Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

18% Congress
First Regular Session

House Bill No.__1976

Introduced by HON. RODRIGO A. ABELLANOSA

EXPLANATORY NOTE

Agriculture plays a significant role in the Philippine economy. Data from the
Canadian International Development Agency-Philippines-Canada Local Government
Support Program, about 40 percent of Filipino workers, it contributes an average of
20 percent to the Gross Domestic Product. This output comes mainly from
agribusiness, which in turn accounts for about 70 percent of the total agricultural
output.

Apart from its role in the economy, agriculture is the primary key in ensuring to food
security. However, over the recent years, the country’s agriculture sector has seen a
decrease in productivity and high production costs. As it must be the policy of the
State to provide support this sector, this bill secks to consolidate existing agricultural
credit programs for Micro, Small, and Medium Enterprises (MSMEs), thereby
creating the Farmers and Fisherfolk Quick Credit Program (FFQCP}, a lending facility
which shall provide small farmers, fisherfolk and MSMEs in the agriculture and
fisheries sectors direct, adequate, affordable, and timely credit for their farming and
fishing activities.

Through the FFQCP, the government shall be able to guarantee a continued and
systematic provision of agricultural support and an even distribution of resources
that will hopefully translate into higher agricultural output.

In view of the evident need for renewed support for the MSMEs in the agricultural
sector, passage of this Bill is earnestly sought.

RODRIGO A. ABELLANOSA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

18% Congress
First Regular Session

House Bill No. 1976

Introduced by HON. RODRIGO A. ABELLANOSA.

AN ACT
UNIFYING ALL EXISTING AGRICULTURAL CREDIT PROGRAMS FOR
THE FARMERS, FISHERFOLD AND MICRO, SMALL AND MEDIUM
ENTERPRISES (MSMEs) ENGAGED IN AGRICULTURE AND FISHERIES,
CREATING THE FARMERS AND FISHERFOLD QUICK CREDIT
PROGRAM, ESTABLISHING THE AGRICULTURAL CREDIT AUTHORITY
OF THE PHILIPPINES (ACAP), AND PROVIDING FUNDS THEREFOR, IN
ORDER TO PROMOTE THE DEVELOPMENT OF ENTREPRENEURSHIP IN
THE AGRICULTURE AND FISHERIES SECTORS

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 “Farmers, Fisherfolk
and MSMEs Engaged in Agriculture/ Fisheries Quick Credit Act of 2019.”

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to
increase agricultural productivity and food production in the countryside through
the provision of adequate, affordable, and timely credit to small farmers and
fisherfolk, including the micro, small, and medium enterprises engaged. in
agriculture and fisheries.

SEC. 3. Definition of Terms. - For purposes of this Act, the following terms are
herein defined:

a) “Agricultural Sector” refers to the sector engaged in the cultivation of the
soil, planting of crops, growing of fruit trees, raising of livestock, poultry, or fish,
including the harvesting and marketing of such farm products, and other farm
activities and practices;

b) “Department” refers to the Department of Agriculture

¢) “Fisheries Sector” refers to the sector engaged in the production, growing,
harvesting, processing, marketing, developing, conserving, and managing of aquatic
resources and fisheries areas;


4) “Small Farmers and Fisherfolk” refers to natural persons dependent on
small-scale subsistence farming and fishing activities as their primary source of
income. Small crop growers are actual tillers of agricultural land of not more than 3
hectares. Small fisherfolk includes (i) those who own or operate fishing boats and
paraphernalia with a capacity of not more than 3 gross tons; (i) those whose fishing
activities are within 25-kilometer radius from the shoreline; (ii) owners or operators
of not more than 5 hectares of fishpond; and (iv) workers of fishponds and fishing
boats.

©) “Micro, Small, and Medium Enterprise (MSME) in agriculture-related
business activities: refers to any business activity or enterprise engaged in
agribusiness and/or services related to agriculture, whether single proprietorship,
cooperative, partnership or corporation whose total assets, inclusive of those arising
from loans but exclusive of the land on which the particular business entity’s office,
plant and equipment are situated, must have value falling under the following
categories: (i) Micro - not more than P3,000,000; (ii) Small — P3,000,001 to
P15,000,000; (III) Medium — P15,000,001 to P100,000,000.

SEC. 4. Creation of the Farmers and Fisherfolk Quick Credit Program. - A
lending facility to be called the Farmers and Fisherfolk Quick Credit Program (FFQCP)
is hereby created to provide small farmers, fisherfolk and MSMEs in the agriculture
and fisheries sectors direct, adequate, affordable, and timely credit for their farming
and fishing activities. FFQCP loan shall be provided with no collateral, at a low
interest rate and with minimal documentary identification requirements.

All existing agricultural credit programs, including the remaining loan funds
from the terminated programs, shall be unified /consolidated into the FFQCP.

The FFQCP shall provide loans for the requirements for agricultural and
fisheries production, processing and trading, working capital, other agricultural
livelihood and agri-based enterprise projects of the small farmers and fisherfolk,
cooperatives, farmers’ /fisherfolk’s organization, and MSMEs engaged in agriculture
and fisheries.

The FFQCP shall provide grant/financing assistance for the relief and
rehabilitation of small farmers, fishers and MSMEs engaged in agriculture /fisheries
affected by calamities/fortuitous events. The FFQCP shall likewise provide grants
and other subsidies for the education, institution capacity building activities, and
training of small farmers, fisherfolk and MSMEs engaged in agriculture /fisheries,
and their organizations on credit awareness, loan acquisition, loan repayment, and
on financial literacy.

SEC. 5. Termination of Agreements and Transfer of Resources. - Upon the
effectivity of this Act, all agreements providing for the administration and
implementation of previously created agricultural credit programs which are herein
being directed to be transferred to the FFQCP shall be deemed terminated, and all
government agencies concerned and partner financial institutions, shall take steps,
in no case later than three (3) months from effective date hereof, for the smooth and
expeditious transfer to the FFQCP of said funds, as well as all assets and liabilities
of such funds, and other resources.

Upon the transfer of the said funds to the FFQCP, the Secretary of DA shall
assume all rights and obligations pertaining to the administration of the funds
transferred to the FFQCP: Provided, That the termination of the various agreements
shall not affect the obligations incurred by third parties, which obligations shall


continue to be in force and effect until such time that such obligations are fully
liquidated.

Funds involved in foreign-assisted projects may be transferred to the FFQCP
subject ot negotiations with the respective foreign institutions concerned.

SEC. 6. Revolving Fund of FFQCP. - Php 50 Billion shall be initially
appropriated for the use of the FFQCP. In addition, the remaining cash balance from
the consolidated credit programs shall also form part of the FFQCP Fund. Collections
from receivables under the consolidated /terminated / pre-terminated credit programs
and sourced from the General Appropriations Act (GAA) for FFQCP shall accrue to
the FFQCP Fund. Likewise, all interest earnings shall be reverted to the FFQCP fund.
The FFQCP Fund shall be treated as a revolving fund and shall no longer pass
through the budgetary process. The FFQCP Fund shall be kept and deposited in a
designated authorized government depository bank.

SEC. 7. Creation of the Agricultural Credit Authority of the Philippines (ACAP). -
‘The Agricultural Credit Authority of the Philippines (ACAP), is hereby referred to as
the “ACAP”, an agency to be governed by a Board, is hereby established to replace
the Agricultural Credit Policy Council (ACPC), to administer and implement the
Farmers and Fisherfolk Quick Credit Program (FFQCP), a direct credit facility. The
ACAP is authorized to lend directly to the small farmers, fisherfolk and MSMEs
engaged in agriculture/fisheries and/or their organizations. The assets and other
resources including the manpower complement of the ACPC shall be transferred to
the ACAP.

SEC. 8. Principal Office. - The ACAP shall maintain its principal office in the
Metro Manila area but it may establish branches or agencies within the Philippines
as may be necessary for the proper conduct of its operations.

SEC. 9. The ACAP Governing Board and Officers. - The Governing Board shall
be composed of: The Secretary, Department of Agriculture as Chairman; the
Administrator, ACAP and the Secretary, Department of Agrarian Reform as Vice-
Chairpersons; the Secretary, Department of Environment and Natural Resources;
the Secretary, Department of Budget and Management; the Secretary, Department
of Finance; one Farmer Sector Representative, and one Fisherfolk Sector
Representative, as members.

The Governing Board shall appoint an Administrator of the ACAP. The
Administrator shall implement the programs, projects and decisions of the Board.

SEC. 10. Powers and Duties of the ACAP Governing Board. - The Governing
Board shall have the following powers and duties:

A) To provide direction and formulate policies on the implementation of the
FFQCP;

B) To approve the annual budget of ACAP;

C) To administer, direct, and manage the implementation of the policies of the
Governing Board;

D) To act on issues or concerns relative to the program implementation;

E) To maintain a management information system on its clients consisting of
farmers, fisherfolk and MSMEs engaged in agriculture /fisheries;

F) To devise monitoring and evaluation system, including collection strategies,
for the program;


G) To conduct information dissemination campaigns on the credit facility
among farmers, fisherfolk and MSMEs engaged in agriculture / fisheries;

H) To conduct policy research studies, and other rural finance empowerment
activities

1) To prepare the annual budget of ACAP;

J) To receive all reports and documents of all programs with agricultural credit
and financing components;

K) To enter into, make and execute contracts of any kind as may be necessary
or incidental to the attainment of ACAP and FFQCP’s purposes and, generally, to
exercise all the powers necessary to achieve the purposes and objectives for which
ACAP is organized;

L) To undertake measures of increasing FFQCP fund base;

M) To establish the internal organization of the ACAP and fix the salaries and
the renumerations, emoluments, allowances and other fringe benefits of its officers
and employees, subject ot the provisions of pertinent compensation law and
regulations;

N) To establish or cause the establishment of branches or agencies, within the
Philippines, whenever deemed necessary by the Board;

0) To create and establish, a “Provident Fund” which shall consist of
contributions made both by the ACAP and its officers and employees to a common
fund for the payment of retirement and other benefits to such officers and employees
or their heirs under such terms and conditions as the Board may fix; and

P) To exercise such other powers as may be necessary and proper for the
effective enforcement of this law and the implementing rules and regulations.

SEC. 12. Agricultural Insurance Coverage. - All FFQCP loans shall be covered
by the Philippine Crop Insurance Corporation.

SEC. 13. Use of Registry of Farmers, Fisherfolk and MSMEs Engaged in
Agriculture/ Fisheries. -FFQCP loans shall only be provided to small farmers,
fisherfolk and MSMEs engaged in agriculture/fisheries listed in an authorized
census or registry by the government. The governance and updating of a registry
system for farmers, fisherfolk and MSMEs engaged in agriculture/fisheries shall be
the responsibility of the Department of Agriculture.

SEC. 14. Annual Appropriation. - The Department of Budget and Management
(DBM) is hereby mandated to include annually, in the President's Program of
expenditures for submission to Congress, and release, an amount proposed by the
Department of Agriculture for the implementation of this Act. The DBM shall expedite
the approval of the staffing pattern of the ACAP, not later than thirty (3) days from
the effectivity of this Act.

SEC. 15. Operating Fund of the ACAP. - As operational funds, interest earnings
of the FFQCP Fund shall be used to augment the operating budget of ACAP under
the General Appropriations Act. Five percent (5%) of the interest earnings shall be
set aside annually for institution capacity building activities to strengthen the small
farmers, fisherfolk and MSMEs engaged in agriculture/fisheries, and their
organizations.


SEC. 16. Implementing Rules and Regulations. -The Department of Agriculture
shall, within ninety (90) days after the effectivity of this Act, prepare and issue the
necessary policies, rules and regulations, and guidelines to implement this Act.

SEC. 17. Automatic Review. - Every five (5) years after the effectivity of this
Act, an independent review panel, composed of experts to be appointed by the
Secretary of the Department of Agriculture, shall review the policies and programs
relevant this Act and shall make recommendations, based on its findings, to the
President and to both Houses of Congress.

SEC. 18. Penalty for Delinquent Borrowers. - A farmer, fisherfoll or MSME
engaged in agriculture /fisheries borrower or its organization that fails to pay the loan
availed from the FFQCP after being given re-structuring or reOfinancing plans based
on merit shall be blacklisted from the program.

SEC. 19. Repealing Clause. - All laws, decrees, executive issuance, rules and
regulations inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 20. Separability Clause. - The provisions of this Act are hereby declared
to be separable, and in the event one or more of such provisions are held
unconstitutional, the validity of the other provisions shall not be affected thereby.

SEC. 21. Effectivity. - This Act shall take effect thirty (30) days from the date

of its publication in the Official Gazette or in at least two (2) newspapers of general
circulation.

Approved,