FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
, SENATE 
S. B. No:' 15 4 
Introdnced by Senator Ralph G. Recto 
Explanatory Note 
Agriculture is the foundation of the rural economy. Aside from providing the nation with 
the basic necessities of food and raw materials, the sector also provides employment to one-fifth 
of the country's population. A force that drives the economy, the agriculture sector contributes 
an annual 18% to the country's GDP despite the onslaught of typhoons, drought, pests, diseases, 
and high cost of fertilizers. As such, agriculture is regarded as the nation's weapon against 
poverty and hunger. 
The growth of the sector however, has not been enough to improve the overall labor 
productivity in the sector. Data on employment in the agriculture sector from the National 
Statistics Office (NSO) show that from January 2004 to January 2009, the employment in the 
sector grew by only 679,268 jobs compared to the MTPDP target of 2 million jobs. Comparative 
yield, production cost and price data on various agricultural commodities show that the gains 
posted by the country were not at pace with those of its neighbors. As a result, the comparative 
advantage of Philippine agriculture continued to decline resulting in our country increasingly 
becoming a net importer of agricultural products since 1994. 
These setbacks were mainly due to: low public and private investments in the sector, 
higher cost of farm inputs, high postharvest losses due to inadequate equipment and 
infrastructure, poor postharvest handling practices, and inadequate skills and technical support, 
among others. Investments in agriculture continued to lag behind the actual food requirements 
of our increasing population. Thus, poverty and inequity have remained a challenge in the 
countryside. 
Funding support for agriculture is necessary because it leads to greater productivity, 
which in turn translates to stable prices of commodities, and more affordable food on the table. 
This bill allocates funds for farm inputs, post-harvest facilities, and infrastructure support. 
In order to promote agribusiness as a tool for countryside development, this bill also provides 
funding support to livelihood programs, capability programs/trainings, and microfinance. 
Since agriculture plays a major role in the generation of incomes and employment in the 
countryside, the development of the sector is essential and should be given additional budgetary 
support. 
In view of the foregoing, immediate passage of this bill is earn 
1 sought. 


FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S. BILL NO. 
154 
Introduced by Senator Ralph G. Recto 
AN ACT 
ALLOCATING FIVE 
PERCENT 
(5%) 
OF ANNUAL 
VALUE-ADDED 
TAX 
COLLECTIONS TO FINANCE AGRICULTURE EXPENDITURES AMENDING FOR 
THE PURPOSE THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS 
AMENDED 
Be it enacted by the Senate and the House of Representative of the Philippines in Congress 
assembled: 
. 
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SECTION I. A new section, to be numbered two hundred eighty-seven, shall be added to 
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Chapter II, Title XI ofthe National Internal Revenue Code, as amended to read as follows: 
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"SEC. 287. DISPOSITION OF PROCEEDS OF VALUE-ADDED TAX -FIVE 
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PERCENT (5%) OF THE VALUE-ADDED TAX COLLECTED UNDER TITLE IV OF THIS 
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ACT, AS AMENDED, SHALL BE ALLOCATED TO THE FOLLOWING AGRICULTURE 
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EXPENDITURES: 
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1.) TWENTY PERCENT (20%) FOR CONSTRUCTION, REHABILITATION AND 
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RESTORATION OF COMMUNAL IRRIGATION SYSTEMS; 
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2.) TEN PERCENT (10%) FOR POST-HARVEST FACILITIES INCLUDING 
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MECHANICAL AND SOLAR DRYERS AND WAREHOUSES; 
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3.) TEN PERCENT (10%) FOR SEED AND ORGANIC FERTILIZER SUBSIDIES; 
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4.) TWENTY PERCENT (20%) FOR FARM-TO-MARKET ROADS IN 
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MUNICIPALITIES WITH SIGNIFICANT AGRICULTURAL ACTIVITIES; 
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5.) TEN PERCENT (10%) FOR LIVESTOCK DISPERSAL PROGRAM; 
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6.) TEN PERCENT (10%) FOR TRAINING/CAP ABILITY BUILDING PROGRAMS 
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FOR AGRICULTURAL EXTENSION WORKERS AND THEIR CLIENTELE; 
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7.) TEN PERCENT (10%) FOR MICROFINANCE LENDING PROGRAMS TO 
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FINANCE SMALLHOLDER AGRICULTURE; 
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8.) TEN PERCENT (10%) FOR THE ESTABLISHMENT AND MAINTENANCE OF 
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MARICULTURE AND AQUACULTURE PARKS. 


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THE FUND SHALL BE ADMINISTERED BY THE DEPARTMENT OF 
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AGRICULTURE (DA) IN CONSULTATION WITH THE LOCAL GOVERNMENT UNIT 
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CONCERNED. 
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ASIDE FROM THE ABOVE ITEMS OF EXPENSES, AT NO TIME SHALL ANY 
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PORTION OF THE EARMARKED FUNDS BE USED TO AUGMENT PERSONAL 
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SERVICES AND OTHER MAINTENANCE AND OTHER OPERATING EXPENSES. 
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SEC. 2. The succeeding Sections of the National Internal Revenue Code are hereby 
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renumbered accordingly. 
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SEC. 3. Coverage of this Act. - The allocation of value-added tax revenues shall 
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commence in the fiscal year within which this Act shall take effect. 
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SEC. 4. Separability Clause. - If any part or provision of this Act shall be held to be 
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unconstitutional or invalid, other parts or provisions hereof which are not affected thereby shall 
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continue to be in full force and effect. 
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SEC. 5. Repealing Clause. - AIl laws, decrees, executive orders, rules and regulations, or 
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parts thereof which are inconsistent with this Act are hereby repealed, amended or modified 
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accordingly. 
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SEC. 6. Effectivity. - This Act shall take effect upon its approval. 
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Approved,