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Republic Act No. 3470· Enacted 1962-06-16

NACIDA Cottage Industries Law (RA 3470) — BatasKo ELI5

Ang RA 3470 ay nagtatag ng NACIDA para tulungan ang mga gumagawa ng handicrafts, weaving, at iba pang cottage industries sa Pilipinas na lumago at maibenta ang kanilang produkto.

ELI5OtherRA-3470cottage industriesNACIDA

Ang Batas sa Madaling Salita— ELI5

RA 3470 ay nagtatag ng National Cottage Industries Development Authority (NACIDA) para suportahan ang mga maliliit na negosyante at home-based producers ng mga produktong Filipino — mula sa banig at basket hanggang sa pagkain at tela. Ang NACIDA ay tumutulong sa financing, marketing, at training ng mga cottage industry producers.

Official text — Republic Act No. 3470

Jump to section ↓20 sections

Preamble

REPUBLIC ACT No. 3470

AN ACT CREATING THE NATIONAL COTTAGE INDUSTRIES DEVELOPMENT AUTHORITY (NACIDA) UNDER THE DEPARTMENT OF COMMERCE AND INDUSTRY, PRESCRIBING ITS DUTIES, POWERS AND FUNCTIONS, AND APPROPRIATING FUNDS THEREFORE.

Section 1

Section 1.

Within thirty days after the approval of this Act, the President of the Philippines shall create a board known as the National Cottage Industries Development Authority, hereinafter referred to as the Board, under the Department of Commerce and Industry, which shall be composed of a chairman and four members, one of whom shall be the Chief of the Division of Home Industries of the Bureau of Public Schools:

Provided

, That no person appointed to this Board shall simultaneously serve as director of any government-owned or controlled corporation:

Provided, further

, That no person who is a candidate for a public elective office at the time of his appointment or was such candidate at the general or special elections immediately preceding the same shall be eligible for appointment as administrator, deputy administrator, member of the board of directors or director of regional institutes:

Provided, further

, That one of the members of the Board must come from the minority party to be nominated by the president of the said party. The chairman and members of the Board who shall be appointed by the President of the Philippines, with the consent of the Commission on Appointments, shall hold office for a term of six years unless sooner removed or otherwise separated from the service of causes provided by law, in which case a successor may be appointed for the unexpired term. The chairman and members of the Board shall be entitled to a per diem of twenty-five pesos for each session actually attended by them:

Provided, however

, That in no case shall the regular or special sessions exceed ten sessions monthly but under no circumstance shall a member receive more than five hundred pesos a month including privileges, allowances and expenses. The President of the Philippines shall appoint the Administrator of the Board with a compensation of fifteen thousand pesos per annum. There shall also be a Deputy Administrator to be appointed by the President with a compensation of twelve thousand pesos per annum. The other officers and personnel of the Board shall be appointed and their compensation fixed by the Board in accordance with the Civil Service Law and Rules and Salary Law.

Section 2

Section 2.

The National Cottage Industries Development Authority, shall perform the following duties:

(a) To organize, revive, encourage, and promote the establishment of cottage industries; however, projects for the establishment, expansion and development of cottage industries now being undertaken by other governmental agencies or offices shall be transferred to the Board and the personnel, know-how and technology from these governmental agencies shall be absorbed by the Board;

(b) To survey and evaluate existing skills, machinery and equipment, and raw materials available in industrial quantities;

(c) To promote the effective merchandising of cottage products in domestic and foreign market so that those engaged in such industries will be placed on a basis of economic security and towards this end the Board itself may, if necessary, market the cottage products for the producers;

(d) To promote the standardization of cottage industries products, prescribe rules and regulations governing the grading, classifying, and inspecting of cottage industries products especially those for export;

(e) To grant small loans under such terms and conditions as may be prescribed by the Board or arrange for necessary loans with public or private credit institutions and banks, including such other loans intended for the planting, cultivation, and production of needed raw materials for the cottage industries covered under this Act;

(f) To extend assistance to cottage industries producers in their problems relating to financing, production and marketing;

(g) To render consultation services, provide technical know-how and field assistance to cottage industries producers;

(h) To undertake research and training programs designed to improve cottage industries products;

(i) To administer and maintain a tool and dye development program responsive to the technological needs of the cottage industries; and

(j) To adopt such measures as may be deemed necessary and proper to carry out the purposes of this Act.

Section 3 — General Powers. The National Cottage Industries Development Authority is hereb→

Section 3.

General Powers. The National Cottage Industries Development Authority is hereby authorized to make contracts; to lease or own real and personal property, and to sell or otherwise dispose of the same; to sue or be sued; to prescribe such rules and regulations as are necessary to carry out the functions vested it by this Act; to make such expenditure to carry out the purposes and functions of the Board; and to acquire and hold such assets resulting directly from operation authorized by the provisions of this Act, or as are essential or incidental to the proper conduct of such operations. The rules and regulations issued by the Board shall take effect fifteen days after their publication in a newspaper of general circulation in the Philippines.

Section 4 — Powers and duties of the Board of Directors. The Board of Directors shall have→

Section 4.

Powers and duties of the Board of Directors. The Board of Directors shall have the following powers and duties:

(a) To fix the compensation and number of officers and employees of the Board;

(b) To approve the annual and/or such supplemental budget of the Board which may be submitted to it from time to time; and

(c) To enunciate the policies that shall guide the operations of the Board.

Section 5 — Managing Head. The Head of the Technical Office of the Board shall be known as→

Section 5.

Managing Head. The Head of the Technical Office of the Board shall be known as Administrator who, together with the Deputy Administrator, shall be appointed by the President with the consent of the Commission on Appointments.

Section 6 — Powers and Duties of the Administrator. The Administrator shall have the follo→

Section 6.

Powers and Duties of the Administrator. The Administrator shall have the following powers and duties:

(a) To manage the affairs of the Board subject to the policies of the Board of Directors;

(b) To submit within sixty days before the beginning of each fiscal year an annual budget to the Board of Directors;

(c) To appoint such subordinate officials and employees as may be provided in the annual plantilla or budget necessary for the proper discharge of the duties and functions of the Board. Appointments to supervisory positions shall be subject to the confirmation of the Board of Directors;

(d) To submit within sixty days after the close of the fiscal year an annual report to the President and Congress through the Board of Directors. Said report shall contain a detailed account of all activities, achievements, receipts and disbursements, financial condition of the institution, problems encountered, solved and unsolved, recommendations, and a program of future activities; and

(e) To perform such other duties as may be assigned to him by the Board of Directors.

Show 13 more sections +→
Section 7 — Regional Institutes. There shall be at least nine institutes suitably located →

Section 7.

Regional Institutes. There shall be at least nine institutes suitably located in Northern Luzon, Central Luzon, Tagalog Region, Bicol Region, Western Visayas, Central Visayas, Eastern Visayas, Western Mindanao and Eastern Mindanao, which will be charged with the conduct of research, the determination of which cottage industry products shall be produced in specified regions or localities in a commercial manner, the standardization of products and such other functions as the Secretary of Commerce and Industry may fix in relation to the promotion of cottage industries.

Each of these institutes will be headed by a Director who will likewise be appointed by the President upon the recommendation of the Board with compensation of six thousand pesos per annum.

Section 8 — Funds. The sum of four million pesos as initial fund for the National Cottage →

Section 8.

Funds. The sum of four million pesos as initial fund for the National Cottage Industries Development Authority is hereby appropriated, out of any funds in the National Treasury not otherwise appropriated. Hereafter, the necessary amount to carry out the purposes of this Act shall be included in the annual General Appropriation Acts.

Section 9 — Within one year after the organization of the National Cottage Industries Deve→

Section 9.

Within one year after the organization of the National Cottage Industries Development Authority and from time to time thereafter, it shall furnish the Bureau of Supply with a list and samples of items produced by cottage industries and thereafter the Bureau of Supply shall give priority in the procurement of these cottage products for government use.

Section 10 — The Development Bank of the Philippines shall allocate an amount of fifty mil→

Section 10.

The Development Bank of the Philippines shall allocate an amount of fifty million pesos of its available funds for loans to cottage industries under its program of loan assistance to industries:

Provided

, That a guaranty of mortgage or pledge on cottage industries products shall be considered sufficient in granting said loans. Likewise, the Philippine National Bank shall allocate an amount of fifty million pesos of its available fund for loans to cottage industries under the terms and conditions similar to that of the Development Bank of the Philippines. The loans to be granted under this section shall bear interest not exceeding four per cent annually. Real estate which has no Torrens Title May be accepted as security of the loans.

Section 11 — Definition. The term "cottage industry" as used in this Act shall mean an eco→

Section 11.

Definition. The term "cottage industry" as used in this Act shall mean an economic activity in a small scale which is carried on mainly in the homes or in other places for profit and which is mainly done with the help of the members of the family. It shall include the following: (1) fiber crafts such as making of abaca ropes and twines, buntal fiber extracting and buri leaf braiding: (2) woodcraft such as making of wooden shoes, wooden fans, walking sticks (canes) and wood carvings; (3) hat weaving such as Calasiao, buri, rafia, buntal and bamboo hats, salakots and helmets; (4) mat weaving such as door, sleeping, buri, pandan, bailan and sabutan mats; (5) metal craft such as making of jewelries, knives, boloes, scissors, razors, silverwares, and brassworks; (6) ceramics such as making of potteries, hollow blocks, tiles, firebricks, clay stoves and other ceramic products; (7) shall craft such as making of sea shell buttons and coconut shell products; (8) bamboo and rattan craft such as making of hammocks, basketry, making of sawali and other bamboo and rattan furniture and articles; (9) small agricultural hand tools such as plow points; (10) toy craft such as making of dolls and toys; (11) embroidery industries; (12) needle craft (including knitting and crocheting); (13) loom weaving such as making of fish nets, making of mosquito nets, weaving of Ilocano cloth, Igorot weaving, pina "barong Filipino" jusi and sinamay; (14) machine parts manufacture such as wheels and stone mortars; (15) poultry including duck raising and "balut" making; (16) piggery; (17) home cigar making; (18) food preservation and canning, including the making of vinegar wine, "bagoong", "mazapan" pili, "tostado compitado" de pili, "bucayo", (19) small mining operations; (20) other related crafts such as making of broom, nito and buri bags, "karagomoy" bags, bead making, guitar and other musical instruments; and (21) such other industries done in the home with the aid of electrical gadgets and/or by hand manipulation. The cottage industries shall be owned and operated by Filipino citizens, or if a corporation, partnership or cooperative, at least seventy-five per cent of its capital and its stockholders and all members of its Board of Directors shall be Filipino citizens.

The term "cottage products" shall mean products produced by cottage industries and shall be labeled as "Cottage Products Made in the Philippines."

Section 12 — Any person, corporation, partnership, or association who desires to avail of →

Section 12.

Any person, corporation, partnership, or association who desires to avail of the benefits and assistance under this Act may register with the Board, and any such registered person or firm who fails to comply with the rules and regulations issued by the Board shall not be entitled to the assistance and benefits of this law, including but not limited to those provided in Section ten of this Act.

Section 13 — Notwithstanding any provisions of law to the contrary, the export of any loca→

Section 13.

Notwithstanding any provisions of law to the contrary, the export of any local raw materials which may be needed for the promotional of cottage industries herein provided shall be prohibited as long as local demands therefor have not yet been satisfied.

Section 14 — Producers and Marketing Cooperatives. The Board shall stimulate the organizat→

Section 14.

Producers and Marketing Cooperatives. The Board shall stimulate the organization and establishment of producers and marketing cooperatives in coordination with the activities of the Cooperatives Administration Office and train and develop a competent management pool for the operation of producers and marketing cooperatives and cottage industries.

Section 15 — The Reparations Commission shall give priority allocation for capital goods a→

Section 15.

The Reparations Commission shall give priority allocation for capital goods and fields of studies intended for cottage industry projects certified by the Board.

Section 16 — The production, manufacture and sale of cottage products shall be exempt from→

Section 16.

The production, manufacture and sale of cottage products shall be exempt from all taxes for a period of five years from the date of registration of the person or firm engaged in the production or manufacture of cottage products with the Board.

Section 17 — Any person who utilizes or abstains from the utilization of any funds borrowe→

Section 17.

Any person who utilizes or abstains from the utilization of any funds borrowed under the provisions of this Act for any purpose or purposes other than those applied for in their loans shall be punished by imprisonment of one year and a fine of two thousand pesos.

Section 18 — Repealing clause. All Acts, executive orders, administrative orders, proclama→

Section 18.

Repealing clause. All Acts, executive orders, administrative orders, proclamations, rules and regulations, or parts thereof, inconsistent with any of the provisions of this Act are repealed or modified accordingly.

Section 19 — This Act shall take effect upon its approval.→

Section 19.

This Act shall take effect upon its approval.

Approved: June 16, 1962.

The Lawphil Project - Arellano Law Foundation

Full text on BatasKo. Original source: Official Gazette / Lawphil.

National Cottage Industries Development Authority Act — RA 3470

Mayroon kang bahay-negosyo sa Leyte — gumagawa ka ng mga banig, basket, at unan mula sa pandan. Maganda ang iyong produkto pero hindi mo alam paano ibenta sa labas ng barangay. Kailangan mo ng puhunan pero walang bangko na magpapautang sa iyo dahil wala kang collateral.

Ang RA 3470 ay ginawa para sa mga tulad mo.

ELI5 / Sa madaling salita: Ang National Cottage Industries Development Authority (NACIDA) ay isang government agency na itinayo noong 1962 para tulungan ang mga home-based producers — gumagawa ng banig, basket, weaving, pagkain, keramika, at iba pa — na mapabuti ang kanilang produkto, maibenta ito sa bansa at ibayong dagat, at makakuha ng financing para lumago.

Real Filipino Scenario

Aling Nena ay isang 55-taong-gulang na manghahabi ng Ilocano cloth sa Vigan, Ilocos Sur. Siya at ang kanyang pamilya ay gumagawa ng pina at jusi cloth sa kanilang bahay — mga produktong may presyo sa mga turista at local buyers. Ngunit ang kanyang pinaka-malaking problema ay marketing: hindi siya makaabot sa mga buyers sa Maynila, at hindi niya alam kung paano mag-export.

Sa ilalim ng RA 3470, maaaring magtungo si Aling Nena sa NACIDA Regional Institute sa kanyang lugar. Ang NACIDA ay maaaring:

  • Tulungan siyang ma-standardize ang kanyang produkto para maging export-ready
  • I-connect siya sa Bureau of Supply para government procurement
  • Tulungan siyang makakuha ng loan mula sa Development Bank of the Philippines o Philippine National Bank sa 4% interest bawat taon
  • I-market ang kanyang produkto nang direkta sa kanyang ngalan kung kailangan

What the Law Actually Says

RA 3470, na pinagtibay noong Hunyo 16, 1962, ay nagtatag ng National Cottage Industries Development Authority (NACIDA) sa ilalim ng Department of Commerce and Industry (ngayon ay Department of Trade and Industry).

Ano ang Cottage Industry? (Section 11)

Ang "cottage industry" ay isang economic activity na:

  • Small-scale at isinasagawa pangunahin sa mga tahanan o iba pang lugar para sa kita
  • Pangunahing ginagawa ng mga miyembro ng pamilya

Kabilang dito ang:

  • Fiber crafts (abaca ropes, buntal fiber, buri braiding)
  • Woodcraft (wooden shoes, carvings, walking sticks)
  • Hat weaving (Calasiao, buri, bamboo hats, salakots)
  • Mat weaving (pandan, sleeping, buri mats)
  • Metal craft (alahas, kutsilyo, bolo, silverware)
  • Ceramics (palayok, hollow blocks, clay stoves)
  • Bamboo at rattan craft (hamaka, basketry, sawali, furniture)
  • Loom weaving (pina, jusi, sinamay, Ilocano cloth, Igorot weaving)
  • Embroidery at needle craft
  • Pagkain preservation (vinegar, wine, bagoong, bucayo)
  • Guitar at iba pang musical instruments
  • At marami pang iba

Importante: Ang mga cottage industries ay dapat pagmamay-ari ng mga Pilipinong mamamayan. Kung corporation o partnership, hindi bababa sa 75% ng capital at lahat ng Board of Directors ay Pilipino.

Mga Pangunahing Tungkulin ng NACIDA (Section 2)

  1. Organisahin at i-promote ang pagtatatag ng cottage industries
  2. I-survey ang mga available na skills, makinarya, at raw materials sa bansa
  3. I-market ang cottage products sa domestic at foreign markets — ang NACIDA mismo ay maaaring mag-market para sa mga producers kung kinakailangan
  4. Mag-standardize ng cottage products, kabilang ang grading at inspection lalo na para sa export
  5. Mag-grant ng small loans o mag-ayos ng loans sa mga bangko para sa financing
  6. Magbigay ng technical assistance at consultation services
  7. Mag-research at mag-training para mapabuti ang mga produkto

Financing (Section 10)

Ang batas ay nagtuturo sa dalawang pangunahing bangko na maglaan ng pondo para sa cottage industries:

  • Development Bank of the Philippines — ₱50 million (sa mga loan)
  • Philippine National Bank — ₱50 million (sa mga loan)

Ang interest rate sa mga loan na ito ay hindi dapat lumampas sa 4% bawat taon. Kahit ang real estate na walang Torrens Title ay maaaring tanggapin bilang collateral.

Tax Exemption (Section 16)

Ang produksyon, paggawa, at pagbebenta ng cottage products ay exempt sa lahat ng taxes sa loob ng 5 taon mula sa petsa ng registration ng tao o kumpanya sa NACIDA.

Regional Institutes (Section 7)

Ang NACIDA ay nagtatayo ng mga regional institutes sa buong bansa — Northern Luzon, Central Luzon, Tagalog Region, Bicol, Western at Central at Eastern Visayas, at Western at Eastern Mindanao — para sa research, standardization, at training sa lokal na antas.

What This Means for You

Kung ikaw ay gumagawa ng kahit anong home-based product — pagkain, tela, handicraft, keramika, atbp. — maaari kang mag-register sa NACIDA para makakuha ng access sa:

  • Technical assistance at training
  • Loan referrals sa DBP at PNB sa mababang interest
  • Marketing support para maabot ang mas malaking market
  • Export assistance at standardization

Maaari ring gumawa ng cooperatives — ang NACIDA ay aktibong tumutulong sa pag-organize ng producers cooperatives para mas malakas ang collective bargaining power ng mga maliliit na producers.

Government procurement priority — sa loob ng isang taon pagkatapos maitayo ang NACIDA, dapat itong magbigay sa Bureau of Supply ng listahan ng mga cottage products, at ang gobyerno ay kailangang bigyan ng priority ang cottage products sa procurement (Section 9).

What Most Filipinos Get Wrong

"Ang NACIDA ay para lang sa mga artisano at magsasaka." Hindi — ang saklaw ay napakalawak, mula sa food processing hanggang sa musical instruments, poultry, at piggery. Basta home-based at small-scale, malamang kasama ka.

"Kailangan mong may malaking negosyo para makinabang sa NACIDA." Ang batas ay dinisenyo para sa mga maliliit na producers. Ang "cottage industry" ay literal na ginagawa sa bahay at pamilya lang ang trabahador.

"Hindi na functional ang NACIDA ngayon." Ang NACIDA ay patuloy na gumagana sa ilalim ng DTI. Ngayon ay kilala ito bilang bahagi ng DTI's support programs para sa MSMEs at cottage industries, na may mga programa tulad ng One Town One Product (OTOP) na nagpapalawak ng konsepto ng RA 3470.

What to Do If You Want NACIDA Support

  1. Tukuyin kung ang iyong negosyo ay cottage industry ayon sa kahulugan ng Section 11 ng RA 3470.
  2. Makipag-ugnayan sa pinakamalapit na DTI Provincial Office — sila ang nagpapatakbo ng NACIDA-related programs sa lokal na antas.
  3. Mag-register ang iyong negosyo — ang registration ay nagbubukas ng access sa mga benepisyo at assistance.
  4. Alamin ang mga loan programs sa Development Bank of the Philippines (DBP) at Small Business Corporation para sa mga cottage industry-specific financing.
  5. Sumali sa producers cooperative — ang NACIDA at DTI ay tumutulong sa pag-organize ng mga cooperative para mas madaling ma-access ang markets at financing.

DTI Hotline: 1-384 o bisitahin ang www.dti.gov.ph

Related Laws

Mga Tanong at Sagot (FAQ)

Tanong: Maaari ba akong makakuha ng loan sa mababang interest para sa aking cottage industry ngayon? Sagot: Ang mga orihinal na loan provisions ng RA 3470 (4% interest sa DBP at PNB) ay mula sa 1962 at ang mga specific na amounts ay malamang na na-update na. Makipag-ugnayan sa iyong lokal na DTI Provincial Office o sa Small Business Corporation (SBC) para sa kasalukuyang available na loan programs para sa cottage at micro industries.

Tanong: Exempt ba ako sa taxes kung magrehistro sa NACIDA? Sagot: Ang Section 16 ng RA 3470 ay nagtatadhana ng 5-taong tax exemption mula sa petsa ng registration. Ngunit dahil mula pa noong 1962 ang batas na ito, ang mga implementing rules at ang relasyon nito sa kasalukuyang BIR regulations ay kailangang i-verify. Kumonsolto sa BIR o sa isang accountant para sa kasalukuyang tax treatment ng cottage industries.

Tanong: Paano kung ang aking produkto ay hindi kasama sa listahan ng Section 11? Sagot: Ang listahan ng Section 11 ay nagtatapos sa "such other industries done in the home with the aid of electrical gadgets and/or by hand manipulation" — isang catch-all provision. Ang DTI at NACIDA ay may discretion na isama ang mga bagong uri ng cottage industries na hindi pa umiiral noong 1962.

Sources

  • Republic Act No. 3470 — An Act Creating the National Cottage Industries Development Authority, approved June 16, 1962. Full text at Lawphil.net
  • Department of Trade and Industry (DTI): www.dti.gov.ph

General information only. Not legal advice. Consult PAO at 1-800-10-PAO-8888 or your local DTI Provincial Office for current programs and assistance.

By Irvin Abarca & Claude (AI Research Partner) Published May 2026 · 6 min read

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