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Pursuant to Sugar Order No. 1, Series of 2003-2004, and for the information and guidance of eligible food processors/exporters, the following guidelines concerning the allocation of "B-1" sugar for Crop Year 2003-2004 are hereby promulgated:

I. Submission to SRA of "B-1" Quedan-Permits

1. All sugar mills shall submit weekly to the SRA the photocopies of "B-1" quedan-permits issued by them in a consolidated form for every planters' association/cooperative (mills as assignees) transmitted directly to the Production Control and Regulation Office (PCRO), SRA, Diliman, Quezon City (Fax Nos. 926-4337/927-0928) not later than 12 noon of Tuesday after the week-end cut-off.

II. Dissemination of the Holders of the "B-1" Quedan-Permits to Philfoodex

1. The SRA-PCRO shall generate every week the following:
   
   a. List of "B-1" quedan-permits with their numbers and sugar production of a given week-ending
   b. List of "B-1" sugar stock-on-hand (sugar balance) as of a given week-ending
   
   
2. The foregoing information shall be generated by mill companies (mills share and planters share)
3. The aforementioned list shall be made available every Wednesday to PHILFOODEX

III. Criteria for Allocation to be Prepared by Philfoodex and submitted to SRA

1. The PHILFOODEX shall prepare and submit to the SRA for approval the allocation criteria of "B-1" sugar for eligible food processors/exporters.
2. The allocation shall take into consideration all factors deemed by PHILFOODEX to be relevant which shall include the weekly or monthly volume of sugar required by each eligible allocatee, including the business location of such allocatee.
3. No change in the allocation criteria shall take effect until change is submitted to and approved by the SRA.

IV. Eligible for Allocation of the "B-1" Sugar

1. Only small and medium-sized enterprises principally engaged in the business of processing sugar-based food products for export shall be eligible for this grant.
2. All interested parties who are non-member of the PHILFOODEX shall inform the SRA in writing about their intention to participate in this "B-1" program on or before 31 October 2003, after which the SRA shall endorse to PHILFOODEX, for information, the list of interested processors/exporters.
3. The PHILFOODEX shall furnish the SRA the list of qualified processors/exporters so that the SRA shall advise the same of the status of their applications for "B-1" allocation.

V. Allocation of Available "B-1" Sugar to Eligible Food Processors/Exporters.

1. The PHILFOODEX shall be responsible for applying and implementing the approved allocation criteria.
2. Every Wednesday, the SRA shall inform PHILFOODEX about the details of "B-1" sugar production during the preceding week and the corresponding quantity available for allocation.

VI. Payment for and Withdrawal of "B-1" Sugar

1. The SRA shall provide the PHILFOODEX a list of all operating sugar mills and their corresponding bank savings account numbers.
   
   
2. The "B-1" quedan-permits (planters' and mill's shares) shall be subject to payment within nine (9) weeks (63 days) from date of production at a liquidation price of P700.00/LKg.-Bag pursuant to Section 3 of sugar Order No. 2, Series of 2002-2003.
   
   
3. Using as basis the available "B-1" quedans, as provided by the SRA to PHILFOODEX every Wednesday, PHILFOODEX shall remit payment of said quedan to the mills through the online banking system. The mill shall remit payment of the planters' "B-1", through their respective associations, within thirty (30) days from the date of the PHILFOODEX remittance.
   
   
4. Upon presentation to SRA-PCRO by PHILFOODEX of proof of payment of the "B-1" quedans, the SRA shall issue the Letter Authority addressed to the concerned mill authorizing the withdrawal of certain volume of "B-1" sugar corresponding to the amount paid for it.
   
   The Sugar Production Control and Regulation Officer (SPCRO) assigned thereat shall be furnished with the said Letter Authority.
   
   
5. Only authorized PHILFOODEX personnel shall be allowed to withdraw the "B-1" sugar upon presentation to the mill of the Letter Authority to withdraw.
   
   The SPCRO assigned thereat, after withdrawal, shall cause the stamping of the covering "B-1" quedans as "served".
   
   
6. In case PHILFOODEX shall not withdraw the "B-1" sugar from the mill and instead have it swapped with a "B" or Domestic sugar, PHILFOODEX shall demand/claim from the mill the "B-1" quedans already paid by them.

VII. Reporting of the Distribution of the "B-1" sugar and Maturing "B-1" Quedan-Permits

The PHILFOODEX shall report at the end of every month to the SRA the distribution of the "B-1" sugar among the Processors/Exporters with their corresponding volume of sugar.

The SRA-PCRO shall generate from these monthly reports a consolidated report on the distribution of the "B-1" sugar, by Processors/Exporters with their volume of sugar received as of a given date.

The SRA shall provide the planters' association with the list of maturing "B-1" or quedan-permits due for conversion every Wednesday through the fastest available means.

VIII. Swapping of the "B-1" Sugar into "B" or Domestic Sugar

In order to facilitate the transport of the "B-1" sugar (to achieve the objective of making available "B-1" sugar to eligible food processors for export) to where it will be used (or refined), the "B-1" sugar shall be allowed swapping with the "B" or Domestic sugar pursuant to Section 4 of Sugar Order No. 2, Series of 2003-2004, said swapping shall be subject to the requirements of Circular Letter No. 31, Series of 1997-1998.

The swapping fee of P1.50/LKg. - Bag pursuant to General Administrative Order No. 1, series of 2003-2003, is hereby waived for the crop year 2003-2004.

IX. Verification and Surcharging of the "B-1" Quedan-Permits into "B"

If PHILFOODEX fails to pay for the "B-1" within nine (9) weeks (63 days) from date of production, the subject "B-1" shall be eligible for reclassification into "B" or domestic sugar pursuant to Section 2 of sugar Order No. 3, Series of 2003-2004. The subject "B-1" quedan-permits shall be applied for sucharging into "B" sugar with the PCRO, SRA, Quezon City and shall be verified from the masterlist of "B-1" quedan-permits to determine whether subject "B-1" quedan permits have been previously submitted to the SRA in the form of photocopies.

If the said "B-1" quedan-permits are found to be in the masterlist of "B-1" quedan-permits and have already matured, the said quedan-permits shall be surcharged into "B" or domestic sugar. Otherwise it shall remain as "B-1" sugar, pursuant also, to said Sugar Order No. 3.

A reclassification fee of P1.20/LKg. Shall be paid to SRA pursuant to General Administrative Order No. 2, Series of 1999-2000.

X. Letter Authority

After the "B-1" quedan-permits have been surcharged into "B" or Domestic sugar, the SRA shall issue:

a) Letter-Authority - addressed to the mill (copy furnished the SRA SPCRO assigned thereat) authorizing the release of the sugar covered by the surcharged/reclassified "B-1" quedans to individual planters' association/cooperative (which includes the unaffiliated planters).

The concerned planter association/cooperative shall be furnished with a copy of the Letter-Authority.

XI. This Circular shall take effect immediately.

XII. Provisions of Sugar Orders, Circular Letters, rules and regulations inconsistent with or contrary to this Circular Letter are hereby amended, modified or revoked.

Adopted: 01 Sept. 2003

(SGD.) JAMES C. LEDESMA
Administrator