g5>cnatt
of tI)C &‘n-ptarp
NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S.B. No. 1 828
23 JAN 31 P4:24
RECEIVED BV;
Introduced by SENATOR IMEE R. MARCOS
AN ACT CONSOLIDATING THE LOAN ALLOCATION PROVIDED FOR 
AGRICULTURE AND FISHERIES CREDIT AND AGRARIAN REFORM 
BENEFICIARIES, AND INCREASING THE PENALTIES ON LENDING 
INSTITUTIONS FOR NON-COMPLIANCE AND UNDERCOMPLIANCE WITH 
THE PROVISIONS OF REPUBLIC ACT NO. 10000, OTHERWISE KNOWN AS 
"THE AGRI-AGRA REFORM CREDIT ACT OF 2009", AMENDING FOR THE 
PURPOSE SECTION 6 AND SECTION 10 THEREOF,
AND FOR OTHER PURPOSES
EXPLANATORY NOTE
It is a declared policy of the State under Section 2 of Republic Act No. 10000, 
otherwise known as the "Agri-Agra Reform Credit Act of 2009," "to promote equal 
access to opportunities under an environment of sustained growth and expanding 
productivity as the key to raising the quality of life for all. Towards this end, the State 
shall promote rural development by enhancing access of the rural agricultural sector to 
financial services and programs that increase market efficiency and promote 
modernization in the rural agricultural sector."
Section 6 of the same Act provides that "All banking institutions, whether 
government or private, shall set aside a t least twenty-five percent (25%) of their total 
loanable funds for agriculture and fisheries credit in general, of which at least ten 
percent (10%) of the loanable funds shall be made available for agrarian reform 
beneficiaries mentioned in Section 5 hereofHowever, records of the Bangko Sentral 
ng Pilipinas (BSP) show that as of June 2022, except for rural banks and cooperatives, 
overall compliance with RA No. 10000 has been declining and has generally been below 
the mandatory lending requirement. With the impact of the COVID-19 pandemic and 
the effects of climate change becoming more severe, the demand for accessible and 
affordable financial services for the agriculture and fisheries sectors has become more 
urgent. A consolidation of the loan allocation would work to broaden the area within 
which the financial institutions may comply with the requirements of the same Act.


Section 10 of RA No. 10000 further provides that "The BSP shall Impose 
administrative sanctions and other penalties on the lending institutions for non- 
compliance with the provisions of this Act. Penalties on non-compliance shall be 
computed at one-half of one percent (0.5%) of non-compliance and under-compliance 
and shall be directed to the development of the agri-agra sector. Ninety percent (90%) 
of the penalties collected shall be allocated between the AGFP and the PCIC according 
to the needs of the agri-agra sector as provided for in the implementing rules and 
regulations of this Act and the remaining ten percent (10%) shall be given to the BSP 
to cover administrative expenses." Most banks are not willing to follow the requirement 
of RA No. 10000, choosing, instead, to pay the penalties provided in Section 10 quoted 
above. While the State recognizes the right of financial institutions to implement a 
sound lending policy based on its own discretion and evaluation, the duty to obey the 
mandates of the law, with utmost good faith, is paramount. Therefore, it is deemed 
proper to implement a four-fold increase of the penalty, from 0.5% to 2%.
The agricultural and fisheries sectors have not been able to fully avail of the 
credit services imposed by RA No. 10000 on banks and other financial institutions. This 
is due to the imposition of strict eligibility and documentary requirements and high 
standards on the borrowers' ability to settle loans, which the agricultural and fisheries 
sectors have difficulty complying with. Thus, the 25% requirement is not met, which is 
detrimental to the development of the said sectors.
It is not the intention of this Act to penalize and reprimand the banking 
institutions. Instead, this Act seeks to encourage said institutions to implement 
measures aimed at realizing of the purposes of the law and the development of the 
agricultural and fisheries sector of the country.
Thus, the immediate passage of this bill is necessary.
R. MARCOS


lam ,
of il)'' SSi cretnru
NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
First Regular Session 
)
SENATE
s.B. No. 1823-
23 JAN 31 P4 24
Rl'CEiVlD bV
Introduced by SENATOR IMEE R. MARCOS
AN ACT
CONSOLIDATING THE LOAN ALLOCATION PROVIDED FOR 
AGRICULTURE AND FISHERIES CREDIT AND AGRARIAN REFORM 
BENEFICIARIES, AND INCREASING THE PENALTIES ON LENDING 
INSTITUTIONS FOR NON-COMPLIANCE AND UNDERCOMPLIANCE WITH 
THE PROVISIONS OF REPUBLIC ACT NO. 10000, OTHERWISE KNOWN AS 
"THE AGRI-AGRA REFORM CREDIT ACT OF 2009", AMENDING FOR THE 
PURPOSE SECTION 6 AND SECTION 10 THEREOF,
AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled:
1 
Section. 1. Credit Quota. - Article II, Section 6 of Republic Act No. 10000 is
2 
hereby amended to read:
3
4 
"Sec. 6. Credit Quota. - All banking institutions, whether government or
5 
private, shall set aside at least twenty-five (25%) of their total loanable
6 
funds for agriculture and fisheries credit [in general, of which at least ten
7 
percent (10%) of the loanable funds shall be made ovailoble-fer] AND
8 
agrarian reform beneficiaries mentioned in Section 5 hereof: Provided,
9 
however, That total loanable funds as used in this Section shall refer to
10 
funds generated from the date of effectivity of this Act: Provided, further,
11 
That the twenty-five percent (25%) credit quota is subject to a joint
12 
review by the Department of Agriculture (DA), the Department of
13 
Agrarian Reform (DAR) and the Bangko Sentral ng Pilipinas (BSP) after
14 
three (3) years of implementation to determine whether the law has been
15 
effective in accomplishing its goals. The findings shall be submitted to
16 
Congress."
17
18 
Sec. 2. Penalty Clause. - Article III, Section 10 of Republic Act No. 10000 is
19 
hereby amended to read:


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16
17
18
19
20 
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
"Sec. 10. Penalty Clause. -
a) The BSP shall impose administrative sanctions and other penalties on 
the lending institutions for noncompliance with the provisions of this 
Act. Penalties on noncompliance shall be computed at [one half of 
one percent (0.5%)] TWO PERCENT (2%) of noncompliance and 
undercompliance and shall be directed to the development of the agri- 
agra sector. Ninety percent (90%) of the penalties collected shall be 
allocated between the AGFP and the PCIC according to the needs of 
the agri-agra sector as provided for in the implementing rules and 
regulations of this Act and the remaining ten percent (10%) shall be 
given to the BSP to cover administrative expenses.
b) OFFICIALS ACCOUNTABLE FOR NON-COMPLIANCE AND 
UNDER-COMPLIANCE WITH THE PROVISIONS OF THIS ACT 
SHALL BE LIABLE ADMINISTRATIVELY AND CIVILLY IN THE 
MANNER THAT SHALL BE EXPRESSED AND INCLUDED IN THE 
IMPLEMENTING RULES AND REGULATIONS OF THE AGRI- 
AGRA REFORM CREDIT ACT OF 2009 (RA 10000). BSP 
OFFICIALS SHALL LIKEWISE BE LIABLE FOR REFUSAL OR 
FAILURE TO SANCTION ERRING BANK OFFICIALS."
Sec. 3. Congressional Annual Reports. - The BSP shall furnish reports on the 
compliance with the Credit Quota, as provided in this Act, including Information on the 
amount of penalties collected and remitted to the Congress on a yearly basis. The BSP 
shall, as part of its regulatory functions, monitor the compliance by the banks with the 
requirements of this Act.
Sec. 4. Separability Clause. - If for any reason, any provision of this Act is 
declared invalid or unconstitutional, the remaining parts or provisions not affected shall 
remain in full force and effect.
Sec. 5. Repealing Clause. - All laws or parts thereof, decrees, orders, rules and 
regulations inconsistent with the provisions of this Act are hereby repealed or modified 
accordingly: Provided, however, that nothing in this Act shall be construed or applied 
as amending the Comprehensive Agrarian Reform Law (CARL) and other laws on 
agrarian reform.
Sec. 6. Effectivity. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,