WHEREAS, since the Palayan ng Bayan was created on August 2, 1973 under Presidential Decree No. 262 as a project of the Office of the President and the Provincial Governors, involving the development and use of virgin public lands primarily for rice and secondarily for corn and other selected foodcrops, it has successfully contributed to increased production of rice and other foodstuffs, injected substantial revenue into provincial economies, provided additional employment opportunities, and has served effectively as instrument of human settlements; and

WHEREAS, the expansion of Palayan ng Bayan integrated projects has enhanced countryside development, there is now urgent need to reorganize and rename it as œPagkain ng Bayan  to include the production as well as the primary processing of all foodstuffs (pagkain);

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines, by virtue of the authority granted in me by the Constitution, do hereby reorganize Palayan ng Bayan as follows:

1. In place and instead of Palayan ng Bayan, the same is hereby changed and converted to Pagkain ng Bayan as a continuing project of the Office of the President and the Provincial Governors as provided for in Presidential Decree No. 262, to cover in its expansion the production and primary processing of all kinds of foodstuffs (pagkain) contemplated originally in Palayan ng Bayan, as well as other food products.

2. All assets and liabilities, organization and personnel of the Palayan ng Bayan are hereby transferred to Pagkain ng Bayan.

3. City Mayors are hereby allowed to participate in the Pagkain ng Bayan program in the same way as Provincial Governors have been authorized by Presidential Decree No. 262.

4. The maximum loan per hectare for the development and cultivation of raw lands, and loans for other activities related to the attainment of the objectives of Pagkain ng Bayan, shall be determined by the National Advisory Council, depending on project requirements.

5. Crop loans and operational loans shall not exceed one year while loans for investment and capital requirements may be granted for more than one year subject to the approval of the National Advisory Council.

6. The National Advisory Council shall determine the interest rates and charges on the kinds of loans to be granted, subject to existing rates and charges authorized by the Central Bank for such loans.

7. The Minister of Finance is hereby authorized and directed to issue and sell interest-bearing bonds, debentures, or certificates of indebtedness up to P200 million to provide the funding of the expanded Pagkain ng Bayan program.

8. In case the province/city shall fail/default in loan repayments, the Minister of Finance, upon the request of Pagkain ng Bayan, shall withhold a certain part of the revenues due to the province/city and apply the same as payment of its obligation with the Pagkain ng Bayan, without prejudice to the rights of Pagkain ng Bayan to enforce the personal guarantee of the Provincial Governor/City Mayor.

9. The use; cultivation of idle private lands by the Provincial Governors/City Mayors may be authorized by the National Advisory Council for Pagkain ng Bayan projects on a voluntary lease contract with the private owners, subject to restrictions to be outlined by the Council.

10. Leasing of Pagkain ng Bayan areas or a portion thereof by the provincial/city governments to private sectors shall not be allowed, and any lease contract or similar agreement entered into by the Provincial Governor/City Mayor in violation of this section shall be null and void ab initio.

11. All provisions of the law, presidential decrees, executive orders, letters of instructions, rules and regulations inconsistent with this Executive Order are hereby repealed and/or modified accordingly.

This Executive Order shall take effect immediately.

Done in the City of Manila, this 11th day of September, in the year of Our Lord, nineteen hundred and eighty.


By the President:

(SGD.) JOAQUIN T. VENUS, JR.
Presidential Assistant