EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
SENATE 
S. No. 
468
senate
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r.-uy
.x.V,
*19 JUL 15 A10;33
Introduced by Senator Ralph G. Recto
AN ACT
PR IO R ITIZIN G  THE AGRICULTURAL SECTOR IN  THE GRANT OF LOANS BY THE 
LAND BANK OF THE PHILIPPINES, AMENDING FOR THE PURPOSE REPUBLIC ACT 
NO. 3844, AS AMENDED
EXPLANATORY NOTE
The Land Bank of the Philippines (LBP) is a government financial institution that 
ranks among the top commercial banks in the Philippines in terms of deposits, assets, loans 
and capital. LBP's original mandate was limited to financing the acquisition by the 
Government of land for distribution and resale to small landholders as well as the purchase 
of landholdings by agricultural lessees as provided for under Republic Act 3844 or the 
Agricultural Land Reform Code. Today, LBP is one of the formal credit institutions with the 
highest level of visibility in the countryside. From being the financing arm of the agrarian 
reform program, the LBP has since expanded into a full-service commercial bank.
In 2018, LBP reported P867.3 billion gross loan portfolio with the highest year-on- 
year growth in a decade1. However, much of the bank's loan was offered to industries other 
than the agricultural sector. In the same year, of the P798.8 billion worth of loans extended 
to all sectors, 64.15% was extended to public utilities, micro, small and medium enterprises 
(MSMEs), housing, transportation, education, communications, environment projects, 
healthcare and tourism, while another 14.23% was tendered to other sectors like local 
government units, government-owned or -controlled corporations (GOCCs), and other 
treasury loans2. This leaves only 21.62% of the bank's gross loan portfolio to support small 
farmers and fisherfolk and to bolster agribusiness, aqua-business and agriculture-related 
projects of private enterprises, local government units (LGUs) and GOCCs.
1 Landbank o f the Philippines (2019). LANDBANK regular loans up 33% to P799.2B in 2018, records highest growth in 10 years. Accessed 
from httDs://landbank.com/node/4106 on 09 July 2019.
2 Landbank of the Philippines (2017). Annex 3: Landbank of the Philippines Performance Highlights 2018. Accessed from 
h tto s://www.landbank.com/sites/default/files/transDarencv/LANDBANK PERFH1GH2018 10APR2019rev.Ddf on 09 July 2019.
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This bill proposes to amend the charter of the Land Bank of the Philippines (LBP), 
allowing it to focus on the provision of affordable credit to the agriculture sector where 
most poor Filipinos belong. It amends the LBP Charter by giving priority to the agriculture 
sector and putting a cap to the amount of loans the bank may grant for programs and 
projects in sectors other than agriculture. Such move will allow the agricultural sector, 
particularly the small farmers and fisherfolks to share in the responsibility and fruits of 
growth and development.
This bill seeks to restore the original intent for the creation of the Land Bank of the 
Philippines, which is to assist farmers and other agricultural workers, and to contribute to 
the fruition of agricultural development projects.
In view of the foregoing, the approval of this bill is earnestly sought.
/mdg


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
0i Till' Jr-.- ff'iiP
SENATE 
S. No. 
4 8 8
T9 JUL 15 .AlO 33
RtCE'vLL' ■_
Introduced by Senator Ralph G. Recto
AN ACT
PR IO R ITIZIN G  THE AGRICULTURAL SECTOR IN  THE GRANT OF LOANS BY THE 
LAND BANK OF THE PHILIPPINES, AMENDING FOR THE PURPOSE REPUBLIC ACT 
NO 3844, AS AMENDED
Be it enacted by the Senate and House o f Representatives o f the Philippines in Congress 
assembled:
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Section 1. Section 75 of Republic Act No. 3844, as amended, is hereby further 
amended to read as follows:
"Sec. 75. Powers In General. The bank shall have the power:
"x X x;
"5. To grant short, medium and long term loans and advances against 
security 
of 
real 
estate 
and/or 
other 
acceptable 
assets 
for 
the 
establishment, development or expansion of agricultural, industrial, home 
building or home financing projects and other productive enterprises:
PROVIDED, THAT THE TOTAL AMOUNT OF LOANS GRANTED FOR 
PROGRAMS 
AND 
PROJECTS 
IN 
SECTORS 
OTHER 
THAN
AGRICULTURE SHALL NOT EXCEED TWENTY PERCENT (2 0 % ) OF 
THE BANK'S TOTAL LOAN PORTFOLIO.
"x  X X."
Sec. 2. 
Validity o f Existing Contracts, Agreements and Obligations. -  Nothing in this 
Act, shall affect the validity or legality of any right, duty, or obligation created by or in 
respect of the Bank by virtue of its loan operations as a commercial bank prior to this Act. 
Any receivables pertaining to loans granted prior to this Act, which might be affected by this 
Act, shall be valid and enforceable upon the terms and conditions under which the loans 
were made, including the pledge of collateral against which they were issued, and all loans 
made and security or collateral therefore held by the bank shall remain enforceable 
according to the terms unless they may be lawfully terminated in accordance with this Act, 
nor shall this Act supersede the operation of any law protecting or preserving vested


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contractual rights or be construed to change the terms of any legal contract between the
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bank and any third party or to impose any new conditions thereon, or to dispense with any
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condition expressed or authorized in any such contract entered into and taking effect prior
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to this Act.
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Sec. 3. 
Transition Period. -  The Land Bank of the Philippines (LBP) shall have a
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period of ten (10) years from the effectivity of this Act to restructure its loan portfolio. The
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transition milestones shall be identified in the Implementing Rules and Regulations to be
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promulgated pursuant to Section 4 of this Act.
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Sec. 4. 
Impiementing Ruies and Reguiations. -  Within ninety (90) days from
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effectivity of this Act, the Department of Finance (DOF) shall, in coordination with the LBP,
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promulgate the rules and regulations to effectively implement the provisions of this Act.
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Sec. 5. 
Separabiiity Ciause. -  If any provision of this Act is held invalid or
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unconstitutional, the same shall not affect the validity and effectivity of the other provisions
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hereof.
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Sec. 
6 . 
Repeaiing Clause. 
-  
Pertinent provisions of all other laws, 
decrees,
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executive orders 
and 
rules 
and regulations contrary to or 
inconsistent 
with the
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provisions of this Act are hereby repealed or modified accordingly.
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Sec. 7. Effectivity Clause. -  This Act shall take effect fifteen (15) days after its
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publication in the Official Gazette or in two (2) newspapers of general circulations.
Approved,