House of Representatives
Quezon City. Meteo Manila

FIFTEENTH CONGRESS
Second Regular Session

comnarrree neront nol 500
Submitted by the Committee on Banks and Financial Intermediaries on _! 0 ee
5462
Re: House Bill No. atid

Recommending its approval, in substitution of House Bills No. 4621 and 5117

Sponsors: Representatives Sergio A. F. Apostol and Cresente C. Paez

Mr. Speaker
The Committee on Banks and Financial intermediaries to whichwee referred:

House Bill No. 4621, introduced by Cresente C. Paez and Jose R. Ping-ay, entitled: AN ACT
EXTENDING THE LIFE OF THE LAND BANK OF THE PHILIPPINES, FURTHER AMENDING REPUBLIC
ACT 3844, OTHERWISE KNOWN AS THE “AGRICULTURAL LAND REFORM CODE", AS AMENDED:
and

House Bill No. 5117, introduced by Pedre P. Romualdo, entitled: AN ACT EXTENDING THE TERM
OF THE LAND BANK OF THE PHILIPPINES (LBP) TO ANOTHER FIFTY (50) YEARS THEREBY
AMENDING SECTION 74 OF THE REPUBLIC ACT NO. 3844, AS AMENDED, OTHERWISE KNOWN AS
THE "AGRICULTURAL. LAND REFORM CODE”

has considered the same and hereby recommends the epproval of the attached bill, entitled:

AN ACT EXTENDING THE TERM OF THE LAND BANK OF THE PHILIPPINES FURTHER AMENDING REPUBLIC
ACT NO. 3844, OTHERWISE KNOWN AS THE "AGRICULTURAL LAND REFORM CODE", AS AMENDED,

with Representatives Cresente C. Paez, Jose R. Ping-ay, Pedro P. Romualdo, Sergio A F. Agostol, Rufus
B. Rodriguez, Maximo B. Rodriguez, Jr., Rollo S. Golez, Julieta R. Cortuna, Isidro Q. Lico, and Philip A
Pichay as authors thereof.

Respectiully submitted,

SERGIO AF APOSTOL
Chairman

The HONORABLE SPEAKER
HOUSE OF REPRESENTATIVES
Quezon City


FACT SHEET

a
House BillNo.__ 220 E
(Substitute bill to HB. No. 4621 and 5117)

AN ACT EXTENDING THE TERM OF THE LAND BANK OF THE PHILIPPINES
FURTHER AMENDING REPUBLIC ACT NO. 3844, OTHER WISE KNOWN AS.
THE “AGRICULTURAL LAND REFORM CODE

Introduced by: REPRESENTATIVES CRESENTE PAEZ, JOSE R. PING-AY, PEDRO
ROMUALDO, SERGIO AF. APOSTOL RUFUS 8 RODRIGUEZ, MAXIMO B. RODRIGUEZ,
JULIETA R CORTUNA, ISIDRO Q. LICO AND PHILIP A, PICHAY

Committee Referral: COMMITTEE ON BANKS & FINANCIAL INTERMEDIARIES
Chairperson: REPRESENTATIVE SERGIO A F APOSTOL

OBJECTIVE

To sustain credit assistance to the agricultural and rural sectors in support of the
social justice objectives of agrarian reform.

KEY PROVISION

+ Extends the corporate life of the Land Bank which ends on August 8, 2013 by
another 50 years,


wee

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
FIFTEENTH CONGRESS

Second Regular Session

HOUSE BILL NO,

INTRODUCED BY Representatives Cresente C. Pazz, Jose R, Ping-ay, Pedro P. Romualdo, Sergio A. F.
‘Apostol, Rufus B. Rodriguez, Maximo B. Rodriguez, Jr, Roilo S. Golez, Julieta R. Cortuna, Isidro Q. Lico, and
Phitip A. Pichay

‘AN ACT
EXTENDING THE TERM OF THE LAND BANK OF THE PHILIPPINES, FURTHER AMENDING REPUBLIC ACT NO.
3844, OTHERWISE KNOWN AS THE "AGRICULTURAL LAND REFORM CODE", AS AMENDED,

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

SECTION 1. Section 74 of Republic Act No. 3844, as amended is hereby amended to read as follows:

" Section 74, Creation - To finance the acquisition by the Government of landed estates for division
and resale to small landholders, as well as the purchase of the landholding by the agricultural lessee from
the landowner, there is hereby established a body corporate to be known a8 the "Land Bank of the
Philippines", hereinafter called the "Bank", which shall have its principal place of business in Manila. [The
egal existence of the Bank shall be for a period of fifty years counting from the date of the approval hereof]
THE BANK IS HEREBY GRANTED FROM THE EXPIRATION OF ITS ORIGINAL TERM ON AUGUST 8, 2013,
ANOTHER PERIOD OF FIFTY (50) YEARS. The Bank shall be subject to such rules and regulations as the
[Central Bank] BANGKO SENTRAL NG PILIPINAS may from time to time promulgate.”

SECTION 2. Repealing Clause, - All laws, decrees, executive orders, proclamations, rules and

-gulations and other issuances, or parts thereof which are inconsistent with the provisions of this Act, are
hereby repealed, amended or modified,

SECTION 3. Effectivity Clause. - This Act shall take effect fifteen (15) days from the date of its
Publication in at least two (2) newspapers of general circulation in the Philippines.

Approved,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

Fifteenth Congress
First Regular Session

HOUSEBILLNO. 4621

Introduced by Honorable Cresente C. Paez and Honorable Jose R. Ping-ay

EXPLANATORY NOTE

The Land Bank of the Philippines, a Specialized Government Bank with universal
banking license, was created under Republic Act No. 3844 also known as the
Agricultural Land Reform Code on 08 August 1963 primarily to finance the acquisition
and distribution of agricultural estates for division and resale to small landholders as
well as the purchase of landholdings by the agricultural lessee as defined under the law.
This Body Corporate was granted legal existence for a period of Fifty (50) years
counting from the approval of the law. In 1977 the Bank was reorganized to form three
major sectors - Agrarian, Banking and Operations to strengthen operations and ensure
long-term viability. Several issuances and enactments were later on passed relative to its
organizational structure, operations and vested functions. Among which, on 23 February
1995, Republic Act No. 7907 made the LBP as an official government depository.

In its almost forty eight (48) years of corporate existence, LBP was a well
renowned government financial institution meritoriousty receiving scores of highly
acclaimed awards and citations from both local and international award-giving bodies
which is a testament to its sound management and profuse growth over the years. As a
matter of fact, as of 31 December 2010, LBP reported total assets of 565.72 Billion
pesos and total net income after tax of 8.108 Billion pesos translating to an annual
growth of 20%.

In the light of LBP’s impending corporate life expiration on 2013, this bill seeks
to extend the Bank’s life for another period of fifty (50) years with an optimistic
anticipation that it would continuously replicate with greater dedication and visibility
Past successes in countryside development and expand further, years of
accomplishments in the industry permeating all levels of the Filipino society to provide
excellent and responsive services especially to farmers, fisher folks and other priority
sectors and stakeholders (its avowed beneficiaries) towards economic prosperity.

Tn view of the foregoing, the approval of this bill is earnestly sought.

CRESRYTE PAEZ



weeny

10

un

12
13
4
1s
16
7

19
20
a
2
23
24
25
26

Repubtic of the Philippines
House OF REPRESENTATIVES
Quezon City, Metro Manila

Fifteenth Congress
First Regular Session
4621
HOUSE BILL NO.

Introduced by Honorable Cresente C. Paez and Honcrable Jose R. Ping-ay

AN ACT EXTENDING THE LIFE OF THE LAND BANK OF THE
PHILIPPINES, FURTHER AMENDING REPUBLIC ACT 3844,
OTHERWISE KNOWN AS THE AGRICULTURAL LAND REFORM
CODE, AS AMENDED ~
Be it enacted by the Senate and House of Representatives of the

Philippines in Congress assembled:

SECTION 1. The Land Bank of the Philippines (LBP) franchise
granted under Republic Act No. 3844, also known as the “Agricultural Land

Reform Code”, is amended to read as follows:

(1) Sec. 74. Creation, is hereby amended to read as follows;

“Sec. 74, Creation. - To finance the acquisition by the
Government of landed estates for division and resale to small
landholders, as well as the purchase of the landholding by the
agricultural lessee from the landowner, there is hereby
established a body corporate to be known as the “Land Bank of
the Philippines”, hereinafter called the “Bank”, which shall
have its principal place of business in Manila [The legal
existence of the Bank shall be for a period of fifty years
counting from the date of the approval hereof.] THE BANK 1S
HEREBY GRANTED FROM THE EXPIRATION OF ITS
ORIGINAL TERM ON 08 AUGUST 2013, ANOTHER
PERIOD OF FIFTY (50) YEARS OF LEGAL
EXISTENCE RENEWABLE FOR ANOTHER FIFTY (50)
YEARS. The Bank shall be subject to such rules and


Sev aneonne

un
12

regulations as the Central Bank may from time to time
promulgate.”

SEC. 2. Repealing Clause. — All laws, presidential decrees, executive
orders in whole or in part, including the rules and regulations promulgated
thereunder inconsistent with the provisions of this Act, are hereby amended,
repealed or modified accordingly.

SEC. 3. 2ffectivity. - This Act shall take effect fifteen (15) days
following its publication in the Official Gazette or in at least two (2)
newspapers of general circulation.

Approved,


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila
FIFTEENTH CONGRESS
Second Regular Session

HOUSE BILLNO.__9117

INTRODUCED BY REPRESENTATIVE PEDRO P. ROMUALDO-

EXPLANATORY NOTE

The Land Bank of the Philippines (LBP) was created on August 8, 1963 by virtue of
Section 74 of Republic Act No. 3844, with an original term of fifty (50) years which will
expire on August 8, 2013. This bill proposes to extend the term of the Land Bank of the
Philippines to another fifly (50) years to continue its existence and operations.

‘The Land Bank of the Philippines has been very successfull in its twin-thursts as a
bank by virtue of Presidential Decree No. 251 on July 21, 1973 and as the
financial intermediary of the agrarian reform program of the government wherein it was
primarily created to provide financial support in all phases of agrarian reform under
Section 64 of Republic Act No. 3844.

It was reorganized in 1977 to focus into three areas: Agrarian, Banking and Operations

to meet the increasing and diverse needs of its clients and strengthen its long term
ility. On February 23, 1995, its charter was amended wherein its authorized capital
increased from its original authorized capital One billion five hundred thousand
pesos (P\ 1,500,000.00) to "Nine billion pesos" (P\ 9,000,000.00) and its Board of
uustees Was increased from seven (7) to nine (9). It also became the official government
depository bank. On August 25, 1998, its authorized capitalization was again increased to
"Twenty-five billion pesos” (P\ 25,000,000.00).

Today, Land Bank of the Philippines is one of the top five commercial banks in the
country in terms of deposits, assets, loans and capital. It continues to serve the country
as: a) the implementing arm of the Comprehensive Agrarian Reform Program which
includes land valuation, compensation to owners of agricultural lands, and collection of
amortizations from CARP-farmer beneficiaries; b) provision of credit assistance to small
farmers and fisherfolks and agrarian reform beneficiaries; c) as official government
depository bank; and d) in fulfilling its mandate to spur countryside development.

Let us continue to support "Ang Bangkong May Damdaming Bayan” so it can function
well and fulfill its mandate as a top universal and government bank as well as lead
partner of our national government in the successful implementation of the
Comprehensive Agrarian Reform Program. “

Congressman, Lone District, Camiguin


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila
FIFTEENTH CONGRESS
Second Regular Session

House BILL No._5117

INTRODUCED BY REPRESENTATIVE PEDRO P. ROMUALDO-

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

AN ACT
EXTENDING THE TERM OF THE LAND BANK OF THE PHILIPPINES (LBP)
TO ANOTHER FIFTY (50) YEARS THEREBY AMENDING SECTION 74 OF
THE REPUBLIC ACT NO. 3844, AS AMENDED, OTHERWISE KNOWN AS
THE "AGRICULTURAL LAND REFORM CODE"

(CTION 1. Section 74 of Republic Act No. 3844, as amended is hereby amended to
as follows:

ion 74. Creation - To finance the acquisition by the Government of landed
estates for division and resale (0 small landholders, as well as the purchase of the
landholding by the agricultural lessee from the landowner, there is hereby established a
body corporate to be known as the "Land Bank of the Philippines", hereinafter called the
"Bank", which shall have its principal place of business in Manila. [The legal existence
of the Bank shall be for a period of fifty years counting from the date of the approval
hereof] THE BANK IS HEREBY GRANTED FROM THE EXPIRATION OF ITS
NAL TERM ON AUGUST 8, 2013, ANOTHER PERIOD OF FIFTY (50)
YEARS. The Bank shall be subject to such rules and regulations as the [Central Bank]
KO SENTRAL NG PILIPINAS may from time to time promulgate.

SECTION 2. Repealing Clause. - All laws, decrees, executive orders, proclamations,
rules and regulations and other issuances, or parts thereof which are inconsistent with
the provisions of this Act, are hereby repealed, amended or modified.

SECTION 3. Effeetivity Clause. - This Act shall take effect fifteen (15) days from the
date of its publication, upon its initiative, in at least two (2) newspapers of general
circulation in the Philippines.

4
>

Approved,


House of Representatives
®uezon City. Metro Manila

MINUTES OF THE 22°° AUGUST 2011 MEETING
Conference Room 1, Ramon V. Mitra Jr. Bldg.
Batasan Pambansa Complex, Quezon City

Honorable Sergio Apostol, Chairman, presiding.
Resource Persons:

‘Mr. Eric Pama ~ President, Rural Bankers Association of the Philippines

Mr. Tomas Gomez —Past President, Rural Bankers Association of the Philippines

Mr. Vicente Mendoza — Executive Director, Rural Bankers Association of the Philippines
Ms. Gilda Pico — President, Land Bank of the Philippines

Mr. Francisco Del Rosario Jr. — President, Development Bank of the Philippines

Atty, Prudence Kasala - Supervision and Examination Sector, Bangko Sentral ng Pilipinas
Atty. Loretta Conlu - Supervision and Examination Sector, Bangko Sentral ng Pilipinas

Call to Order
The meeting was called to order at 9:45 am. On mation, the calling of the roll was dispensed with.
Consideration of HB 4805, HB 4854 and HB 4519 (Allowing foreign equity in rural banks)

Representative Pedro Romualdo, author of HB 4854, said that the rural bank industry has 2 pivotal
role in meeting and sustaining the needs of various sectors af the local economy such as the business
sector, agriculture and fishery sector, micro-enterprises and small to medium enterprises and the
service industries. He proposed that, with the increase in the minimum capital requirement for rural
banks, fresh capital from interested foreign investors or non-Filipino citizens be allowed in order to
sustain the growth of the industry.

‘Atty Prudence Kasala of the Supervision and Examination Sector of the Bangko Sentral ng Pilipinas said
that the BSP does not interpase any objection to allowing foreign equity in rural banks. She suggested
that the foreign equity be limited to 40% of voting stock 2s provided in HB 4805 and HB 4854, instead of
60% as provided in HB 4519. This is to avoid issues on foreclosure of property, specifically on the
qualification to acquire tand, which existing laws limit to Philippine citizens. Atty Kasals said that if
foreign equity is more than 40% of voting stock, the rural bank will no longer be qualified to hold tand
and therefore could not take title to the land. Atty Kasala also proposed the adoption of section 11 of
the General Banking Law on the determination of the nationality of the corporate stockholder.

Mr. Eric Pama, President of the Rural Bankers Association of the Philippines (RBAP), endorsed the
Proposal allowing foreign equity in rural banks of up to 40% of voting stock,

‘Congressman Rufus Rodriguez, author of HB 4519, manifested that he is supporting the proposal to
limit foreign equity in rural banks to 40% of voting stock.


Approval of HB-4805 and HB. 4854

‘On motion, the committee voted to approve the bills allowing foreign equity in rural banks of up to.
40% of voting stock.

Approval of HB 4621 and HB5117

On motion, the committee voted to approve HB 4621 and HB 5517 extending the term of Land Bank by
another 50 years.

Consideration of HB 135 ond HB 3731 (LBP-DBP merger)

‘The committee deferred discussion of the bills. Instead, it created a technical working group headed by
Representative Golez to study the proposals and to submit its recommendations to the committee.

Adjournment

The meeting was adjourned at 11:45 am.

Certified correct:

ey ay

RAMON R. FEDERIZON
Committee Secretary