,iI/nat.-
SIXTEENTH CONGRESS OF THE REPUBLIC ) 
(4ilJ.;, of I~.j.'''fb{~ 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
JUL -8 P2:50 
SENATE 
S.No. 619 
Introduced by Senator Ralph G. Recto 
Explanatory Note 
Agriculture is the foundation of a rural economy. Aside from providing our basic necessities of 
food and raw materials, the sector employs one-third of the country's labor force. As such, agriculture 
is regarded as the nation's defense against poverty and hunger. As one of the forces that drive the 
economy, it contributes an annual 18% to the country's GDP despite the onslaught of typhoons, 
droughts, diseases and high cost of inputs such as fertilizers, antibiotics, seed treatments, pesticides, i.e. 
herbicides, fungicides, plant growth regulators and rodenticides. 
However, growth in the sector has not been enough to improve overall agriculture labor 
productivity. Latest data as of October 2012 from the National Statistics Office (NSO) show a decline in 
employment in agriculture by 705,000, or 5.5 %, compared to that of October 2011.1 Likewise, from 
January 2004 to January 2009, employment in the sector grew by only 679,268 jobs compared to the 
Medium-Term Philippines Development Plan target of2 millionjobs.2 
Data on yield, production cost and price of various agricultural commodities show that the 
country lagged behind its neighbors. As a result, the comparative advantage of Philippine agriculture 
continued to decline resulting in our country increasingly becoming a net importer of agricultural 
products since 1994. 
These setbacks were mainly due to: low public and private investments in the sector, higher cost 
of farm inputs, high postharvest losses due to inadequate equipment and infrastructure, poor postharvest 
handling practices, and inadequate skills and technical support, among others. Investments in agriculture 
fall below levels at which the sector can meet actual food requirements of our increasing population. 
Thus, ending povelty and inequity have remained serious challenges in the countryside. 
Funding support for agriculture is necessary because it leads to greater productivity, which in 
tum translates to stable prices of commodities and more affordable food on the table. To illustrate: in 
telms of the share of agricultural land with irrigation facilities, the Philippines ranks 7th in Southeast 
Asia with only 14.7%, while rice exporter Vietnam's farmland is 47.8% irrigated. On undernourishment, 
we have 17% versus 9% only in Vietnam. In addition, our imports have outpaced exports with 10.3 % 
growth in imports versus 8.9% growth in exports, from 2001 to 20103 
This bill allocates funds for farm inputs, post-harvest facilities, and infrastructure support. In 
order to promote agribusiness as a tool for countryside development, this bill also provides funding 
support to livelihood programs, capability programs/trainings, and micro finance. Since agriculture plays 
a major role in the generation of incomes and employment in the countryside, the sector should be given 
additional budgetary support. 
In view of the foregoing, immediate passage of this bill is eal!.Jll~j(,sought. 
dhg 
1 www.bles.dole.gov.ph/PUBLICATIONS/ .. .IvoI16 35.pdf (Accessed on March 21, 201 ~ 
'code-ngo.orgl .. .lMTPDP2004-2010_AssessmenLFuILReport.pdf (Accessed on March 21,2013) 
, FA 0, Selected Indicators of Food and Agricultural Development in the Asia-Pacific Region 
o 
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SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
S.No. 619 
Introduced by Senator Ralph G. Recto 
AN ACT 
'-< " 
,{-,. 
'st!tlntr 
·(6lf,; •• f t~.J>.~ 
'13 
JUL -8 P 2 :50 
MODERNIZING AGRICULTURE, PROVIDING FUNDS FROM THE ANNUAL V ALUE-
ADDED TAX COLLECTIONS, AMENDING FOR THE PURPOSE THE NATIONAL 
INTERNAL REVENUE CODE OF 1997, AS AMENDED 
Be it enacted by the Senate and the House of Representative of the Philippines in Congress 
assembled: 
SECTION 1. A new section, to be numbered two hundred eighty-seven, shall be added to 
Chapter II, Title XI of the National Internal Revenue Code, as amended to read as follows: 
"SEC. 287. DISPOSITION OF PROCEEDS OF VALUE-ADDED TAX. - FIVE 
PERCENT (5%) OF THE VALUE-ADDED TAX COLLECTED UNDER, TITLE IV OF 
, 
I 
THIS ACT, AS AMENDED, SHALL BE ALLOCATED TO THE FOLLOWING 
AGRICULTURE EXPENDITURES: 
, 
1.) TWENTY PERCENT (20%) FOR CONSTRUCTION, REHABILITATION AND 
RESTORATION OF COMMUNAL IRRIGATION SYSTEMS; 
2.) TEN PERCENT (10%) FOR POST-HARVEST FACILITIES INCLUDING 
MECHANICAL AND SOLAR DRYERS AND WAREHOUSES; 
3.) TEN PERCENT (10%) FOR SEED AND ORGANIC FERTILIZER SUBSIDIES; 
4.) TWENTY 
PERCENT 
(20%) 
FOR 
FARM-TO-MARKET 
ROADS 
IN 
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MUNICIPALITIES WITH SIGNIFICANT AGRICULTURAL ACTIVITIES; 
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5.) TEN PERCENT (10%) FOR LIVESTOCK DISPERSAL PROGRAM; 
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6.) TEN PERCENT (10%) FOR TRAINING/CAPABILITY BUILDING PROGRAMS 
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FOR AGRICULTURAL EXTENSION WORKERS AND THEIR CLIENTELE; 
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7.) TEN PERCENT (10%) FOR MICROFINANCE LENDING PROGRAMS TO 
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FINANCE SMALLHOLDER AGRICULTURE; 
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8.) TEN PERCENT (10%) FOR THE ESTABLISHMENT AND MAINTENANCE OF 
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MARICUL TURE AND AQUACULTURE PARKS. 
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THE 
FUND 
SHALL 
BE 
ADMINISTERED 
BY 
THE 
DEPARTMENT 
OF 
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AGRICULTURE (DA) IN CONSULTATION WITH THE LOCAL GOVERNMENT UNIT 
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CONCERNED. 
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SEC. 2. The succeeding Sections of the National Internal Revenue Code are hereby 
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renumbered accordingly. 
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SEC. 3. Implementing Rules and Regulations .- The Department of Budget and 
2 
Management, Bureau of Internal Revenue and DA shall within thirty (30) days from the effectivity 
3 
of this Act issue the nece,ssary rules and regulations for its effective implementation, I 
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SEC. 4. Repealing Clause. - All laws, decrees, executive orders, rules and regulations, or 
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parts thereof which are inconsistent with this Act are hereby repealed, amended or modified 
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accordingly, 
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SEC. 5. Effectivity, - This Act shall take effect fifteen (15) days after its publication either in 
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the Official Gazette or in at least two (2) newspapers of general circulation, 
Approved, 
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