HOUSE OF REPRESENTATIVES:
RECEIVED

SEVENTEENTH CONGRESS OF THE ) ae OT AUG 2018

REPUBLIC OF THE PHILIPPINES —_) Dare:

First Regular Session ) aime: LE
ey

RECISTRATION UNIT

HOUSE OF REPRESENTATIVES
BULLS ANJ INDEX SERVICE

H.No._ 2176

Introduced by Representative Vilma Santos-Recto
6th District of Batangas

AN ACT
PRIORITIZING THE AGRICULTURAL SECTOR IN THE GRANT OF LOANS BY THE
LAND BANK OF THE PHILIPPINES,AMENDING FOR THE PURPOSE REPUBLIC ACT
NUMBER THREE THOUSAND EIGHT HUNDRED FORTY-FOUR, 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 intent 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 2014, LBP recorded a P385.9 billion in gross loan portfolio. However, much of the bank’s
loan portfolio wasoffered to industries other than the agricultural sector. In the same year, 57.0% of
the bank’s loan portfolio was extended to public utilities, micro, small and medium enterprises
(MSMES), housing, transportation, education, communications, environment projects, healthcare and
tourism, while another 14.1% was tendered to other sectors like local government units, government-
owned or -controlled corporations (GOCCs)'. This leaves only 28.9% 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.

This bill proposes to amend the charter of the Land Bank of the Philippines (LBP), al
itto focus on the provision of affordable credit to the agriculture sector where most poor F:
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 frui
of agricultural development projects.

In view of the foregoing, the approval of this bill is
DF

[A SANTOS-RECTO.



SEVENTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES __)
First Regular Session )

HOUSE OF REPRESENTATIVES

H.No.__2176

Introduced by Representative Vilma Santos-Recto
6th District of Batangas

AN ACT
PRIORITIZING THE AGRICULTURAL SECTOR IN THE GRANT OF LOANS BY THE
LAND BANK OF THE PHILIPPINES,AMENDING FOR THE PURPOSE REPUBLIC ACT
NUMBER THREE THOUSAND EIGHT HUNDRED FORTY-FOUR, AS AMENDED

Beit enactedbytheSenateand House ofRepresentativesofihe Philippinesin Congress assembled.

SECTION 1.Section 75 of Republic Act No. 3844, as amended by Presidential Decree Number 251, is

hereby further amended to read as follows:

“Sec. 75. Powers in General. The bank shall have the power:

Sx xX;
"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 (20%) OF THE BANK’S
‘TOTAL LOAN PORTFOLIO.
“Xx Xx.”

Sec. 2. Savings Clause. ~ 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 contractual rights or be
construed to change the terms of any legal contract between the bank and any third party or to impose
any new conditions thereon, or to dispense with any condition expressed or authorized in any such

contract entered into and taking effect prior to this Act.

‘Been int”


Sec. 3. Separability Clause. — If any provision of this Act is held invalid or
unconstitutional, the same shall not affect the validity and effectivity of the other provisions hereof.

Sec. 4. Repealing Clause. — Pertinent provisions of all other laws, decrees, executive
orders and rules and regulations contrary to or inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.

Sec. 5. Efféctivity Clause. — This Act shall take effect fifteen (15) days after its publication
in the Official Gazeue or in two (2) newspapers of general circulation.

Approved,

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