EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
SENATE 
S. No.
. ■ C i .
*19 
JUL 15 
.■'uQ:43
Introduced by Senator 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 
23.1% of our labor force1. Despite the onslaught of natural hazards and pestilence, as well 
as the ever-increasing costs of production inputs, the agricultural sector still contributed 
9.28% to the Philippine gross domestic product (GDP) in 20181 2.
However, growth in this sector has not been enough to improve overall agricultural 
productivity and achieve food security. Whereas the year-on-year Gross Domestic Product 
grew by 10.24% in 2018, the agricultural, forestry and fisheries sector grew only by 
5.91%3. While the number of employed persons grew by 1.21% in July 2018 compared to 
July 2017, the estimated number of persons employed in the sector decreased by 7.28%4. 
Even the production volume of crops like palay and corn in 2018 also registered a decline 
of 1.09% and 1.81%, respectively5. 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
1 Philippine Statistical Authority. (2018 October). Current Labor Statistics. Quezon City: Philippine Statistical Authority.
2 Philippine Statistical Authority. (2019 April). Gross National Income and Gross Domestic Product by Industry. Quezon City: 
Philippine Statistical Authority.
3 Philippine Statistical Authority. (2019 April). Gross National Income and Gross Domestic Product by Industry. Quezon City: 
Philippine Statistical Authority.
4 Philippine Statistical Authority. (2018 October). Current Labor Statistics. Quezon City: Philippine Statistical Authority.
5 Philippine Statistical Authority. (2019 January). Countrystat Philippines. Quezon City: Philippine Statistical Authority.


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 
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.
/mdg


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
SENATE 
S. No.
V.1 !.;r  
* 1 1
'19 
JUL 15 
n>lC:43
Introduced by Senator 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 o f Representatives o f 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 % )0 ?  THE VALUE-ADDED TAX COLLECTED UNDER TITLE
6 
IV OF THIS ACT, AS AMENDED, SHALL BE ALLOCATED TO THE FOLLOWING
7 
AGRICULTURE EXPENDITURES:
8 
1.) TWENTY 
PERCENT 
(20% ) 
FOR 
CONSTRUCTION,
9 
REHABILITATION 
AND 
RESTORATION OF COMMUNAL IRRIGATION
10 
SYSTEMS;
11 
2.) TEN 
PERCENT 
(10% ) 
FOR 
POST-HARVEST 
FACILITIES
12 
INCLUDING MECHANICAL AND SOLAR DRYERS AND WAREHOUSES;
13 
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;
17 
5.) TEN PERCENT (10% ) FOR LIVESTOCK DISPERSAL PROGRAM;
18 
6.) TEN 
PERCENT 
(10% ) 
FOR 
TRAINING 
AND 
CAPABILITY
19 
BUILDING PROGRAMS FOR AGRICULTURAL EXTENSION WORKERS AND
20 
THEIR CLIENTELE;
21 
7.) TEN PERCENT (10% ) FOR MICROFINANCE LENDING PROGRAMS
22 
TO FINANCE SMALLHOLDER AGRICULTURE; AND
23 
8.) TEN 
PERCENT 
(10% ) 
FOR 
THE 
ESTABLISHMENT 
AND
24 
MAINTENANCE OF MARICULTURE AND AQUACULTURE PARKS.


1 
THE 
FUND 
SHALL 
BE 
ADMINISTERED 
BY THE 
DEPARTMENT 
OF
2 
AGRICULTURE IN CONSULTATION WITH THE LOCAL GOVERNMENT UNITS
3 
CONCERNED."
4 
Sec. 2. The succeeding sections of the National Internal Revenue Code are hereby
5 
renumbered accordingly.
6 
Sec. 3. Implementing Rules and Regulations. -  The Department of Budget and
7 
Management, the Department of Finance, the Department of Agriculture, and the Bureau
8 
of Internal Revenue shall, within thirty (30) days from the effectivity of this Act, issue the
9 
necessary rules and regulations for its effective implementation.
10 
Sec. 4. Repealing Clause. -  All laws, decrees, executive orders, rules and
11 
regulations, or parts thereof which are inconsistent with this Act are hereby repealed,
12 
amended or modified accordingly.
13 
Sec. 5. Effectivity. -  This Act shall take effect fifteen (15) days after its publication
14 
either in the Official Gazette or in at least two (2) newspapers of general circulation.
Approved,