Page | 1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
Nineteenth Congress 
First Regular Session 
House Bill No. _________ 
Introduced by REP. JOEY SARTE SALCEDA 
AN ACT  
GRANTING A CHARTER TO THE PHILIPPINE COMMODITY CREDIT 
CORPORATION, SETTING UP MECHANISMS FOR THE MANAGEMENT 
OF FARM SURPLUS, AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
The certainty and stability of income flows is critical in making the agriculture sector a thriving 
driver of economic growth. Some 22.5% of the country’s labor force are employed in the sector, 
according to recent estimates by the International Labor Organization1 (ILO), making this 
sector critical in addressing issues of wage security, income inequality, and rural poverty.  
One of the key deficiencies of the Philippine agriculture system is the lack of a mechanism for 
managing sudden fluctuations in commodity prices and farm income. Just last year, the country 
experienced a dramatic surplus of 2 million kilograms of mangoes, a commodity that can be 
easily preserved, processed, and packaged for export2. Earlier this year, Luzon also faced 
surpluses of pork3 and vegetables4. 
In a country where 64.1% of total Filipino households are food insecure5, and where, due to the 
COVID-19 pandemic, an estimated 5.2 million Filipino families experienced involuntary 
hunger – hunger due to lack of food to eat – at least once in the past three months6, farm 
surpluses are clearly not so much a problem of lack of demand, as they are a lack of 
coordination and allocation. 
Farm surpluses also impact farmer income negatively. They also disincentivize farmers from 
producing adequate food to meet the country’s nutritional needs. 
1 Modeled estimates from the World Bank collection of development indicators 
2 https://www.bbc.com/news/world-asia-48581857 
3 http://www.pcaf.da.gov.ph/index.php/2020/04/29/da-to-help-transport-surplus-pork-in-mindanao-to-luzon-
visayas-repost/ 
4 https://news.abs-cbn.com/news/03/28/20/da-to-help-farmers-sell-surplus-crops-amid-luzon-lockdown 
5
http://enutrition.fnri.dost.gov.ph/site/preview.php?xx=%20uploads/2019%20ENNS%20Results%20Disseminati
on_Household%20Food%20Security%20%20Status.pdf 
6 SWS July 3-6, 2020 National Mobile Phone Survey – Report No. 5 
July 1, 2022 
8:00 am
674


Page | 2 
Thus far, the interventions of the Department of Agriculture, while laudable, have been 
sporadic and centered on marketing and transportation assistance. Without an institutionalized 
system for buying up farm surplus, preserving them for future use or as “commodity credits,” 
these scattered efforts will continue to have limited reach, and can only be undertaken as far as 
the limited field operations capacity of the Department will allow. 
This bill aims to address the lack of a systematic manner of addressing farm surplus by 
chartering the Philippine Commodity Credit Corporation, a government-owned and -controlled 
corporation which shall be under the Department of Agriculture.  
The Corporation shall have the following main functions: 
(a) Income Support and Disaster Assistance – Income support and disaster assistance
programs of the Corporation shall provide financial assistance to protect farmers from
fluctuations in market conditions and unexpected natural or man-made disasters;
(b) Conservation –The Corporation shall offer a variety of financial and economic
incentives to conserve natural resources on the nation’s privately owned agricultural
lands. These programs shall focus on reducing erosion, protecting streams and rivers,
restoring and establishing fish and wildlife habitats, and improving air quality through
several conservation incentive payments, technical assistance, and cost-share programs;
(c) Commodity Operations and Food Aid – The Corporation shall undertake programs to
help achieve domestic farm program price support objectives, establish a system of
accepting surplus produce and processing and preserving them as “commodity credit”
for farmers and for food aid programs; produce a uniform regulatory system for storing
agricultural products, and ensure the timely provision of food products for domestic
food assistance programs as may be determined by the Secretary in coordination with
relevant agencies such as the Department of Social Welfare and Development (DSWD),
and market development programs; and
(d) Foreign Market Development –The Corporation shall undertake programs to open new
markets and facilitate global competitiveness of the Philippine agriculture sector. Such
programs shall include support for economic development and trade capacity building
of the domestic agriculture sector.
How will the farm surplus management system work? 
Although this charter grants the Corporation a broad range of powers, its principal purpose 
shall be to establish a surplus management system. The Corporation shall establish operations 
to accept surplus produce to support farm price. The Corporation may issue “commodity 
receipts” in exchange for the surplus. The Corporation may either sell the surplus in other 
markets, or process and preserve them for future use, or for food aid operations of other 
government agencies.  
These “commodity receipts” can be redeemed either in kind – in the form of processed, 
warehoused, or preserved commodities currently held by the Corporation – or in other forms 
of equivalent and fair payment that the Corporation may deem proper. The Corporation may 
set the guidelines necessary to make this process efficient and cost-effective.  
The system will not only help manage farm prices; it will also ensure that no farm surplus is 
wasted, and that food produced in the country by its farmers eventually helps address the 
country’s nutritional needs. 


Page | 3 
The Corporation’s store of surplus food will also be critical during calamities, where food relief 
is needed.  
In view of the benefits of establishing this system to the growth and stability of the country’s 
agricultural sector and given its role in addressing the country’s nutritional demands, the 
approval of this bill is urgently sought. 
JOEY SARTE SALCEDA 


Page | 1 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
Nineteenth Congress 
First Regular Session 
House Bill No. _________ 
Introduced by REP. JOEY SARTE SALCEDA 
AN ACT  
GRANTING A CHARTER TO THE PHILIPPINE COMMODITY CREDIT 
CORPORATION, SETTING UP MECHANISMS FOR THE MANAGEMENT 
OF FARM SURPLUS, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. – This Act shall be known as the ‘‘Commodity Credit System 
Act’’ 
SEC. 2. Creation and Purposes. – For the purpose of stabilizing, supporting, and 
protecting farm income and prices, of assisting in the maintenance of balanced and adequate 
supplies of agricultural commodities, products thereof, foods, feeds, and fibers (hereinafter 
collectively referred to as ‘‘agricultural commodities’’), and of facilitating the orderly 
distribution of agricultural commodities, there is hereby created a body corporate to be known 
as Philippine Commodity Credit Corporation (hereinafter referred to as the ‘‘Corporation’’), 
which shall be an agency and instrumentality of the Philippine Government, within the 
Department of Agriculture, subject to the general supervision and direction of the Secretary of 
Agriculture (hereinafter referred to as the ‘‘Secretary’’). 
The objectives of this Act are as follows: 
(a) Income Support and Disaster Assistance – Income support and disaster assistance
programs of the Corporation shall provide financial assistance to protect farmers from 
fluctuations in market conditions and unexpected natural or man-made disasters; 
(b) Conservation – The Corporation shall offer a variety of financial and economic
incentives to conserve natural resources on the nation’s privately owned agricultural lands. 
These programs shall focus on reducing erosion, protecting streams and rivers, restoring and 
establishing fish and wildlife habitats, and improving air quality through several conservation 
incentive payments, technical assistance, and cost-share programs; 
(c) Commodity Operations and Food Aid – The Corporation shall undertake programs
to help achieve domestic farm program price support objectives, establish a system of accepting 
surplus produce and processing and preserving them as “commodity credit” for farmers and for 
674


Page | 2  
 
food aid programs; produce a uniform regulatory system for its operations to store agricultural 
products, and ensure the timely provision of food products for domestic food assistance 
programs as may be determined by the Secretary in coordination with relevant agencies such 
as the Department of Social Welfare and Development (DSWD), and market development 
programs; and 
 
(d) Foreign Market Development – The Corporation shall undertake programs to open 
new markets and facilitate global competitiveness of the Philippine agriculture sector. Such 
programs shall include support for economic development and trade capacity building of the 
domestic agriculture sector. 
 
SEC. 3 Office. – The Corporation may establish offices in such place or places as it may 
deem necessary or desirable in the conduct of its business. 
 
SEC. 4. General powers. – The Corporation 
 
(a) Shall have succession in its corporate name.  
 
(b) May adopt, alter, and use a corporate seal, which shall be judicially noticed.  
 
(c) May sue and be sued, but no attachment, injunction, garnishment, or other similar 
process, mesne or final, shall be issued against the Corporation or its property. 
 
(d) May adopt, amend, and repeal bylaws, rules, and regulations governing the manner 
in which its business may be conducted, and the powers vested in it may be exercised.  
 
(e) Shall have all the rights, privileges, and immunities of the Philippine Government 
with respect to the right to priority of payment with respect to debts due from insolvent, 
deceased, or bankrupt debtors. The Corporation may assert such rights, privileges, and 
immunities in any suit, action, or proceeding. 
 
(f) Shall be entitled to the use of the Philippine Government mailing privileges in the 
same manner and upon the same conditions as the executive departments of the national 
government.  
 
(g) May enter into and carry out such contracts or agreements as are necessary in the 
conduct of its business 
 
(h) May contract for the use, in accordance with the usual customs of trade and 
commerce, of plants and facilities for the physical handling, storage, processing, servicing, and 
transportation of the agricultural commodities subject to its control. The Corporation shall not 
have power to acquire real property or any interest therein except that it may (a) rent or lease 
office space necessary for the conduct of its business and (b) acquire real property or any 
interest therein for the purpose of providing storage adequate to carry out effectively and 
efficiently any of the Corporation’s programs, or of securing or discharging obligations owing 
to the Corporation, or of otherwise protecting the financial interests of the Corporation: 
Provided, That the authority contained in this subsection (h) shall not be utilized by the 
Corporation for the purpose of acquiring real property, or any interest therein, in order to 
provide storage facilities for any commodity unless the Corporation determines that existing 
privately owned storage facilities for such commodity in the area concerned are not adequate: 


Page | 3  
 
Provided further, That no refrigerated cold storage facilities shall be constructed or purchased 
except with funds specially provided by Congress for that purpose: And provided further, That 
any contract entered into by the Corporation for the use of a storage facility shall provide at 
least that (1) the rental rate charged for an extended term in excess of one year shall be at an 
annual rate less than that which is charged for a one-year contract, (2) any obligation of the 
Corporation to pay for the use of any space in a facility shall be relieved to the extent that the 
Corporation does not use the space and payment is made by another person for the use of such 
space, and (3) if the Corporation determines that it no longer needs the space reserved in the 
facility, the Corporation may be relieved for the remaining term of the contract, of its 
obligations to an extent and in a manner that will provide significant savings to the Corporation 
while permitting the owner of the facility reasonable time to lease such space to another person: 
And provided further, That nothing contained in this subsection (h) shall limit the duty of the 
Corporation, to the maximum extent practicable consistent with the fulfillment of the 
Corporation’s purposes and the effective and efficient conduct of its business, to utilize the 
usual and customary channels, facilities, and arrangements of trade and commerce in the 
warehousing of commodities: And provided further, That to encourage the storage of grain on 
farms, where it can be stored at the lowest cost, the Corporation may make loans to grain 
growers needing storage facilities when such growers shall apply to the Corporation for 
financing the construction or purchase of suitable storage, and these loans shall be deducted 
from the proceeds of price support loans or purchase agreements made between the Corporation 
and the growers, except that the Secretary shall make such loans in areas in which the Secretary 
determines that there is a deficiency of such storage. 
 
(i) May borrow money subject to any provision of law applicable to the Corporation: 
Provided, That the total of all money borrowed by the Corporation, other than trust deposits 
and advances received on sales, shall not at any time exceed in the aggregate a cap annually set 
the Secretary of Finance. The Corporation shall at all times reserve a sufficient amount of its 
authorized borrowing power which, together with other funds available to the Corporation, will 
enable it to purchase, in accordance with its contracts with lending agencies, notes, or other 
obligations evidencing loans made by such agencies under the Corporation’s programs. 
 
(j) Shall determine the character of and the necessity for its obligations and expenditures 
and the manner in which they shall be incurred, allowed, and paid.  
 
(k) Shall have authority to make final and conclusive settlement and adjustment of any 
claims by or against the Corporation or the accounts of its fiscal officers.  
 
(l) May make such loans and advances of its funds as are necessary in the conduct of 
its business. 
 
(m) Shall have such powers as may be necessary or appropriate for the exercise of the 
powers specifically vested in the Corporation, and all such incidental powers as are customary 
in corporations generally; but any research financed by the Corporation shall relate to the 
conservation or disposal of commodities owned or controlled by the Corporation and shall be 
conducted in collaboration with research agencies of the Department of Agriculture. 
 
Notwithstanding any other provision of this Act, the Corporation may, in the exercise 
of its power to remove and dispose of surplus agricultural commodities, export, or cause to be 
exported, not to exceed such amounts of commodities owned by the Corporation as will enable 


Page | 4  
 
the Corporation to finance research and development of external combustion engines using fuel 
other than that derived from petroleum and petroleum products. 
 
SEC. 5. Specific powers. – In the fulfillment of its purposes and in carrying out its 
annual budget programs submitted to and approved by the Congress, the Corporation is 
authorized to use its general powers only to – 
 
(a) Support the prices of agricultural commodities (other than tobacco) through loans, 
purchases, the issuance of commodity receipts, payments, and other operations.  
 
(b) Make available materials and facilities required in connection with the production 
and marketing of agricultural commodities (other than tobacco).  
 
(c) Procure agricultural commodities (other than tobacco) for sale to other Government 
agencies, foreign governments, and domestic, foreign, or international relief or rehabilitation 
agencies, and to meet domestic requirements.  
 
(d) Remove and dispose of or aid in the removal or disposition of surplus agricultural 
commodities (other than tobacco).  
 
(e) Increase the domestic consumption of agricultural commodities (other than tobacco) 
by expanding or aiding in the expansion of domestic markets or by developing or aiding in the 
development of new and additional markets, marketing facilities, and uses for such 
commodities.  
 
(f) Export or cause to be exported, or aid in the development of foreign markets for, 
agricultural commodities (other than tobacco) (including fish and fish products, without regard 
to whether such fish are harvested in aquacultural operations).  
 
(g) Carry out conservation or environmental programs authorized by law.  
 
(h) Carry out such other operations as the Congress may specifically authorize or 
provide for.  
 
In the Corporation’s purchasing and selling operations with respect to agricultural 
commodities (other than tobacco) (except sales to other Government agencies), and in the 
warehousing, transporting, processing, or handling of agricultural commodities (other than 
tobacco), the Corporation shall, to the maximum extent practicable consistent with the 
fulfillment of the Corporations purposes and the effective and efficient conduct of its business, 
utilize the usual and customary channels, facilities, and arrangements of trade and commerce 
(including, at the option of the Corporation, the use of private sector entities). 
 
SEC. 6. Existing statutes applicable to the corporation. – The national statutes 
applicable to duly-registered government corporations shall be applicable to the Corporation.  
 
SEC. 7. Capital stock. – The Corporation shall have a capital stock to be set by the 
Secretary of Finance in the Implementing Rules and Regulations of this Act, and which shall 
be subscribed in the manner set by the same. Such subscription shall be deemed to be fully paid 
by the transfer of assets to the Corporation. The Corporation shall pay interest to the National 
Treasury on the amount of its capital stock, and on the amount of the obligations of the 


Page | 5  
 
Corporation purchased by the Treasury, at such rates as may be determined by the Secretary of 
the Finance to be appropriate in view of the terms for which such amounts are made available 
to the Corporation. 
 
SEC. 8. Funds. – The Corporation is authorized to use in the conduct of its business all 
its funds and other assets, including capital and net earnings therefrom, and all funds and other 
assets, which have been or may hereafter be transferred or allocated to, borrowed by, or 
otherwise acquired by it. 
 
SEC. 9. Board of Directors and Advisory Board. – 
 
(a) The management of the Corporation shall be vested in a Board of Directors 
(hereinafter referred to as the ‘‘Board’’), subject to the general supervision and direction of the 
Secretary. The Secretary shall be an ex officio director and shall serve as Chairman of the 
Board. The Board shall consist of seven members (in addition to the Secretary), who shall be 
appointed by the President. In addition to their duties as members of the Board, such appointed 
members shall perform such other duties as may be prescribed by the Secretary. 
 
Each appointed member of the Board shall receive compensation at such rate not in 
excess of the maximum then payable under existing law, as may be fixed by the Secretary, 
except that any such member who holds another office or position under the Government the 
compensation for which exceeds such rate may elect to receive compensation at the rate 
provided for such other office or position in lieu of the compensation provided by this section.  
 
A majority of the directors shall constitute a quorum of the Board and action shall be 
taken only by a majority vote of those present. 
 
 
(b) In addition to the Board of Directors there shall be an advisory board reflecting 
broad agricultural and business experience in its membership and consisting of five members 
who shall be appointed by the President, and who shall serve at the pleasure of the President. 
Not more than three of such members shall belong to the same political party.  
 
The advisory board shall meet at the call of the Secretary, who shall require it to meet 
not less often than once each ninety days; shall survey the general policies of the Corporation, 
including its policies in connection with the purchase, storage, and sale of commodities, and 
the operation of lending and price-support programs; and shall advise the Secretary with respect 
thereto.  
 
Members of the advisory board shall receive for their services as members 
compensation of not to exceed per diems set by the Board when actually engaged in the 
performance of their duties as such, together with their necessary traveling expenses while 
going to and coming from meetings. 
 
SEC. 10. Personnel of Corporation. – The Secretary shall appoint such officers and 
employees as may be necessary for the conduct of business of the Corporation, define their 
authority and duties, delegate to them such of the powers vested in the Corporation as he may 
determine. With the exception of experts, appointments shall be made pursuant to the civil 
service laws. 
 


Page | 6  
 
SEC. 11. Cooperation with other government agencies. – The Corporation may, with 
the consent of the agency concerned, accept, and utilize, on a compensated or uncompensated 
basis, the officers, employees, services, facilities, and information of any agency of the 
Government. The Corporation may allot to any bureau, office, administration, or other agency 
of the Department of Agriculture or transfer to such other agencies as it may request to assist it 
in the conduct of its business any of the funds available to it for administrative expenses. 
 
SEC. 12. Utilization of farmers associations and trade facilities. – The Corporation 
may, in the conduct of its business, utilize on a contract or fee basis, committees or associations 
of producers, producer-owned and producer-controlled cooperative associations, and trade 
facilities. 
 
SEC. 13. Records and annual report. – The Corporation shall at all times maintain 
complete and accurate books of account and shall file annually with the Secretary of 
Agriculture a complete report as to the business of the Corporation, a copy of which shall be 
forwarded by the Secretary of Agriculture to the President for transmission to the Congress. In 
addition to the annual report, the Corporation shall submit to Congress on a quarterly basis an 
itemized report of all expenditures over Ten Million Pesos (P10,000,000.00) made under 
section 5 or 11 during the period covered by the report, including expenditures in the form of 
allotments or fund transfers to other agencies and departments of the Government. 
 
SEC. 14. Management of conflicts of interest. – Laws, rules, and regulations on conflicts 
of interest of government officials shall apply to all contracts or agreements of the Corporation, 
except contracts or agreements of a kind which the Corporation may enter into with farmers 
participating in a program of the Corporation. 
 
SEC. 15. Penal provisions. –  
 
(a) Whoever makes any statement knowing it to be false, or whoever willfully 
overvalues any security, for the purpose of influencing in any way the action of the Corporation, 
or for the purpose of obtaining for himself or another, money, property, or anything of value, 
under this Act, or under any other Act applicable to the Corporation, shall, upon conviction 
thereof, be punished by a fine of not more than one million pesos (P1,000,000) or by 
imprisonment for not more than five years, or both. 
 
(b) Whoever, being connected in any capacity with the Corporation or any of its 
programs – 
 
(i) embezzles, abstracts, purloins, or willfully misapplies any money, funds, 
securities, or other things of value, whether belonging to the Corporation or 
pledged, or otherwise entrusted to it; or 
 
(ii) with intent to defraud the Corporation or any other body, politic or corporate, or 
any individual, or to deceive any officer, auditor, or examiner of the 
Corporation, makes any false entry in any book, report, or statement of, or to, 
the Corporation, or draws any order, or issues, puts forth or assigns any note or 
other obligation or draft, mortgage, judgment, or decree thereof; or 
 
(iii) with intent to defraud the Corporation, participates or shares in, or receives 
directly or indirectly any money, profit, property, or benefits through any 


Page | 7  
 
transaction, loan, commission, contract, or any other act of the Corporation, 
shall, upon conviction thereof, be punished by a fine of not more than one 
million pesos (P1,000,000) or by imprisonment for not more than five years, or 
both. 
 
(c) Whoever shall willfully steal, conceal, remove, dispose of, or convert to his own use 
or to that of another any property owned or held by, or mortgaged or pledged to, the 
Corporation, or any property mortgaged or pledged as security for any promissory note, or other 
evidence of indebtedness, which the Corporation has guaranteed or is obligated to purchase 
upon tender, shall, upon conviction thereof, if such property be of any amount or value in excess 
of ten thousand pesos (P10,000), be punished by a fine of not more than one million pesos 
(P1,000,000) or by imprisonment for not more than five years, or both, and, if such property be 
of an amount or value of ten thousand pesos (P10,000) or less, be punished by a fine of not 
more than one hundred thousand pesos (P100,000) or by imprisonment for not more than one 
year, or both. 
 
(d) Whoever conspires with another to accomplish any of the acts made unlawful by the 
preceding provisions of this section shall, upon conviction thereof, be subject to the same fine 
or imprisonment, or both, as is applicable in the case of conviction for doing such unlawful 
acts. 
 
(e) All the general penal statutes relating to crimes and offenses against the Republic of 
the Philippines shall apply with respect to the Corporation, its property, money, contracts and 
agreements, employees, and operations. 
 
(f) No individual, association, partnership, or corporation shall use the words 
‘‘Philippine Commodity Credit Corporation’’ or any combination of the same, as the name or 
a part thereof under which he or it shall do or purport to do business. Every individual, 
partnership, association, or corporation violating this prohibition shall be guilty of a 
misdemeanor and shall be punished by a fine of not more than one hundred thousand pesos 
(P100,000) or by imprisonment for not more than one year, or both. 
 
SEC. 16. Release of innocent purchasers of converted goods. – A buyer in the ordinary 
course of business of fungible goods heretofore or hereafter sold and physically delivered by a 
warehouseman or other dealer who was regularly engaged in the business of buying and selling 
such goods shall take or be deemed to have taken such goods free of any claim, existing or 
hereafter arising, by Commodity Credit Corporation, based on the want of authority in the seller 
to sell such goods, provided the buyer purchased such goods for value in good faith and did not 
know or have reason to know of any defect in the seller’s authority to sell such goods. To be 
entitled to relief under this section a buyer must assert as an affirmative defense and establish 
by a preponderance of the evidence the facts necessary to entitle him to such relief. 
 
SEC. 17. Corporate Governance. – The corporate governance and disclosure provisions 
of Republic Act No. 10149 or the “GOCC Governance Act of 2011” shall apply to the 
Corporation. 
 
SEC. 18. Implementing Rules and Regulations. – Within ninety (90) days after the 
effectivity of this Act, the Secretary of Agriculture and the Secretary of Finance shall jointly 
promulgate the rules and regulations necessary for its implementation. Supplementary rules 


Page | 8  
 
and regulations, as are authorized by this Act, may be issued by either or both Secretaries as 
may be appropriate and necessary. 
 
SEC. 19 Separability Clause. – If any part or provision of this Act is held invalid or 
unconstitutional, the remaining parts or provisions not affected shall remain in full force and 
effect. 
 
SEC. 20. Repealing Clause. – All laws, decrees, orders, rules, and regulations 
inconsistent with the provisions of this Decree are hereby repealed or modified accordingly. 
 
SEC. 21. Effectivity. – This Act shall take effect fifteen (15) days after its publication 
in the Official Gazette or in any newspaper of general circulation. 
 
Approved,