FIFTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES
HOUSE BILLNo.___1773.

Introduced by the Honorable Agapito H. Guanlao

EXPLANATORY NOTE

The Philippines is still an agricultural country, thus, its plan to industrialize
must be founded on a strong, modern and globally competitive agricultural sector.
ILis often said that the farming sector is the backbone of the Philippine economy. It
is sad to note, however, that this very sector, together with the fisherfolk, is taken for
granted most of the time.

Statistics show that the per capita income of farmers and fisherfolk remain
below the poverty line of P6,000 per month. Majority of farmers and fisherfolk do
not even realize a net income at par with the minimum wage accorded to rural
workers. Worse, the inadequacy of social services in rural areas forces some of their
members to seek opportunities in urban centers. This phenomenon of rural
emigration puts an undue strain in the capacity of cities to accommodate the
burgeoning population of urban poor and informal settlers. On another level, this
puls pressure as well to the food security of the nation since there is now a dearth for
agricultural hands while the unproductive urban poor increases.

Against this backdrop, it is imperative then for the State to adopt measures
that will reward the farming sector and fisherfolk that sacrifice their personal
comfort just to remain true to their God-given role ~ that is to produce food that will
feed the citizenry. Definitely, a contented and secure farmer toiling his field and a
fisherfolk that has stable source of income can contribute much to the economic
uplift of the nation. An economically viable agricultural and fishery sector can boost
industries in urban centers since it will be, consequently, a potent market for
manufactured goods and other services. It is common sense that in order to hold
down the farmer in the field and the fisherfolk in the villages, he/she must be made
to be economically stable.

It is envisioned, therefore, that basic social services to the farmer/fisherfolk
must be strengthened to satisfy his/her needs. It can be argued that there are

1


government institutions already in place to provide these. It is unfortunate,
however, that these are not enough as gleaned from experience. What is needed,
therefore, is a social security system similar to those provided by the Social Security
System for private employees and the Government Service Insurance System for
government employees.

Furthermore, with the planned revision of P.D. 717 or the Agri-Agra Law,
there is a need to set up a single fund that will provide sovereign guarantee to
agricultural, fishery and rural credit from private commercial banks. The private
banks will continue to skirt the law forcing them to finance the agricultural and
fishery sectors if farmers and fisherfolk will remain as high credit risks, There ought
to evolve a system that will strengthen their financial condition given the enormity
of their number.

Finally, statistics show that the crop insurance program will remain costly if it
cannot garner a wider participation from among the farming population and the
fisherfolk. This is attributable to the lack of support from government to fund a
larger share in the premium for crop insurance. At present, the Philippine Crop
Insurance Corporation covers only about 20% of eligible rice and corn farmers since
the annual budget for crop insurance extend to only that much. With additional
funding support, definitely the crop insurance program can benefit more farmers
and even the fisherfolk.

All these point to the need for the setting up of a State Agricultural Guarantee
and Insurance Protection Fund or SAGIP Funds. The SAGIP Funds will be similar to
the Pag-IBIG Fund but dedicated not only for the building of low-cost housing but

for the up-building of a strong, viable and globally competitive farmer and fishery
sectors.

It is long overdue that the State honor and dignify the farmers and fisherfolk
for the contribution they are providing for the survival of the nation. It is only
fitting, therefore, to consider and pass this bill as our heritage to the future
generations of farmers and fisherfolk that will continue the noble duty of providing
food for every Filipino dining table.

HON. AGAPITO H. GYANLAO,


FIFTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
FIRST REGULAR SESSION )

HOUSE OF REPRESENTATIVES
HOUSE BILL No. 1773

Introduced by the Honorable Agapito H. Guanlao

AN ACT
ESTABLISHING THE STATE AGRICULTURAL GUARANTEE AND
INSURANCE PROTECTION FUNDS (SAGIP Funds),
CREATING THE STATE AGRICULTURAL GUARANTEE AND INSURANCE
PROTECTION CORPORATION (SAGIPCo),
DEFINING ITS OBJECTIVES, POWERS, FUNCTIONS,
PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES

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

ARTICLE I - TITLE, DECLARATION OF POLICY AND DEFINITION OF
TERMS

SECTION 1. Title. ~ This Act shall be known as the “SAGIP Funds Act of
2010."
’ SECTION 2. Declaration of Policy ~ It is the policy of the State to develop the
full potential of the Filipino people as the basic resource of the land.
Complementary with this, the State, covering an agricultural country, shall put
priority in harnessing the contribution of farmers and fisherfolk in the promotion of
a stable economy founded on a vibrant, progressive and globally competetive
agricultural and fishery sector.

As enshrined in the Philippine constitution, specifically Article II, Section 9,
“The State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty through
policies that provide adequate social services, promote full employment, a rising
standard of living, and an improved quality of life for all.” In addition, Article X11,
Section 1 states, “The Congress shall give highest priority to the enactment of
measures that protect and enhance the right of all the people to human dignity,


reduce social, economic, and political inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for the common good.”

Towards this end the State shall guarantee a sound social and economic
climate that will nurture a sense of security and dignity among the farming/fishing
sector, particularly the small scale/subsistence farmers and fisherfolk. ‘This shall be
attained by providing them a package of services that will (a) enable the
farmers/fisherfolk manage effectively and efficiently the risks inherent in their
respective trade and economic endeavor, (b) encourage private financial institutions,
particularly those based in rural areas, to extend credit to farmers/fisherfolk through
guarantees and other financial management mechanisms, such as but not limited to
crop/livestock/aquaculture insurance, and () provide a mantle of insurance
protection, in the event of disability or death, and other social amelioration
programs for farmers/fisherfolk and their families that will ensure their welfare and
future, Concommitant with these, rural finance to micro, small and medium
enterprises in the countryside shall be encouraged by providing windows of
participation of the private sector, particularly the private commercial banks,
cooperatives, and other rural financial institutions in support and in collaboration
with people’s organizations.

SECTION 3. Definition of Terms. ~ The following words and phrases as used in
this Act shall have the meaning indicated below unless a different meaning is
manifestly intended by their context:

(a) Funds ~ The State Agric
(SAGIP Funds);

tural Guarantee and Insurance Protection Funds
(b) SAGIPCo - The State Agricultural Guarantee and Insurance Protection
Corporation;

(c) Board - The Board of Trustees of the State Agricultural Guarantee and Insurance
Protection Corporation (SAGIPCo);

(d) Member ~ Any farmer/fisherfolk covered by the SAGIP Funds;

(c) Dependents - The legitimate, legitimated or legally adopted child who is
unmarried, not gainfully employed, and not over eigtheen years of age, or over
eigtheen years of age but congenitally incapacitated and incapable of self
support, physically or mentally; the legitimate spouse dependent for support
upon the farmer/fisherfolk; and the legitimate parents wholly dependent upon
the SAGIP Funds member for regular support;

(0) Member's Contribution - The personal contribution of the member plus the
counterpart of the National Government to the SAGIP Funds;


(g) Physical Disability - Any loss or reduction of earning capacity of the member
due to impairment of the normal functions of his physical and/or mental
faculties which reduces his ability to engage in any gainful occupation;

(h) Farmer-Beneficiary - Anyone who is a recipient of a transfer/award of land
under the Comprehensive Agrarian Reform Program;

(i) Formal Source of Credit - Any private or public lending/financial institution
accredited by law to extend credit or loan;

() Production Loan - Any loan or credit from any formal source of credit to finance
the cost of production inputs of a farmer/fisherfoll

(k) Post-Harvest Loan ~ Any loan or credit from any formal source of credit for the
purpose of financing procurements, purchases, preservation and_ storage,
transport and/or conversion of raw agricultural/fishery materials (o finished
products for the consumption of the public;

()) Farmer ~ Any natural person whose primary livelihood is cultivation of land or
the production of agricultural crops, livestocks and aquaculture products, in
small or commercial scale either by himself or primarily with the assistance of his
immediate farm household or workers, whether the land is owned by him, or by
another person under a leasehold tenancy agreement or arrangement with the
owner thereof;

(m) — Fisherfolk - Any natural person whose primary livelihood is fishing or the
catching and/or gathering of other marine products, in small or commercial
scale, either by himself or with the assistance of his immediate fishing household
or workers, whether the vessel, banca and other equipment used is owned by
him or by another person under lease or other arrangement with the owner
thereof;

(n) People’s Organization ~ Any association or group, e.g. a cooperative, formally
organized voluntarily by farmers, fisherfolk or other land reform beneficiaries for
the purpose of pooling agricultural land or fishing gears, vessels or facility,
human, technological, financial or other economic resources, and operated on the
principle of one member, one vote;

(0) Survivor's Cash Assistance - The cash amount equivalent to twenty percent
(20%) of the sum insured as provided for in Section 20 of Article IV of this Act.
‘This amount is deemed included in said sum insured, payable to qualified
primary beneficiaries of the deseased insured to cushion them against the severe
adverse economic effect resulting from the demise of their income earner;

(p) Funeral Grant - The cash amount equivalent to up to twenty percent (20%) of the
sum insured as provided for in Section 20 of Article IV of this Act. This amount


is deemed included in the sum insured payable, upon the death of the insured
member, to the surviving spouse, legitimate child or to any other person who can
show incontrovertible proofs of his having borne the funeral expenses of the
insured;

(q) Death Indemnity - The cash amount equivalent to the sum insured provided for
in Section 20 of Article IV of this Act minus the cash benefits paid for survivor's
cash assistance and the funeral grant;

(®) Natural Disaster - Any natural calamity such as typhoon, flood, drought,
earthquake and volcanic eruption; and

(8) Insurance Policy or Certificate ~ The contract of insurance which defines the
rights and obligations of the insured and the insurer.

ARTICLE II - ADMINISTRATION

SECTION 4. Creation, Name, Domicile and Corporate Life ~ ‘To carry out the
above-stated policy, there is hereby created the State Agricultural Guarantee and
Insurance Protection Funds, hereinafter referred to as the SAGIP Funds, which shall
be administered by a body corporate to be known as the State Agricultural
Guarantee and Insurance Protection Corporation, hereinafter referred to as the
SAGIPCo.

The SAGIPCo's authorized capital shall be Fifty Billion Pesos
(P50,000,000,000.00), sixty percent (60%) of which shall be subscribed by the
Government and the balance of forty percent (40%) to be offered to the private sector
consistent with relevant provisions of R.A. 7393 and under the supervision of the
Securities and Exchange Commission. In view of this, the SAGIPCo shall prepare its
own Articles of Incorporation and By-Laws in accordance with the Corporation
Code of the Philippines.

The SAGIPCo shall have its principal place of business in Metro Manila. It
may establish stich offices, branches, agencies or other units in any part of the
Philippines as its business operation may require.

The SAGIPCo shall have a corporate life of fifty (50) years from the date of
approval of this Act.

The SAGIPCo shall be attached to the Department of Agriculture for
budgetary purposes.

SECTION 5. Objectives. - The SAGIPCo shall have the following objectives:


a) To encourage lending institutions, government and private, to extend credit
facilities to farmers/fisherfolk and the rural sector through guarantee and other
mechanism;

b) To provide insurance protection directly or indirectly to farmers/fisherfolk
against losses to their crops, livestock, aquaculture products, properties,
equipment and other farm/fishing facilities;

©) To provide life insurance coverage directly or indirectly, like in reinsurance

arrangements, to farmers/fisherfolk and the rural sector;

d) To extend social security services to farmers/fisherfolk or their families such as
providential or educational loans, funeral grants, medical and/or hospitalization
benefits, survivors’ cash assistance and old-age benefits; and

oh

©) To support the Comprehensive Agrarian Reform Program by providing land
amortization redemption insurance for farmer-beneficiaries.

SECTION 6. Powers and Functions of the SAGIPCo - The SAGIPCo shall have
the following powers and functions:

a) To prescribe, repeal and alter its own by-laws;

b) To determine, adopt, amend and rescind such operating policies, rules and
regulations as may be necessary to implement the programs which it is mandated
to pursue;

©) To adopt and use a corporate seal;

d) To sue and be sued;

e) To have continuous succession until dissolved by law;

£) To reinsure in the Philippines or abroad all or any of the loss that the SAGIP
Funds may be held to indemnify;

) To adopt from time to time a budget for the administration and operation of the
SAGIPCo;

h) To invest its funds, directly or

irectly, in accordance with existing laws;

i) To conduct continuing actuarial and statistical studies and valuations for the
purpose of determining the financial condition of the SAGIP Funds and taking
into consideration such studies and valuations and the limitations herei
provided, readjust the benefits, contributions, premium rates, interest rates, or
the allocation, of funds;



j) To borrow funds from any source, private or public, foreign or domestic and to
issue bonds to augment its finances;

k) To receive grants from any source, domestic or foreign, public or private, in
accordance with existing laws;

1) Toact asa receiver;

m) To purchase or otherwise acquire ownership and manage any and all parts of the
business, property and liabilities of any person or company which the SAGIPCo
is authorized to carry on or possess;

n) To purchase or otherwise acquire ownership of and/or invest in, hold, sell,
dispose of stocks or bonds or any interest in either, or any obligation or evidence
of indebtedness of any corporation, domestic or foreign;

0) To purchase, acquire, sell, lease, convey, mortgage, encumber, and deal with any
property, real or personal, or any security of real estate or movable property;
exercise easement rights or privileges over or in respect to any property, real or
personal, as may be reasonably necessary to carry out the purposes of this Act;
and

p) To exercise all the general powers conferred by law upon corporations as are
incidental or conducive to the attainment of the objectives of this Act.

SECTION 7. Governing Board. - The SAGIPCo shalll be governed by a Board of
Trustees, hereinafter referred to as the “Board” which shall be composed of the
Secretary of Agriculture as ex officio chairman, the President of the SAGIPCo who
shall serve as Vice Chairperson, and seven (7) members. ‘The members are: the
Secretaries of Agrarian Reform and Finance, on ex officio capacity; and one
representative each of the farming sector, the fishing sector, the private insurance
industry, the cooperative insurance sector and the rural financial institutions.

All Members of the Board shall be natural-born Filipino citizens and at least
thirty-five (3) years of age at the time of their appointment by the President of the
Philippines from among, the recommendees of the groups they represent.

Of the first appointees under this Act, the vice chairperson (President of
SAGIPCo) and the representative from the cooperative insurance sector shall serve
for a term of four years. The representatives from the farming sector, fisheries
sector, the private insurance industry and the rural financial institutions shall serve
for a term of two (2) years. Thereafter, the appointed vice chairperson and members
of the Board shall serve for a term of four years.


No Board Member, except the President of the SAGIPCo and the three ex
officio members, may be re-appointed after the expiration of his/her term of office.
The Secretaries of Agriculture, Agrarian Reform and Finance may appoint their
respective representatives to the Board provided they hold not lower than Assistant
Secretary level position.

‘The Board shall meet regularly at least once a month or as often as it deems
necessary. At least five (5) members shall constitute a quorum. The Board may be
convoked by the Chairperson or in his/her absence, the Vice Chairperson. The
Chairperson and members of the Board shall each receive a per diem of Five
Thousand Pesos (P5,000.00) for every session attended, but in no case shall the total
thereof exceed ‘Twenty Five Thousand Pesos (P25,000.00) per month.

SECTION 8. Powers and Functions of the Board, - The Board shall have the

following powers and functions:

a) To implement the provisions and purposes of this Act;

b) To formulate and adopt policies, plans and programs to promulgate rules and
regulations for the management, operation and conduct of the affairs and
business of the SAGIP Funds;

©) To enter into, make and execute contracts of any kind or nature as may be
necessary, or incidental to the accomplishment of the purposes of this Act;

.d) To approve the budget of the SAGIPCo and to determine the reasonable
compensation of its personnel independent of the provisions of R.A. 6758 The
Salary Standardization Law”; 2

e) To review and approve the appointment of personnel of the SAGIPCo from the
rank of division chief or higher;

f) To have final authority on administrative cases involving personnel of the
SAGIPCo where the penalty imposed is suspension of thirty (30) days or more;

8) To establish policies and guidelines for employment on the basis of merit,
technical competence and moral character, and approve a staffing pattern of
personnel defining their powers and duties subject to Civil Service laws, rules
and regulations;

h) To have original jurisdiction to settle any dispute or claim arising from the
operations of the SAGIPCo subject to Article VI of this Act;

i) To exercise the general powers provided in the Corporation Law insofar as they
are not inconsistent or incompatible with the provisions of this Act.


SECTION 9. Management. - The management of the SAGIPCo and the general
conduct of its operations shalll be vested in the President who shall serve as the Chief
Executive Officer. ‘The President shall be a natural-born Filipino citizen, at least
thirty-five (35) years old and a person of known integrity and competence in
technical and administrative fields related to the purposes of this Act.

He shall be appointed by the President of the Philippines for a term of four (4)
years and may be re-appointed once for another term.

He shall receive a salary to be determined by the Board.
He shall have the following powers and duties:

a) To act as ex-officio Vice Chairperson of the Board and, in that capacity, assist the
Chairperson and act in his/her stead in case of absence or incapacity;

b) To execute and administer the policies, plans, programs and rules and
regulations approved and/or promulgated by the Board;

©) To submit for the consideration of the Board such policies, plans and programs as
he/she deems necessary to carry out this Act;

4) To direct and supervise the operation and internal administration of the
SAGIPCo;

e) To appoint or promote employees of the SAGIPCo;

£) To transfer, assign, re-assign employees of the SAGIPCo as the exigencies of the
service may require and to approve penalties in administrative cases involving
suspension for less than thirty (30) days and lighter penalties;

g) To recommend to the Board the appointment or promotion of personnel from the
rank of division chief or higher and to submit for decision by the Board
administrative cases where the penalty imposed is suspension for thirty (30) days
or more, demotion or separation from the servi

h) To exercise such other powers and perform such other duties as may be directed
by the Board.

SECTION 10. Auditor. ~ The Chairman of the Commission on Audit shall be
the ex-officio auditor of the SAGIP Funds. He may appoint a representative who
shall be the auditor of the SAGIP Funds, and the necessary personnel to assist said
representative iy the performance of his/her duties.



The Auditor shall submit to the Board an audited statement showing the
financial condition and progress of the SAGIP Funds for the calendar year just
ended.

SECTION 11. Abolition of the Philippine Crop Insurance Corporation and the
Quedan and Rural Credit Guarantee Corporation. - The Philippine Crop Insurance
Corporation (PCIC) organized under Presidential Decree No. 1467, as amended, and
the Quedan and Rural Credit Guarantee Corporation (Quedancor) organized under
R.A. 7393, as amended, are hereby abolished and their assets and administration
transferred to the SAGIPCo. The liabilities of PCIC shall be absorbed by SAGIPCo.
However, the liabilities of Quedancor shall be worked out in a separate scheme
under an inter-agency body to be created by the Office of the President of the
Republic so as not to ericumber the initial operation of the SAGIP Funds.

All personnel of the PCIC and the Quedancor shall be absorbed by the
SAGIPCo without reduction in rank or diminution in pay and benefits: Provided,
‘That in the hiring of other personnel of the SAGIPCo, preference shall be given to
civil service eligibles certified by the Civil Service Commission and be subject to civil
service rules and regulations.

ARTICLE Ill - SCOPE OF THE SAGIP FUNDS

SECTION 12. Compulsory Coverage. - Membership in the SAGIP Funds shall
be compulsory for all farmers/fisherfolk engaged in small-scale or commercial
agricultural/fishing production who are beneficiaries of the Comprehensive
Agrarian Reform Program and all farmers/fisherfolk who secure loans from any
accredited formal source of credit for agricultural/fishing production and post-
harvest purposes,

For this purpose, the SAGIPCo shall draw up the mechanics, rules and
regulations with the Department of Agrarian Reform, the Department of
Agriculture, the Department of Finance and the lending institutions/conduits
concerned,

SCTION 13. Voluntary Coverage. - Other farmers/fisherfolk who are already
covered by other government insurance systems and all others not otherwise
covered in Section 12 above who are engaged in small-scale agriculture/ fishing may
become members of the SAGIP Funds under such rules and regulations as the
SAGIPCo may prescribe.

SECTION 14. Effective Date of Coverage. - Compulsory coverage shall take
effect upon the issuance of a certificate of membership or other documents, e.g, an
identification card, evidencing membership; Provided, That the effective date for the
land amortization-redemption insurance benefit coverage for the CARP beneficiaries



shall be upon issuance by the Department of Agrarian Reform of the Certificate of
got ey

papers evid

Voluntary coverage shall take effect upon approval of the application for
membership in accordance with such rules and regulations prescribed by the
SAGIPCo.

SECTION 15. Effect of Cession from the Agricultural/Fishing Profession. - Any
member who ceases to engage in agriculture/fishing activities may continue his
membership under such terms and conditions to be prescribed by the SAGIPCo,

ARTICLE IV - BENEFITS

ECTION 16. The SAGIP Funds shall provide the members with
crop/livestock/aquaculture insurance, loan guarantees, life insurance, social
security and other benefits subjéct to such rules and regulations as SAGIPCo may
promulgate; Provided, that they are members of cooperatives/people’s
organizations or other self-help groups.

A. CROP/LIVESTOCK/ AQUACULTURE INSURANCE,

: SECTION 17. Integration of the Crop/Livestock/Aquaculture Insurance Programs
into the SAGIP Funds. - The crop/livestock/aquaculture insurance programs
ered by the Philippine Crop Corporation are hereby transferred
into the SAGIP Funds. The SAGIPCo shall promulgate the implementing rules and
regulations covering the integration of the operations of PCIC into. the
administration of the SAGIP Funds.

Pertinent provisions of P.D. 1467, as amended, and R.A. 8175 that are not
inconsistent with this Act shall have suppletory effect. upon the
crop/livestock/aqu re insurance operations of SAGIPCo,

B. QUEDAN AND RURAL CREDIT GUARANTI

eitan ai

SECTION 18. Integration of the Q Rural Credit Guarantee Programs into
the SAGIP Funds. ~ The quedan and rural credit guarantee programs administered by
the Quedancor are hereby transferred into the SAGIP Funds, The SAGIPCo shail
promulgate the implementing rules and regulations covering the integration of the
operations of Quedancor into the administration of the SAGIP Funds.

Pertinent provisions of R.A. 7393, as amended, that are not inconsistent with
this Act shall have suppletory effect upon the quedan and rural credit guarantee
rations of SAGIPCo.

C. LIFE INSURANCE


SECTION 19. Coverage. - All farmers/fisherfolk who have accumulated
membership contributions sufficient to pay the cost of the group life insurance
pre shall be issued life insurance policies or certificates of insurance covered
by the SAGIP Funds. Such premiums shall be charged against the total personal
contributions of the member plus thi ferpart of the National Government.

Benefits from fife insurance coverage shall include death indemnity to
beneficiaries, survivors cash assistance and funeral grant in case of death of the
insured farmer/fisherfolk.

SECTION 20. Sunt Insured. - The principal sum of life insurance coverage
shall be fixed by the Board from time to time but in no case shall it be less than One
Hundred Thousand Pesos (P100,000.00) which shall include death indemnity to
beneficiaries, survivors’ cash assistance and funeral grant.

SECTION 21. Double Ind ity Benefit. - The SAGIP Funds, upon receipt and
approval of the proof of the death of the member from any bodily injury effected
through external and/or violent means sustained in an accident, within ninety (90)
days after the date of such injury, independently of other causes, shall pay, in
addition to the principal death indemnity benefit, an additional amount equal to the
said death indemnity benefit; Provided, that this benefit shall be proportionately
extended to the Member even if his death occurred as in Paragraph 2 of the
succeeding Section of this Article.

SECTION 22. Term of Covernge, Life insurance coverage shalll be on a yearly
basis commencing from the receipt by the SAGIPCo of the member's contribution
sufficient to pay the premium and ending one year thereafter. The coverage shall be
automatically rene the expiry date if the member's contribution
reaches a level sufficient to pay the subsequent year’s premium.

In case a Member dies at a vhen his member's contribution is not yet
sufficient to pay the premium, his/her beneficiaries shall be indemnified in a sum
proportionate to the amount of life insurance which his/her outstanding
membership contr an purchase,

SECTION 23. Premiums. - The premium rate shall be determined by the Pool
of Farmers/Fisherfolk Life Insurers as defined in the succeeding section: Provided,
‘That such rate shalll be affordable to the insured: and Provided, further, That the rate
shall be approved by the SAGIPCo.

SECTION 24. Pool of Farmers/Fisherfolk Life Insurers (FARMLIFEPOOIL). ~ The
group life insurance policies shall be underwritten by a Pool of Farmers/Fisherfolk
Life Insurers or FARMLIFEPOOL composed of private life insurance companies
(with the cooperative insurance sector as lead) domestic or foreign, duly



operate in the Philippines and which shall enter into a pooling or reinsurance
the SAGIPCo.

agreement

‘The FARMLIFEPOOL. shall define the terms and conditions of the life
insurance coverage pursuant to this Act, fix the premium rate, design the methods,
procedures and forms, and promtlgate policies, rules and regulations for the
efficient functioning of the life insurance program, subject to approval by the
‘SAGIPCo.

‘The FARMLIFEPOOL shall adopt a pari-passu sharing scheme in terms of
risks and premiums; Provided, that the SAGIPCo shall retain five percent (5%) of the
premitms collected to defray ive and operating costs, as the case may be.

D. SOCIAL SECURITY AND OTHER BENEFITS

SECTION 25. Land Amortization Redemption Insurance. ~ The SAGIPCo shall
extend land amortization redemption insurance to all farmer-beneficiaries of the
Comprehensive Agrarian Reform Program under R.A. 6657 and/or other agrarian
reform laws tinder such terms, « in mechanics of implementation as it
may prescribe, subject to the follo conditions:

a) The premium rate shall be in terms of the unpaid valute of land transferred to him
and shall consider, among other factors, the age of the farmer-beneficiary at the
onset of the insurance cover;

b) ‘The indemnity shall pay the balance of the land amortizations due and payable
per amortization schedule reckoned on the date of death of the member
beneficiary to fully settle payment of the land awarded/transferred to him,
exclusive of arrearages;

©) The land amortization redemption insurance polic
the time of the farmer-beneficiary’s death.

Il be in force and effect at

d) The program does not conflict with other programe being implemented by other
government institutions such as the Land Bank of the Philippines.

SECTION 26. Disability Benefits. - A member's disability caused by bodily
injury or disease, which completely prevents him from engaging in farming/ fishing
or any business or occupation, or performing any work, physical or mental, for
compen! or profit, to disability benefits under terms and
conditions to be determined by the SAGIPCo.

SECTION 27. Old-Age Benefit. - Once
(65) years, he sha
determined by thi

ber reaches the age of sixty-five
be entitled to old-age bonus under terms and conditions to be
GIPCo, and subject to: (a) the amount of accumulated unused



member's contribution at the time of entitlement, and (b) length of membership in
the SAGIP

‘The total amount of old-age bonus shall be equivalent to his total
accumulated unused member's contribution plus an equal counterpart amount to be
paid by the SAGIP Funds; P) that a farmer/fisherfolk who became a member
after reaching sixty-five (65) years of age shall not be entitled to the benefits under
this Sectic

SECTION 28. Other Benefits. - The SAGIPCo- may devise
programs such as educational loans, mortgage redemption insurance for loans
obtained from accredited s of credit, property insurance, and other
similar programs, thru pooling or other arrangements for the benefit of its Members.

ind implement other

ARTICLE V - THE FUNDS OF SAGIP:
SOURCING, UTILIZATION AND MANAGEMENT

: SECTION 29. The Funds of SAGIP. ~ The SAGIP Funds shall have three
“Tunds” fered by the SAGIPCo, namely: (a) The Agricultural and
1 (AGAIN Fund) for the crop/livestock/:

insurance program including the insurance of other agricultural/fisheries assets; (b)

The Agricultural/ Fisheries Credit Guarantee Program Fund (AGAP Fund) for the
id agricultural/fisheries/rural credit guarantee programs of SAGIPCo;

and (0) The Philippine Agriculture/Fishery Sector Social Amelioration Fund

(PAGASSA Fund) for the social security benefits of farmers/fisherfolk.

SECTION 30. The Agricultural and Fisheries Insurance Fund (AGAIN Fund). ~
‘There is hereby established an Agricultural and Fisheries Insurance Fund (AGAIN
Fund) which shall be utilized by the SAGIPCo solely for providing crop, livest
and aquaculture insurance cover for farmers/fisherfolk as defined under this Act.
‘The AGAIN Fund be co:

a) The outstanding balance of PCIC assets as at the date of effectivity of this Act;

b) The amount provided in
V of this Act;

bparagraphs a, b, and ¢ paragraph 1, Sec. 43, Article

©) Budgetary appropriations fror

ent,

d) Transfers from other funds administered by the SAGIPCo; and

e) Loans, issuance of bonds,
foreign sources.

ons from local and/or

S, Br


SECTION 31. The Agricultural/Fisheries Credit Guarantee Program Fund (AGAP’
Fund). - There is hereby established an Agricultural/Fisheries Credit Guarantee
Program I g 2 shall be used by the SAGIPCo solely for the
purpose of providing guarantee cover for credit obtained by farmers/fisherfolk and
rural entrepreneurs from formal credit sources as prescribed under this Act. The
AGAP Fund sha! ted from the gf sources:

a) The outstanding balance of Quedancor assets as at the date of effectivity of this
Act;

b) ‘The Special Revolving Trust Fund (SRTF) created under Letter of Instruction No.
1242 including incomes and recoveries thereof;

©) The amount provided in subparagraph d, paragraph 1, Section 43, Article V of
this Act;

d) Budgetary appropriations from Government;

e) T

rs from other funds 2 ed by the SAGIPCo; and
f) Loans, issuance of bonds, donations, grants and contributions from local and/or
foreign sources.

SECTION 32. The Philippine Agriculture/Fishery Sector Social Amelioration Fund
(PAGASSA Fund) - There is hereby created a Philippine Agriculture/Fishery Sector
Social Amelioration Fund (PAGASSA F:
membership contributions of farmers and fisherfolk plus the counterpart
contributions of the National Government which shall accrue to the trust fund of the

a in accordance with the rules and regu that shall be
promulgated by the SAGIPCo. The PAGASSA Fund shall be the source of funding
“the life insurance coverages and social security benefits as well as other purposes
d under this Act. The PAGASSA Fund shall be constituted from the
following sources: .

a) The am 43, Article V of

this Act;

¢, paragraph 1, Sec

b) Contrity

nal Government which shall be One

ons of the
Hundred Pesos (P100,00) per month from the member and a counterpart
contribution of the National Government of twenty five percent (25%) of the

personal contribution of the member in accord: h the implementing rules
and regulations that SAGIPCo shall promulgate; Provided, That the. total
Member's contribution shall be credited in the name of the member upon actual
receipt of SAGIPCo and the counterpart of the National Government shall be
credited on a quarterly basis from out of the appropriated sum as specified under
Section 43, Article V of this Act. The rate of contribution of the member and the

4


National Government shall be reviewed periodically and may be revised as the
experience in risk, cost of administration and actual or anticipated as well as
unexpected losses may requi

©) Loans, grants, donations and contributions from local and/or foreign source or
nce of bonds; and i

d) Fund transfers from other funds administered by the SAGIPCo.

SECTION 33. Collection: and Rem ~ The SAGIPCo shall require a
complete and proper collection of funds due it and shall require proper
identification of farmers, fisherfolk and other cooperating persons, entity, association
de in cash, checks, stamps, coupons, tickets, or
other reasonable devices that the SAGIPCo may prescribe and adopt. All monies
received or collected by any person, entity, association or corporation for the SAGIP
Funds shall be remitted to the SAGIPCo within fifteen (15) calendar days from the
date of receipt or collection or within such time as the SAGIPCo may prescribe,

SECTION 34. Penalty for Non- ce or Delayed Remittance. - Unremitted
collected monies for the SAGIP Funds shall be subject to the penalties and fines
specified in Section 58 Article VII of this Act and shall earn such interest as the
SAGIPCo may prescribe, payable by the person, entity, association or corporation
that collected the monie:

SECTION 35. Mc is. - The contributions of the Member and
the National Government shall be treated in the books of account of SAGIP Funds as
Member's Contributions in the name of the Member upon receipt thereof by the
SAGIPCo.

‘The Member's Contributions shall be utilized firstly, to defray the life
insurance premium of the Member and secondly, if he is a farmer-beneficiary of the

Comprehensive Agrarian Reform Program under R.A. 6657 and/or other agrarian
reform laws, to pay the cost of the land amortization redemption insurance
premium. ‘The remainder of a Member's Contributions may be used, at his option,
to pay for crop other nor

prescribed by the SAGIPCo; Provided, That in no case shall such interest rate be
lower than the prevailing interest rate on savings deposits; and Provided, further,
That the Government contribu
thereof by the SAGIP Funds.

only begin to carn interest upon receipt

SECTION 36. Deputized Collecting Agents and Their Incentives. ~ The People’s
Organization, like the cooperative, cooperative bank, cooperative insurance
company, where a member farmer/fisherfolk originally belongs shall be deputized

15


to be the collecting agent of the farmer/fisherfolk-member of the SAGIP Funds. The
Deputized Collecting Agent shall be entitled to the following incentives:

a) A service fee of not more than five percent (5%) of the the members’ total
contributions remitted to the SAGIP Funds, exclusive of the Government's
counterpart contribution; and

b) Preferential assistance in securing financing for its agricultural/ fishery projects.

SECTION 37. Contribution of the Funds to Operating Expenses, - The AGAIN,

AGAP and PAGASSA Funds shall share in the annual personnel expenditures,

maintenance and other operating expenses and capital outlays of the SAGIPCo:

a) For AGAIN Fund, not exceeding fifteen percent (15%) of the year-end balance;

‘b) For AGAP Fund, not exceeding ten percent (10%) of the year-end balance; and

©) For PAGASSA Fund, not exceeding fifteen percent (15%) of yearly collections
including accruals thereto for the first two (2) years but not exceeding, ten percent
(10%) thereafter,

Should the expenses in any year become less than the maximum amount
permissible, the difference shall be kept by the SAGIPCo in a separate trust fund for
its future capital outlays and operating expenses.

SECTION 38. Inter-Fund Transfers. - When the exigencies of operations 60
require, the Board may transfer amounts from one fund to another; Provided, That
the amount transferred shall not exceed twenty-five percent (25%) of the balance of
the fund source within any given year subject to applicable laws and jurisprudence.

‘TION 39. Management of the SAGIP Funds. - All monies paid to or
collected by the SAGIP Funds under this Act shall be deposited, admini
disbursed in the same manner and under the same conditions and req
provided by law for other public special funds.

ered and
irements as

Investible funds of the SAGIP Funds shall be invested in high-yielding
government securities in accordance with law. In addition, the SAGIPCo is likewise
authorized to invest in cooperati cooperative insurance
companies and other people's organizations that are accredited deputized collecting,
agents of SAGIP Funds; Provided, That the investment shall have interest income of
higher than ordinary savings account and; Provided, further, That the investment
shall not exceed ten percent (10%) of the total capital of the concerned cooperative,
cooperative bank, cooperative insurance company or people's orgai
Provided, finally, That the investment shall be approved by the Bo:
sound financial management practices.

16


SECTION 40. Records and Reports. ~ The SAGIP Funds shall keep and
maintain records of all its funds and their disbursements. Within thirty (30) days
from the termination of its fiscal/calendar year, the President of SAGIPCo shall
prepare for submission to the President of the Philippines and to Congress of the
Philippines a report of operation of the SAGIP Funds during the preceding year
including but not limited to statistical data on the number of persons covered and
benefitted, finances of the SAGIPCo, and recommendations. He shall also cause the
circulation to the farmers/fisherfolk and the general public a synopsis of the annual
report, showing in particular the status of the finances of SAGIPCo and the benefits
administered. Separate and distinct records of operation of each funds, social
security benefits and insurance shall be maintained

SECTION 41. Grants, Aids and Contributions. - The SAGIP Funds shall be
authorized to receive grants, aids and contributions in the form of cash or property
from any person, entity, or association or corporation, domestic or foreign, for the
purpose of furthering the programs and policies adjudged to be in interest of the
government as a whole.

SECTION 42. Other Sources of Funds, ~ The SAGIP Funds shall be authorized
to collect licensing, accreditation, servicing, adjustment, and other fees which the
Board may prescribe in its rules and regulations from time to time.

SCTION 43. Appropriations. - To ensure the viability and stability of the
SAGIP Funds programs and objectives, the following are hereby appropriated

a) During the first year of the SAGIP Funds’ operation, the government shall,
within six (6) months thereof, release to the SAGIP Funds:

1) The amount of Three Hundred ‘Thirty Seven Million, Three Hundred
Ninety Seven Thousand Pesos (P337,397,000.00) representing the unpaid
balance of the authorized capital stock of the Philippine Crop Insurance
Corporation for the AGAIN Fund;

2) The amount of One Hundred Sixty Eight Million Seven Hundred Fifty
Eight Thousand Two Hundred Pesos (P168,758,200) representing its
unpaid premium shares in the PCIC rice and corn crop insurance
programs for the previous years for the AGAIN Fund;

3) The amount of Two Hundred Million Pesos (P200,000,000.00) representing
its estimated premium shares in the PCIC rice and corn crop insurance
program for the ensuing year for the AGAIN Fund;

4) The amount of Two Billion Pesos (P2,000,000,000.00) for the AGAP Fund.
This appropriated amount shall be funded from the outstanding balance
of the Agricultural Competitiveness Enhancement Fund set up under R.A.
8178, as amended; and


5) The amount of Six Hundred Million Pesos (P600,000,000.00) as its initial
contribution to the PAGASSA Fund. This amount shall be treated as its
advances to the Member's Contributions computed at the rate of twenty
five percent (25%) of the personal contribution of the member, which shall
be One Hundred Pesos (P100) per month, and shall be transferred
quarterly to the individual accounts of members as counterpart
contribution of their actual member's contribution to the PAGASSA Fund.
‘This appropriated amount shall be funded from the support services fund
of the comprehensive Agrarian Reform Program under R.A. No. 6657 or
other agrarian reform laws that shall have been enacted by the time this
Act has been approved.

b) For the subsequent years, yearly projection of the Government's contribution to
the AGAIN, AGAP and PAGASSA Funds shall be submitted by the SAGIPCo to
the President of the Philippines, through the Secretary of Agriculture, in
accordance with the regular budgetary practice, and upon his/her approval shall
be included in the Government budgetary appropriations; Provided, That the
support services fund of the Agrarian Reform Fund shall bear up to fifty percent
(50%) of the required amount. Releases shall be made on a quarterly basis
depending upon the actual amounts of:

1) Crop/livestock/aquaculture insurance underwritten by the SAGIPCo;
Provided, That the SAGIPCo shall bill the Government the sum of money
corresponding to the computed amount of contributions to the AGAIN
Fund and to crop insurance premiums;

2) Amount of fund releases for calls on guarantee in excess of the existing
AGAP Fund for the guarantee operations; and

3) Contribution of members to the PAGASSA Fund.

¢) Should any of the SAGIP Funds being administered by the SAGIPCo encounter
catastrophic losses during a year due to unexpected surge of indemnity claims
and/or calls on guarantee, SAGIPCo shall bill the National Government the
reimbursement of its catastrophic losses in the subsequent year after such losses
have been determined to preserve the integrity of the SAGIP Funds.

SECTION 44. Examination and Valuation of Benefits and Funds, ~ The SAGIPCo
shall keep and cause to keep such records as may be necessary for the purpose of
making actuarial studies, calculations, examinations, valuation of the SAGIP Funds
and shall keep or cause to keep records of such statistical data needed in the
computation of rates of old age bonus, disability, sickness, and other adjustments of
the benefits in the SAGIP Funds. The examination and valuation of benefits and
funds shall be made periodically in accordance with accepted actuarial principles.

18


SECTION 45. Exemption from Tax, Legal Process and Lien. - The actuarial
solvency of the SAGIP Funds shall be preserved and maintained at all times and that
the assessments and contribution rates necessary to sustain the benefits under this
Act shall be kept as low as possible in order not to burden the members and
contributing persons, entities, or associations or corporations of the SAGIP Funds.
Taxes imposed on the SAGIP Funds will impair their actuarial solvency and increase
the contribution rate and/or assessments necessary to sustain the benefits under this
Act. Accordingly, notwithstanding any laws to the contrary, the SAGIP Funds, its
assets, revenues including accruals thereto, and all benefits paid to members, shall
be exempt from all taxes, assessments, fees, charges or duties of all kinds. These
exemptions shall apply only to the SAGIP Funds itself and shall not apply to
persons, entities or associations or corporations doing business with the SAGIPCo,

Whatever benefits granted under this Act shall not be subject, among other
matters, to attachment, garnishment, levy or other process, or be seized, taken,
appropriated, or applied by any legal or equitable process to pay any debt or liability
of a member or beneficiary, or any person who may have right thereunder either
before or after payment; Provided, That this, however, shall not apply to obligations
of the member to the SAGIP Funds, or when the benefits granted hercin are assigned
in writing by the member with the authority of the SAGIPCo, e.g. crop insurance
indeminity paid to accredited formal lending institutions,

ARTICLE VI - ADJUDICATION OF CLAIMS AND DISPUTES.

SECTION 46, Facility of Payment. - The SAGIPCo shalll prescribe such rules
and regulations to facilitate payment of benefits, proceeds, credits, and claims under
this Act. Payments made by the SAGIP Funds prior to its receipt of an adverse
claim, to a beneficiary or claimant subsequently found not entitled thereto, shalll free
the SAGIPCo from any liability to the person or persons legally entitled to such
payment who shall, however, have a right to institute the appropriate action in a
court of law against the fraudulent recipient of the benefits, proceeds, credits, or
claims

SECTION 47. Settlement of Dispute. - The SAGIPCo shall have original
jurisdiction to settle any dispute arising under this Act. The Board may designate
any of its member official of the SAGIPCo to act as a hearing officer to receive
evidence, make findings of fact, and submit recommendations thereon. ‘The hearing
officer shall submit his/her findings, recommendations, together with all the
documentary and testimonial evidence, to the Board within fifteen (15) working
days from the time the parties have closed their respective evidence and filed their
last pleading. ‘The Board shall decide the case within twenty (20) days therefrom.
‘The cases heard directly by the Board shall be decided within ten (10) working days
from the time they are submitted by the parties for decision.

19


SECTION 48. Appeals. - Within ten (10) days from receipt of notice of
decision or award, the aggrieved party may appeal the same to the Insurance
Commission.

SECTION 49. Execution of Decisions. ~ Any decision or award of the Board
shall be final and executory when no appeal is perfected and there is no order to stay
by the Insurance Commission. For this purpose, the Board shall have the power to
issue to the city, municipal or provincial sheriff or its appointed sheriff such writs of
execution as may be necessary for the enforcement of such decision or award, and
any person, entity or association or corporation who shall fail or refuse to comply
with such decision, award, writ or process after being required to do so, shall, upon
application by the SAGIPCo, be punished for contempt.

SECTION 50. Oaths, Witnesses, and Production of Records. ~ When authorized
by the Board, an official or employee of the SAGIPCo shall have the power to
administer oath or affirmation, take depositions, certify to official acts, and issue
subpoena and subpoena duces tecum to compel the attendance of witnesses and the
production of books, papers, correspondences, and other records deemed necessary
as evidence in connection with any question arising under this Act. Any case of
contumacy shall be dealt with in accordance with the provisions of Section 580 of the
Revised Administrative Code.

ARTICLE VII - GENERAL AND PENAL PROVISIONS

SECTION 51. Government Assistance Thru Inter-Agency Linkages, - To support
and promote the realization of the objectives and to enhance the operations of the
SAGIP Funds, all government departments, bureaus, offices, agencies and
instrumentalities, national or local, all formal lending institutions, public or private,
now or hereinafter involved with agricultural/fisheries/rural credit programs,
namely: Department of Agriculture, Department of Agrarian Reform, Department of
Finance, Department of Interior and Local Government, Department of Labor and
Employment, Department of National Defense, Department of Public Works and
Highways, Department of Social Welfare and Development, Department of Trade
and Industry, National Economic and Development Authority, Bangko Sentral ng,
Pilipinas, National Food Authority, National Irrigation Administration, National
Electrification Administration, Armed Forces of the Philippines, Land Bank of the
Philippines, Development Bank of the Philippines, Philippine Al Amanah Bank,
Social Security System, Government Service Insurance System, all government
financing institutions, government owned or controlled banks, all private
commercial, savings banks, cooperative banks, all savings and thrift associations and
cooperatives, all rural banks, all barangay associations and other mutual benefit
associations and cooperative insurance organizations and such other public or
private persons, entities or associations or corporations covered by the objectives
and the rules and regulations of the SAGIP Funds, shall act as cooperating agencies
of the SAGIPCo and for this purpose shall direct their policies, programs, rules and
regulations so as to attune and synchronize them with the objectives of this Act.

20


SECTION 52. Prioritization of Coverage. - The Board shall determine priorities
in the implementation of this Act in terms of:

a) Type of benefit to be extended;
b) Type of farmer/fisherfolk to be covered;
©) ‘Type of produce to be covered;
d) Geographical area of coverage; and
€) Other factors as the Board may consider.
SECTION 53. Prohibition from Competition with the Private Sector. - ‘The
SAGIPCo shall not compete with the private industry. It can, however, collaborate

with private companies under pooling or similar arrangements as well as in
reinsurance undertaking.

SECTION 54. Participation of People’s Organizations. - The SAGIPCo shall
involve people’s organizations of farmers and/or fisherfolk, such as cooperatives
and self-help groups, in the implementation of this Act such as in the collection and
remittance of members’ contributions, loan amortizations, and insurance premiums
as well as in the underwriting of insurance. The SAGIPCo shall develop and
‘implement incentive schemes to attract the participation of such people's
organization and to allow for their eventual takeover at the local level.

SECTION 55. Government Guarantees. ~ The Government of the Republic of
the Philippines guarantees the fulfillment of any or all of the obligations of the
SAGIP Funds to its members and/or beneficiaries of the insured when they mature.

The Government's contribution to crop insurance premium, once the
premium rates and sharing are approved by the President of the Philippines, is an
obligation of the Republic of the Philippines.

SECTION 56. Implementing Rules and Regulations. - The implementing rules
and regulations to carry out the provisions of this Act shall be promulgated by the
SAGIPCo within sixty (60) days after the effectivity of this Act.

SECTION 57. Exclusiveness of Benefits. ~ Whenever other laws provide similar
benefits for the same contingencies covered by this Act, the member who qualifies
for the benefits shall have the option to choose which benefit will be paid to him.
However, if the benefits chosen are less than the benefits provided under this Act,
the SAGIPCo shall pay the difference: Provided, however, That when the disability
or death of an insured member is work connected as defined in Presidential Decree
No. 626, as amended, or when the loss of his crops/livestock and other

21


agricultural /fisheries assets is due to military operations arising from insurgency, he
shall be entitled to the full benefits therefor as provided herein.

SECTION 58. Penalty Clause. -

a) Any person found to have participated directly or indirectly in the commission of
fraud, collusion, falsification, or misrepresentation in any transaction with the
SAGIP Funds whether for him or for some other persons, shall suffer penalties
provided for in Article 172 of the Revised Penal Code, as amended;

b) Whoever shall obtain or receive any money or check invoking any provision of
this Act or any agreement thereunder, without being entitled thereto with the
intent to defraud any member, cooperating entity, the SAGIP Fund or third
party, shall be punished by a fine of not less than Ten Thousand Pesos
(P10,000.00) nor more than Fifty Thousand Pesos (P50,000.00) or by
imprisonment of not less than five (5) years nor more than ten (10) years, or both,
at the discretion of the Court;

c) Whoever buys, sells, offers for sale, uses, transfers, takes, or gives in exchange, or
pledges or gives in pledge, except as authorized in this Act or in the rules and
regulations made pursuant thereto, any stamp, coupon, ticket, book, quedan
certificate or other device, prescribed by the SAGIPCo for the collection or
payment of contributions required herein, shall be fined not less than Five
Thousand Pesos (P5,000.00) nor more than Ten Thousand Pesos (P10,000,00), or
imprisonment for not less than two (2) years nor more than five (5) years, or both,
at the discretion of the Court;

) Whoever, with intent to defraud, alters, forges, makes or counterfeits any stamp,
coupon, ticket, book, quedan certificate or other device prescribed by the
SAGIPCo for the collection of contributions required herein, or uses, sells, lends,
or had in his possession any material in imitation of the material used in the
manufacture of such stamp, coupon, ticket, book, quedan certificate or other
device, shall be fined not less than Ten Thousand Pesos (P10,000.00) nor more
than Twenty Thousand Pesos (P20,000.00), or imprisonment for not less that five
(5) years nor more than ten (10) years, or both, at the discretion of the Court;

) Whoever fails or refuses to comply with the provision of this Act or with the
rules and regulations adopted by the SAGIPCo shall be punished by a fine of not
less than Five Thousand Pesos (P5,000.00) nor more than Ten ‘Thousand Pesos
(P10,000.00), or imprisonment for not less than three (3) years nor more than six
(6) years, or both, at the discretion of the Court;

f) Any employee of the SAGIPCo who receives or keeps funds or property
belonging, payable, or deliverable to the SAGIP Funds and who shall appropriate
the same, or shall take or misappropriate or shall consent, or through
abandonment or negligence, shall permit any other person to take such property

22


or funds, wholly or partially, or shall otherwise be guilty of misappropriation of
such funds or property, shall suffer the penalties provided in Article 217 of the
Revised Penal Code, as amended;

8) Any collecting agent who fails to remit the collected/received contributions,
cash, credits or loan amortizations within thirty (30) days from the date of
collection or receipt shall be presumed to have misappropriated such
contributions, credits or loan amortization and shall be fined not less than Ten
‘Thousand Pesos (10,000.00) nor more than Fifty Thousand Pesos (P50,000.00), or
imprisonment for not less than five (5) years nor more than ten (10) years, or
both, at the discretion of the Court; and

h) Criminal actions arising from violations of these provisions of this Act may be
commenced by the SAGIPCo or by the aggrieved party, either under this Act or,
in appropriate cases, under the Revised Penal Code.

SECTION 59, Applicability of the Insurance Code of the Philippines (P.D. No. 612,
ended) and Agriculture and Fisheries Modernization Act (R.A. 8435). ~ The
provisions of the Insurance Code and the Agriculture and Fisheries Modernization
Act in so far as they are not inconsistent with the provisions of this Act shall apply to
the SAGIPCo and shall have suppletory effect. The Insurance Commission shall
exercise powers of visitation over the SAGIPCo.

SECTION. 60. Transitory Provisions. - Upon the effectivity of this Act, the
governing Board shall immediately be constituted and convened. All incumbent
officers and employees of the Quedancor and PCIC shall continue in office as
personnel of the SAGIPCo without demotion in rank nor diminution in
compensation and fringe benefits. The incumbent president of PCIC shall be the
Acting President of SAGIPCo until a new President shall have been appointed by the
President of the Republic. The Officer-in-Charge of the Quedancor shall be the
Acting Executive Vice President of the SAGIPCo. The Acting President shall form a
Management Committee composed of senior officers of both Quedancor and PCIC
to prepare and submit to the Board such plans and programs which will ensure
harmonious and effective transitional activities towards the full operations of the
SAGIP Funds,

Personnel of both PCIC and Quedancor who shall opt to retire because of
redundancy in functions as brought about by this reorganizaton shall be given a
retirement pay equivalent to twice the average of their monthly basic pay for the last
five years for every year of service; Provided, That they have rendered government
service of not less than ten (10) years as of the date of the effectivity of this Act,
Funds for this shall be drawn from the residual funds of both the PCIC and the
Quedancor. This benefit is over and above the benefit which the personnel shall
receive from the Government Service Insurance System. Furthermore, personnel
who opted to retire under this provision shall be barred to reemploy with the
SAGIPCo for five years after making such retirement.

23


SECTION 60. Repealing Clause. - All laws, decrees, charters, executive orders,
administrative orders, proclamations, rules and regulations, or parts thereof

inconsistent with any provision of this Act are hereby repealed or modified
accordingly.

SECTION 61. Separability Clause. - Should any provision of this Act or any
part thereof be declared invalid, the other provisions, so far as they are separable
shall remain in force and effect.

SECTION 62. Fffectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette and in any two (2) newspapers of general
circulation,

Approved,

24