugar producers (planters and millers) in proportion to their actual production.''

SEC. 4. In order to avoid conflicts of interest, no sugar trader or miller may serve simultaneously as a Commissioner of PHILSUCOM and as a Director of PHILSUMA.

SEC. 5. Since there are non-Filipino sugar producers who will be qualified to own shares in PHILSUMA, and in order to permit PHILSUMA to fully engage in trading in the domestic market, PHILSUMA is hereby excluded from the purview of Republic Act No. 1180, as amended by Presidential Decree No. 714, entitled "An Act to Regulate the Retail Business."

DONE in the City of Manila, this 4th day of October, in the year of Our Lord, nineteen hundred and eighty-five.