NINETEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

H. B. No. 3708

Introduced by Representative Ralph G. Recto

AN ACT
MODERNIZING AGRICULTURE, PROVIDING FUNDS FROM THE ANNUAL
VALUE-ADDED TAX COLLECTIONS, AMENDING FOR THE PURPOSE THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED

EXPLANATORY NOTE

Agriculture is the foundation of a rural economy, supplies food and raw materials
for the country’s people and industries. It provides employment and livelihood to about
a quarter of our labor force. Despite the onslaught of natural hazards and pestilence, as
well as the ever-increasing costs of production inputs, the agricultural sector still
contributed 10% to the Philippine gross domestic product (GDP) in 2021.

However, growth in this sector has not been enough to improve overall agricultural
productivity and achieve food security. Whereas the GDP for 2021 grew by almost 5% in
real terms, the agricultural, forestry and fisheries sector actually declined by almost one
percent. As a result, the comparative advantage of Philippine agriculture continues to
be eroded and our country increasingly becomes more dependent on agricultural imports.

These problems can be traced back to one of the major impediments to
agricultural productivity: public and private investments in agriculture fall below levels at
which the sector can meet actual food requirements of our increasing population. Low
investment contributes to low productivity, higher inefficiency, higher postharvest losses,
poor product handling, inadequate skills, and deficient technical support, among others.
As such, before agriculture can take the role in poverty and hunger alleviation, adequate

funding support must be promptly identified and earmarked.



This bill seeks to address the agricultural investment problem by earmarking funds
from the annual Value-Added Tax collections specifically for farm inputs, post-harvest
facilities, and infrastructure support. In order to promote agribusiness as a tool for
countryside development, this bill also provides funding support to livelihood programs,
training and capacity-building, and microfinance. At the end of the day, this bill aims to
help in providing decent livelihood and income for farmers, in maintaining stable prices
of commodities, and in ensuring the accessibility of food to all Filipinos.

In view of the foregoing, immediate passage of this bill is earnestly sought.

rnd


NINETEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES

H.B.No, 3708

Introduced by Representative Ralph G. Recto

AN ACT
MODERNIZING AGRICULTURE, PROVIDING FUNDS FROM THE ANNUAL
VALUE-ADDED TAX COLLECTIONS, AMENDING FOR THE PURPOSE THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED

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

1 Section 1. A new section, to be numbered two hundred eighty-seven, shall be
2 added to Chapter II, Title XI of the National Internal Revenue Code, as amended to read

3 as follows:

4 “SEC. 287. DISPOSITION OF PROCEEDS OF VALUE-ADDED TAX. —

5 FIVE PERCENT (5%) OF THE VALUE-ADDED TAX COLLECTED UNDER
TITLE IV OF THIS ACT, AS AMENDED, SHALL BE ALLOCATED TO THE

7 FOLLOWING AGRICULTURE EXPENDITURES:

8 1.) TWENTY PERCENT (20%) FOR CONSTRUCTION,

9 REHABILITATION AND RESTORATION OF COMMUNAL IRRIGATION

10 SYSTEMS;

a 2.) TEN PERCENT (10%) FOR POST-HARVEST FACILITIES

2 INCLUDING MECHANICAL AND SOLAR DRYERS AND WAREHOUSES;

3 3.) TEN PERCENT (10%) FOR SEED AND ORGANIC FERTILIZER

14 SUBSIDIES;

15 4.) TWENTY PERCENT (20%) FOR FARM-TO-MARKET ROADS IN

16 MUNICIPALITIES WITH SIGNIFICANT AGRICULTURAL ACTIVITIES;

v7 5.) TEN PERCENT (10%) FOR LIVESTOCK DISPERSAL PROGRAM;


6.) TEN PERCENT (10%) FOR TRAINING AND CAPABILITY

BUILDING PROGRAMS FOR AGRICULTURAL EXTENSION WORKERS AND

THEIR CLIENTELE;

7.) TEN PERCENT (10%) FOR MICROFINANCE LENDING

PROGRAMS TO FINANCE SMALLHOLDER AGRICULTURE; AND

8.) TEN PERCENT (10%) FOR THE ESTABLISHMENT AND

MAINTENANCE OF MARICULTURE AND AQUACULTURE PARKS.

THE FUND SHALL BE ADMINISTERED BY THE DEPARTMENT OF
AGRICULTURE IN CONSULTATION WITH THE LOCAL GOVERNMENT UNITS
CONCERNED.”

Sec. 2. The succeeding sections of the National Internal Revenue Code are hereby
renumbered accordingly.

Sec. 3. Implementing Rules and Regulations, ~ Within thirty (30) days from the
effectivity of this Act, the Department of Budget and Management, the Department of
Finance, the Department of Agriculture, and the Bureau of Internal Revenue shall issue
the necessary rules and regulations for the effective implementation of this Act.

Sec. 4. Repealing Clause. - All laws, decrees, executive orders, rules and
regulations, or parts thereof which are inconsistent with this Act are hereby repealed,
amended or modified accordingly.

Sec. 5. Effectivity. - This Act shall take effect fifteen (15) days after its publication
either in the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,