Establishing The Cotton Research and Development Institute

Case Overview and Summary

Summary of Presidential Decree No. 1432

Establishment of the Cotton Research and Development Institute
• Section 1: Establishes the Cotton Research and Development Institute attached to the Don Mariano Marcos State University, Batac Ilocos Norte, to strengthen and accelerate efforts in cotton research and development to support the national objective of attaining self-sufficiency in cotton.

Powers and Functions of the Institute
• Section 2: The Institute shall have the following powers and functions:
- Design, encourage, supervise, fund and undertake research and development programs in cotton consistent with the policies of the Philippine Cotton Corporation and the requirements of the cotton-growing industry. (Section 2a)
- Monitor problems encountered by cotton farmers and processors in production, post-harvest processing, storage and marketing. (Section 2b)
- Set and prescribe directions for cotton research in the Philippines and review and integrate cotton research studies and projects for improving cotton varieties. (Section 2c)
- Assist in the training requirements of cotton production and industry manpower development, and undertake related programs. (Section 2d)
- Assist in the multiplication and storage of quality seed and the dissemination of improved cotton varieties. (Section 2e)
- Develop up-to-date information on cotton production and post-harvest technology. (Section 2f)
- Hire, employ and dismiss personnel and enter into contracts or agreements with them. (Section 2g)
- Purchase, own, hold, lease and dispose of all types of property, real or chattel, essential for carrying out its functions. (Section 2h)
- Enter into contracts with any agency, entity or person in the pursuit of its objectives. (Section 2i)
- Delegate selected privileges, powers or authority as allowed by law to corporations, cooperatives, associations, or individuals, to assist the Institute in carrying out its functions. (Section 2j)
- Undertake all other activities required for, and related to, research and development in the cotton industry. (Section 2k)

Advisory Board and Governance
• Section 3: Policies, plans and programs of the Institute shall be subject to the approval of an Advisory Board, and shall be reviewed annually by the Board of Trustees of the Don Mariano State University.
- The Advisory Board shall be composed of:
- The Secretary of Agriculture (Chairman)
- The President of the Philippine Cotton Corporation
- The President of the Don Mariano Marcos State University
- The Director of the Cotton Research and Development Institute
- Three others representing the research and development sectors, appointed by the President of the Philippines.

Organizational Structure and Personnel
• Section 4: The Advisory Board is empowered to determine and create an organizational structure for the Institute, including the number, position and salaries of its officers and employees.
- The Board shall appoint all officers and employees of the Institute, establish a compensation scheme including allowances, honoraria and other benefits, and other conditions of employment.
- The Institute shall be headed by an Executive Director appointed by the Board, assisted by Deputy Directors as required.
- By mutual agreement, existing employees of the Philippine Cotton Corporation involved in research and development activities may be transferred to the Institute.
- Technical and managerial employees of the Institute shall be selected solely on the basis of merit and fitness, and are not subject to the regulation of the Office of Compensation and Position Classification.

Engagement of External Personnel
• Section 5: The Institute may obtain the services of scholars, scientists and technical personnel from government agencies, the private sector, or from abroad, and pay them honoraria and allowances, exempted from existing provisions on honoraria and allowances contained in LOI 565.

Facilities, Equipment and Tax Exemptions
• Section 6: The Institute is authorized to construct buildings and other facilities, lease and buy land, and purchase equipment locally and abroad as necessary.
- The Institute shall be exempt from all forms of taxes and import duties on any materials, equipment, articles, goods, and services imported from abroad when not available locally on favorable terms.

Auditing and Accounting Rules
• Section 7: Expenditure and disbursements made by the Institute shall be subject to special auditing and accounting rules and regulations suited to the requirements of research and development, to be formulated by the Commission on Audit and the Institute within four (4) months of the effectivity of this Decree.

Funding and Appropriations
• Section 8: An amount of Five Million Pesos (P5,000,000) is appropriated from the National Treasury, with an amount of at least equal to this to be likewise appropriated each year for a period of three years, and such other amounts as may be required thereafter.
- The Philippine Cotton Corporation is authorized to transfer funds from the Special Cotton Financing Fund to the Institute in the amount of Five Million Pesos (P5,000,000) to supplement the initial year's funding.
- Funds of the Institute shall be used only for purposes approved by its Board.

Loans and Financing
• Section 9: The Institute is authorized to negotiate for and enter into contracts relating to loans to help finance its capital and operating expenditures.

Grants and Donations
• Section 10: The Institute may solicit and receive grants and donations from government and private entities, whether local or foreign, and administer them in accordance with the terms of the donation or grant, consistent with the Institute's objectives and functions.

Revolving Fund
• Section 11: Any fund and all savings of the Institute shall constitute a revolving fund which shall not be reverted to the General Fund.

Effectivity and Repealing Clause
• Section 12: This Decree shall take effect immediately, and all acts, parts of acts, executive orders, ordinances, rules and regulations which are inconsistent with the provisions of this Presidential Decree are hereby repealed, amended or modified accordingly.