EIGHTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
)
Third Regular Session 
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'll IW 25 . 2 :.?3
SENATE 
Senate Bill No.
(In substitution of Senate Bill Nos. 1038, 1336, 1352, 1361, 1585, 1740, 1924, 
taking into consideration Proposed Senate Resolution No. 19 and House Bill No. 6134)
Prepared by the Committees on Agriculture, Food and Agrarian Reform; Banks, 
Financial Institutions and Currencies with Senators Imee R. Marcos, Ramon Bong 
Revilla Jr, Manuel "Lito" M. Lapid, Sonny Angara, Cynthia A. Villar, Grace Poe and 
Christopher Lawrence T. Go as authors thereof.
AN ACT STRENGTHENING THE FINANCING SYSTEM FOR AGRICULTURE, 
FISHERIES, AND RURAL DEVELOPMENT IN THE PHILIPPINES, REPEALING 
FOR THE PURPOSE REPUBLIC ACT NO. 10000 OR "THE AGRI-AGRA REFORM
CREDIT ACT OF 2009"
Be it enacted by the Senate and House of Representatives of the Philippines 
in Congress assembled:
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SECTION 1. Short Title. ■ This Act shall be known as 'The Agriculture,
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Fisheries and Rural Development Financing Enhancement Act of 2022".
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SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to
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promote inclusive and broad-based economic growth by ensuring equal access to
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opportunities under an environment of sustained growth and expanding productivity
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as the key to raising the quality of life for all. Towards this end, the State shall
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promote rural development by enhancing access of rural communities and agricultural
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and fisheries households to financial services and programs that increase productivity,
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enhance market efficiency, and promote modernization and improve the welfare and
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economic prospects of beneficiaries in rural communities through active participation
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of banking institutions.


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The Landbank of the Philippines (LBP) and the Development Bank of the 
Philippines (DBP) shall continue to promote savings and credit in the rural areas by 
offering affordable deposit products such as the basic deposit account for deposits 
and low interest rates for loans.
The lending cooperatives, microfinance institutions, retail banks, rural and thrift 
banks shall apply minimum interest rates for wholesale loans obtained from 
government banks.
Likewise, the LBP and DBP shall use their resources to innovate, develop, 
promote and invest in digital, automation technology, branchless banking and cash 
agent operations to reach remote barangays and municipalities; using e-commerce, 
on-line transactions, bank-on-wheels, point of sale devices with retailers and non­
banking institutions, lottery kiosks and mobile phone applications in making banking 
services accessible to the rural public.
SEC. 3. Definition of Terms. - As used in this Act:
(A) Agrarian Reform Beneficiary (ARB) refers to a farmer who was granted land under 
Presidential Decree No. 27, the Comprehensive Agrarian Reform Law and 
Republic Act No. 9700 or the "Comprehensive Agrarian Reform Extension with 
Reforms" and a regular farmworker who is landless, irrespective of tenurial 
arrangement, who benefited from the redistribution of land, regardless of crops 
or fruits produced, to include the totality of factors and support services designed 
to lift the economic status of the beneficiary and all other alternative 
arrangements to the physical distribution of lands, such as production or profit 
sharing, labor administration, and the distribution of shares of stock which will 
allow the beneficiary to receive a just share of the fruits of the lands one tilled. 
The term shall also Include registered ARBs' cooperatives/associations/other farm 
groups, respectively endorsed as comprising of ARBs by the nearest office of the 
Department of Agrarian Reform (DAR), as well as ARB households.
(B) Agrarian Reform Community (ARC) refers to a barangay or a cluster of barangays 
primarily composed and managed by ARBs which is organized and willing to 
undertake the integrated development of an area and/or their 
organizations/cooperatives.


(C)
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(F)
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Agri-Business refers to agriculture and fishery-related activities that put farmers, 
fisherfolk processors, distributors, and consumers within a system that produces, 
processes, transports, markets, and distributes agricultural and fishery products. 
It encompasses Input production, farm and fishery operations and management, 
equipment and supplies manufacturing, food/non-food processing, trading, and 
retailing.
Agri-Tourism, also referred to as "Farm Tourism" under Republic Act No. 10816, 
or the "Farm Tourism Development Act of 2016", refers to the practice of 
attracting visitors and tourists to farm areas for production, educational and 
recreational purposes. It involves any agricultural- or fishery-based operation or 
activity that brings to a duly-accredited farm tourism camp, visitors, tourists, 
farmers and fisherfolk who want to be educated and trained on farming and its 
related activities.
Agricultural Lessee refers to any person who, with or without help from one's 
immediate farm household, cultivates the land owned by another for a certain 
price in money, in produce, or in both.
Agricultural or fisheries household refers to a household with at least one (1) 
member of the household who is a farmer, a fisherman, an ARB, a settler, an 
agricultural lessee, an amortizing owner, a farmworker, a fishworker, an owner- 
cultivator, a compact farmer, or a tenant farmer.
Agricultural Value Chain (AVC) refers to a set of actors/players, such as farmers, 
fisherfolks, traders, suppliers, processors, aggregators, who make up linked 
sequence of value-adding activities undergone by an agricultural product when 
converted from raw material to final form it is presented to the consumers. 
Agricultural Value Chain Financing (AVCF) refers to the financial products and 
services made available to an AVC following the appropriate evaluation of the 
AVC's composition, goal, size and capacity.
Agro-Industry Modernization Credit and Financing Program (AMCFP) refers to the 
umbrella credit/financing program of the government for the agriculture and 
fisheries sector created under Republic Act No. 8435, or the "Agriculture and 
Fisheries Modernization Act of 1997".


(J)
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(P)
Amortizing owners refer to landowners who amortize payment for the land to a 
private individual or to the State.
Basic Deposit Account (BDA) refers to interest- or non-interest-bearing account 
designed to promote financial inclusion.
Cash agent refers to a third party entity contracted by a bank to accept and 
disburse cash on its behalf, and facilitate self-service deposits, withdrawals and 
fund transfers, bills payment and other banking services, as allowed under BSP 
rules and regulations.
Compact farmers refer to those farmers with adjoining farms operating as a 
single unit under one (1) management, farm plan and budget.
Farmer refers to a natural person whose primary livelihood is cultivation of land 
or the production of agricultural crops, agro-forest products, or livestock, either 
by oneself, or primarily with the assistance of their immediate farm household, 
whether the land is owned by them or by another person under a leasehold or 
share tenancy agreement or arrangement with the owner thereof.
Farmworker refers to a natural person who renders service for value as an 
employee or laborer in an agricultural enterprise or farm regardless of whether 
the compensation is paid on a daily, weekly, monthly or pakyaw or contracted 
project. The term includes an individual whose work has ceased as a 
consequence of, or in connection with, a pending agrarian dispute who has not 
obtained a substantially equivalent and regular farm employment.
Farmers' cooperatives refer to cooperatives composed primarily of small 
agricultural producers, farmers, farmworkers, or other ARBs who voluntarily 
organize themselves for the purpose of pooling land, manpower, technological, 
financial or other economic resources, and operate on the principle of "one 
member, one vote". A juridical person may be a member of a cooperative, with 
the same rights and duties as a natural person.
Farmer's and ftsherfolk organizations or associations refer to farming or fishing 
cooperatives, associations or corporations duly registered with appropriate 
government agencies and which are composed primarily of small agricultural 
producers, farmers, farmworkers, ARBs, and fisherfolk who voluntarily join 
together to form business enterprises or non-business organizations which they 
themselves own, control and patronize.


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(W)
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Farm-To-Market road refers to a road linking the agriculture and fisheries 
production sites, coastal landing point and post-harvest facility to the market and 
arterial road or highway.
Financial services refer to services extended by banks and financial institutions 
such as credit/iending, deposits, rediscounting, investments, and insurance. 
Fisherfoik refers to people directly or personally and physically engaged In 
catching and processing fishery and/or aquatic resources, and in fish farming or 
aquaculture whether the fish specie is grown in tanks, fishponds or other types of 
enclosures.
Fishworker refers to a person whether or not regularly employed in commercial 
fishing and related industries, whose income is either from wages, profit sharing 
or stratified sharing basis, including those working in fishpens, fish corral/traps, 
fishponds, prawn farms, sea farms, salt beds, fish ports, fishing boat or trawlers, 
or fish processing and/or packing plants, but excluding administrators, security 
guards and overseers.
Green projects refer to green economic activities and projects. Aside from 
activities that promote climate change adaptation and mitigation, green projects 
also cover environmental and efficiency improvements, natural capital 
preservation and resource mobilization.
Micro, Small and Medium Enterprise (MSME) refers to any business activity or 
enterprise defined as such under existing laws.
Newly Established Bank refers to a domestic or foreign bank without banking 
presence in the Philippines prior to the issuance of its certificate of authority to 
operate. It shall not include banks that have been formed through the acquisition, 
purchase of ownership of the voting stock of an existing domestic bank or the 
merger or consolidation of banks.
Owner-cultivators refer to natural persons who own lands by purchase, 
inheritance, or land distribution by the State. Owner-cultivators can operate the 
farm themselves, supervise wage labor or delegate operations to farmers. 
Post-harvest Activities refer to threshing, drying, milling, grading, storing, and 
handling of produce and such other activities of a similar nature such as stripping, 
winnowing, chipping and washing.


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(AA) Post-harvest Facilities refer to threshers, moisture meters, dryers, weighing 
scales, milling equipment, fish ports, fish landings, ice plants and cold storage 
facilities, processing plants, warehouses, buying stations, market infrastructure 
and transportation facilities, and such other facilities supporting post-harvest 
activities.
(BB) Public Rural Infrastructure refers to infrastructure in rural communities such as 
highways, streets, bridges, tunnels, railways, railroad, transport systems, ports, 
airports, hydropower projects, canals, dams, irrigation, government buildings and 
housing projects, public schools, public hospitals, public health centers, public 
markets, slaughterhouses, warehouses, solid waste management, sewerage, 
flood control, drainage, dredging and other similar infrastructure projects.
(CC) Registry System For Basic Sectors in Agriculture (RSBSA) is an electronic 
compilation of basic information on farmers, farmworkers, and fisherfolk. The 
database, which includes the profile of farmers, farm workers and fisherfolk, and 
additional information such as farm parcels and fisheries, among others, is mainly 
used to help government planners and policymakers in formulating policies for 
agricultural development.
(DD) Rural Community refers to an area that is defined as such by the Philippine 
Statistics Authority (PSA).
(EE) Rural Financial Institution (RFI) refers to any financial institution established and 
is operating in a rural community.
(FF) Settlers refer to persons who range from the forest-clearing pioneers, including 
indigenous people, with a subsistence economy to the better equipped and more 
experienced farmers.
(GG) Sustainable Finance refers to any form of financial product or service which 
integrates environmental, social and governance criteria into business decisions 
that support economic growth and provide lasting benefit for both clients and 
society while reducing pressures on the environment. This also covers green 
finance which is designed to facilitate the flow of funds towards green economic 
activities and climate change mitigation and adaptation projects.
(HH) Tenant Farmer refers to one who cultivates another's land under a sharing or 
leasehold agreement.


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SEC. 4. Agriculture, Fisheries and Rural Development Financing System. -
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There shall be an agriculture, fisheries, and rural development financing system to
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improve the productivity, income, competitiveness and welfare of the rural community
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beneficiaries, particularly the farmers, fisherfolk, ARBs, ARCs, settlers, agricultural
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lessees, amortizing owners, farmworkers, fish workers, owner-cultivators, compact
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farmers, tenant farmers, and members of their household and their MSMEs, as well as
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farmer's and fisherfolk's cooperatives, organizations and associations, through
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government and private banking institutions.
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Agriculture, fisheries and rural development financing, as used herein, shall
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consist of loans and investments to finance activities that shall enhance productivity
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and increase income of an agricultural and fisheries household, thereby promoting
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agricultural sector productivity and competitiveness, as well as sustainable
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development of rural communities, these shall include, but not be limited to: activities
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identified under the AMCFP as enumerated under Chapter 3 Section 23 of Republic Act
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No. 8435, off-farm/fishery entrepreneurial activities, agricultural
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mechanization/modernization, agri-tourism, environmental, social and governance
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projects, including green projects, digitization/automation of farming, fishery and
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agribusiness activities and processes, acquisition of lands authorized under the
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Agrarian Reform Code of the Philippines and its amendments, efficient and effective
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marketing, processing, distribution, shipping and logistics, and storage of agricultural
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and fishery commodities, public rural infrastructure, as well as programs that shall
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promote the health and wellness of farmers, fisherfolks and ARBs, including members
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of their households, such as water and sanitation projects for rural communities, and
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address the developmental needs of rural communities, such as, but not limited to,
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projects that promote the livelihood, skills enhancement, and other capacity-building
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activities of the rural community beneficiaries and all other activities consistent or
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analogous to the foregoing.
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Toward this end, banking institutions are expected to design and offer
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financial products and services that suit the specific requirements of their agricultural
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clients, taking into account their cash flows and the gestation and harvest period of
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the agricultural produce/activity/project being financed.


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SEC. 5. Rural Community Beneficiaries. - The financing mentioned in the
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preceding section shall be extended to the rural community beneficiaries named
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therein or to cooperatives, associations, MSMEs or organizations in good standing of
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such beneficiaries, regardless of capitalization based on the feasibility of the project
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and their paying capacity, their estimated production, and/or securities they can
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provide as well as such assets as may be acquired by them from the proceeds of the
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loan and investments.
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SEC. 6. Credit Quota. - All banking institutions, whether government or
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private, except newly-established banks for a period of five (5) years from date of
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commencement of the banks' operations, shall set aside a credit quota, or a minimum
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mandatory agricultural and fisheries financing requirement of at least twenty-five
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percent (25%) of their total loanable funds.
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The total loanable funds generated by a banking institution shall be defined by
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the BSP. During the first year of effectivity of this Act, the total loanable funds
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generated shall be computed starting from 20 April 2010, the effectivity of Republic
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Act No. 10000, after which the bank’s total loanable funds shall be determined based
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on funds generated starting from the second year of effectivity of this Act.
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SEC. 7. Modes of Compliance. - Banks may comply with the mandatory credit
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requirement by lending to rural community beneficiaries, to finance agricultural and
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fishery-related activities as enumerated under Section 4 of this Act. Banks may also
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comply with the mandatory financing requirement through other means as follows:
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(a) Invest in debt securities, including those issued by the DBP and the LBP:
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Provided, That the proceeds from said debt securities shall be used to finance
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activities under Section 4 hereof: Provided, further. That the proceeds from debt
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securities issued by the DBP and the LBP shall be separately accounted for and shall
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not be considered for purposes of computing the loanable funds under Section 6
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hereof of the said banks;
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(b) Open deposit accounts and/or invest in fixed term deposit products with
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RFIs: Provided, That such deposit accounts/products shall be separately accounted for
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by the depository bank and shall not be considered for purposes of computing the
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loanable funds of the said banks as described in Section 6 hereof;


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(c) Rediscount with banks eligible paper covering agriculture, fisheries and 
agrarian reform credits: Provided, That rediscounted paper shall no longer be eligible 
as compliance on the part of the originating bank;
(d) Invest directly in shares of stock of RFIs, subject to prevailing laws, rules or 
regulations or lend wholesale to RFIs: Provided, That the wholesale loans shall be 
credited as compliance of the bank acting as wholesale lender alone;
(e) Lend for the construction and upgrading of infrastructure, including but not 
limited to, farm-to-market roads, as well as the provision of post-harvest facilities and 
other public rural infrastructure that will benefit the rural community;
(f) Lend to agri-business enterprises that maintain agricultural commodity 
supply-chain arrangements directly with rural community beneficiaries;
(g) Undertake AVCF to actors/players in the AVC that benefits rural 
communities;
(h) Engage in sustainable finance; and
(i) Invest in shares of stock of the Philippine Crop Insurance Corporation (PCIC) 
or in companies that primarily engage in activities under Section 4 hereof, including 
investments in venture capital corporations, that benefit rural community 
beneficiaries;
Provided, That the loans and investments that are counted as compliance are 
not funded by proceeds from the issuance of debt securities, and/or deposit/lending 
of other banks that have been counted as compliance with the mandatory credit: 
Provided, further. That loans to finance activities that shall generally benefit ARBS, 
ARCS, or other priority sectors, as may be determined by the Agricultural Credit Policy 
Council (ACPC), shall be counted at ten times (lOx) their outstanding amount, or as 
otherwise prescribed by the ACPC, for purposes of determining compliance with the 
mandatory agricultural and fisheries financing requirement.
The modes of compliance enumerated in this section shall be subject to review 
by the ACPC after implementation to determine whether these are adequate to 
support the financing requirements of rural communities and recommend to Congress 
for appropriate action.
The BSP, the Department of Agriculture (DA) and the DAR may provide inputs 
to the review process in their capacity as members of the ACPC.


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Further, the BSP shall be authorized to identify other actions that may be 
considered as eligible modes of compliance with the mandatory credit to rural 
community beneficiaries.
SEC. 8. Annual Reports. - The BSP shall furnish reports on the compliance with 
the mandatory agriculture, fisheries rural development financing requirement, 
including information on amount of agri-agra penalties collected and remitted to the 
implementing agencies of the Special Fund as identified under Section 11 of this Act, 
to the ACPC and the Congress on a yearly basis. The BSP shall, as part of its 
regulatory functions, monitor the compliance by the banks with the requirements of 
this Act.
SEC. 9. Penalty Clause. - The BSP shall impose administrative sanctions and 
other penalties on the lending institutions for violation of any of the provisions of this 
Act. Penalties on noncompliance or undercompliance shall be computed at one-half of 
one percent (0.5%) of noncompliance or under compliance, or at rates prescribed by 
the BSP Monetary Board. Upon collection of the penalties, the BSP shall remit the 
same to the implementing agencies of the Special Fund as identified under Section 11 
of this Act. Ten percent (10%) of the penalties collected shall be retained by the BSP 
to cover administrative expenses and twenty-five (25%) shall be remitted to the 
General Fund.
SEC. 10. Special Fund. - The Special Fund shall consist of penalties due from 
banks on their noncompliance or undercompliance with the mandatory agri-agra credit 
requirement under Republic Act No. 10000, collected after the effectivity of this Act, 
net of the ten (10) percent amount to be retained by the BSP and the twenty five 
percent (25%) to be remitted to the General Fund, and penalties collected under 
Section 9 hereof.
The annual penalties for noncompliance and undercompliance with the 
mandatory agri-agra credit that are collected by the BSP under Section 9 shall be 
remitted directly to the implementing agencies, within one and a half (1.5) years from 
imposition of the same, for distribution in accordance with the provisions under 
Section 11 of this Act.
SEC. 11. Use of the Special Fund. - The Special Fund under Section 10 of this Act 
shall be allocated to the following implementing agencies in this manner:


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(A) Thirty five percent (35%) of the fund shall be allocated to DAR for the titling and 
parcelization of landholdings covered with Collective Certificate of Land Ownership 
Awards (CLOA);
(B) Sixty five percent (65%) of the fund shall be made available in the form of credit 
facility with minimal interest rates and with minimum collateral requirements, to 
be equally managed by the LBP and the DBP which shall set their geographic 
coverage in administering said credit facility.
The LBP and DBP shall utilize the Special Fund for lending to farmers and 
fisheries registered in the RSBSA, farms and fisheries cooperatives and 
associations, and microfinance institutions: Provided, That a portion of the Special 
Fund managed by the LBP and DBP shall be used to fund capacity building 
programs which will equip ARBs, as well as members of their household and their 
MSMEs, and agrarian reform communities with the appropriate knowledge and 
skills to improve their welfare, competitiveness, income and productivity. For this 
purpose, the LBP and DBP may coordinate with qualified training providers as well 
as the ACPC and the Cooperative Development Authority, on the design and 
delivery of these capacity building programs.
In the case of the DBP share, to promote financial inclusion in Islamic 
communities, particularly the ARBs in the Bangsamoro Region, two and one-half 
percent (2.5%) in the thirty-two and one-half percent (32.5%) share of DBP shall 
be allocated to Al Amanah Islamic Investment Bank of the Philippines (AAIIBP) for 
as long as the National Government is a majority shareholder of AAIIBP.
Provided, That all loan repayments and other collections shall revert to the 
General Fund of the National Treasury: Provided further, That LBP and DBP shall 
be allowed to reimburse direct costs incurred in the management of the Fund, but 
in no case shall these reimbursements exceed two percent (2%) of the average 
quarterly loan balance.
SEC. 12. Congressional Oversight - The Congressional Oversight Committee 
on Agricultural and Fisheries Modernization (COCAFM) shall exercise oversight 
functions over the implementation of this Act. In line with this, COCAFM shall conduct 
an independent review of the use of the Special Fund administered by the 
Implementing agencies.


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SEC. 13. Implementing Guidelines. - The BSP, in consultation with LBP, DBP,
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AIIBP, Cooperative Development Authority, DA, DAR, the banking industry,
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Microfinance Organizations and other relevant agencies, shall promulgate such rules
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and regulations as may be necessary to implement the provisions relating to the
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mandatory agricultural and fisheries financing requirement, within sixty (60) working
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days after approval of this Act.
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SEC. 14. Separability Ciause. - If any part, section or provision of this Act is
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held invalid or unconstitutional, other provisions not affected thereby shall remain in
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force and effect.
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SEC. 15. Repealing Clause. - Republic Act No. 10000 is hereby repealed. Any
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other provisions of laws, decree and regulations, administrative orders inconsistent
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with the provisions of this Act are hereby repealed or amended accordingly.
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SEC 16. Effectivity. - This Act shall take effect fifteen (15) days after its
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publication in the Official Gazette or in a newspaper of general circulation.
Approved,