ESS
RECEIVED

Republic of the Philippines

House of Representatives
Quezon City, Metro Manila

TWENTIETH CONGRESS
First Regular Session

2414

HOUSE BILL NO..

Introduced by Hon. Felimon M. Espares

AN ACT
PROVIDING FOR THE RESTRUCTURING AND CONDONATION OF UNPAID
INTERESTS, PENALTIES, AND SURCHARGES ON LOANS SECURED BY
FARMERS, FISHERFOLKS, CDA-REGISTERED COOPERATIVES AND
AGRARIAN REFORM BENEFICIARIES FROM
THE DEPARTMENT OF AGRARIAN REFORM, THE DEPARTMENT OF
AGRICULTURE, THE PEOPLE'S CREDIT AND FINANCE CORPORATION, THE
COOPERATIVE DEVELOPMENT AUTHORITY, THE NATIONAL FOOD
AUTHORITY, AND THE QUEDAN AND RURAL CREDIT GUARANTEE
CORPORATION

EXPLANATORY NOTE

This bill seeks to condone the unpaid interests, penalties, and surcharges of
loans secured by the farmers, fisherfolks, and agrarian reform beneficiaries from
various government agencies, namely: the Department of Agrarian Reform (DAR),
Department of Agriculture-Agricultural Credit Policy Council (DA-ACPC), Cooperative
Development Authority (CDA), National Food Authority (NFA) and the Quedan and
Rural Guarantee Corporation.

The facts are glaring: farmers and fisherfolk continue to be the poorest sectors
of society.! In 2023, the poverty incidence among farmers stood at 27.0%, while
among fisherfolk it reached 27.5%. This means that a significant portion of these
populations do not earn the minimum income required to meet basic food and non-
food needs, much less settle their outstanding loan obligations.

By providing blanket relief from burdensome interests, penalties, and
surcharges, this bill aims to give our farmers, fisherfolk, and agrarian reform
beneficiaries a fresh start — free from the weight of compounding debt. This will allow
them to refocus their efforts on food production and agricultural development, while
preserving their capacity to settle the principal amounts of their loans, and which the
government may still collect under flexible and realistic terms.

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Over the past six years, the agriculture sector has experienced a consistent
decline in annual production, reflecting structural and financial challenges that have
yet to be resolved. Without targeted intervention, our food producers will continue to
struggle that threatens both their livelihoods and the country’s food security.

This measure is more than financial relief—it is a gesture of solidarity and
recognition. It sends a clear message that the government values the critical role of
farmers and fisherfolk and is committed to standing with them. By restoring their
credit standing and providing them with a clean slate, we empower these sectors to
recover, rebuild, and continue contributing to national development.

In view of the foregoing, the approval of this bill is earnestty-sought



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Republic of the Philippines

House of Representatives
Quezon City, Metro Manila

‘TWENTIETH CONGRESS
First Regular Session

HOUSE BILL NO. 2414

Introduced by Hon. Felimon M. Espares

AN ACT
PROVIDING FOR THE RESTRUCTURING AND CONDONATION OF UNPAID
INTERESTS, PENALTIES, AND SURCHARGES ON LOANS SECURED BY
FARMERS, FISHERFOLKS, CDA-REGISTERED COOPERATIVES AND
AGRARIAN REFORM BENEFICIARIES FROM
THE DEPARTMENT OF AGRARIAN REFORM, THE DEPARTMENT OF
AGRICULTURE, THE PEOPLE'S CREDIT AND FINANCE CORPORATION, THE
COOPERATIVE DEVELOPMENT AUTHORITY, THE NATIONAL FOOD
AUTHORITY, AND THE QUEDAN AND RURAL CREDIT GUARANTEE
CORPORATION

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

SECTION 1. Short Title. — This Act shall be known as the "Agrarian and

Agricultural Loan Restructuring and Condonation Act”.

SEC. 2. Declaration of Policy. - The State shall promote comprehensive
rural development and agrarian reform through the provision of measures that will
release farmers, fisherfolks, and agrarian reform beneficiaries from the bondage of
debt. To this end, it shall be the objective of the State to provide farmers, fisherfolks,
and agrarian reform beneficiaries the opportunity to regain access to government and
commercial credit facilities through the condonation of unpaid interests, penalties, and

surcharges on their existing loans obtained through government lending programs.


Republic of the Philippines

House of Representatives
Quezon City, Metro Manila

SEC. 3. Definition of Terms. — As used in this Act:

(a) Agrarian reform beneficiaries refer to farmers who were granted lands
under Presidential Decree No. 27, known as the Emancipation of Tenants and Transfer
of Ownership of Land They Till, and Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law of 1988, as amended, and other existing
agrarian reform laws. These include regular farmworkers, irrespective of tenurial
arrangement, who benefited from the redistribution of lands, including their
organizations and cooperatives which have availed of the credit programs enumerated
in Section 5 hereof;

(b) Agricultural and agrarian reform credit refers to loans granted for
agricultural production; promotion of agricultural business and exports including, but
not limited to, the acquisition of work animals, farm equipment and machinery, seeds,
fertilizers, poultry, livestock, feeds construction, acquisition and repair of agricultural
facilities;

(©)  Condonation refers to the relief granted by law in the payment of unpaid
interests, penalties and surcharges;

(d) Delinquent borrower refers to a borrower with at least three (3)
consecutive unpaid amortizations or whose total unpaid amortization has reached
twenty percent (20%) of the total outstanding balance of the loan regardless of the
number of unpaid amortizations as of the effectivity of this Act;

(e) Farmers refer to any natural person whose primary livelihood is the

cultivation of land or the production of agricultural crops, livestock, and agricultural


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products, either by themselves or primarily with the assistance of their immediate
farm household or workers, whether the land is owned by them or by another person,
under a leasehold agreement or other similar arrangements;

() _ Fisherfolks refer to people directly or personally and physically engaged
in taking or culturing and processing fishery and/or aquatic resources;

(g) Force Majeure refers to events whether natural or political, beyond the
reasonable control of a loan borrower, which have a material adverse effect on the
ability of the borrower to pay an obligation;

(h) _ Market aberrations refer to unusual adverse movements in market prices
which have detrimental effects on the yield and income of farmers, fisherfolks and
agrarian reform beneficiaries;

(i) __ Loan restructuring refers to a process where the principal terms and
conditions of the original loan are modified in accordance with an agreement setting
forth a new plan or schedule of payment; and

@ Terminated lending programs refer to lending programs instituted by the
government which are no longer existing and operational yet with intractable records
of loans.

SEC. 4. Condonation. — All unpaid interests, penalties, and surcharges of
agricultural and agrarian reform credit secured by farmers, fisherfolks, agrarian reform
beneficiaries, Cooperative Development Authority (CDA)-registered cooperatives,
agrarian reform beneficiary organizations and farmer organizations from the

Department of Agrarian Reform (DAR), Department of Agriculture (DA), People’s


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Credit and Finance Corporation (PCFC), CDA, National Food Authority (NFA), and the
Quedan and Rural Credit Guarantee Corporation (QUEDANCOR) prior to the effectivity
of this Act are hereby condoned upon approval of the application for condonation of
a borrower qualified under this Act: Provided, That the bases for the condonation shall
be limited to cases involving force majeure or market aberration, and shall, in no case
be applied to cases resulting from the willful default of the borrower to pay such loans:
Provided, further, That accumulated payments of not less than two percent (2%) of
the loan principal shall have been paid at the time of application for condonation:
Provided, furthermore, That, a graduation process shall be followed in consonance
with the plan of payment, such that a borrower shall be granted a one-time
condonation only to encourage borrowing discipline and enhance credit worthiness:
Provided, finally, That the condonation of unpaid interests, penalties, and surcharges
from loans acquired through conduit banks, financial institutions, and the agencies
mentioned above shall be in conformity with the applicable general banking laws and
regulations of the Bangko Sentral ng Pilipinas (BSP).

This Act shall likewise apply to all unpaid interests, penalties, and surcharges
of agricultural and agrarian reform credit that will accrue in favor of the national
government, government agencies, or government-owned and -controlled
corporations in the event of abolition, dissolution, or cessation of existence of any of
the above entities where it was principally availed from.

SEC. 5. Coverage. — The following accounts are covered by the condonation

program:


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(a) Agricultural and agrarian reform credit secured through the Credit
Assistance Program — Program Beneficiaries Development of the DAR;

(b) Agricultural and agrarian reform credit secured through the terminated
credit program schemes of the DAR, such as the Dutch Rural Development Assistance
Program (DRDAP), DAR Direct Lending Financing Program (DDLFP), DAR Special
Projects Office (SPO) Direct, and the SPO Window III Financing Program for Agrarian
Reform Beneficiaries of the DAR and the Development Bank of the Philippines;

(c) _ Loans secured under the Resettlement Loan Assistance Program of the
DAR for individual agrarian reform beneficiaries;

(d) Agricultural credit secured through the High Yield Crop Loan Assistance
Program of the DA;

(e) Agricultural credit secured through Microfinance Program for Small
Farmers and Fisherfolk and the Household of the PCFC;

(f) Loans secured under the Cooperative Development Loan Fund of the
CDA;

(g) Loans secured under the Farmers Level Grain Center of the NFA; and

(h) Loans secured under the Comprehensive Agrarian Reform Program —
Barangay Marketing Center (CARPBMC) and all agri-credit guarantee programs of
QUEDANCOR.

SEC. 6. Qualified Beneficiaries. — Delinquent farmers, fisherfolks, agrarian
reform beneficiaries, CDA-registered cooperatives, agrarian reform beneficiary

organizations and farmer organizations that secured agricultural and agrarian reform


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credit under any of the accounts enumerated in Section 5 of this Act and who are
delinquent borrowers may apply for condonation of unpaid interests, penalties, and
surcharges with the concerned government agency or corporation.

SEC. 7. Approval of Application for Condonation. - The government
agency or corporation managing the accounts secured from the various programs and
agencies enumerated in Section 5 hereof shall review and approve an application for
condonation and loan restructuring. The period for payment of the restructured loan
shall be determined according to the financial capacity of the farmers, fisherfolks,
agrarian reform beneficiaries, CDA-registered cooperatives, agrarian reform
beneficiary organizations and farmer organizations upon the approval of the
application. The approval of an application for condonation shall serve as the basis for
the concerned government agency or corporation to write off the unpaid interests,
penalties, and surcharges condoned.

SEC. 8. Collection of Payment. — The annual collection from payments of
loans under the terminated credit programs as provided in Section 5(b) of this Act
shall accrue to the Agrarian Reform Fund and be remitted to the Bureau of Treasury.

SEC. 9. Restoration of Non-performing Loans to Good Standing
Status. —Loans restructured under this Act shall be restored to good standing status
upon three (3) consecutive payments by the borrower of the required periodic
amortizations under the restructured loan as determined. Upon satisfaction of the said
condition, government agencies may issue the appropriate certifications to the

borrower thereby facilitating their reintegration into the financial and banking system.


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House of Representatives
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SEC. 10. Writing off of Loans from the Books of Terminated Lending
Programs, — The concerned agencies shall write off from their books the loans
secured under lending programs that have been terminated provided that the
programs are clearly identified, and the accounts involved are past due. The procedure
for the writing off of loans shall be provided for in the rules and regulations to be
issued to implement this Act.

SEC. 11. Implementing Rules and Regulations (IRR). —Within sixty (60)
days from the effectivity of this Act, the Secretary of the DAR shall, in consultation
with the secretaries and heads of offices of the DA, CDA, NFA, QUEDANCOR, the
Agriculture Credit Policy Council (ACPC) and the BSP promuigate rules and regulations
for the effective implementation of this Act.

SEC. 12. Repealing Clause. — A\l laws, executive orders, issuances or parts
thereof inconsistent with the provisions of this Act are hereby amended, repealed or
modified accordingly.

SEC. 13. Separability Clause. — If any provision of this Act is declared
unconstitutional, the remainder of this Act or any provisions not affected thereby shall
remain in full force and effect.

SEC. 14. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,