v't'.! 
of l;;C ?■ ; '■(.
NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
s. B. No. 766
■22 JUL19 P6 36
%
Introduced by Senator SONNY ANGARA
AN ACT
STRENGTHENING THE PHILIPPINE CROP INSURANCE CORPORATION 
(PCIC), AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1467, 
AS AMENDED OT HERWISE KNOWN AS THE CHARTER OF THE PHILIPPINE 
CROP INSURANCE CORPORATION
EXPLANATORY NOTE
The Philippines is primarily an agrarian country, with up to 32% (9.7 million) 
of its 30-million hectares of land devoted to agricultural production. Agriculture sector 
remains the main source of income and employment for 24.8% of the working 
population. It is equivalent to about 9.8 million of the 39.33 million total employed 
workers, based on the Philippine Statistics Authority's (PSA) 2021 Agricultural 
Indicators System.
However, farmers and fisherfolk have remained the poorest among the basic 
sectors of the country. According to the Department of Agriculture, among the 11 
basic sectors in the Philippines, farmers and fisherfolk residing in rural areas still 
remain the poorest since 2006. Farmers were recorded with 31.6% poverty incidence 
in 2018 while fishers with 26.2%. Basically, around 5.5 million farmers and 4.6 million 
fishers are poor. Problems in the agriculture sector are compounded by losses brought 
by natural calamities that have brought both severe drought and heavy rainfall. Thus, 
it is imperative for the government to make an effort in assisting farmers and fisherfolk 
through the agricultural insuiance program. Agricultural insurance program is one of 
the micro-/area-based schemes that provide protection to one of the most vulnerable 
sectors in the Philippines—the agriculture sector.


This bill intends to expand the agricultural crops that can be insured by the 
Philippine Crop Insurance Corporation (PCIC) by including corn crops, high-value 
commercial crops, livestock, aquacuiture and fishery products, agroforestry crops and 
forest plantations; provide life and accident insurance to both farmers and fisherfolk; 
strengthen the financial capacity of the PCIC by mandating the Philippine Charity 
Sweepstakes Office (PCSO) to remit P5 million pesos annually until the unreleased 
government premium subsidy is fully paid; and, increase the PCIC's capitalization from 
P2 billion to PIO billion. It is our hope that this bill could provide financial security that 
farmers and fisherfolk need and deserve.
In view of the foregoing, immediate approval of this bill into law is earnestly 
sought.
SONNY ANGARA


cr of [:|0 :f
NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
■22 JUL 19 P6 36
SENATE
S. B. No. 766
RliCEIUDBV
Introduced by Senator SONNY ANGARA
AN ACT
STRENGTHENING THE PHILIPPINE CROP INSURANCE CORPORATION 
(PCIC), AMENDING FOR 1 HE PURPOSE PRESIDENTIAL DECREE NO. 1467, 
AS AMENDED, OTHERWISE KNOWN AS THE CHARTER OF THE PHILIPPINE 
CROP INSURANCE CORPORATION
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
SECTION 1. Section 1 of Presidential Decree No. 1467, as amended, is hereby
2 
further amended to read as follows:
3 
"Sec. 1. Creation of the Philippine Crop Insurance Corporation. - There is
4 
hereby created a body corporate to be known as the 'Philippine Crop
5 
Insurance Corporation' (PCIC and herein called the Corporation) which shall
6 
be attached to the Department of Agriculture [for budgetary-purposes].
7 
The Corporation shall insure qualified farmers AND FISHERFOLK against
8 
losses arising from natural calamities, FORTUITOUS EVENTS, plant AND
9 
FISH diseases and ptst infestations. [-Initiait)-;] [t]The Corporation shall
10 
provide insurance coverage for palay AND CORN crops, HIGH-VALUE
11 
COMMERCIAL CROPS, LIVESTOCK, AQUACULTURE AND FISHERY
12 
PRODUCTS, AGROFORESTRY CROPS AND FOREST PLANTATIONS;
13 
[and- later-on to other crops without-prejudice-te-the-inelusion-of-ether]
14 
non-crop agiiculturai assets such as but not limited to machineries,
15 
equipment, transport facilities and other related infrastructures, AND LIFE
16 
AND ACCIDENT TERM INSURANCE COVERAGE FOR FARMERS AND
17 
FISHERFOLK, as the Board of Directors of the Corporation may determine.
1


1 
Such crop insurance shall cover, in every case, the cost of production inputs,
2 
the value of the farmer's OR FISHERFOLK'S own labor and those of the
3 
members of his household, including the value of the labor of hired workers,
4 
and a portion of the expected yield as the Board of Directors, in its
5 
discretion, decide to insure. Such insurance protection, however, shall
6 
exclude losses arising from avoidable risks emanating from or due to the
7 
negligence, malfeasance or fraud committed by the insured or any member
8 
of his immediate farm household or employee or the failure of the insured
9 
to follow proven farm practices.
10 
"THE CORPORATION SHALL ALSO INSURE PROPERTIES AND
11 
FACILE lES WHICH ARE OWNED OR USED 3Y GOVERNMENT
12 
AGENCIES INVOLVED IN AGRI-FISHERY-FORESTRY
13 
PROJECTS / ACTIVITIES AND GOVERNMENT-FINANCED AGRI-
14 
FISHERY-FORESTRY PROJECTS. THE CORPORATION SHALL
15 
PROVIDE REINSURANCE COVERAGE TO AGRI-FISHERY-
16 
FORESTRY PROPERTIES AND FACILITIES UNDERWRITTEN BY
17 
PRIVATE AND GOVERNMENT INSURANCE COMPANIES."
18 
SEC. 2. Subsections 3.5 and 3.11 of Section 3 of the same Decree, are hereby
19 
further amended to read as follows:
20 
"Sec. 3. 
- The Corporation shall have che following powers:
21 
"X X X
22 
"3.5. To insure the [flee—production] CROPS of farmers AND
23 
FISHERFOLK against loss, damage and destruction caused by natural
24 
calamities such as typhoons, floods, drought, earthquake, volcanic
25 
eruptions, rodents, vermin[s], disease, insects and other pests; and to carry
26 
on any business necessary, related to, and expedient for the above
27 
purpose;
28 
"x X X
29 
"3.11. To generate iniernal funds by floating bonds, i expansion to other]
30 
EXPANDING THE CORPORATION'S insurance lines and extending
31 
coverage to other areas of agriculture SUCH AS LIVESTOCK,
32 
AQUACULTURE, FISHERY, AGROFORESTRY, AND FOREST


1 
PLANTATIONS in order to address insurance needs of the target sector
2 
and to do and perform act: and things and to exercise all the general
3 
powers conferred by law upon the Corporation as are incidental or
4 
conducive to the attainment of the objectives of the Corporation."
5 
SEC. 3. Section 5 of the same Decree is hereby further amended to read as
6 
follows:
7 
"Sec. 5. Rate of Premium and its Sharing. - The rate of premium, as well
8 
as the allocated sharing thereof [by the] OF farmers, FISHERFOLK, [the]
9 
lending institutions, the Government of the Republic of the Philippines
10 
(herein called the Government) and other parties, shall be determined by
11 
the Board of Directors of the Corporation: Provided, 't hat the share of the
12 
Government in the premium cost in the form of premium subsidy, shall be
13 
limited to subsistence farmers AND FISHERFOLK: Provided, however,
14 
That each of these subsistence farmers is cultivating not more than seven
15 
(7) hectares OF FARMJVNDS AND EACH FISHERFOLK IS
16 
CULTIVATING NOT MORE THAN FIVE (5) HECTARES OF THE
17 
FISHPOND, SEAWEED, OYSTER OR MUSSEL FARM by themselves or
18 
with the help of the labor of the members of their households or hired labor,
19 
the premium rate and sharing to be determined by the Board of Directors
20 
subject to approval by the President of the Philippines: Provided, further,
21 
That the premium share of the subsistence farmer OR FISHERFOLK shall
22 
be reasonably affordable by him: Provided, furthermore. That the
23 
Government shall share in the premium cost only in insurance coverage
24 
against jnforeseen and unavoidable risks such as, but not limited to
25 
typhoons, droughts, outbreaks of pets and diseases: Provided, finaiiy. That
26 
premium subsidy and/or insurance benefits shall upon the accumulation of
27 
surplus funds, be increased to such amount as may be determined by the
28 
Board, taking into consideration that the Corporation has been established
29 
not only for profit but mainly to help the insured in their direct hours of
30 
need."
31 
SEC. 4. Subsections 6.3 and 6.5 of Section 6 of the same Decree are hereby
32 
further amended to read as follows:


1 
"Sec. 6. Premium Subsidy. -
2 
"x X X
3 
"6.3. Unappropriated and/or unreleased government premium subsidy for
4 
policies written for the period from May 1A 1981 up to [the approval of this
5 
Aet] DECEMBER 31/ 2011 computed on the basis of premium rates and
6 
sharing previously approved by the President as authorized by law shall be
7 
programmed for payment by the Government [within a peri0d-0f-t-en-(4Q-)
8 
years from the approval- of this Act], and the yearly sums shall be included
9 
in the budgetary appropriations for submission to Congress, starting the
10 
fiscal year following approval hereof, in addition to the premium subsidy
11 
requirement of the year involved.
12 
"x X X
13 
"6.5. [Ten percent (10%) of the net earnings of] [t]The Philippine Charity
14 
Sweepstakes Office (PCSO) [from-its-lotto operatien-shall be earmarked for]
15 
SHALL CONTRIBUTE A YEARLY AMOUNT OF FIVE MILLION PESOS
16 
(P5,000,000) FROM ITS CHARITY FUND TO the Crop Insurance
17 
Program and said amount shall be directly remitted by the PCSO to the
18 
Corporation [ever^-sfx—(6-) -menths] YEARLY until the [amount of
19 
government st^bserfptian] UNRELEASED 
PREMIUM SUBSIDY 
is fully
20 
paid."
21 
SEC. 5. Subsections 8.1, 8.3, 8.4.1, 8.4.3, and 8.5 of Section 8 of the 
same
22 
Decree are hereby further amended to read as follows:
23 
"Sec. 8. Capital Stock, -
24 
"8.1. The authorized capital stock of the Corporation is [Two billion pesos
25 
(f27QOQ,Q0O,OOQ)] TEN BILLION PESOS (P10,000,000,000) divided
26 
into [Fifteen—million—(15;QQQ,QQQ)] SEVENTY-FIVE MILLION
27 
(75,000,000) common shares with a par value of One hundred pesos
28 
(PlOO) each share, which shall be fully subscribed by the Government and
29 
[five-miltion-(5,000,000)] TWENTY-FIVE MILLION (25,000,000)
30 
preferred shares with a par value of One hundred pesos (PlOO) per share
31 
which shall have the features as provided in Section 8.4 hereof and shall be
32 
issued in accordance with the provisions of Section 8.5 hereof.


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2
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14
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21 
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25
26
27
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29
30
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32
X X X
"8.3. The additional common capital stock of [One—Men—pesos 
(Pl-.OOQ/OQO.OOO)] SIX BILLION PESOS (P6/000,000/000) shall be fully 
subscribed by the Government and the necessary funds shall be 
appropriated by Congress unless otherwise provided by existing laws: 
Provided, That Congress shall provide, on an annual basis, [ai least fifty 
percent (50%) of] the needed capital, until the authorized capital stock is 
fully paid up.
"8.4. The preferred shares shall be entitled to a preference over common 
shares in any declaral’on of dividends. They shall also be given priority in 
the distribution of assets in the event of liquidation of the Corporation. They 
shall have the following specific features:
"8.4.1. Preferred as to dividends at a minimum of [six per-eent (6%)] ONE
AND ONE-HALF PERCENT (1.5%) OR THE PREVAILING THREE 
HUNDRED SIXTY (360)-DAY TREASURY BILL RATE AT THE TIME 
OF DECLARATION OF DIVIDENDS, WHICHEVER IS HIGHER;
"x X X
"8.4.3. NON-Participating;
"x X X
"8.5. AT LEAST FIVE HUNDRED MILLION PESOS (P500,000,000) OF 
PREFERRED SHARES SHALL BE SUBSCRIBED AND PAID FOR BY 
THE LAND BANK OF THE PHILIPPINES. THE BALANCE OF [T]The
preferred shares may be available for sale or to subscription by the general 
public."
SEC. 6. Section 8-A of the same Decree is hereby amended to read as follows: 
"Sec. 8-A. RESERVE FUND FOR CATASTROPHIC LOSSES. - A State 
resen/e fund for catastrophic losses in the amount of Five hundred million 
pesos (.)50C/000,00C) shall be created exclusively to answar for the 
proportion of all losses in excess of risk (pure) premiums under the 
Corporation's Crop Insurance Program for small farmers AND 
FISHERFOLK. THE FUND MAY BE INCREASED SUBJECT TO THE 
APPROVAL OF THE PRESIDENT. The Fund shall be administered by a


1 
government financial institution to be designated by the Corporation's Board
2 
of Directors. Such sum as may be necessary for the purpose shall be funded
3 
by the National Government through the annual General Appropriations Act
4 
starting the calendar year immediately following the approval of this Act
5 
and every year thereafter until the full amount is completed. The mechanics
6 
of claims against the [f]Funci and to what extent the Fund shall be liable
7 
shall be determined jointly by the financial institution administering the
8 
Fund, subject to the approval by the President."
9 
SEC. 7. Subsection 9.1 of Section 9 of the same Decree is hereby further
10 
amended to read as follows:
11 
"Sec. 9. Board of Directors.-
12 
"9.1. The powers of the Corporation shall be vested in and exercised by a
13 
Board of Directors now composed of seven (7) members and made up of
14 
the following: the President of the Land Bank of the Philippines (LBP), the
15 
President of the Corporation, the [Executive- Director-Qf-the-AgFic-ultufal
16 
C-redit Policy Council (ACPC)] SECRETARY OF THE DEPARTMENT OF
17 
AGRICULTURE (DA), a representative from the private insurance industry
18 
to be nominated by the Secretary of Finance and three (3) representatives
19 
from the suosistence farmers sector, preferably representing agrarian
20 
reform beneficiaries/cooperatives/associations coming from Luzon, Visayas
21 
and Mindanao, who shall be selected and nominated by the different
22 
farmers organizations and/or cooperatives. The respective nominees of the
23 
private insurance industry and the farmer's sector sha!1 be submitted to and
24 
appointed by the President. The chairman of the Board of Directors shall be
25 
appointed by the President from among the members of the Board of
26 
Directors. The President of the Corporation shall also be appointed by the
27 
President and shall be ex officio vice chairman who shall assist the chairman
28 
and act in his stead in case of absence or incapacity. In case of absence or
29 
incapacity of both the chairman and the vice chairman, the Board of
30 
Directors shall designate a temporary chairman from among its members.
31 
Except for the President of the LBP and the [Executive Director of the ACPG]
32 
SECRETARY OF THI DA, ail members of the Board of Directors, including


1 
the Pres deni of the Corporation, shall be appointed by the Presioent within
2 
a reasonable period of time after the approval of this Act."
3 
SEC. 8. Implementing Rules and Regulations. - Within sixty (60) days from the
4 
approval of this Act, the Corporation shall promulgate the rules and regulations
5 
implementing the provisions of this Act.
6 
SEC. 9. Separability Clause. - If any portion or provision of this Act is
7 
subsequently declared invalid or unconstitutional, other provisions hereof which are
8 
not affected thereby shall remain in full force and effect.
9 
SEC. 10. Repealing Clause. - Ail other laws, acts, presidential decrees,
10 
executive orders, presidential proclamations, issuances, rules and regulations, or parts
11 
thereof which are contrary to or inconsistent with any of the provisions of this Act are
12 
hereby repealed, amended, or modified accordingly.
13 
SEC. 11. Effectivity. - This Act shall take effect fifteen (15) days after its
14 
publication in the O/fida! Gazette or in a newspaper of genei n\ circulation.
Approved,