HOUSE OF REPRESENTATIVES
RECEIVED
Republic of the Philippines er
House of Representatives STAT Pe

Quezon City TING: 4
BY:

DATE:

SEVENTEENTH CONGRESS
First Regular Session REGISTRATION UNTT
436 BILLS AND INDEX SERVICE

HOUSE BILL NO.

Introduced by Hon. Anthony M. Bravo
and Hon. Sabiniano S. Canama
COOP-NATCCO PARTYLIST

EXPLANATORY NOTE

The Philippine Crop Insurance Corporation (PCIC) is a government owned and
controlled corporation created under PD 1467. It was later amended by PD 1733 and further
amended by RA 8175. It is the implementing agency of the government’s agricultural
insurance program, PCIC is an attached agency of the Department of Agriculture and its
principal mandate is to provide insurance protection to farmers against losses arising from

natural calamities, plant diseases and pest infestations of their crops.

The problem with the PCIC is that it has continually failed to adequately protect our
subsistence farmers from the rigors of calamities, often paying far less than what the actual
value of the projected harvest is. This bill seeks to amend the PCIC Charter to require a
payment between the range of 80% to a hundred percent of the actual value of the projected
harvest of our farmers. It is only by properly compensating the farmers will we fully protect
their interest and those of their families. This is very much needed at present and in the years
to come considering the devastation brought about by climate change which has led to

stronger typhoons and more unpredictable weather patterns,

In light of the foregoing, the immediate passage of this bill is earnestly requested

HON. SABINIANO S. CANAMA


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 436

Introduced by Hon. Anthony M. Bravo
and Hon. Sabiniano S. Canama
COOP-NATCCO PARTYLIST

AN ACT
STRENGTHENING THE PHILIPPINE CROP INSURANCE
CORPORATION (PCIC), AMENDING FOR THE PURPOSE
PRESIDENTIAL DECREE NO, 1467, AS AMENDED, OTHERWISE
KNOWN AS THE CHARTER OF THE PHILIPPINE CROP
INSURANCE CORPORATION

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

further amended to read as follows:

“SEC. 1. Creation of the Philippine Crop Insurance Corporation. ~
There is hereby created a body corporate to be known as the “Philippine Crop
Insurance Corporation” (PCIC and herein called the Corporation) which shall
be attached to the Department of Agriculture [for budgetary purposes). The
Corporation shall insure qualified farmers AND FISHERFOLK against
TOUS EVENTS, plant AND
FISH diseases and pest infestations. [Initially] [t]The Corporation shall

losses arising from natural calamities, FOR’

provide insurance coverage for palay AND CORN crops, HIGH-VALUE
COMMERCIAL CROPS, LIVESTOCK, AQUACULTURE AND FISHERY
PRODUCTS, AGROFORESTRY CROPS AND FOREST PLANTATIONS,
[and later on to other crops without prejudice to the inclusion of other] non-
crop agricultural assets such as but not limited to machineries, equipment,
transport facilities and other related infrastructures;], AND LIFE AND
ACCIDENT TERM INSURANCE COVERAGE FOR FARMERS AND
FISHERFOLK, as the Board of Directors of the Corporation may determine
Such crop insurance shall cover, in every case, the cost of production inputs,
the value of the farmer’s OR FISHERFOLK’S own labor and those of the
members of his household, including the value of the labor of hired workers,
and a portion of the expected yield as the Board of Directors, in its discretion,

‘TION 1. Section 1 of Presidential Decree No. 1467, as amended, is hereby


decide to insure, Such insurance protection, however, shall exclude losses

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arising from avoidable risks emanating from or due to the negligence,
malfeasance or fraud committed by the insured or any member of his

immediate farm household or employee or the failure of the insured to follow

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proven farm practices,

6 THE CORPORATION SHALL ALSO INSURE PROPERTIES AND
“i FACILITIES WHICH ARE OWNED OR USED BY GOVERNMENT
8 AGENCIES INVOLVED IN AGRI-FISHERY-FORESTRY
9
0

PROJECTS/ACTIVITIES AND GOVERNMENT-FINANCED AGRI-
FISHERY-FORESTRY PROJE(

THE CORPORATION SHALL

ul PROVIDE REINSURANCE COVERAGE TO  AGRI-FISHERY-
12 FORESTRY PROPERTIES AND FACILITIES UNDERWRITTEN BY

13 PRIVATE AND GOVERNMENT INSURANCE COMPANIES.”

14 SEC. 2, Subsections 3.5 and 3.11 of Section 3 of Presidential Decree No. 1467, as
15 amended, are hereby further amended to read as follows

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7 3, Powers, - The Corporation shall have the following powers:

18 XXX

19 3.5. To insure the [rice production] CROPS of farmers AND

20 FISHERFOLK against loss, damage and destruction caused by natural

21 calamities such as typhoons, floods, drought, earthquake, volcanic

2 eruptions, rodents, vermin{s], diseases, insects and other pests, and to

23 carry on any business necessary, related to and expedient for the

24 above purpose;

25 XXX

26 3.11, To generate internal funds by floating bonds, [expansion to

21 other] EXPANDING THE CORPORATION’S insurance lines and

28 extending coverage to other areas of agriculture{,] SUCH AS

29 LIVESTOCK, AQUACULTURE, FISHERY, AGROFORESTRY,

30 AND FOREST PLANTATIONS in order to address insurance needs

31 of the target sector and to do and perform acts and things and to

32 exercise all the general powers conferred by law upon the Corporation

33 as are incidental or conducive to the attainment of the objectives of

34 the Corporation.”

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36 SEC. 3, Section 5 of Presidential Decree No. 1467, as amended, is hereby further

37 amended to read as follows:


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“SEC. 5 Rate of Premium and its Sharing. — The rate of premium, as
well as the allocated sharing thereof [by the] OF farmers, FISHERFOLK,
[the] lending institutions, the Government of the Republic of the Philippines
(herein called the Government) and other parties, shall be determined by the
Board of Directors of the Corporation: Provided, That the share of the
Government in the premium cost in the form of premium subsidy, shall be
limited to subsistence farmers AND FISHERFOLK: Provided, however, That
each of these subsistence farmers is cultivating not more than seven (7)
hectares OF FARMLANDS AND EACH FISHERFOLK IS CULTIVATING
NOT MORE THAN FIVE (5) HECTARES OF THE FISHPOND,
SEAWEED, OYSTER OR MUSSEL FARM by themselves or with the help
of the labor of the members of their households or hired labor, the premium
rate and sharing to be determined by the Board of Directors subject to
approval by the President of the Philippines: Provided, further, That the
premium share of the subsistence farmer OR FISHERFOLK shall be
reasonably affordable by him: Provided, furthermore, That the Government
shall share in the premium cost only in insurance coverage against unforeseen
and unavoidable risks such as, but not limited to typhoons, droughts,
outbreaks of pests and diseases: Provided, finally, ‘That premium subsidy
and/or insurance benefits shall upon the accumulation of surplus funds, be
increased to such amount as may be determined by the Board taking into
consideration that the Corporation has been established not only for profit but
mainly to help the insured in their direst hours of need.”

SEC. 4. Subsections 6.3 and 6.5 of Section 6 of Presidential Decree No. 1467, as
amended, are hereby further amended to read as follows:

“SEC. 6, Premium Subsidy. —
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6.3 Unappropriated and/or unreleased government premium subsidy
for policies written for the period from May 1, 1981 up to
DECEMBER 31, 2011 [the approval of this Act] computed on the
basis of premium rates and sharing previously approved by the
President as authorized by law shall be programmed for payment by
the Government [within a period of ten (10) years from the approval
of this Act], and the yearly sums shall be included in the budgetary

appropriations for submission to Congress, starting the fiscal year


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following approval hereof, in addition to the premium subsidy
requirement of the year involved
XXX

6.5 [Ten percent (10%) of the net earings of] THE Philippine
Charity Sweepstakes Office (PCSO) [from its lotto operation shall be
earmarked from] SHALL CONTRIBUTE A YEARLY AMOUNT
OF FIVE MILLION PESOS (P5,000,000,00) FROM ITS CHARITY
FUND TO the Crop Insurance Program and said amount shall be
directly remitted by the PCSO to the Corporation YEARLY [every
six (6) months} until the [amount of] UNRELEASED PREMIUM
SUBSIDY [government subscription] is fully paid.”

SEC. 5. Subsections 8.1, 8.3, 8.4.1, 8.4.3, and 8.5 of Section 8 of Presidential Decree
No. 1467, as amended, are hereby further amended to read as follows:

C. 8. Capital Stock, -

8.1. The authorized capital stock of the Corporation is TEN BILLION
PESOS (P10,000,000,000,00) [Two billion pesos (P2,000,000,000)}
divided into SEVENTY-FIVE MILLION (75,000,000) [Fifteen
Million (15,000,000)] common shares with a par value of One
hundred pesos (P100.00) each share, which shall be fully subscribed
by the Government and TWENTY-FIVE MILLION (25,000,000)
[Five Million (5,000,000)] preferred shares with a par value of One

hundred pesos (P100.00) per share which shall have the features as
provided in Section 8.4 hercof and shall be issued in accordance with
the provisions of Section 8.5 hereof

XXX

8.3 The additional common capital stock of SIX BILLION PESOS
(P6,000,000,000.00) [One Billion pesos (P1,000,000,000)] shall be
fully subscribed by the Government and the necessary funds shall be
appropriated by Congress unless otherwise provided by existing laws:
Provided, That Congress shall provide, on an annual basis, [at least
fifty percent (50%) of] the needed capital, until the authorized capital
stock is fully paid up.

84 The preferred shares shall be entitled to a preference over

common shares in any declaration of dividends. They shall also be


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given priority in the distribution of assets in the event of liquidation of
the Corporation. They shall have the following specific features

8.4.1 Preferred as to dividends at a minimum of ONE AND
ONE-HALF PERCENT (1.5%) OR THE PREVAILING 360-
DAY TREASURY BILL RATE AT THE TIME OF
DECLARATION OF DIVIDENDS, WHICHEVER IS
HIGHER [six percent (6%)].

XXX
8.4.3 NON-Participating,

XXX

85 AT LEAST FIVE HUNDRED MILLION PESOS
(P500,000,000.00) OF PREFERRED SHARES SHALL BE
SUBSCRIBED AND PAID FOR BY THE LAND BANK OF THE
PHILIPPINES, THE BALANCE OF the preferred shares may be

ayailable for sale or to subscription by the general public.”

SEC. 6. Section 8-A of Presidential Decree No. 1467, as amended, is

amended, to read as follows:

“SEC. 8-A. RESERVE FUND FOR CATASTROPHIC LOSSES, - A
state reserve fund for catastrophic losses in the amount of Five Hundred
Million Pesos (P500,000,000.00) shall be created exclusively to answer for
the proportion of all losses in excess of risk (pure) premium under the
Corporation's Crop Insurance Program for small farmers. AND
FISHERFOLK. THE FUND MAY BE INCREASED SUBJECT TO THE
APPROVAL OF THE PRESIDENT.

‘The Fund shall be administered by a
‘government financial institution to be designated by the Corporation’s Board
‘of Directors. Such sum as may be necessary for the purpose shall be funded
by the National Government through the annual General Appropriations Act
starting the calendar year immediately following the approval of this Act and

every year thereafter until the full amount is completed, The mechanics of

claims against the Fund and to what extent the Fund shall be liable shall be
determined jointly by the financial institution administering the Fund, subject
to the approval by the President.”

hereby

SEC. 7. Subsection 9.1 of Section 9 of Presidential Decree No, 1467, as amended, is

hereby further amended, to read as follows:


SEC. 8. Separability Clause

“SEC. 9, Board of Directors. -

9.1. The powers of the Corporation shall be vested in and exercised
by a Board of Directors now composed of seven (7) members and
made up of the following: the President of the Land Bank of the
Philippines (LBP), the President of the Corporation, the
SECRETARY OF THE DEPARTMENT OF AGRICULTURE (DA)
[Executive Director of the Agricultural Credit Policy Council
(ACPC)], @ representative from the private insurance industry to be
nominated by the Secretary of Finance and three (3) representatives
from the subsistence farmers sector, preferably representing agrarian
reform beneficiaries/cooperatives/ associations coming from Luzon,
Visayas, and Mindanao, who shall be selected and nominated by the
different farmers organizations and/or cooperatives. ‘The respective
nominees of the private insurance industry and the farmer’s sector
shall be submitted to and appointed by the President. ‘The chairman
of the Board of Directors shall be appointed by the President from
among the members of the Board of Directors, ‘The President of the
Corporation shall also be appointed by the President and shall be ex-
officio vice chairman who shall assist the chairman and act in his
stead in case of absence or incapacity. In case of absence or
incapacity of both the chairman and the vice chairman, the Board of
Directors shall designate a temporary chairman from among its
members. Except for the President of the LBP and the SECRETARY
OF THE DA [Executive Director of the Agricultural Credit Policy
Council (ACPC)], all members of the Board of Directors, including
the President of the Corporation, shall be appointed by the President
within a reasonable period of time after the approval of this Act.”

or invalid, the other provisions not affected shall remain in force and effect.

SEC. 9, Repealing Clause.— All laws, executive orders, and other issuances or parts

If any provision or part hereof is held unconstitutional

thereof inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 10. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation,

Approved,