WHEREAS, cottage industry development and promotion is the appropriate vehicle along the thrust of developing the countryside because of its high labor intensity, low investment requirements and adaptability to Philippine conditions owing to our abundant raw materials and superior craftsmanship;
WHEREAS, it is of strategic importance to further develop and vitalize the cottage industry sector to maintain the stability of our economy and to accelerate the pace of industrialization;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution, do hereby decree and order the following to be the revised charter of the National Cottage Industries Development Authority:
SECTION 1. Title. — This act shall be known as the Cottage Industries Development Decree of 1981.
SECTION 2. Declaration of Policy. — High employment levels, growth and diversification of exports, and countryside development are strategic aims of government in order to attain industrial stability and growth.
The State, realizing the vital importance and special significance of cottage industries towards improving the quality of life and spreading its benefits to the people, mandates mandated the National Cottage Industries Development Authority with the corporate mission to develop and promote cottage industries to its fun potential.
SECTION 3. Creation. — To carry out the above policy, a body corporate to be known as the NATIONAL COTTAGE INDUSTRIES DEVELOPMENT AUTHORITY, hereinafter referred to as the NACIDA, is hereby created and placed under the Ministry of Industry for policy, program and administrative supervision.
SECTION 4. General Powers — The National Cottage Industries Development Authority as an authority with corporate powers, is hereby authorized to do or undertake the following:
To make or enter into contract; to lease or own real or personal property; to sell or otherwise dispose of its real or personal property; to sue and be sued; to acquire and no Id assets of all types and kind resulting directly from operations authorized by this Decree or as are essential or incidental to the proper conduct of such operations; to accept donations or development aids to be used in furtherance of its objectives; to establish subsidiary corporations and/or other institutional mechanism deemed necessary by the Board of Directors to attain plan objective or program priorities under such scheme or design, as it may adopt in accordance with existing laws, rules and regulations; to make such expenditures to carry out the purposes and functions of the NACIDA; to prescribe such rules and regulations and other issuances as are necessary to carry out its functions vested on it by this Decree; to invest or make investments in any financial undertaking, public or otherwise, for the purpose of enhancing the interests of the cottage industries in general as may be deemed necessary by the Board, and all such earnings accruing therefrom shall be held in trust for the account of NACIDA.
SECTION 5. Functions. — The NACIDA shall perform the following functions and duties:
SECTION. 6. Board of Directors. — The NACIDA shall have a duly constituted Board of Directors which shall be the governing body that shall define and promulgate the necessary policies affecting the NACIDA and the cottage industry in general.
All members of the Board ox Directors shall be ex-officio members, except the representatives of the private sector, who shall be appointed by the President/Prime Minister of the Philippines for a term of four (4) years.
SECTION 7. Administration. — The Minister of Industry as Chairman of the NACIDA Board shall be the Chief Executive Officer of NACIDA with full powers to restructure, reorganize and manage NACIDA. The Chairman as Chief Executive Officer shall review, develop, supervise and direct a revitalized national cottage industries development program.
The administrator snail be the Chief Operating Officer shall report to and be responsible directly to the Chairman.
SECTION 8. Powers and Duties of the administrator. — Administrator shall have the following powers and duties:
SECTION 9. Regional Offices.— The NACIDA shall establish regional offices in accordance with the regional groupings of the Integrated Reorganization Plan. - Each of these regional offices to be established shall be headed by a Regional Manager and an Assistant Regional Manager.
SECTION 10. Cottage Industry — The term "Cottage Industry" shall mean a modest economic activity for profit using primarily indigenous raw materials in the production of various articles that generally involve craftsmanship, artistic skills and tradition of the country. Provided, however, that all cottage industries shall be owned and operated by Filipino citizens, or by corporations, partnerships, or cooperatives at least seventy-five percent (75%) of the capital investment of which shall be owned by Filipino citizens. Provided, further, that the total assets of which shell not exceed one hundred thousand pesos (100,000.00) at the time of registration with the NACIDA. Provided, finally, that the maximum total assets allowable for cottage industries for purposes of registration may be modified and/or increased accordingly by the NACIDA Board subject to the approval of the President of the .Republic of the Philippines.
For facility of implementation, coordination and statistical gathering cottage industries shall be classified as follows;
The Board of Directors shall determine and issue more specific guidelines on the classification and categorization of any other craft whose product lines are produced on the level of cottage industries for the purposes of registration, invalidation, and/or accreditation.
SECTION 11. Registration — All persons, corporations, partnerships, cooperatives rand associations engaged in the production or manufacture of cottage products may register with the NACIDA to avail of the benefits granted by this Decree.
For purposes of this Decree, “registration” shall mean recognition by government through inclusions in the official registry of persons, partnerships, cooperatives, corporations and other establishments engaged in the production or manufacture of cottage products to avail of incentives and/or benefits granted under Section 14 of this Decree.
SECTION 12. Revalidation — producers registered prior to this Decree shall be required to revalidate their privileges granted to registered cottage industry producers by subsequent and related laws within one (l) year from the effectivity date of this Decree, otherwise such firms shall be deemed as having ceased operating or no longer in existence to warrant their cancellation or deletion from the NACIDA Registry of Registered Producers.
SECTION 13. Accreditation — The Board of directors may adopt an accreditation system as it may deem appropriate to attest to the fulfillment of, or compliance with, certain standards or requirements set by the government in consultation with appropriate industry sectors to attain a more favored reputation or status on the basis of available and verified business performance.
SECTION 14. Incentives and Benefits — To accelerate the growth and development of cottage industries, the government may provide, among others, the following incentives and benefits to persons, firms or corporations registered with the NACIDA: tax privileges, promotion/marketing assistance, production, assistance, skills development and technology assistance, credit and loans assistance, equipment assistance, raw materials assistance, and such other incentives or benefits as may be provided for by subsequent laws.
SECTION 15. Tax Exemptions —The tax privileges mentioned above shall mean exemption from all taxes except specific and income taxes for a period of five (5) years from the date of registration of such cottage industries with the NACIDA. Provided, However, that no exemption from the percentage taxes shall be enjoyed for sales in excess of four hundred thousand pesos (P400,000.00) aggregate each year. Provided, finally, that this tax exemption, shall be withheld from any firm or entity which has availed of this incentive under a previous registration for the same activity in another name or another organizational set up.
SECTION 16. Tax-Free Importation — Subject to the last proviso of the preceding section, NACIDA, is authorized to approve the tax-free importation of tools, gadgets, machineries, or equipment not available in the local market and which shall De used exclusively for production purposes by the NACIDA registered entity.
SECTION 17. Withdrawal of Registration and Accreditation — The Board, after due notice, can withdraw registration and accreditation of a NACIDA. producer upon violation of this Decree, failure to maintain the quality of its products if there are any government standards set for such products and to comply with tile terms and conditions duly imposed by the Board for its registration, including submission of reports to NACIDA.
SECTION 18. Penal Provision — Any person, firm or corporation found violating Section 16 of this Decree shall, upon conviction by a court of competent jurisdiction, be punished by imprisonment not exceeding five years and/or a fine not exceeding five thousand pesos (P5,000.00). All aliens found violating this provision of the Decree shall, in addition to the aforementioned penalties, be subject to deportation.
SECTION 19 Incentive Pay — All officers and
personnel of the NACIDA shall be entitled to an incentive pay equivalent to one
month salary for every year of meritorious servi.ce rendered. Provided,
however, that an equivalent proportional fraction thereof shall be allowed
for all those who have rendered less than one year of meritorious
service.
SECTION 20. Memberships in Industry
associations — To facilitate coordination and consultation with the private
sector for planning and policy-formulation, the NACIDA shall encourage the
formation of cottage industry associations along sectoral lines as classified
under Section 10 of this Decree. The Board of Directors nay require, as
condition-precedent to registration or accreditation, membership in such
industry associations.
SECTION 21. Repealing Clause — All laws, Decree, Letters of instruction, Executive Orders, Directives and other Acts or parts thereof inconsistent herewith are hereby repealed or modified accordingly.
SECTION 22. Effectivity — This Act shall take effect upon approval.
Done in the City of Manila, this l5th day of January, in the year of Our Lord, nineteen hundred and eighty-one.
(Sgd.) FERDINAND E. MARCOS
President of the Philippines
By the President: (Sgd.) JUAN C. TUVERA Presidential Executive Assistant
Vol. 25, Vital Documents, Presidential Decree 1980-1981