FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
Second Regular Session 
SENATE 
S. No. 2957 
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Introduced by Senator Manuel "Lito" M. Lapid 
EXPLANATORY NOTE 
Agriculture plays a fundamental role in Philippine economy, with the country having a 
land area of 30 million hectares, 47% of which is agricultural land. This brings with it the obvious 
need to give high priority to transforming agriculture into a current, vibrant and competitive 
sector. It is sad to note, however, that this very sector, together with the fisherfolk, is taken for 
granted most of the time. In order to maximize productivity gains, certain areas still need to be 
given much needed attention, such as problems of inadequate infrastructure, lack of financing 
and government policies. Apart from that, the marine fishing industry also faces a bleak future 
due to harmful fishing methods, lack of funds, and inadequate government support. 
At present, the per capita income of our farmers and fisherfolk still rernain below the 
poverty line of P6,OOO.OO per month. According to the data from the Department of Labor and 
Employment National Wages and Productivity Commission (as of 8 July 2011), the minimum 
wage rate for the agriculture sector in NCR is set at P389.00 and the minimum wage rate for the 
agriculture sector in other regions is ranging from P190.00 to P312.00. Furthermore, data shows 
that farmers and fisherfolk are not even getting a net income at par with the minimum wage 
afforded to rural workers. Minimum wage for the non-agriculture sector in NCR is set at P426.00 
and the minimum wage rate for the non-agriculture sector in other regions is ranging from 
P204.00 to P337.00. To make matters even worse, government's failure to provide basic social 
services to the people in the countryside is resulting to a massive migration of rural workers to 
the already crowded urban centers, in the hopes of finding jobs and improving their quality of 
life. In effect, more and more agricultural hands are being forced to leave the livelihood that was 


passed on to them from generations, and more and more idle hands are forced to settle into the 
already densely-populated urban areas. 
Given the circumstances, it is now imperative for the State to implement measures that 
will compensate our farmers and fisherfolk for the noble work that they are doing - that is, 
sustaining the production of enough harvest to feed the citizenry. Common sense dictates that if 
one is economically stable, there is less chance for him or her to look for other means of 
livelihood. Definitely, a contented and secure farmer toiling his field and a fisherfolk that has 
stable source of income can contribute much to the economic uplift of the nation. An 
economically viable agricultural and fishery sector can boost industries in urban centers since it 
will be, consequently, a potent market for manufactured goods and other services. 
It is envisioned, therefore, that basic social services to the farmer/fisherfolk must be 
strengthened to satisfy his/her needs. It can be argued that there are government institutions 
already in place to provide these. It is unfortunate, however, that these are not enough as 
gleaned from experience. What is needed, therefore, is a social security system similar to those 
provided by the Social Security System for private employees and the Government Service 
Insurance System for government employees. 
Furthermore, with the planned revision P.O. 717 or the Agri-Agra Law, there is a need to 
set up a single fund that will provide sovereign guarantee to agricultural, fishery and rural credit 
from private commercial banks. The private banks will continue to skirt the law forCing them to 
finance the agricultural and fishery sectors if farmers and fisherfolk will remain as high credit 
risks. There ought to evolve a system that will strengthen their financial condition given the 
enormity of their number. 
Finally, statistics show that the crop insurance program will remain costly if it cannot 
garner a wider partiCipation from among the farming population and the fisherfolk. This is 
attributable to the lack of support from government to fund a larger share in the premium for 
crop insurance. At present, the Philippine Crop Insurance Corporation covers only about 20% 
of eligible rice and corn farmers since the annual budget for crop insurance extend only that 
much. With additional funding support, definitely the crop insurance program can benefit more 
farmers and even the fisherfolk. 
All these point to the need for the setting up of a State Agricultural Guarantee and 
Insurance Protection Fund or SAGIP Funds. The SAGIP Funds will be similar to the Pag-IBIG 


Fund but dedicated not only for the building of low-cost housing but for the up-building of a 
strong, viable and globally competitive farmer and fishery sectors. 
It is long overdue that the State honor and dignify the farmers and fisherfolk for the 
contribution they are providing for the survival of the nation. It is only fitting, therefore, to 
consider and pass this bill as our heritage to the future generations of farmers and fisherfolk that 
will continue the noble duty of providing food for every Filipino dining table. 
In view of the foregoing, the immediate passage of this bill is earnestly sought. 
MA 
EL "LITO" M. LAPID Vi 
Senator 
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FIFTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
Second Regular Session 
SENATE 
S. No. 2957 
) 
) 
) 
'11 
SEP -7 
£10 :34 
1 
y 
Introduced by Senator Manuel "Lito" M. Lapid 
AN ACT 
" 
ESTABLISHING THE STATE AGRICULTURAL GUARANTEE AND 
INSURANCE PROTECTION FUNDS (SAGIP Funds), CREATING THE 
STATE AGRICULTURAL GUARANTEE AND INSURANCE 
PROTECTION CORPORATION (SAGIPCo), DEFINING ITS 
OBJECTIVES, POWERS, FUNCTIONS, PROVIDING FUNDS 
THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled.' 
ARTICLE 1- TITLE, DECLARATION OF POLICY AND DEFINITION OF TERMS 
SECTION 1. Title. - This Act shall be known as the "SAGIP Funds Act of 2011." 
SECTION 2. Declaration of Policy. - It is the policy of the State to develop the 
full potential of the Filipino people as the basic resource of the land. Complementary 
with this, the State, covering an agricultural country, shall put priority in harnessing the 
contribution of farmers and fisherfolk in the promotion of a stable economy founded on a 
vibrant, progressive and globally competitive agricultural and fishery sector. 
As enshrined in the Philippine constitution, specifically Article II, Section 9, "The 
State shall promote a just and dynamic social order that will ensure the prosperity and 
independence of the nation and free the people from poverty through policies that 
provide adequate social services, promote full employment, a rising standard of living, 
and an improved quality of life for all." In addition, Article XIII, Section 1 states, "The 
Congress shall give highest priority to the enactment of measures that protect and 
enhance the right of all the people to human dignity, reduce social, economic, and 


political inequalities, and remove cultural inequities by equitably diffusing wealth and 
political power for the common good." 
Towards this end the State shall guarantee a sound social and economic climate 
that will nurture a sense of security and dignity among the farminglfishing sector, 
particularly the small scale/subsistence farmers and fisherfolk. This shall be attained by 
providing them a package of services that will (a) enable the farmers/fisherfolk manage 
effectively and efficiently the risks inherent in their respective trade and economic 
endeavor, (b) encourage private financial institutions, particularly those based in rural 
areas, to extend credit to farmers/fisherfolk through guarantees and other financial 
management mechanisms, such as but not limited to crop/livestock/aquaculture 
insurance, and (c) provide a mantle of insurance protection, in the event of disability or 
death, and other social amelioration programs for farmers/fisherfolk and their families 
that will ensure their welfare and future. Concommitant with these, rural finance to 
micro, small and medium enterprises in the countryside shall be encouraged by 
providing windows of participation of the private sector, particularly the private 
commercial banks, cooperatives, and other rural financial institutions in support and in 
collaboration with people's organizations. 
SECTION 3. Definition of Terms. - The following words and phrases as used in 
this Act shall have the meaning indicated below unless a different meaning is manifestly 
intended by their context: 
(a) Funds - The State Agricultural Guarantee and Insurance Protection 
Funds (SAGIP Funds); 
(b) SAGIPCo - The State Agricultural Guarantee and Insurance Protection 
Corporation; 
(c) Board - The Board of Trustees of the State Agricultural Guarantee and 
Insurance Protection Corporation (SAGIPCo); 
(d) Member - Any farmerlfisherfolk covered by the SAGIP Funds; 
(e) Dependents - The legitimate, legitimated or legally adopted child who is 
unmarried, not gainfully employed, and not over eighteen years of age, 
or over eighteen years of age but congenitally incapacitated and 
incapable of self-support, physically or mentally; the legitimate spouse 
dependent for support upon the farmer/fisherfolk; and the legitimate 
parents wholly dependent upon the SAGIP Funds member for regular 
support; 
(f) Member's Contribution - The personal contribution of the member plus 
the counterpart of the National Government to the SAGIP Funds; 
(g) Physical Disability - Any loss or reduction of earning capacity of the 
member due to impairment of the normal functions of his physical 


and/or mental faculties which reduces his ability to engage in any 
gainful occupation; 
(h) Farmer-Beneficiary - Anyone who is a recipient of a transfer/award of 
land under the Comprehensive Agrarian Reform Program; 
(i) Formal Source of Credit -
Any private or public lending/financial 
institution accredited by law to extend credit or loan; 
U) Production Loan - Any loan or credit from any formal source of credit to 
finance the cost of production inputs of a farmer/fisherfolk; 
(k) Post-Harvest Loan - Any loan or credit from any formal source of credit 
for the purpose of financing procurements, purchases, preservation and 
storage, transport and/or conversion of raw agricultural/fishery materials 
to finished products for the consumption of the public; 
(I) Farmer - Any natural person whose primary livelihood is CUltivation of 
land or the production of agricultural crops, livestocks and aquaculture 
products, in small or commercial scale either by himself or primarily with 
the assistance of his immediate farm household or workers, whether the 
land is owned by him, or by another person under a leasehold tenancy 
agreement or arrangement with the owner thereof; 
(m) Fisherfolk - Any natural person whose primary livelihood is cultivation 
of land or the production of agricultural crops, livestocks and 
aquaculture products, in small or commercial scale either by himself or 
primarily with the assistance of his immediate farm household or 
workers, whether the land is owned by him, or by another person under 
a leasehold tenancy agreement or arrangement with the owner thereof; 
(n) People's Organization - Any association or group, e.g. a cooperative, 
formally organized voluntarily by farmers, fisherfolk or other land reform 
beneficiaries for the purpose of pooling agricultural land or fishing 
gears, vessels or facility, human, technological, financial or other 
economic resources, and operated on the principle of one member, one 
vote; 
(0) Survivor's Cash Assistance - The cash amount equivalent to twenty 
percent (20%) of the sum insured as provided for in Section 20 of 
Article IV of this Act. This amount is deemed included in said sum 
insured, payable to qualified primary beneficiaries of the deceased 
insured to cushion them against the severe adverse economic effect 
resulting from the demise of their income earner; 


(p) Funeral Grant - The cash amount equivalent to up to twenty percent 
(20%) of the sum insured as provided for in Section 20 of Article IV of 
this Act. This amount is deemed included in the sum insured payable, 
upon the death of the insured member, to the surviving spouse, 
legitimate child or to any other person who can show incontrovertible 
proofs of his having borne the funeral expenses of the insured; 
(q) Death Indemnity - The cash amount equivalent to the sum insured 
provided for in Section 20 of Article IV of this Act minus the cash 
benefits paid for survivor's cash assistance and the funeral grant; 
(r) Natural Disaster - Any natural calamity such as typhoon, flood, drought, 
earthquake and volcanic eruption; and 
(s) Insurance Policy or Certificate -
The contract of insurance which 
defines the rights and obligations of the insured and the insurer. 
ARTICLE /1- ADMINISTRATION 
SECTION 4. Creation, Name, Domicile and Corporate Life. - To carry out the 
above-stated policy, there is hereby created the State Agricultural Guarantee and 
Insurance Protection Funds, hereinafter referred to as the SAGIP Funds, which shall be 
administered by a body corporate to be known as the State Agricultural Guarantee and 
Insurance Protection Corporation, hereinafter referred to as the SAGIPCo. 
The 
SAGIPCo's 
authorized 
capital 
shall 
be 
Fifty 
Billion 
Pesos 
(P50,000,000,000.00), sixty percent (60%) of which shall be subscribed by the 
Government and the balance of forty percent (40%) to be offered to the private sector 
consistent with relevant provisions of R.A. 7393 and under the supervision of the 
Securities and Exchange Commission. In view of this, the SAGIPCo shall prepare its 
own Articles of Incorporation and By-Laws in accordance with the Corporation Code of 
the Philippines. 
The SAGIPCo shal\ have its principal place of business in Metro Manila. It may 
establish such offices, branches, agencies or other units in any part of the Philippines 
as its bUsiness operation may require. 
The SAGIPCo shall have a corporate life of fifty (50) years from the date of 
approval of this Act. 
The SAGIPCo shall be attached to the Department of Agriculture for budgetary 
purposes. 
SECTION 5. Objectives. - The SAGIPCo shall have the following objectives: 


a) To encourage lending institutions, govemment and private, to extend credit facilities to 
farmers/fisherfolk and the rural sector through guarantee and other mechanism; 
b) To provide insurance protection directly or indirectly to farmers/fisherfolk against losses 
to their crops, livestock, aquaculture products, properties, equipment and other 
farm/fishing facilities; 
c) To provide life insurance coverage directly or indirectly, like in reinsurance 
arrangements, to farmers/fisherfolk and the rural sector; 
d) To extend social security services to farmers/fisherfolk or their families such as 
providential or educational loans, funeral grants, medical and/or hospitalization benefits, 
survivors' cash assistance and old-age benefits; and 
e) To support the Comprehensive Agrarian Reform Program by providing land amortization 
redemption insurance for farmer-beneficiaries. 
SECTION 6. Powers and Functions ofthe SAG/peo. - The SAGIPCo shall have 
the following powers and functions: 
a) To prescribe, repeal and alter its own by-laws; 
b) To determine, adopt, amend and rescind such operating policies, rules and 
regulations as may be necessary to implement the programs which it is 
mandated to pursue; 
c) To adopt and use a corporate seal; 
d) To sue and be sued; 
e) To have continuous succession until dissolved by law; 
f) To reinsure in the Philippines or abroad all or any of the loss that the SAGIP 
Funds may be held to indemnify; 
g) To adopt from time to time a budget for the administration and operation of the 
SAGIPCo; 
h) To invest its funds, directly or indirectly, in accordance with existing laws; 
i) 
To conduct continuing actuarial and statistical studies and valuations for the 
purpose of determining the financial condition of the SAGIP Funds and taking 
into consideration such studies and valuations and the limitations herein 
provided, readjust the benefits, contributions, premium rates, interest rates, or 
the allocation of funds; 


j) To borrow funds from any source, private or public, foreign or domestic and to 
issue bonds to augment its finances; 
k) To receive grants from any source, domestic or foreign, public or private, in 
accordance with existing laws; 
I) 
To act as a receiver; 
m) To purchase or otherwise acquire ownership and manage any and all parts of the 
business, property and liabilities of any person or company which the SAGIPCo 
is authorized to carryon or possess; 
n) To purchase or otherwise acquire ownership of and/or invest in, hold, sell, 
dispose of stocks or bonds or any interest in either, or any obligations or 
evidence of indebtedness of any corporation, domestic or foreign; 
0) To purchase, acquire, sell, lease, convey, mortgage, encumber, and deal with 
any property, real or personal, or any security of real estate or movable property; 
exercise easement rights or privileges over or in respect to any property, real or 
personal, as may be reasonably necessary to carry out the purposes of this Act; 
and 
p) To exercise all the general powers conferred by law upon corporations as are 
incidental or conducive to the attainment of the objectives of this Act. 
SECTION 7. Governing Board. - The SAGIPCo shall be governed by a Board of 
Trustees, hereinafter referred to as the "Board" which shall be composed of the 
Secretary of Agriculture as ex officio chairman, the President of the SAGIPCo who shall 
serve as Vice Chairperson, and seven (7) members. The members are: the Secretaries 
of Agrarian Reform and Finance, on ex officio capacity; and one representative each of 
the farming sector, the fishing sector, the private insurance industry, the cooperative 
insurance sector and the rural financial institutions. 
All Members of the Board shall be natural-born Filipino citizens and at least thirty-
five (35) years of age at the time of their appointment by the President of the Philippines 
from among the recommendees of the groups they represent. 
Of the first appointees under this Act, the vice chairperson (President of 
SAGIPCo) and the representative from the cooperative insurance sector shall serve for 
a term of four years. The representatives from the farming sector, fisheries sector, the 
private insurance industry and the rural financial institutions shall serve for a term of two 
(2) years. Thereafter, the appointed vice chairperson and members of the Board shall 
serve for a term of four years. 
No Board Member, except the President of the SAGIPCo and the three ex officio 
members, may be re-appointed after the expiration of his/her term of office. The 


Secretaries of Agriculture, Agrarian Reform and Finance may appoint their respective 
representatives to the Board provided they hold not lower than Assistant Secretary level 
position. 
The Board shall meet regularly at least once a month or as often as it deems 
necessary. At least five (5) members shall constitute a quorum. The Board may be 
convoked by the Chairperson or in his/her absence, the Vice Chairperson. The 
Chairperson and members of the Board shall each receive a per diem of Five Thousand 
Pesos (P5,000.00) for every session attended, but in no case shall the total thereof 
exceed Twenty Five Thousand Pesos (P25,000.00) per month. 
SECTION 8. Powers and Functions of the Board. - The Board shall have the 
following powers and functions: 
a) To implement the provisions and purposes of this Act; 
b) To formulate and adopt policies, plans and programs to promulgate rules and 
regulations for the management, operation and conduct of the affairs and 
business of the SAGIP Funds; 
c) To enter into, make and execute contracts of any kind or nature as may be 
necessary, or incidental to the accomplishment of the purposes of this Act; 
d) To approve the budget of the SAGIPCo and to determine the reasonable 
compensation of its personnel independent of the provisions of RA 6758 "The 
Salary Standardization Law"; 
e) To review and approve the appointment of personnel of the SAGIPCo from the 
rank of division chief or hig her; 
f) To have final authority on administrative cases involving personnel of the 
SAGIPCo where the penalty imposed is suspension of thirty (30) days or more; 
g) To establish policies and guidelines for employment on the basis of merit, 
technical competence and moral character, and approve a staffing pattern of 
personnel defining their powers and duties subject to Civil Service laws, rules nd 
regulations; 
h) To have original jurisdiction to settle any dispute or claim ariSing from the 
operations of the SAGIPCo subject to Article VI of this Act; 
i) 
To exercise the general powers provided in the Corporation Law insofar as they 
are not inconsistent or incompatible with the provisions of this Act. 
SECTION 9. Management. - The management of the SAGIPCo and the general 
conduct of its operations shall be vested in the President who shall serve as the Chief 


Executive Officer. The President shall be a natural-born Filipino citizen, at least thirty-
five (35) years old and a person of known integrity and competence in technical and 
administrative fields related to the purposes of this Act. 
He shall be appointed by the President of the Philippines for a term of four (4) 
years and may be re-appointed once for another term. 
He shall receive a salary to be determined by the Board. 
He shall have the following powers and duties: 
a) To act as ex-officio Vice Chairperson of the Board and, in that capacity, aSSist 
the Chairperson and act in his/her stead in case of absence or incapacity; 
b) To execute and administer the policies, plans, programs and rules and 
regulations approved and/or promulgated by the Board; 
c) To submit for the consideration of the Board such policies, plans, programs as 
he/she deems necessary to carry out this Act; 
d) To direct and supervise the operation and internal administration of the 
SAGIPCo; 
e) To appoint or promote employees of the SAGIPCo; 
f) To transfer, assign, re-assign employees of the SAGIPCo as the exigencies of 
the service may require and to approve penalties in administrative cases 
involving suspension for less than thirty (30) days and lighter penalties; 
g) To recommend to the Board the appointment or promotion of personnel from the 
rank of division chief or higher and to submit for decision by the Board 
administrative cases where the penalty imposed is suspension for thirty (30) days 
or more, demotion or separation from the service; 
h) To exercise such other powers and perform such other duties as may be directed 
by the Board. 
SECTION 10. Auditor. - The Chairman of the Commission on Audit shall be the 
ex-officio auditor of the SAGIP Funds. He may appoint a representative who shall be 
the auditor of the SAGIP Funds, and the necessary personnel to assist said 
representative in the performance of his/her duties. 
The Auditor shall submit to the Board an audited statement showing the financial 
condition and progress of the SAGIP Funds for the calendar year just ended. 


SECTION 11. Abolition of the Philippine Crop Insurance Corporation and the 
Quedan and Rural Credit Guarantee Corporation. -
The Philippine Crop Insurance 
Corporation (PCIC) organized under Presidential Decree No. 1467, as amended, and 
the Quedan and Rural Credit Guarantee Corporation (Quedancor) organized under R.A. 
7393, as amended, are hereby abolished and their assets and administration 
transferred to the SAGIPCo. The liabilities of PCIC shall be worked out in a separate 
scheme under an inter-agency body to be created by the Office of the President of the 
Republic so as not to encumber the initial operation of the SAGIP Funds. 
All personnel of the PCIC and Quedancor shall be absorbed by the SAGIPCo 
without reduction in rank or diminution in pay and benefits: Provided. That in the hiring 
of other personnel of the SAGIPCo, preference shall be given to civil service eligibles 
certified by the Civil Service Commission and be subjected to civil service rules and 
regulations. 
ARTICLE III - SCOPE OF THE SAGIP FUNDS 
SECTION 12. Compulsory Coverage. - Membership in the SAGIP Funds shall 
be compulsory for all farmers/fisherfolk engaged in small-scale or commercial 
agricultural/fishing production who are beneficiaries of the Comprehensive Agrarian 
Reform Program and all farmers/fisherfolk who secure loans from any accredited formal 
source of credit for agricultural/fishing production and post-harvest purposes. 
For this purpose, the SAGIPCo shall draw up the mechanics, rules and 
regulations with the Department of Agrarian Reform, the Department of Agriculture, the 
Department of Finance and the lending institutions/conduits concerned. 
SECTION 13. Voluntary Coverage. - Other farmers/fisherfolk who are already 
covered by other government insurance systems and all others not otherwise covered in 
Section 12 above who are engaged in small-scale agriculture/fishing may become 
members of the SAGIP Funds under such rules and regulations as the SAGIPCo may 
prescribe. 
SECTION 14. Effective Date of Coverage. -
Compulsory coverage shall take 
effect upon the issuance of a certificate of membership or other documents, e.g. an 
identification card, evidencing membership; Provided, That the effective date for the 
land amortization redemption insurance benefit coverage for the CARP beneficiaries 
shall be upon issuance by the Department of Agrarian Reform of the Certificate of Land 
Transfer or other papers evidencing such beneficiary status. 
Voluntary coverage shall take effect upon approval of the application for 
membership who ceases to engage in agriculture/fishing activities may continue his 
membership under such terms and conditions to be prescribed by the SAGIPCo. 


SECTION 15. Effect of Cession from the Agricultural/Fishing Profession. - Any 
member who ceases to engage in agriculture/fishing activities may continue his 
membership under such terms and conditions to be prescribed by the SAGIPCo. 
ARTICLE IV - BENEFITS 
SECTION 
16. 
The 
SAGIP 
Funds 
shall 
provide 
the 
members 
with 
crop/livestock/aquaculture insurance, loan guarantees, life insurance, social security 
and other benefits subject to such rules and regulations as SAGIPCo may promulgate; 
Provided, that they are members of cooperatives/people's organizations of other self-
help groups. 
A CROP/LiVESTOCKIAQUACUL TURE INSURANCE 
SECTION 17. Integration of the Crop/Livestock/Aquaculture Insurance Programs 
into the 
SAGIP Funds. 
-
The crop/livestock/aquaculture insurance programs 
administered by the Philippine Crop Insurance Corporation are hereby transferred into 
the SAGIP Funds. The SAGIPCo shall promulgate the implementing rules and 
regulations covering the integration of the operations of PCIC into the administration of 
the SAGIP Funds. 
Pertinent provisions of P.O. 1467, as amended, and R.A 8175 that are not 
inconsistent 
with 
this 
Act 
shall 
have 
suppletory 
effect 
upon 
the 
crop/livestock/aquaculture insurance operations of SAGIPCo. 
B. QUEDAN AND RURAL CREDIT GUARANTEE 
SECTION 18. Integration of the Quedan and Rural Credit Guarantee Programs 
into the SAGJP Funds. - The quedan and rural credit guarantee programs administered 
by the Quedancor are hereby transferred into the SAGIP Funds. The SAGIPCo shall 
promulgate the implementing rules and regulations covering the integration of the 
operations of Quedancor into the administration of the SAGIP Funds. 
Pertinent provisions of R.A 7393, as amended, that are not inconsistent with this 
Act shall have suppletory effect upon the quedan and rural credit guarantee operations 
of SAGIPCo. 


C, LIFE INSURANCE 
SECTION 19. Coverage, -
All farmers/fisherfolk who have accumulated 
membership contributions sufficient to pay the cost of the group life insurance premiums 
shall be issued life insurance poliCies or certificates of insurance covered by the SAGIP 
Funds, Such premiums shall be charged against the total personal contributions of the 
member plus the counterpart of the National Government. 
Benefits from life insurance coverage shall include death indemnity to 
beneficiaries, survivors cash assistance and funeral grant in case death of the insured 
farmerlfisherfolk. 
SECTION 20. Sum Insured, - The principal sum of life insurance coverage shall 
be fixed by the Board from time to time but in no case shall it be less than One Hundred 
Thousand Pesos (P100,000,00) which shall include death indemnity to beneficiaries, 
survivors' cash assistance and funeral grant. 
SECTION 21. Double Indemnity Benefit, - The SAGIP Funds, upon receipt and 
approval of the proof of the death of the member from any bodily injury effected through 
external and/or violent means sustained in an accident, within ninety (90) days after the 
date of such injury, independently of other causes, shall pay, in addition to the principal 
death indemnity benefit, an additional amount equal to the said death indemnity benefit; 
Provided, that this benefit shall be proportionately extended to the Member even if his 
death occurred as in Paragraph 2 of the succeeding Section of this Article, 
SECTION 22. Term of Coverage, - Life insurance coverage shall be on a yearly 
basis commencing from the receipt by the SAGIPCo of the member's contribution 
sufficient to pay the premium and ending one year thereafter. The coverage shall be 
automatically renewed any time after the expiry date if the member's contribution 
reaches a level sufficient to pay the subsequent year's premium, 
In case a Member dies at a time when his member's contribution is not yet 
sufficient to pay the premium, his/her beneficiaries shall be indemnified in a sum 
proportionate to the amount of life insurance which his/her outstanding membership 
contribution can purchase, 
SECTION 23. Premiums, - The premium rate shall be deterrnined by the Pool of 
Farmers/Fisherfolk Life Insurers as defined in the succeeding section: Provided, That 
such rate shall be affordable to the insured: and Provided, further, That the rate shall be 
approved by the SAGIPCo, 
SECTION 24. Pool of FarmerslFisherfolk Life Insurers (FARMLIFEPOOL), - The 
group life insurance policies shall be underwritten by a Pool of Farmers/Fisherfolk Life 


Insurers or FARMLIFEPOOL composed of private life insurance companies (with the 
cooperative insurance sector as lead) domestic or foreign, duly licensed to operate in 
the Philippines and which shall enter into a pooling or reinsurance agreement with the 
SAGIPCo. 
The FARMLIFEPOOL shall define the terms and conditions of the life insurance 
coverage pursuant to this Act, fix the premium rate, design the methods, procedures 
and forms, and promulgate policies, rules and regulations for the efficient functioning of 
the life insurance program, subject to approval by the SAGIPCo. 
The FARMLIFEPOOL shall adopt a pari-passu sharing scheme in terms of risks 
and premiums; Provided, that the SAGIPCo shall retain five percent (5%) of the 
premiums collected to defray administrative and operating costs, as the case may be. 
D. SOCIAL SECURITY AND OTHER BENEFITS 
SECTION 25. Land Amortization Redemption Insurance. - The SAGIPCo shall 
extend land amortization redemption insurance to all farmer-beneficiaries of the 
Comprehensive Agrarian Reform Program under R.A. 6657 and/or other agrarian 
reform laws under such terms, conditions and mechanics of implementation as it may 
prescribe, subject to the following basic conditions: 
a) The premium rate shall be in terms of the unpaid value of land transferred to 
him and shall consider, among other factors, the age of the farmer-beneficiary 
at the onset of the insurance cover; 
b) The indemnity shall pay the balance of the land amortization due and payable 
per amortization schedule reckoned on the date of death of the member 
beneficiary to fully settle the payment of the land awarded/transferred to him, 
exclusive of arrearages; 
c) The land amortization redemption insurance policy shall be in force and effect 
at the time of the farmer-beneficiary's death. 
d) The program does not conflict with other programs being implemented by 
other government institutions such as the Land Bank of the Philippines. 
SECTION 26. Disability Benefits. - A member's disability caused by bodily injury 
or disease, which completely prevents him from engaging in farming/fishing or any 
business or occupation, or performing any work, physical or mental, for compensation 
or profit, shall entitle him to disability benefits under terms and conditions to be 
determined by the SAGIPCo. 


SECTION 27. Old-Age Benefit. - Once a Member reaches the age sixty-five (65) 
years, he shall be entitled to old-age bonus under terms and conditions to be 
determined by the SAGIPCo, and subject to: (a) the amount of accumulated unused 
member's contribution at the time of entitlement, and (b) length of membership in the 
SAGIP Funds which, in no case, shall be less than five (5) years. 
The total amount of old-age bonus shall be equivalent to his total accumulated 
unused member's contribution plus an equal counterpart amount to be paid by the 
SAGIP Funds; Provided, That a farmer/fisherfolk who became a member after reaching 
sixty-five (65) years of age shall not be entitled to the benefits under this Section. 
SECTION 28. Other Benefits. - The SAGIPCo may devise and implement other 
programs such as educational loans, mortgage redemption insurance for loans obtained 
from accredited formal sources of credit, property insurance, and other similar 
programs, thru pooling, or other arrangements for the benefit of its Members. 
ARTICLE V - THE FUNDS OF SAGIP: 
SOURCING, UTILIZATION AND MANAGEMENT 
SECTION 29. The Funds of SAGIP. -
The SAGIP Funds shall have three 
"Funds" to be administered by the SAGIPCo, namely: (a) The Agricultural and Fisheries 
Insurance Fund (AGAIN Fund) for the cropllivestock/aquaculture insurance program 
including 
the 
insurance 
of 
other 
agricultural/fisheries 
assets; 
(b) 
The 
Agricultural/Fisheries Credit Guarantee Program Fund (AGAP Fund) for the quedan and 
agricultural/fisheries/rural credit guarantee programs of SAGIPCo; and (c) The 
Philippine Agriculture/Fishery Sector Social Amelioration Fund (PAGASSA Fund) for the 
social security benefits of farmerslfisherfolk. 
SECTION 30. The Agricultural and Fisheries Insurance Fund (AGAIN Fund). -
There is hereby established an Agricultural and Fisheries Insurance Fund (AGAIN 
Fund) which shall be utilized by the SAGIPCo solely for providing crop, livestock and 
aquaculture insurance cover for farmers/fisherfolk as defined under this Act. The AGAIN 
Fund shall be constituted from the following sources: 
a) The outstanding balance of PCIC assets as at the date of effectivity of this 
Act; 
b) The amount provided in subparagraphs a, b, and c, paragraph 1, Sec. 43, 
Article V of this Act; 
c) Budgetary appropriations from Government; 
d) Transfers from other funds administered by the SAGIPCo; and 


e) Loans, issuance of bonds, donations, grants and contributions from local 
and/or foreign sources. 
SECTION 31. The Agricultural/Fisheries Credit Guarantee Program Fund (AGAP 
Fund). -
There is hereby established an Agricultural/Fisheries Credit Guarantee 
Program Fund (AGAP Fund) which shall be used by the SAGIPCo solely for the 
purpose of providing guarantee cover for credit obtained by farmers/fisherfolk and rural 
entrepreneurs from formal credit sources as prescribed under this Act. The AGAP Fund 
shall be constituted from the following sources: 
a) The outstanding balance of Quedancor assets as at the date of effectivity of 
this Act; 
b) The Special Revolving Trust Fund (SRTF) created under Letter of Instruction 
No.1242 including incomes and recoveries thereof; 
c) The amount provided in subparagraph d, paragraph 1, Section 43, Article V of 
this Act; 
d) Budgetary appropriations from Government; 
e) Transfers from other funds administered by the SAGIPCo; and 
f) Loans, issuance of bonds, donations, grants and contributions from local 
and/or foreign sources. 
SECTION 32. The Philippine Agriculture/Fishery Sector Social Amelioration Fund 
(PAGASSA Fund). - There is hereby created a Philippine Agriculture/Fishery Sector 
Social Amelioration Fund (PAGASSA Fund) representing the accumulations of 
membership contributions of farmers and fisherfolk plus the counterpart contributions of 
the National Government which shall accrue to the trust fund of the contributing 
members in accordance with the rules and regulations that shall be promulgated by the 
SAGIPCo. The PAGASSA Fund shall be the source of funding the life insurance 
coverages and social security benefits as well as other purposes prescribed under this 
Act. The PAGASSA Fund shall be constituted from the following sources: 
a) The amount provided in subparagraph e, paragraph 1, Section 43, Article V of 
this Act; 
b) Contributions of the Members and the National Government which shall be 
One Hundred Pesos (P100.00) per month from the member and a 
counterpart contribution of the National Government of twenty five percent 
(25%) of the personal contribution of the member in accordance with the 
implementing rules and regulations that SAGIPCo shall promulgate; Provided, 


That the total Member's contribution shall be credited in the name of the 
member upon actual receipt of SAGIPCo and the counterpart of the National 
Government shall be credited on a quarterly basis from out of the 
appropriated sum as specified under Section 43, Article V of this Act. The rate 
of contribution of the member and the National Government shall be reviewed 
periodically and may be revised as the experience in risk, cost of 
administration and actual or anticipated as well as unexpected losses may 
require; 
c) Loans, grants, donations and contributions from local and/or foreign source or 
issuance of bonds; and 
d) Fund transfers from other funds administered by the SAGIPCo. 
SECTION 33. Collection and Remittance. -
The SAGIPCo shall require a 
complete and proper collection of funds due it and shall require proper identification of 
farmers, fisherfolk and other cooperating persons, entity, association or corporation. 
Payments may be made in cash, checks, stamps, coupons, tickets, or other reasonable 
devices that the SAGIPCo may prescribe and adopt. All monies received or collected by 
any person, entity, association or corporation for the SAGIP Funds shall be remitted to 
the SAGIPCo within fifteen (15) calendar days from the date of receipt or collection or 
within such time as the SAGIPCo may prescribe. 
SECTION 34. Penalty for Non-Remittance or Delayed Remittance. - Unremitted 
collected monies for the SAGIP Funds shall be subject to the penalties and fines 
specified in Section 58 Article VII of this Act and shall earn such interest as the 
SAGIPCo may prescribe, payable by the person, entity, association or corporation that 
collected the monies. 
SECTION 35. Member's Contributions. - The contributions of the Member and 
the National Government shall be treated in the books of account of SAGIP Funds as 
Member's Contributions in the name of the Member upon receipt thereof by the 
SAGIPCo. 
The Member's Contributions shall be utilized firstly, to defray the life insurance 
premium of the Member and secondly, if he is a farmer-beneficiary of the 
Comprehensive Agrarian Reform Program under R.A. 6657 andlor other agrarian 
reform laws, to pay the cost of the land amortization redemption insurance premium. 
The remainder of a Member's Contributions may be used, at his option, to pay for crop 
or other non-life insurance premiums or other costs related to social benefit programs 
availed by himlher from the SAGIP Funds. 
The unused portion of the Member's Contributions shall earn interest at rates 
prescribed by the SAGIPCo; Provided, That in no case shall such interest rate be lower 
than the prevailing interest rate on savings deposits; and Provided, further, That the 


Government contribution shall only begin to earn interest upon receipt thereof by the 
SAGIP Funds. 
SECTION 36. Deputized Collecting Agents and Their Incentives. - The People's 
Organization, like the cooperative, cooperative bank, cooperative insurance company, 
where a member farmerlfisherfolk originally belongs shall be deputized to be the 
collecting agent of the farmer/fisherfolk-member of the SAGIP Funds. The Deputized 
Collecting Agent shall be entitled to the following incentives: 
a) A service fee of not more than five percent (5%) of the members' total 
contributions remitted to the SAGIP Funds, exclusive of the Government's 
counterpart contribution; and 
b) Preferential assistance in securing financing for its agricultural/fishery 
projects. 
SECTION 37. Contribution of the Funds to Operating Expenses. - The AGAIN, 
AGAP and PAGASSA Funds shall share in the annual personnel expenditures, 
maintenance and other operating expenses and capital outlays of the SAGIPCo: 
a) For AGAIN Fund, not exceeding fifteen percent (15%) of the year-end 
balance; 
b) For AGAP Fund, not exceeding ten percent (10%) of the year-end balance; 
and 
c) For PAGASSA Fund, not exceeding fifteen percent (15%) of yearly collections 
including accruals thereto for the first two (2) years but not exceeding ten 
percent (10%) thereafter. 
Should the expenses in any year become less than the maximum amount 
permissible, the difference shall be kept by the SAGIPCo in a separate trust fund 
for its future capital outlays and operating expenses. 
SECTION 38. Inter-Fund Transfers. - When the exigencies of operations so 
require, the Board may transfer amounts from one fund to another; Provided, That the 
amount transferred shall not exceed twenty-five percent (25%) of the balance of the 
fund source within any given year subject to applicable laws and jurisprudence. 
SECTION 39. Management of the SAGIP Funds. -
All monies paid to or 
collected by the SAGIP Funds under this Act shall be deposited, administered and 
disbursed in the same manner and under the same conditions and requirements as 
provided by law for other public special funds. 


Investible funds of the SAGIP Funds shall be invested in high-yielding 
government securities in accordance with law. In addition, the SAGIPCo is likewise 
authorized to invest in cooperatives, cooperative banks, cooperative insurance 
companies and other people's organizations that are accredited deputized collecting 
agents of SAGIP Funds; Provided, That the investment shall have interest income of 
higher than ordinary savings account and; Provided, further, That the investment shall 
not exceed ten percent (10%) of the total capital of the concerned cooperative, 
cooperative bank, cooperative insurance company or people's organization; Provided, 
finally, That the investment shall be approved by the Board based on sound financial 
management practices. 
SECTION 40. Records and Reports. -
The SAGIP Funds shall keep and 
maintain records of all its funds and their disbursements. Within thirty (30) days from the 
termination of its fiscal/calendar year, the President of SAGIPCo shall prepare for 
submission to the President of the Philippines and to Congress of the Philippines a 
report of operation of the SAGIP Funds during the preceding year including but not 
limited to statistical data on the number of persons covered and benefitted, finances of 
the SAGIPCo, and recommendations. He shall also cause the circulation to the 
farmers/fisherfolk and the general public a synopsis of the annual report, showing in 
particular the status of the finances of SAGIPCo and the benefits administered. 
Separate and distinct records of operation of each funds, social security benefits and 
insurance shall be maintained. 
SECTION 41. Grants, Aids and Contributions. -
The SAGIP Funds shall be 
authorized to receive grants, aids and contributions in the form of cash or property from 
any person, entity, or association or corporation, domestic or foreign, for the purpose of 
furthering the programs and policies adjudged to be in interest of the government as a 
whole. 
SECTION 42. Other Sources of Funds. - The SAGIP Funds shall be authorized 
to collect licensing, accreditation, servicing, adjustment, and other fees which the Board 
may prescribe in its rules and regulations from time to time. 
SECTION 43. Appropriations. - To ensure the viability and stability of the SAGIP 
Funds programs and objectives, the following are hereby appropriated: 
a) During the first year of the SAGIP Funds' operation, the government shall, 
within six (6) months thereof, release to the SAG!P Funds: 
1) The amount of Three Hundred Thirty Seven Million, Three Hundred Ninety 
Seven Thousand (P337,397,000.00) representing the unpaid balance of 
the authorized capital stock of the Philippine Crop Insurance Corporation 
for the AGAIN Fund; 


2) The amount of One Hundred Sixty Eight Million Seven Hundred Fifty Eight 
Thousand Two Hundred Pesos (P168,758,200.00) representing its unpaid 
premium shares in the PCIC rice and corn crop insurance programs for 
the previous years for the AGAIN Fund; 
3) The 
amount 
of Two 
Hundred 
Million 
Pesos 
(P200,OOO,OOO.OO) 
representing its estimated premium shares in the PCIC rice and corn crop 
insurance program for the ensuing year for the AGAIN Fund; 
4) The amount of Two Billion Pesos (P2,OOO,OOO,OOO.OO) for the AGAP 
Fund. This appropriated amount shall be funded from the outstanding 
balance of the Agricultural Competitiveness Enhancement Fund set up 
under R.A. 8178, as amended; and 
5) The amount of Six Hundred Million Pesos (P600,OOO,OOO.OO) as its initial 
contribution to the PAGASSA Fund. This amount shall be treated as its 
advances to the Member's Contributions computed at the rate of twenty 
five percent (25%) of the personal contribution of the member, which shall 
be One Hundred Pesos (Pi00.00) per month, and shall be transferred 
quarterly to the individual accounts of members as 
counterpart 
contribution of their actual member's contribution to the PAGASSA Fund. 
This appropriated amount shall be funded from the support services fund 
of the Comprehensive Agrarian Reform Program under RA No. 6657 or 
other agrarian reform laws that shall have been enacted by the time this 
Act has been approved. 
b) For the subsequent years, yearly projection of the Government's contribution 
to the AGAIN, AGAP and PAGASSA Funds shall be submitted by the 
SAGIPCo to the President of the Philippines, through the Secretary of 
Agriculture, in accordance with the regular budgetary practice, and upon 
his/her 
approval 
shall 
be 
included 
in 
the 
Government 
budgetary 
appropriations; Provided, That the support services fund of the Agrarian 
Reform Fund shall bear up to fifty percent (50%) of the required amount. 
Releases shall be made on a quarterly basis depending upon the actual 
amounts of: 
1) Crop/livestock/aquaculture insurance underwritten by the SAGIPCo; 
Provided, That the SAGIPCo shall bill the Government the sum of money 
corresponding to the computed amount of contributions to the AGAIN 
Fund and to crop insurance premiums; 
2) Amount of fund releases for calls on guarantee in excess of the existing 
AGAP Fund for the guarantee operations; and 
3) Contribution of members to the PAGASSA Fund. 


c) Should any of the SAGIP Funds being administered by the SAGIPCo 
encounter catastrophic losses during a year due to unexpected surge of 
indemnity claims and/or calls on guarantee, SAGIPCo shall bill the National 
Government the reimbursement of its catastrophic losses in the subsequent 
year after such losses have been determined to preserve the integrity of the 
SAGIP Funds. 
SECTION 44. Examination and Valuation of Benefits and Funds. -
The 
SAGIPCo shall keep and cause to keep such records as may be necessary for the 
purpose of making actuarial studies, calculations, examinations, valuation of the SAGIP 
Funds and shall keep or cause to keep records of such statistical data needed in the 
computation of rates of old age bonus, disability, sickness, and other adjustments of the 
benefits in the SAGIP Funds. The examination and valuation of benefits and funds shall 
be made periodically in accordance with accepted actuarial principles. 
SECTION 45. Exemption from Tax. Legal Process and Lien. - The actuarial 
solvency of the SAGIP Funds shall be preserved and maintained at all times and that 
the assessments and contribution rates necessary to sustain the benefits under this Act 
shall be kept as low as possible in order not to burden the members and contributing 
persons, entities, or associations or corporations of the SAGIP Funds. Taxes imposed 
on the SAGIP Funds will impair their actuarial solvency and increase the contribution 
rate and/or assessments necessary to sustain the benefits under this Act. Accordingly, 
notwithstanding any laws to the contrary, the SAGIP Funds, its assets, revenues 
including accruals thereto, and all benefits paid to members, shall be exempt from all 
taxes, assessments, fees, charges or duties of all kinds. These exemptions shall apply 
only to the SAGIP Funds itself and shall not apply to persons, entities or associations or 
corporations doing business with the SAGIPCo. 
Whatever benefits granted under this Act shall not be subject, among other 
matters, to attachment, garnishment, levy or other process, or be seized, taken, 
appropriated, or applied by any legal or equitable process to pay any debt or liability of a 
member or beneficiary, or any person who may have right thereunder either before or 
after payment; Provided, That this, however, shall not apply to obligations of the 
member to the SAGIP Funds, or when the benefits granted herein are assigned in 
writing by the member with the authority of the SAGIPCo, e.g. crop insurance indemnity 
paid to accredited formal lending institutions. 
ARTICLE VI- ADJUDICATION OF CLAIMS AND DISPUTES 
SECTION 46. Facility of Payment. - The SAGIPCo shall prescribe such rules 
and regulations to facilitate payment of benefits, proceeds, credits, and claims under 
this Act Payments made by the SAGIP Funds prior to its receipt of an adverse claim, to 
a beneficiary or claimant subsequently found not entitled thereto, shall free the 
SAGIPCo from any liability to the person or persons legally entitled to such payment 


who shall, however, have a right to institute the appropriate action in a court of law 
against the fraudulent recipient of the benefits, proceeds, credits, or claims. 
SECTION 47. Settlement of Dispute. -
The SAGIPCo shall have original 
jurisdiction to settle any dispute arising under this Act. The Board may designate any of 
its member official of the SAGIPCo to act as a hearing officer to receive evidence, make 
findings of fact, and submit recommendations thereon. The hearing officer shall submit 
his/her findings, recommendations, together with all the documentary and testimonial 
evidence, to the Board within fifteen (15) working days from the time the parties have 
closed their respective evidence and filed their last pleading. The Board shall decide the 
case within twenty (20) days therefrom. The cases heard directly by the Board shall be 
decided within ten (10) working days from the time they are submitted by the parties for 
decision. 
SECTION 48. Appeals. - Within ten (10) days from receipt of notice of decision 
or award, the aggrieved party may appeal the same to the Insurance Commission. 
SECTION 49. Execution of Decisions. - Any decision or award of the Board shall 
be final and executory when no appeal is perfected and there is no order to stay by the 
Insurance Commission. For this purpose, the Board shall have the power to issue to the 
city, municipal or provincial sheriff or its appointed sheriff such writs of execution as may 
be necessary for the enforcement of such decision or award, and any person, entity or 
association or corporation who shall fail or refuse to comply with such decision, award, 
writ or process after being required to do so, shall, upon application by the SAGIPCo, 
be punished for contempt. 
SECTION 50. Oaths, Witnesses, and Production of Records. - When authorized 
by the Board, an official or employee of the SAGIPCo shall have the power to 
administer oath or affirmation, take depositions, certify to official acts, and issue 
subpoena and subpoena duces tecum to compel the attendance of witnesses and the 
production of books, papers, correspondences, and other records deemed necessary 
as evidence in connection with any question arising under this Act. Any case of 
contumacy shall be dealt with in accordance with the provisions of Section 580 of the 
Revised Administrative Code. 
SECTION 51. Government Assistance Thru Inter-Agency Linkages. - To support 
and promote the realization of the objectives and to enhance the operations of the 
SAGIP 
Funds, 
all 
government departments, 
bureaus, 
offices, 
agencies 
and 
instrumentalities, national or local, all formal lending institutions, public or private, now 
or hereinafter involved with agricultural/fisheries/rural credit programs, namely: 
Department of Agriculture, Department of Agrarian Reform, Department of Finance, 
Department of Interior and Local Government, Department of Labor and Employment, 
Department of National Defense, Department of Public Works and Highways, 
Department of Social Welfare and Development, Department of Trade and Industry, 


National Economic and Development Authority, Bangko Sentral ng Pilipinas, National 
Food Authority, National Irrigation Administration, National Electrification Administration, 
Armed Forces of the Philippines, Land Bank of the Philippines, Development Bank of 
the Philippines, Philippine AI Amanah Bank, Social Security System, Government 
Service Insurance System, all government financing institutions, government owned or 
controlled banks, all private commercial, savings banks, cooperative banks, all savings 
and thrift associations and cooperatives, all rural banks, all barangay associations and 
other mutual benefit associations and cooperative insurance organizations and such 
other public or private persons, entities or associations or corporations covered by the 
objectives and the rules and regulations of the SAGIP Funds, shall act as cooperating 
agencies of the SAGIPCo and for this purpose shall direct their policies, programs, rules 
and regulations so as to attune and synchronize them with the objectives of this Act. 
SECTION 52. Prioritization of Coverage. - The Board shall determine priorities in 
the implementation of this Act in terms of: 
a) Type of benefit to be extended; 
b) Type of farmer/fisherfolk to be covered; 
c) Type of produce to be covered; 
d) Geographical area of coverage; and 
e) Other factors as the Board may consider. 
SECTION 53. Prohibition from Competition with the Private Sector. -
The 
SAGIPCo shall not compete with the private industry. It can, however, collaborate with 
private companies under pooling or similar arrangements as well as in reinsurance 
undertaking. 
SECTION 54. Participation of People's Organization. -
The SAGIPCo shall 
involve people's organizations of farmers and/or fisherfolk, such as cooperatives and 
self-help groups, in the implementation of this Act such as in the collection and 
remittance of members' contributions, loan amortizations, and insurance premiums as 
well as in the underwriting of insurance. The SAGIPCo shall develop and implement 
incentive schemes to attract the participation of such people's organization and to allow 
for their eventual takeover at the local level. 
SECTION 55. Government Guarantees. - The Government of the Republic of 
the Philippines guarantees the fulfillment of any or all of the obligations of the SAGIP 
Funds to its members and/or beneficiaries of the insured when they mature. 


The Government's contribution to crop insurance premium, once the premium 
rates and sharing are approved by the President of the Philippines, is an obligation of 
the Republic of the Philippines. 
SECTION 56. Implementing Rules and Regulations. - The implementing rules 
and regulations to carry out the provisions of this Act shall be promulgated by the 
SAGIPCo within sixty (60) days after the effectivity of this Act. 
SECTION 57. Exclusiveness of Benefits. - Whenever other laws provide similar 
benefits for the same contingencies covered by this Act, the member who qualifies for 
the benefits shall have the option to choose which benefit will be paid to him. However, 
if the benefits chosen are less than the benefits provided under this Act, the SAGIPCo 
shall pay the difference: Provided, however, That when the disability or death of an 
insured member is work connected as defined in Presidential Decree No. 626, as 
amended, or when the loss of his crops/livestock and other agricultural/fisheries assets 
is due to military operations arising from insurgency, he shall be entitled to the full 
benefits therefor as provided herein. 
SECTION 58. Penalty Clause. -
a) Any person found to have participated directly or indirectly in the commission 
of fraud, collusion, falsification, or misrepresentation in any transaction with 
the SAGIP Funds whether for him or for some other persons, shall suffer 
penalties provided for in Article 172 of the Revised Penal Code, as amended; 
b) Whoever shall obtain or receive any money or check invoking any proVision of 
this Act or any agreement thereunder, without being entitled thereto with the 
intent to defraud any member, cooperating entity, the SAGIP Fund or third 
party, shall be punished by a fine of not Jess than Ten Thousand Pesos 
(P10,000.00) nor more than Fifty Thousand Pesos (P50,OOO.OO) or by 
imprisonment of not less than five (5) years nor more than ten (10) years, or 
both, at the discretion of the Court; 
c) Whoever buys, sells, offers for sale, uses, transfers, takes, or gives in 
exchange, or pledges or gives in pledge, except as authorized in this Act or in 
the rules and regulations made pursuant thereto, any stamp, coupon, ticket, 
book, quedan certificate or other device, prescribed by the SAGIPCo for the 
collection or payment of contributions required herein, shall be fined not less 
than Five Thousand Pesos (P5,000.OO) nor more than Ten Thousand Pesos 
(P10,OOO.OO), or imprisonment for not less than two (2) years nor more than 
five (5) years, or both, at the discretion of the Court; 
d) Whoever, with intent to defraud, alters, forges, makes or counterfeits any 
stamp, coupon, ticket, book, quedan certificate or other device prescribed by 
the SAGIPCo for the collection of contributions required herein, or uses, sells, 


lends, or had in his possession any material in imitation of the material used 
in the manufacture of such stamp, coupon, ticket, book, quedan certificate or 
other device, shall be fined not less than Ten Thousand Pesos (P10,000,00) 
nor more than Twenty Thousand Pesos (P20,000,00), or imprisonment for not 
less than five (5) years nor more than ten (10) years, or both, at the discretion 
of the Court; 
e) Whoever fails or refuses to comply with the provision of this Act or with the 
rules and regulations adopted by the SAGIPCo shall be punished by a fine of 
not less than Five Thousand Pesos (P5,000,00) nor more than Ten Thousand 
Pesos (P10,000,00), or imprisonment for not less than three (3) years nor 
more than six (6) years, or both, at the discretion of the Court; 
f) Any employee of the SAGIPCo who receives or keeps funds or property 
belonging, payable, or deliverable to the SAGIP Funds and who shall 
appropriate the same, or shall take or misappropriate or shall consent, or 
through abandonment or negligence, shall permit any other person to take 
such property or funds, wholly or partially, or shall otherwise be guilty of 
misappropriation of such funds or property, shall suffer the penalties provided 
in Article 217 of the Revised Penal Code, as amended; 
g) Any collecting agent who fails to remit the collectedlreceived contributions, 
cash, credits or loan amortizations within thirty (30) days from the date of 
collection or receipt shall be presumed to have misappropriated such 
contributions, credits or loan amortization and shall be fined not less than Ten 
Thousand Pesos (P10,000,00) nor more than Fifty Thousand Pesos 
(P50,000,00), or imprisonment for not less than five (5) years nor more than 
ten (10) years, or both, at the discretion of the Court; and 
h) Criminal actions arising from violations of these provisions of this Act may be 
commenced by the SAGIPCo or by the aggrieved party, either under this Act 
or, in appropriate cases, under the Revised Penal Code, 
SECTION 59. Applicability of the Insurance Code of the Philippines (P,O, No, 
612, as amended) and Agriculture and Fisheries Modernization Act (R.A. 8435), - The 
provisions of the Insurance Code and the Agriculture and Fisheries Modernization Act in 
so far as they are not inconsistent with the provisions of this Act shall apply to the 
SAGIPCo and shall have suppletory effect. The Insurance Commission shall exercise 
powers of visitation over the SAGIPCo, 
SECTION 60. Transitory Provisions, -
Upon the effectivity of this Act, the 
governing Board shall immediately be constituted and convened, All incumbent officers 
and employees of the Quedancor and PCIC shall continue in office as personnel of the 
SAGIPCo without demotion in rank nor diminution in compensation and fringe benefits, 
The incumbent president of pelc shall be the Acting President of SAGIPCo until a new 


President shall have been appointed by the President of the Republic. The Officer-in-
Charge of the Quedancor shall be the Acting Executive Vice President of the SAGIPCo. 
The Acting President shall form a Management Committee composed of senior officers 
of both Quedancor and PCIC to prepare and submit to the Board such plans and 
programs which will ensure harmonious and effective transitional activities towards the 
full operations of the SAGIP Funds. 
Personnel of both PCIC and Quedancor who shall opt to retire because of 
redundancy in functions as brought about by this reorganization shall be given a 
retirement pay equivalent to twice the average of their monthly basic pay for the last five 
years for every year of service; Provided, That they have rendered government service 
of not less than ten (10) years as of the date of the effectivity of this Act. Funds for this 
shall be drawn from the residual funds of both the PCIC and the Quedancor. This 
benefit is over and above the benefit which the personnel shall receive from the 
Government Service Insurance System. Furthermore, personnel who opted to retire 
under this provision shall be barred to reemploy with the SAGIPCo for five years after 
making such retirement. 
SECTION 61. Repealing Clause. - All laws, decrees, charters, executive orders, 
administrative orders, proclamations, rules and regulations, or parts thereof inconsistent 
with any provision of this Act are hereby repealed or modified accordingly. 
SECTION 62. Separability Clause. - Should any provision of this Act or any part 
thereof be declared invalid, the other provisions, so far as they are separable shall 
remain in force and effect. 
SECTION 63. Effectivity. - This Act shall take effect fifteen (15) days after its 
pUblication in the Official Gazette and in any two (2) newspapers of general circulation. 
Approved,