Republic of the Philippines
HOUSE OF REPRESENTA’
Quezon City

19TH CONGRESS
First Regular Session

339

HOUSE BILL NO.

Introduced by Honorable Michael L. Romero

EXPLANATORY NOTE

LANDBANK was established on August 8, 1963 as part of the Agricultural
Land Reform Code as part of a program of land reform in the Philippines. It was
to help with the purchase of agricultural estates for division and resale to small
landholders and the purchase of land by the agricultural lessee. In 1965,
LANDBANK's by-laws were approved and its first board of trustees was formed,
with the Secretary of Finance as Chairman.

On October 21, 1972, Presidential Decree No. 27, signed by President
Ferdinand Marcos, emancipated all tenant farmers working on private
agricultural lands devoted to rice and corn, whether working on a landed estate
or not. The system was implemented through a system of sharecropping or lease-
tenancy. LANDBANK was tasked to collect 15-year land amortizations from
beneficiaries at the cost of the value of the land plus six percent interest per
annum.

By 1973, LANDBANK was in financial distress. It lacked the resources and
the capital needed to implement the land reform programs and lacked the
structure to implement the programs efficiently. On July 21, Marcos signed
Presidential Decree No. 251 which revitalized the bank. The decree granted
LANDBANK a universal banking license (the first bank in the Philippines to be
issued such a license) with a social mission to spur countryside development. The
decree expanded LANDBANK's powers to include lending for agricultural,
industrial, homebuilding and home-financing projects and other productive
enterprises, as well as lending to farmers’ cooperatives and associations to


facilitate production, marketing of crops and acquisition of essential commodities.
LANDBANK was also required by the decree to provide timely and adequate
support in all phases involved in the execution of agrarian reform and also
increased its authorized capital to 3 billion pesos. It also became exempted from
all national, provincial, city and municipal taxes and assessments.

LANDBANK was reorganized in 1977 when it was divided into three sectors
to better assess the needs of its customers. It was divided into Agrarian, Banking
and Operations sectors to strengthen operations and ensure long-term viability.

In 1982, the Agricultural Credit Administration (ACA), established under
the same law as Landbank, was abolished and all its assets and functions
transferred to Landbank. ACA's function was to extend credit to small farmers.
Also in this year, Union Bank of the Philippines (UnionBank) was formed, with
LANDBANK having a 4 0-percent stake in the government owned commercial
bank.

LANDBANK became the financial intermediary for the Comprehensive
Agrarian Reform Program (CARP) in 1988. It was also in that year that UnionRank
started a graduai privatization. The Aboitiz Group of Companies acquired
Landbank's 40% share of UnionBank then which it contixaues to own.
LANDBANK also became the third member of Expressnet, an interbank network
in December 1991 but now a BancNet member.

On February 23, 1995, LANDBANK's charter was once again amended. Its
authorized capital was increased to nine billion pesos and it became an official
government depository. The number of members of the board of trustees was also
increased to nine. On August 25, 1998, Landbank’s authorized capital was once
again increased to 25 billion pesos, and it then increased to 200 billion pesos,
after the DBP-LANDBANK merger in 2016.

AFFILIATES AND SUBSIDIARIES

+ LBP Leasing Corporation
+ LBP Insurance Brokerage

+ LBP Resources and Development Corporation (former LB (LANDBANK)
Realty Development Corporation) «

+ Masaganang Sakahan, Inc.

+ LBP Countryside Development Foundation, Inc.

CURRENT OPERATIONS

LANDBANK competes against the major banks such as Metrobank, BPI, Banco
de Oro and Philippine National Bank. In rural areas, depending on the situation,
it either competes against or complements rural banks.


On the other end of the spectrum, LANDBANK takes on a dual role with the
Development Bank of the Philippines, which is another government owned bank.
It either competes against or works with DBP, depending on the situation
involved.

This House Bill seeks to foster the continuity and expansion of responsive
financial and support services to all our farmers and fisher folk.

Thus, the ear} passage of this bill is earnestly requested.

MICHAEL L. ROMERO Ph.D.
Representative
1-PACMAN partylist


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

19TH CONGRESS
First Regular Session

HOUSE BILL NO. 339

Introduced by Honorable Michael L. Romero

AN ACT

MANDATING THE LAND BANK OF THE PHILIPPINES (LBP) TO
FOCUS ON ITS CHARTER TO ALLOCATE SIXTY (60) PERCENT OF
ITS TOTAL LOAN PORTFOLIO IN SOLELY PROVIDING SUPPORT
AND FINANCING SERVICES FOR FARMERS AND FISHERFOLKS

ALL OVER THE COUNTRY, TO PROMOTE INCLUSIVE GROWTH
AND IMPROVE THE QUALITY OF LIFE ESPECIALLY IN THE
COUNTRYSIDE THROUGH THE DELIVERY OF INNOVATIVE

SCHEMES, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. DECLARATION OF POLICY - It is hereby a declared policy of
the state to provide comprehensive livelihood programs and schemes to all our
farmers and fisherfolks.

a. It shall hereby be a policy of the state to mandate the Landbank of the

Philippines (LBP) to allocate sixty (60) percent of its total loan portfolio


for the sustainability and development of our thirty (30) million farmers
and fisherfolks;

b. It shall hereby be a policy of the state to provide sustainable livelihood
support for agricultural cooperatives and farmer/fisherfolk associations
all over the country;

c. It shall hereby be a policy of the state to establish and create
microfinancing schemes for developmental purposes, irrigational
requirements of farmlands, seedling and fertilizer requirements;

4. It shall hereby be a policy of the state to provide short term working
capital funding for the sole usage of our farmers and fisherfolks; and

e. It shall hereby be a policy of the state to promote financial and

support services in a successive and progressive manner.

SECTION 2. TRANSITORY PROVISION - Existing industries,
businesses and offices affected by the implementation of this Act shall be
given six (6) months transitory period from the effectivity of the IRR or
such other period as may be determined, to comply with the requirements
of this Act.

SECTION 3. IMPLEMENTING RULES AND REGULATIONS - The
departments and agencies charged, with carrying out the provisions of this
Act, shall within sixty (60) days after the effectivity of this Act, formulate
the necessary rules and regulations for its effective implementation.

SECTION 4. REPEALING CLAUSE - All laws, decrees, executive
orders, rules and regulations, or parts thereof inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

SECTION 5. SEPARABILITY CLAUSE - If, for any reason, any section
or provision of this Act is held unconstitutional or invalid, the other sections
or provisions hereof shall not be affected thereby.


SECTION 6. EFFECTIVITY CLAUSE - This Act shall take effect after
fifteen (15) days from its publication in the Official Gazette or in at least
two (2) national newspapers of general circulation whichever comes earlier.

Approved,