TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JIJL -8 P5 31
SENATE
S. No. 261
Introduced by Senator MARK A. VILLAR
AN ACT
PROVIDING FOR THE WRITING OFF OF LOANS OR CONDONATION OF 
UNPAID INTERESTS, PENALTIES, AND SURCHARGES OF LOANS, AND LOAN 
RESTRUCTURING SECURED BY FARMERS, FISHERFOLK, AND AGRARIAN 
REFORM BENEFICIARIES FROM THE DEPARTMENT OF AGRARIAN REFORM, 
DEPARTMENT OF AGRICULTURE- AGRICULTURAL CREDIT POLICY 
COUNCIL, COOPERATIVE DEVELOPMENT AUTHORITY, NATIONAL FOOD 
AUTHORITY, AND QUEDAN AND RURAL CREDIT GUARANTEE 
CORPORATION
EXPLANATORY NOTE
The Philippine Statistics Authority (PSA) reports that farmers and fisherfolk 
remain the poorest in the country, with the former having a poverty incidence of 30%. 
Filipino farmers face various challenges that hinder the full realization of their 
occupation, which include but are not limited to, the lack of sufficient capital, climate 
change, limited facilities and equipment, limited market access, and limited funding 
for innovation and development. These equate to the need to secure additional 
sources of capital to continue their daily operations.
The Department of Agriculture (DA) and the Department of Agrarian Reform 
(DAR) have several programs designed to provide the necessary credit to farmers and 
agrarian reform beneficiaries (ARBS), in order to support their farming activities. These 
include the Credit Assistance Program of the DAR, and the High Yield Crop Loan 
Assistance Program of the DA. These programs accumulate millions of outstanding
balances from various agricultural loans.
Given that the majority of the borrowers continuously struggle with surviving 
their day-to-day operations, this bill seeks to mandate the one-time condonation of 
unpaid interests, penalties, surcharges and other penalties of agrarian and agricultural


loans that have long burdened our farmers, fisherfolk, and ARBs. The bases for the 
condonation shall be limited to cases involving force majeure or market aberration. It 
shall not be applied to cases resulting from the willful deceit of the borrower to pay 
their loans. The condonation shall also be in conformity with the applicabie general 
banking laws and regulations of the BSP.
As a largely agricultural country, with 47% of the country's entire land mass 
being agricultural, the State must invest its resources in sustainable local production 
and comprehensive rural development. In the same way, farmers, fisherfolk, and ARBs 
should be given access to additional financial resources to uplift the country's 
agriculture from the grassroots.
In view of the foregoing, the passage of this measure is earnestly sought.
MARK A. VILLAR


TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S. No. 2 61
-8 P5 o2
Introduced by Senator MARK A. VILLAR
AN ACT
PROVIDING FOR THE WRITING OFF OF LOANS OR CONDONATION OF 
UNPAID INTERESTS, PENALTIES, AND SURCHARGES OF LOANS, AND LOAN 
RESTRUCTURING SECURED BY FARMERS, FISHERFOLK, AND AGRARIAN 
REFORM BENEFICIARIES FROM THE DEPARTMENT OF AGRARIAN REFORM, 
DEPARTMENT OF AGRICULTURE- AGRICULTURAL CREDIT POLICY 
COUNCIL, COOPERATIVE DEVELOPMENT AUTHORITY, NATIONAL FOOD 
AUTHORITY, AND QUEDAN AND RURAL CREDIT GUARANTEE 
CORPORATION
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
Section 1. Short Tide. -This Act shall be known as the "Agrarian and Agricultural
2 
Writing Off or Condonation and Restructuring of Loans Act".
3 
Sec. 2. Declaration of Policy. - The State shall promote comprehensive rural
4 
development and agrarian reform through the provision of measures that will release
5 
farmers, fisherfolks, and agrarian reform beneficiaries from the bondage of debt. To
6 
this end, it shall be the objective of the State to provide farmers, fisherfolks, and
7 
agrarian reform beneficiaries the opportunity to regain access to government and
8 
commercial credit facilities through the writing off of loans or condonation of unpaid
9 
interests, penalties, and surcharges on their existing loans obtained through
10 
government lending programs.
11 
Sec. 3. Definition of Terms. - As used in this Act:
12 
a) Accountref&cs to loan accounts of agricultural cooperatives, organization or
13 
association of farmers, fisherfolk, and agrarian reform beneficiaries;
14 
Agencies refer to the Department of Agrarian Reform (DAR), Department of
15 
Agriculture (DA) - Agricultural Credit Policy Council (DA-ACPC)/Quedan and Rural


1 
Credit Guarantee Corporation (QUEDANCOR), National Food Authority (NFA), and
2 
Cooperative Development Authority (CDA);
3 
c) Agrarian Reform Beneficiaries refer to farmers who were granted lands under
4 
Presidential Decree No. 27, known as the Emancipation of Tenants and Transfer of
5 
Ownership of Land They Till, and Republic Act No. 6657, otherwise known as the
6 
Comprehensive Agrarian Reform Law of 1998, as amended, and other existing
7 
agrarian reform laws. These include regular farmworkers, irrespective of tenurial
8 
arrangement, who benefited from the redistribution of lands, including their
9 
organizations and cooperatives which have availed of the credit programs enumerated
10 
in Section 5 hereof;
11 
d) Agricuiturai and Agrarian Reform Loansref&c to loans granted for agricultural
12 
production; promotion of agricultural business and exports including, but not limited
13 
to, the acquisition of work animals, farm equipment and machinery, seeds, fertilizers,
14 
poultry, livestock, feeds construction, acquisition and repair of agricultural facilities;
15 
e) Condonation refers to the act of the National Government of waiving or
16 
abandoning its right to collect from the loan account owner any unpaid interest,
17 
penalties, and surcharges under the lending programs enumerated in Section 4 in this
18 
Act;
19 
f) Farmers refer to any natural person whose primary livelihood is the
20 
cultivation of land or the production of agricultural crops, livestock, and agricultural
21 
products, either by themselves or primarily with the assistance of their immediate farm
22 
household or workers, whether the land is owned by them or by another person, under
23 
a leasehold agreement or other similar arrangements;
24 
g) Fisherfoik refer to people directly or personally and physically engaged in
25 
taking or culturing and processing fishery and/or aquatic resources;
26 
h) Loan restructuring refers to a process where the principal terms and
27 
conditions of the original loan are modified in accordance with an agreement setting
28 
forth a new plan or schedule of payment;
29 
i) Terminated tending programs refer to lending programs instituted by the
30 
government which are no longer existing and operational yet with intractable records
31 
of loans; and


1 
j) Write Off refers to the elimination of uncollectible account receivables
2 
recorded on government lending agencies' general ledger or books of accounts for the
3 
past ten (10) years or older prior to the effectivity of this Act.
4 
Sec. 4. Writing Off ofAgricuiturai and Agrarian Reform Loans. -The agricultural
5 
and agrarian reform loans of cooperatives, organizations, and associations of farmers,
6 
fisherfolk, agrarian reform beneficiaries incurred through the following terminated
7 
lending programs of government agencies are hereby written off as detailed in the
8 
appendices;
9 
1) Department of Agrarian Reform (DAR)
10 
a) Dutch Rural Development Assistance Program (DRDAP);
n 
b) DAR-Special Projects Office/Development Bank of the Philippines
12 
Window III (DAR-SPO/DBP Window III);
13 
c) Special Projects Office-Direct Financing Program (SPO-Direct
14 
Financing Program); and
15 
d) DAR Direct Lending Financing Program (DDLFP)
16 
The total outstanding balance for all the programs is Four Hundred
17 
Eighty-Seven Million Eight Hundred Two Thousand Pesos (PhP487,802,000.00).
18 
2) Department of Agriculture-Agricultural Credit Policy Council (DA-
19 
ACPC)/QUEDANCOR (Appendix B)
20 
a) Aurora Integrated Area Development Project (AIADP) (1993-1997)
21 
b) Agri-Fishery Micro Financing Program (AFMP) BOHOL (2010-2013)
22 
c) Catanduanes Agricultural Support Program (CATAG) (1993-1997)
23 
d) Central Cordillera Agricultural Program (CECAP) (1990-1997)
24 
e) Various Programs (Shallow Tube Well, Farm Mechanization, PNPL,
25 
etc.) (1970-1997)
26 
f) Development Assistance Program for Cooperatives and People's
27 
Organizations (DAPCOPO) (1992-2001)
28 
g) Direct Market Linkage Development Program (DMLDP) (2010-2013)
29 
h) Micro Credit for Rural Enterprise Development (MCRED)
30 
i) Various DCPs and AMCFP Programs (1990-2013)
31 
j) Agrarian Production Credit Program (APCP) (2012-2021)


1 
The total outstanding balance for all the programs is Five Billion Five
2 
Hundred Eighty-Eight Million Nine Hundred Nine Thousand Four Hundred Sixty
3 
and Nine Centavos (PhP5,588,909,460.09).
4 
3) National Food Authority (NFA)
5 
a) Farmers' Level Grains Center (FLGC) (1998-2019)
6 
The total outstanding balance for this program is Seventy-Eight Million
7 
Six Hundred Five Thousand Three Hundred Twenty-Eight and Twenty-Four
8 
Centavos (PhP78,605,328.24).
9 
4) Cooperative Development Authority (CDA)
10 
a) Cooperative Authority Development Loan Fund (CADLF) (1973-1999)
11 
The total outstanding balance for this program is Three Hundred Sixty-
12 
Seven Million Six Hundred Forty-Two Thousand Three Hundred Eighteen and
13 
Sixty-Eight Centavos (PhP367,642,318.68).
14 
Provided, That a) loans with collateral under the foregoing loan programs, and
15 
b) loans accounts which have been in the agencies' books of account for less than ten
16 
(10) years shall be excepted from writing off but their corresponding interests,
17 
penalties, and surcharges shall be subject to a one-time condonation and the loan
18 
accounts shall be subject to restructuring.
19 
Sec. 5. Transfer of AH Loan Accounts to the ACPC; Mandatory Provisions. - All
20 
remaining loan accounts of the entities enumerated in Section 4 of this Act, not
21 
covered by writing off of loans, are hereby transferred to the ACPC for management,
22 
collection and disposition: Provided, That the ACPC shall be exempt from court filing
23 
fees and other relevant expenses such as the cost for the transfer of title: Provided,
24 
further. That funds that are collected under the accounts of the CDA shall be remitted
25 
to CDA for its use for project grants to agricultural cooperatives, after deduction of
26 
two (2%) percent for ACPC for its use for operations.
27 
Each government lending agency in this Act shall transfer all remaining loan
28 
account records, together with the respective loan collaterals, to the ACPC within one
29 
hundred eighty days (180) days from the effectivity of this Act.
30 
Account owners shall apply for condonation and loan restructuring with the
31 
ACPC, and once approved, subsequent payment of three (3) successive installments
4


1 
shall operate to restore the account to good standing, to which the ACPC shall issue
2 
a certification to this effect;
3 
Henceforth, it shall be prohibited for any government agency in agriculture,
4 
including the ACPC, to engage in indirect or direct lending to farmers and fisherfolk
5 
and other entities enumerated in section 4 of this Act.
6 
Sec. 6. Collection of Payment - The annual cumulative collection from
7 
payments of loans under this Act shall be remitted to the Bureau of Treasury, after
8 
two (2%) percent of the total annual collection shall have been deducted for ACPC for
9 
its use for operations.
10 
Sec. 7. Repeating Clause. - All laws, executive orders, issuances or parts thereof
11 
inconsistent with the provisions of this Act are hereby amended, repealed or modified
12 
accordingly.
13 
Sec. 8. Separability Clause. - If any provision of this Act is declared
14 
unconstitutional, the remainder thereof or any provisions not affected thereby shall
15 
remain in full force and effect.
16 
Sec. 9. Effectivity. - This Act shall take effect fifteen (15) days after its
17 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,