fa RES
Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH (16™) CONGRESS
First Regular Session

HousE BiLLNo.___—-1844

Introduced by: HON. DELPHINE GAN LEE

EXPLANATORY NOTE
The Constitution, Article 13, Section 5, provides:

Section 5. The State shall recognize the right of farmers,
farmworkers, and landowners, as well as cooperatives, and other
independent farmers’ organizations to participate in the planning,
organization, and management of the program, and shall provide
support to agriculture through appropriate technology and research,
and adequate financial, production, marketing, and other support
services,

Microcredit is the extension of small loans to poor borrowers designed to spur
entrepreneurship or for whatever worthy cause the state may designate. One such
target beneficiary of a microcredit program is the agricultural sector, where subsistence
farmers are often without any access to additional funding. They fall prey to loan sharks
who approach them in times of natural calamities or other unfortunate financial
conditions, Bettering the plight of our farmers is still one of the main challenges of the
Philippine government and it is still primarily a rural phenomenon. Microcredit is regarded as
an innovative financial intermediation scheme aimed to reduce the incidence of poverty
especially in the rural areas.

Based on the 2009 official poverty statistics for the basic sectors of the National
Statistical Coordination Board?, fishermen posted the highest poverty incidence for nine basic
sectors in the Philippines at 41.4%, the same level in 2006, followed by farmers and children at
poverty incidences of 36.7% from 37.2% in 2006 and 35.1% from 32.7% in 2006, respectively.
Poverty Incidences for fishermen, farmers, children, self-employed and unpaid family workers
are higher than the poverty incidence among population in the Philippines at 26.5% in 2009.
Given this state of affairs, it is imperative that we craft a law that will help our farmers and
fishermen in times of financial need.

This bill seeks to extend microcredit services to our farmers and fishermen through the

Land Bank of the Philippines to benefit from the bank branches and facilities that are already
available nationwide.

* nttp:/Avww.nscb.gov.ph/pressreleases/2012/PR-201206-SS2-01_pov2009.asp


HON. DEL ile GAN LEE
Representative, AGRI Party-list


14
15
16

17
18
19
20

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH (16") CONGRESS
First Regular Session

HOUSE BILL NO. 1844

Introduced by: HON. DELPHINE GAN LEE

AN ACT TO INSTITUTIONALIZE MICRO-CREDIT
FINANCING FOR THE AGRICULTURAL SECTOR

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 “Agriculture Micro-
Credit Act of 2013.”

SEC. 2, Declaration of Policy. - Agriculture and Aquaculture are essential for
national development and progress. The State shall give priority to those who engage in
these sectors.

In line with the above, it is hereby declared the policy of the State to promote the
development of the country’s agriculture and aquaculture manpower in line with
economic development and to provide the capability required in the areas of research,
development, innovation, as well as their utilization. It is thus important that the State
provide micro-credit facilities to our farmers and fishermen.

‘The State shall develop a policy environment, especially in the area of savings
generation, supportive of the basic sector initiatives dedicated to serving the needs of
the poor sectors particularly the agricultural sector in terms of microfinance services.

‘The existing government programs for credit and guarantee shall therefore be
rationalized to promote the mechanisms needed for the implementation of
microfinance services.

SEC, 3. Micro-credit for the Agricultural Sector.—The Land Bank of the
Philippines shall have the power to grant loans to farmers, fishermen, and to their
cooperatives and associations to facilitate the production, marketing, delivery and/or
distribution of crops and acquisition of essential equipment, machinery, tools, and


waraus

a
12
13
14
15

19
20
a
22
23
24

25
26
27

28
29
30

31
32

commodities as well as to extend uncollateralized loans of not less than five thousand
pesos (P5,000.00) and not more than thirty thousand pesos (P30,000.00) for
agricultural purposes.

Production loans and loans for the purchase of work animals, tillage equipment,
seeds, fertilizers, poultry, livestock, feed and other similar items, may be extended to
small farmers, based upon their paying capacity and such securities as they can provide,
and under such terms and conditions as the Bank may impose, provided the amount
thereof does not exceed fifty thousand pesos, or such amount as may be fixed by the
President, but in no case shall the amount of loan exceed seventy per centum of the
value of the collateral pledged. In instances where credit is extended for items which are
not consumed in their use, such items may be pledged as security therefor. The Bank
shall promulgate such rules and regulations as may be necessary in the extension of the
loans herein authorized so as to assure their repayment as well as the modes of
payment: Provided, that such rules and regulations shall follow and be in accordance
with generally accepted financing practices and procedures.

SEC. 4. Report to Congress, - The Land Bank shall submit an annual report to
Congress of its Micro-lending Operations with emphasis on the number of beneficiaries,
repayment rates, reach out activities, and other relevant matters.

SEC. 5. Funding, recruitment, and information program. - The amount of
twenty five billion pesos (P25,000,000,000.00) is hereby appropriated for the
establishment of branches and the hiring of additional field personnel to conduct
information and training programs on micro-financing, proper enforcement of program
policies and procedures, and the necessary lending technology terms or mechanisms for
micro-lending as provided in this Act.

SEC. 6. Separability Clause. - If any provision or part hereof, is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected shall
remain valid and subsisting.

SEC. 7. Repealing Clause. - All laws, decrees, executive orders, proclamations,
and administrative regulations or parts thereof inconsistent herewith are hereby
repealed or modified accordingly.

SEC. 8. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette and at least two (2) newspapers of general circulation.

Approved,