Philippine National Coffee Industry Development Act of 2025

Senate Office of the Storctary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) ) First Regular Session 25 NOV 26 A10:01 SENATE RECEIVED BY: S.B. No. 1556 Introduced by Senator Panfilo M. Lacson AN ACT ESTABLISHING THE PHILIPPINE NATIONAL COFFEE INDUSTRY DEVELOPMENT PROGRAM, CREATING THE PHILIPPINE COFFEE BOARD, PROVIDING COMPREHENSIVE SUPPORT MECHANISMS FOR THE COFFEE SECTOR, AND APPROPRIATING FUNDS THEREFOR EXPLANATORY NOTE In the 1880s, the Philippines stood among the world's top coffee exporters, but the industry later collapsed and has since struggled to regain its former standing. Today, despite having highly suitable conditions for large-scale coffee cultivation and despite coffee being recognized as a high-value crop under Republic Act No. 7900 (High-Value Crops Development Act of 1995), we now rely on imports for roughly 81% of our coffee requirements. Several factors have contributed to this decline. Government agencies provide some technical material on coffee production, but the available guidance remains limited and often outdated, leaving many farmers without the practical support needed to improve their yields. This gap is compounded by the predominance of old trees, outdated farming practices, an aging farmer population, and the lack of basic equipment and post-harvest facilities. Farmers also face difficulties accessing planting

materials, fertilizers, and bio-control inputs, with high input costs and poor farm-to- market roads adding to the challenge. These constraints have led to shrinking coffee-growing areas, as farmers shift to other crops or as agricultural lands are converted for real estate and urban development. Most coffee growers cultivate around one to two hectares only, making it difficult for them to rehabilitate or expand their farms— especially with limited access to credit and the stringent requirements of existing loan programs. Post-harvest support remains inadequate as well. Many farmers continue to sun-dry their beans and rely on small local millers, while existing facilities in some areas are underutilized due to inconsistent or insufficient supply of raw beans. Compounding these challenges is the lack of reliable and consistent industry data, with discrepancies between PSA statistics and industry figures making planning and decision-making difficult for both government and private stakeholders. Research and development efforts have also remained limited, slowing advancements in varieties, production technologies, and overall quality standards. To achieve a self-sufficient coffee and cacao industry, the Department of Agriculture gave the following priority recommendations: 1. Development of a program that will encourage and assist private sector processors to develop quality local coffee and cacao products which can compete with international brands (Medium-term target, 2026-2030); 2. Creation of a harmonized online industry information database (price, production, yield, etc.) that can be easily accessed by the concerned stakeholders (Medium- to Long-term targets, 2031-2040); 3. Increased promotion of patronizing local coffee and cacao products (Short-term target 2021-2025); 4. Forging of partnership between local coffee and cacao farmers with high-end and local coffee shops (Medium-term target, 2026-2030); and

5. Profiling of different coffee and cacao varieties to establish authenticity through research and laboratory analysis as an input to the traceability system (Medium- term target, 2026-2030). In line with these recommendations, this measure seeks to establish a national framework that will accelerate the development of the coffee industry, create a National Coffee Board, strengthen every link of the value chain, improve the country's competitiveness, and reduce our heavy reliance on imported coffee. Through these reforms, the Philippines can steadily work toward regaining its place in the global coffee sector, while building an industry that is more responsive and productive one that focuses on increasing yields, improving farmer incomes, strengthening technical skills, widening market opportunities, and ensuring long-term sustainability. In view of the foregoing, the passage of this bill is earnestly sought. PANFT O M. L 1. LACSO Senator

Senate Office of the Seretaup TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session NOV 26 A10:01 SENATE RECEIVED BY: S.B. No. 1556 Introduced by Senator Panfilo M. Lacson AN ACT ESTABLISHING THE PHILIPPINE NATIONAL COFFEE INDUSTRY DEVELOPMENT PROGRAM, CREATING THE PHILIPPINE COFFEE BOARD, PROVIDING COMPREHENSIVE SUPPORT MECHANISMS FOR THE COFFEE SECTOR, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled. ARTICLE I - GENERAL PROVISIONS

Section 1. Short Title. - This Act shall be known as the "Philippine National

Coffee Industry Development Act of 2025."

Section 2. Declaration of Policy. - It is hereby declared the policy of the

State to: a) Transform the Philippines into a globally competitive coffee producer and net exporter by 2035;

b) Improve the livelihood of smallholder coffee farmers operating 95% of the country's coffee farms through comprehensive support systems; c) Preserve and enhance the country's unique coffee varieties including Barako, Robusta, Arabica, and Excelsa; d) Ensure sustainable and climate-resilient coffee production across the archipelago; e) Develop world-class quality standards and value-added processing capabilities; f) Create an institutional framework for coordinated sectoral development.

Section 3. Objectives. - This Act aims to:

a) Increase national coffee production from 37,000 metric tons to 300,000 metric tons by 2035; b) Achieve average yields of 1.2 metric tons per hectare from current 0.3 metric tons; c) Expand coffee cultivation to 250,000 hectares; d) Develop specialty coffee exports targeting 30% of total production; e) Create direct and indirect employment opportunities; f) Achieve 100% self-sufficiency in domestic coffee consumption from current 30%.

Section 4. Coverage. This Act shall cover all coffee farmers including

smallholders who comprise 95% of farms (under 5 hectares each), processors, traders, exporters, and other stakeholders in the coffee value chain across all regions of the Philippines.

ARTICLE II - INSTITUTIONAL FRAMEWORK

Section 5. Creation of the Philippine Coffee Board (PCB). - There is

hereby created the Philippine Coffee Board under the Department of Agriculture, which shall serve as the primary government agency for coffee industry development. This shall supersede and absorb the functions of the existing private sector-led Philippine Coffee Board Inc. (PCBI) established in 2002, with PCBI members given priority representation in the new Board.

Section 6. Composition of the Board. - The PCB shall be composed of:

a) Secretary of Agriculture - Chairperson b) Secretary of Trade and Industry - Co-Chairperson c) Secretary of Science and Technology - Member d) Secretary of Environment and Natural Resources - Member e) Secretary of Agrarian Reform - Member f) Secretary of Department of Economy, Planning, and Development - Member g) Three (3) representatives from coffee farmer cooperatives h) Two (2) representatives from coffee processors/exporters i) One (1) representative from the academe j) One (1) representative from coffee retailers

Section 7. Powers and Functions. The PCB shall:

a) Formulate and implement the National Coffee Development Master Plan; b) Coordinate all government programs related to coffee; c) Establish quality standards and certification systems in coordination with present and future global partners, both public and private;

d) Oversee research and development programs; e) Facilitate market linkages and export promotion; f) Monitor and evaluate program implementation.

Section 8. Regional Coffee Development Councils. Regional councils

shall be established in major coffee-producing regions: a) Cordillera Administrative Region (Benguet, Mountain Province) b) Southern Luzon (Batangas, Cavite - historical Barako centers) c) Mindanao (Davao, Bukidnon, Sultan Kudarat, Cotabato) d) SOCCSKSARGEN e) Other emerging coffee areas ARTICLE III - PRODUCTION SUPPORT PROGRAMS

Section 9. National Coffee Replanting and Rehabilitation Program. A

comprehensive program targeting expansion to 250,000 hectares over 10 years shall include: a) Free distribution of 150 million high-yielding, climate-resilient seedlings; b) Technical assistance for proper planting and cultivation; c) Subsidy of P50,000 per hectare for establishment costs; d) Insurance coverage for the first three years of cultivation;

Section 10. Coffee Farm Productivity Enhancement. Support

services shall include: a) Soil testing and customized fertilization programs; b) Integrated pest and disease management;

c) Provision of farm equipment and post-harvest facilities; d) Establishment of 500 community-based nurseries; e) Solar-powered irrigation systems. 4 A study for the fulfillment of Coffee Farm Productivity Enhancement shall be conducted by the PCB to assess the volume and the applicable beneficiaries of the program.

Section 11. Extension Services Network. Following Colombias model,

the PCB, as implementor of this program, shall initiate and facilitate the following extension services, to improve the coffee industry a) Deploy 1,500 Coffee Development Officers nationwide to promote sustainable farming practices, enhance coffee quality, and to foster market development; b) Establish Farmer Field Schools in all coffee-producing municipalities; c) Conduct monthly farm visits and technical consultations; d) Develop mobile applications for real-time technical support. ARTICLE IV - FINANCIAL SUPPORT MECHANISMS

Section 12. Coffee Credit and Insurance Program. There shall be a

coffee credit and insurance program available for application of coffee farmers, producers, and traders. The rules and regulations for the coffee credit and insurance program shall be released by the PCB within a year from the passage of this Act. a) P10 billion annual allocation for production loans at 3% interest; b) P5 billion for processing and marketing loans at 4% interest; c) Crop insurance covering 100% of production costs; d) Calamity assistance fund of P2 billion annually.

Section 13. Coffee Farmer Subsidy Program. A Coffee Farmer Subsidy

Program is hereby created where direct support shall be provided to coffee farmers, producers and traders. Direct support includes: a) Fertilizer subsidy of P5,000 per hectare annually; b) Price support mechanism guaranteeing minimum farmgate prices; c) Transport subsidy for remote highland areas; ARTICLE V - QUALITY AND STANDARDS

Section 14. Philippine Coffee Quality Standards. The PCB shall

establish comprehensive standards including: a) Moisture content maximum; b) Defect classification system aligned with international standards; c) Cupping score requirements for export grades; d) Geographic indication protection for regional varieties; e) Variety-specific standards recognizing that 90% of current production is Robusta; f) Premium standards for Arabica, Barako (Liberica), and Excelsa varieties. ARTICLE VI - RESEARCH AND DEVELOPMENT

Section 15. National Coffee Research Institute. There is hereby created

a National Coffee Research Institute under the DOST with the mandate to: a) Develop climate-resilient varieties; b) Improve processing technologies; c) Conduct market and consumer research; d) Coordinate with international research institutions. Focus areas for research shall include: a) Breeding programs for high-yield, disease- resistant varieties; b) Climate change adaptation strategies; c) Value- addition technologies; d) Precision agriculture applications; e) Carbon sequestration potential of coffee systems.

ARTICLE VII - PROCESSING AND VALUE ADDITION

Section 16. Coffee Processing Hub Development. The PCB shall establish

facilities including: a) Regional processing centers with modern equipment; b) Instant coffee manufacturing plants; c) Community-level processing facilities; d) Specialty coffee roasting centers.

Section 17. Value Chain Integration. The PCB shall establish support

programs for: a) Farm-to-market roads in coffee areas; b) Cold chain infrastructure; c) Export facilitation centers; d) E-commerce platforms for direct marketing. ARTICLE VIII - MARKET DEVELOPMENT AND TRADE

Section 18. Domestic Market Development. The PCB's Domestic Market

Development strategies shall include the following: a) Philippine Coffee campaign targeting 100% local supply of 100,000 MT annual consumption; b) Coffee consumption promotion building on current 2.5 cups per day average (80% of Filipinos); c) Coffee tourism circuits in production areas; d) Promotion of traditional brewing methods for native varieties;

e) School and workplace coffee programs capitalizing on 90% household penetration.

Section 19. Export Promotion. The PCB's Export Promotion Programs shall

include: a) Participation in international coffee exhibitions; b) Trade missions to importing countries; c) Export subsidy of P10 per kilogram for specialty coffee; d) Brand development for Philippine coffee varieties. ARTICLE IX - SUSTAINABILITY AND CLIMATE RESILIENCE

Section 20. Carbon Credit Program The PCB shall establish a Carbon

Credit Program, which shall have mechanisms for: a) Carbon footprint assessment of coffee farms; b) Participation in voluntary carbon markets; c) Payment for ecosystem services; d) Green bonds for sustainable coffee projects. ARTICLE X - FUNDING AND APPROPRIATIONS

Section 21. Appropriations. The amount necessary to carry out the

provisions of this Act shall be included in the annual General Appropriations Act under the budget of the Department of Agriculture which in no case shall be less than the initial appropriation of P15 billion per year for the first five years.

The distribution of the funds will be determined by available capacity of coffee production.

Section 22. Fund Allocation Distribution. Distribution of the fund

allocation as mentioned in the preceding section shall be as follows: a) Production support - 40% b) Research and development - 15°d» c) Processing and infrastructure - 20% d) Marketing and promotion - 10% e) Institutional support - 10% f) Emergency and calamity fund - 5% ARTICLE XI - FINAL PROVISIONS

Section 23. Implementing Rules and Regulations. Within ninety (90)

days from the effectivity of this Act, the Secretary of DA, in coordination with the DTI, DOST, DENR, DAR, and DepDev, and in consultation with the representatives of the PCB and relevant stakeholders, shall promulgate and issue the necessary implementing rules and regulations for the effective implementation of this Act. The implementing rules and regulations issued pursuant to this section shall take effect thirty (30) days after the publication in the Official Gazette or in two (2) newspapers of general circulation.

Section 24. Repealing Clause. All laws, decrees, orders, and regulations

inconsistent with this Act are hereby repealed or modified accordingly.

Section 25. Separability Clause. If any provision is declared

unconstitutional, other provisions not affected shall remain in force.

Section 26. Effectivity. This Act shall take effect fifteen days after

publication in the Official Gazette or newspaper of general circulation. Approved.