Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

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SIXTEENTH CONGRESS
First Regular Session

3025

House Bill No.

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
ALLOCATING FIVE PERCENT (5%) OF ANNUAL VALUE-ADDED TAX
COLLECTIONS TO FINANCE AGRICULTURE EXPENDITURES AMENDING FOR
THE PURPOSE THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED

EXPLANATORY NOTE

Agriculture is the foundation of the rural economy. Aside from providing the
nation with the basic necessities of food and raw materials, the sector also provides
employment to one-fifth of the country's population. A force that drives the economy,
the agriculture sector contributes an annual 18% to the country’s GDP despite the
onslaught of typhoons, drought, pests, diseases, and high cost of fertilizers. As such,
agriculture is regarded as the nation's weapon against poverty and hunger.

The growth of the sector however, has not been enough to improve the overall
labor productivity in the sector. Data on employment in the agriculture sector from the
National Statistics Office (NSO) show that from January 2004 to January 2009, the
employment in the sector grew by 679,268 jobs as compared to the MTPDP target of 2
million jobs. Comparative yield, production cost and price data on various agricultural
commodities show that the gains posted by the country were not at pace with those of
its neighbors. As a result, the comparative advantage of Philippine agriculture
continued to decline resulting in our country increasingly becoming a net importer of
agricultural products since 1994


These setbacks were mainly due to: (1) low public and private investments in the
sector; (2) higher cost of farm inputs; (3) high post-harvest losses due to inadequate
equipment and infrastructure; (4) poor post-harvest handling practices; and (5)
inadequate skills and technical support, among others. Investments in agriculture
continued to lag behind the actual food requirements of our increasing population.
Thus, poverty and inequity have remained a challenge in the countryside.

Funding support for agriculture is necessary because it leads to greater
productivity, which in turn translates to stable prices of commodities, and more
affordable food on the table.

This bill allocates funds 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, capability programs/trainings,
and microfinance,

Since agriculture plays a major role in countryside income and employment
generation, the development of the sector is essential and should be given additional
budgetary support.

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

DIOSDAD' “-ARAGAL ARROYO GLORIA MACAPAGAL ARROYO.
Second District, Camarines Sur Second District, Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

House Bill No,_ 3029

Introduced by Representatives
DIOSDADO MACAPAGAL ARROYO and GLORIA MACAPAGAL ARROYO

AN ACT
ALLOCATING FIVE PERCENT (5%) OF ANNUAL VALUE-ADDED TAX
COLLECTIONS TO FINANCE AGRICULTURE EXPENDITURES AMENDING
FOR THE PURPOSE THE NATIONAL INTERNAL REVENUE CODE OF 1997,
AS AMENDED

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

SECTION 1. A new section, to be numbered Two Hundred Eighty-Seven,
shall be added to Chapter II, Title XI, of the National Internal Revenue Code, as
amended to read as follows:

“SEC. 287. DISPOSITION OF PROCEEDS OF VALUE-ADDED
TAX — FIVE PERCENT (5%) OF THE VALUE-ADDED TAX COLLECTED
UNDER TITLE IV OF THIS ACT, AS AMENDED, SHALL BE
ALLOCATED TO THE FOLLOWING AGRICULTURE EXPENDITURES:

41) TWENTY PERCENT (20%) FOR CONSTRUCTION,
REHABILITATION AND RESTORATION OF COMMUNAL IRRIGATION
SYSTEMS;

2) TEN PERCENT (10%) FOR POST-HARVEST FACILITIES
INCLUDING MECHANICAL AND SOLAR DRYERS AND
WAREHOUSES;

3) TEN PERCENT (10%) FOR SEED AND ORGANIC FERTILIZER
SUBSIDIES;
1


4) TWENTY PERCENT (20%) FOR FARM-TO-MARKET ROADS IN
MUNICIPALITIES WITH SIGNIFICANT AGRICULTURAL ACTIVITIES;

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

6) TEN PERCENT (10%) FOR TRAINING/CAP ABILITY BUILDING
PROGRAMS FOR AGRICULTURAL EXTENSION WORKERS AND
THEIR CLIENTELE;

7) TEN PERCENT (10%) FOR MICROFINANCE LENDING PROGRAMS
TO FINANCE SMALLHOLDER AGRICULTURE;

8) TEN PERCENT (10%) FOR THE ESTABLISHMENT AND
MAINTENANCE OF MARICULTURE AND AQUACULTURE PARKS.

THE FUND SHALL BE ADMINISTERED BY THE DEPARTMENT OF
AGRICULTURE (DA) IN CONSULTATION WITH THE LOCAL GOVERNMENT
UNIT CONCERNED.

ASIDE FROM THE ABOVE ITEMS OF EXPENSES, AT NO TIME
SHALL ANY PORTION OF THE EARMARKED FUNDS BE USED TO
AUGMENT PERSONAL SERVICES AND OTHER MAINTENANCE AND
OTHER OPERATING EXPENSES.”

SECTION 2. The succeeding Sections of the National Internal Revenue
Code are hereby renumbered accordingly.

SECTION 3. Coverage of this Act. - The allocation of value-added tax
revenues shall commence in the fiscal year within which this Act shall take effect.

SECTION 4. Separability Clause. — If any part or provision of this Act shall
be held to be unconstitutional or invalid, other parts or provisions hereof which
are not affected thereby shall continue to be in full force and effect.

SECTION 5. Repealing Clause. - Ail laws, decrees, executive orders,
rules and regulations, or parts thereof which are inconsistent with this Act are
hereby repealed, amended or modified accordingly

SECTION 6. Effectivity. — This Act shall take effect after its publication in
the Official Gazette or in two (2) newspapers of general circulation

Approved,