HOUSEOF REPRESENTATIVES

RECEIVED
pate, 07 SEP 2016

sive I Bin

EE
BY Tk
REGISTRATION UNIT
BILLS AND INDEX SERVICE

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

17 Congress
First Regular ‘

‘House Bill No.

Introduced by REP. EN A. PINEDA and

EXPLANATORY NOTE

Itis a declared policy of the state under Republic Act No. 10000, otherwise known as the
Agri-Agra Reform Credit Act of 2009 “to promote equal access to opportunities under an

environment of sustained growth and expanding productivity as the key tor

ing the quality of
life for all, Towards this end, the State shall promote rural development by enhancing access of
the rural agricultural sector to financial services and programs that increase market efficiency and

promote modernization in the rural agricultural sector”,

Section 6 of the saiel law provides that “all banking institutions, whether government or

five percent (25%) of their total loanable funds for

private, shall set aside at least twenty
agriculture and fisheries credit in general, of which at least ten percent (10%) of the loanable funds
shall be made available for agrarian reform beneficiaries mentioned in Section 5 hereof”,
Unfortunately, records from the Bangko Sentral ng Pilipinas (BSP) show that the combined
loanable allocations of all banking institutions for agriculture sector and agrarian reform

beneliciaries since the effectivity of the act is way below the mandated threshold.

The noble objective of the law is thwarted by the unwillingness of most banking

institutions to asst

the perceived risk to otherwise qualified borrowers and instead opted to

pay the penalties as provided for in section 10 of the said act, While we recognize the inherent

right of financial institutions to implement what they consider as sound fiscal/lending policy,

they have equal duties to obey, in utmost good faith, the mandates of the law rather than deciding

to pay the penalties for non-compliance thereof.


The qualified credit beneficiaries from the agricultural and fisheries sector have not been
able to fully use the credit services provided by the banks and other Accredited Rural Financial
Institutions as mandated by law, because such banks and other lending institutions have imposed
strict requirements and high standards on the borrowers’ ability to pay off their loans, thus
making it difficult for them to obtain the necessary credit, In so doing, not only has the twenty-
five percent (25%) of the supposed to be total loanable funds for agriculture and fisheries credit
in general have not been made attainable but the net effect is that it has severely hampered the

agricultural and fisheries. development’ ~— in’ the. srural sector,

This proposed act is not aimed at penalizing the banking institutions but to encourage

them to dig deep into their financial ingenuity to come up with alternative or special credit

programs for those usually coming from the marginal sectors:

Approval of this bill is therefore sought.

I %
sadn ROMERO Ph.D ICO A, PINEDA

Representtative, IPACMAN Party-list, Representative, PACMAN Party-list



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

17% Congress
First Regular Session

520
House Bill No. 352 =

~__ Introduced by R| ICO A. PINEDA and MICHAEL ODYLON L. ROMERO

AN ACT

INCREASING THE PENALTIES ON THE LENDING INSTITUTIONS FOR NON-COMPLIANCE
AND UNDERCOMPLIANCE WITH THE PROVISIONS OF R.A. No, 10000, OTHERWISE KNOWN
AS “THE AGRI-AGRA REFORM CREDIT ACT OF 2009", AMENDING FOR THE PURPOSE
SECTION 10 THEREOF, AND FOR OTHER PUSPOSES

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

SECTION 1. Article lil, Section 10 of Republic Act No. 10000 is hereby amended to read:

"Section 10. Penalty Clause.

a) The BSP shall impose administrative sanctions and other penalties on the
lending institutions for noncompliance with the provisions of this Act. Penalties on
noncompliance shall be computed at (one-half of one percent (0.5%)) TWO-AND A
HALF PERCENT ( 2.5%) of noncompliance and under compliance shall be directed to
the development of the agti-agra sector. Ninely percent ( 90%) of the penalties
collected shall be allocated belween the AGFP and the PCIC according to the needs
of he agri-agra sector as provided for in the implementing rules and regulations of this
Act and the remaining len percent ( 10%) shall be given to the BSP to cover
administrative expenses.

b) OFFICIALS LIABLE FOR NONCOMPLIANCE AND UNDERCOMPLIANCE OF THE
PROVISIONS OF THIS ACT SHALL BE CHARGED ADMINISTRATIVELY AND CIVILLY IN THE
MANNER THAT SHALL BE FORMULATED AND DECREED IN THE IMPLEMENTING RULES AND.
REGULATIONS OF THE AGRI AGRA REFORM CREDIT ACT OF 2009 ( RA 10000 ). LIKEWISE,
PENALTIES SHALL BE IMPOSED ON BSP OFFICIALS WHO REFUSE OR FAIL TO SANCTION
ERRING BANK OFFICIALS.”


SECTION 2, AMENDMENTS ~ Any amendments to the administrative
sanctions and their penalties shall be proposed by and ratified by and the same shall
take effect upon approval by the Monetary Board of the Bangko Sentral ng Pilipinas.

SECTION 3. SEPARABILITY CLAUSE - If any provision or section of this Act or
the application thereof to any person or circumstances is held invalid, the other
provisions or sections of this Act shall remain valid, and the application of such
remaining provisions or sections to the other persons or circumstances, shall not be
affected thereby.

SECTION 4, REPEALING CLAUSE - All provisions of Republic Act No.10000
and any other provisions inconsistent with the provision of this Act are hereby amended
accordingly.

SECTION 5. EFFECTIVITY- This Act shall take effect fifteen (15) days from the
date of its publication in the Official Gazette or in at least two (2) newspapers of
general circulation.

Approved.