Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
House Bill No. ____ 
Introduced by Representative 
LEODY F. TARRIELA 
EXPLANATORY NOTE 
Food security has become a major global concern, aggravated by 
climate change and natural and man-made disasters, like the war in Ukraine. 
In the Philippines, the food security issue is compounded by poor 
productivity arising from inadequate irrigation, antiquated farming and 
fishing methods, high cost of farm inputs, and lack of access to credit and 
marketing network. 
Consequently, the Philippines has become one of the world’s largest 
importers of rice, vegetables, poultry and even fish despite having one of 
the longest coastlines in the world. Ironically, the farmers and fishers 
constitute the poorest of the poor Filipinos. Their average age was 
estimated by the National Statistics Office in 2020 at 57 years. With no 
incentives for the young to replace the aging farmers and fishers, the 
biggest threat to food crisis looms in the horizon: lack of producers in 
agriculture and fishery industries. 
Meanwhile, the chasm between the rich and the poor continues to widen. 
Oxfam International reported recently that the richest nine (9) families in 
the Philippines have as much wealth as 50% of the total population or 55 
million Filipinos. The richest one percent (1%) have as much wealth as the 
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99% of all Filipinos. These despite the Philippines registering relatively 
higher GDP growth rate than many other countries (7.9%) in 2022. 
President Ferdinand Marcos, Jr said during the recent oath-taking of newly 
appointed government officials in Malacañang, “Help me uplift our 
people’s economic condition… Efforts to grow our economy would only 
go to waste if the fruits of growth are not enjoyed by the people. Only a 
few would get rich.” 
There is nothing wrong with the rich getting richer; but the poor must 
have a fighting chance to improve his or her quality of life! The first 
necessary measure to make this happen, is for the poor who presently rely 
mainly on usurious informal lenders for capital, to be provided practical 
access to institutional credit. 
In response to the President’s call, and to help address the problems 
of food security and widespread poverty, especially among farmers and 
fishers, this draft measure seeks to establish the Maharlika Cooperative 
Apex Bank, herein referred to as “MCAB”. The MCAB shall take over 
from Land Bank of the Philippines  (LBP), the mandate to provide credit 
and financial support facilities to small farmers, fishers as well as to micro, 
small and medium scale entrepreneurs engaged in agribusiness enterprises. 
LBP which was created with the passage of RA 3844, otherwise 
known as Agrarian Land Reform Code on August 8, 1963, may now focus 
on its vital role as one of the largest universal and commercial banks in the 
Philippines. But it will retain its principal responsibility of land evaluation, 
compensation to owners of private agricultural lands and collection of 
amortization from Comprehensive Agrarian Reform Program (CARP) 
farmer beneficiaries. 
The MCAB shall have the following major functions: 
a.) Serve as Apex Bank for cooperatives and cooperative banks, 
providing incentives for subscriber cooperatives to share in its 
capitalization; 


b.) Be the depository bank for surplus funds of cooperatives and 
cooperative banks; 
c.) Institutional development and capacity building of cooperatives 
and cooperative banks in coordination with Cooperative 
Development Authority and Local Government Units; 
d.) Provide fresh funds to client cooperatives and coop banks when 
needed; 
e.)  Grant loans to farmers, fishers and agribusiness MSMEs, using 
qualified cooperatives as conduits; 
f.)  Link the cooperative system with the general money market and 
the Bangko Sentral ng Pilipinas. 
These MCABP functions are similar to those being undertaken by 
such pillars of cooperative movement and equitable progress in their 
respective countries, like the DG Bank of Germany, Rabobank of the 
Netherlands, NACF/Nonghyup Bank of South Korea, Credit Agricole of 
France, Norinchukin Bank of Japan and NABARD of India. 
With access to institutional credit, the farmers and fishers who must 
be cooperative members of good standing, will be able to benefit from 
economies of scale in purchasing inputs and equipment for farming and 
fishing, avail themselves of modern technology, and access marketing 
networks for their produce. These will result in higher productivity and 
income for farmers and fishers, and lower prices for consumers. 
In view of the foregoing, the immediate consideration and passage 
of the Bill is earnestly requested. 
HON. LEODY “ODIE” F. TARRIELA 
Representative 
      Lone District, Occidental Mindoro 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
House Bill No. ____ 
INTRODUCED BY REPRESENTATIVE 
LEODY F. TARRIELA 
AN ACT 
CREATING THE 
MAHARLIKA COOPERATIVE 
AGRICULTURAL BANK OF THE PHILIPPINES, 
PROVIDING FUNDS THEREFOR, AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines 
in Congress assembled: 
Section 1. Short Title. – This Act shall be known as the “Maharlika Cooperative 
Agricultural Bank of the Philippines  of 2023”. 
Section 2. Declaration of Policy. – It is hereby declared the policy of the State 
to achieve food security, promote rural development, increase and sustain agricultural 
productivity, and advance the welfare of small farmers and fisherfolks by grant access 
to credit and financing. To this end, a bank catering exclusively to the credit and 
financing needs of small farmers and fisherfolks shall be created.   
Section 3. Creation of the MCABP. – There is hereby established a body 
corporate to be known as the " Maharlika Cooperative Agricultural Bank of the 
Philippines", which hereinafter referred to as "MCABP" or “Bank”, which shall have 
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its principal place of business in Metro Manila. The legal and corporate existence of 
the MCAPB shall be perpetual unless its articles of incorporation provides otherwise. 
The MCABP shall be subject to such rules and regulations as the Bangko Sentral ng 
Pilipinas (BSP) may from time to time promulgate. 
 
Section 4. Credit and Financing for Small Farmers. – The MCABP shall extend 
agriculture, fisheries and rural development financing  as used under "Sec. 4 of 
Republic Act No. 11901, otherwise known as the “Agriculture, Fisheries and Rural 
Development Financing Act of 2022”; however, such financing shall be exclusively 
extended for: (a) Agrarian reform beneficiaries under Presidential Decree No. 27, the 
Comprehensive Agrarian Reform Law and Republic Act No. 9700 or the 
"Comprehensive Agrarian Reform Extension with Reforms"; (b) Small farmers who 
own five (5) hectares of agricultural lands or less, or farmers, fisherfolks, farmworkers, 
fishworkers;  (c) Agricultural Lessee as defined under Section 3(e) of R.A. No. 11901; 
and/or (d)  agricultural workers who earn Two Hundred Fifty Thousand Pesos 
(Php250,000.00) or less, annually, which amount may be subject to change as may be 
determined by the Board of Directors of MCABP, as constituted under this Act.  
 
Section 5. Lower Loan Interest Rates. – The loans to be extended under the 
preceding Section shall be subject to interest rates lower than prevailing market rates 
and/or under more favorable terms and conditions, The Board of Directors shall set the 
loan interest rates, with reference and guidance from the BSP.    
 
Section 6. Capital - The authorized capital stock of the MCABP shall be Ten 
Billion Pesos (Php10,000,000,000.00) divided into One Billion (1,000,000,000) shares 


with a par value of Ten Pesos (Php10.00) each, which shall be fully subscribed and paid 
by the Government. Of the total capital subscribed by the Government, Five Billion 
Pesos (Php5,000,000,000.00) shall be paid by the Government within one year from 
the approval of this Code, and Two Billion  Five Hundred Million Pesos 
(Php2,500,000,000.00) every year thereafter for two years for which purpose the 
amount of Five Billion Pesos (Php5,000,000,000.00) is hereby appropriated upon the 
effectivity of this Code, and Two Billion Five Hundred Million Pesos 
(Php2,500,000,000.00), out of the funds from the National Treasury, not otherwise 
appropriated for the purpose for the next two years: Provided, That if there are not 
enough funds in the National Treasury for the appropriation herein made, the Secretary 
of Finance, with the approval of the President of the Philippines, may source funds from 
other available government sources. 
 
Section 7. Maharlika Investment Fund-- At least percent five (5%) of the total 
capital subscribed by the Government shall be subscribed and paid by the Maharlika 
Investment Fund (MIF). The MCABP Board, in concurrence with the Maharlika 
Investment Corporation (MIC) Board, may agree to increase the percentage of the 
capital stock paid and subscribed. 
 
Section 8. Powers in General - To carry out this main purpose, the MCABP 
shall have the following powers: 
 
(1) To prescribe, repeal, and alter its own by- laws, to determine its operating 
policies, and to issue such rules and regulations as may be necessary to achieve 
the main purpose for the creation of the MCABP; 


(2) To adopt, alter and use a corporate seal; 
(3) To acquire and own real and personal property, and to sell, mortgage or 
otherwise dispose of the same; 
(4) To sue and be sued, make contracts, and borrow money from both local and 
foreign sources. Such loans shall be subject to approval by the President of the 
Philippines and shall be fully guaranteed by the Government of the Philippines; 
(5) To hold, own, purchase, acquire, sell or otherwise invest, or reinvest in stocks, 
bonds or other securities capable of giving the SFABP a reasonably assured 
income sufficient to support its financing activities; and 
(6) To provide, free of charge, investment counseling and technical services to 
small farmers and fisherfolks; and 
(7) To act as an official government depository with full authority to maintain 
deposits of the government, its branches, subdivisions and instrumentalities, and 
of government-owned or controlled corporations which deposits shall be subject 
to liquidity floor and/or reserve requirements as may be imposed by the 
Monetary Board upon other commercial banks. 
All capital stocks originally subscribed  by the Government and sourced from National 
Treasury Funds under Sec. 6 of this Act shall not be entitled to earn dividends, whether 
in the form of cash or stock dividends or otherwise. 
 
Section 9. Issuance of Bonds - The SFABP shall, upon recommendation by the 
Board of Directors and approval of the Monetary Board of the Bangko Sentral ng 
Pilipinas, issue bonds, debentures and other evidences of indebtedness at such terms, 
rates and conditions as the SFABP may determine up to an aggregate amount not 
exceeding, at any one time, five times its unimpaired capital and surplus. Such bonds 


and other obligations shall be secured by the assets of the SFABP and shall be fully tax 
exempt both as to principal and income. These bonds and other obligations shall be 
fully negotiable and unconditionally guaranteed by the Government of the Philippines 
and shall be redeemable at the option of the SFABP at or prior to maturity, which in no 
case shall exceed twenty-five years. These negotiable instruments of indebtedness shall 
be mortgageable in accordance with established banking procedures and practices to 
government institutions not to exceed sixty per centum of their face value to enable the 
holders of such bonds to make use of them in investments in productive enterprises. 
They shall also be accepted as payments for reparation equipment and materials. 
 
The Board of Directors shall have the power to prescribe rules and regulations 
for the registration of the bonds issued by the SFABP. 
 
Section 10. The Board of Directors; Membership; Per Diem. – The affairs and 
business of the SFABP shall be directed and its property managed and preserved by a 
Board of Directors consisting of nine (9) members to be composed of the (a) Secretary 
of Finance, as Chairman; (b) the President of the Bank who shall also serve as Vice-
Chairman; (c)the Secretary of Agrarian Reform; (d) the Secretary of Labor;(e) and the 
Secretary of Agriculture as ex officio members. The President of the Philippines shall 
also appoint (a)  two(2) members of the Board who shall represent the small farmers; 
and (b) two (2) members who shall represent small fisherfolk. 
 
The appointive members of the Board shall hold a term of office for one (1) year 
and shall continue to hold office until their successor shall have been appointed and 
qualified.  The Board shall convene as often as necessary to discharge its 


responsibilities properly, but shall meet at least once every two (2) weeks.  The Board 
may be convoked either by the Chairman or in his absence, the Vice-Chairman. 
 
The Chairman and the members of the Board shall receive per diem pursuant to 
and in accordance with the rules and regulations governing government-owned and 
controlled corporations. 
 
Section 11. Executive Officers: Compensation.  The President of the Bank shall 
appointed by the President of the Philippines.  His salary shall be fixed by the Board of 
Directors in accordance with the rules and guidelines of the Governance Commission 
for GOCCs (GCG). The President shall be assisted by Vice-Presidents as may be 
required, whose appointments  shall be approved and whose salaries shall be fixed by 
the Board of Directors in accordance with Section 14 of this Act.  
 
Section 12. Qualifications of Members – No person shall be elected or 
appointed director of the Bank unless he is natural born citizen of the Philippines, not 
less than thirty-five (35) years of age, of good moral character, and has attained 
proficiency, expertise and recognized competence in one or more of the following areas: 
banking, finance, economics, law, agriculture, agrarian reform, business management: 
Provided, further, that no current director, shareholder or employee of any other bank 
or financial institution shall be eligible for election or appointment as member of the 
Board of Directors of the Bank. 
 
Section 13. Committee on Investments - There shall be a Committee on 
Investments composed of three members.  The Committee on Investments shall be 


headed by the Secretary of Finance as Committee Chairman, while the two (2) other 
members shall come from the other ex-officio members, to be elected by the Board of 
Directors. The Committee on Investments shall recommend to the Board of Directors 
the corporations or entities from which the SFABP shall invest its assets and purchase 
shares of stock. 
 
The  SFABP shall not invest in any corporation, partnership or company 
wherein any member of the Board of Directors or of the Committee on Investments or 
his spouse, direct descendant or ascendant has substantial pecuniary interest or has 
participation in the management or control of the enterprise except with the unanimous 
vote of the members of the Board of Directors, excluding the member interested, in a 
joint meeting held for that purpose where full and fair information of the extent of such 
interest or participation has been adequately disclosed in writing and recorded in the 
minutes of the meeting: Provided, That such interested member shall not in any manner 
participate in the deliberations and shall refrain from exerting any pressure or influence 
whatever on any official or member of the SFABP  whose functions bear on or relate 
to the investment of the funds of the SFABP in the enterprise: Provided, further, That 
the total investment in any single corporation, partnership, company, or association 
shall not exceed five per centum of the total investible funds. 
 
Section 14. Personnel. -  The Board of Directors shall provide for an 
organization and staff of officers and employees of the Bank and upon recommendation 
of the President of the Bank, appoint and fix their remunerations and other emoluments, 
and remove such officers and employees: Provided, That the Board shall have exclusive 
and final authority to promote, transfer, assign or reassign personnel of the Bank, any 
provisions of existing law to the contrary notwithstanding. 


All positions in the Bank shall be governed by a compensation, position 
classification system and qualification standards approved by the Bank's Board of 
Directors based on a comprehensive job analysis and audit of actual duties and 
responsibilities  The compensation plan shall be comparable with the prevailing 
compensation plans in the private sector and shall be subject to periodic review by the 
Board no more than once every two (2) years without prejudice to yearly merit reviews 
or increases based on productivity and profitability ; provided that such system, 
standards, and compensation plan are also consistent with the rules and regulations of 
the GCG. It shall endeavor to make its system conform as closely as possible with the 
principles under  Republic Act No. 6758, or the Compensation and Position 
Classification Act of 1989. 
The Bank officers and employees, including all members of the Board, shall not 
engage directly or indirectly in partisan activities or take part in any election except to 
vote. 
No officer or employee of the Bank subject to the Civil Service Law and 
Regulations shall be removed or suspended except for cause as provided by law. 
 The Chairman of the Commission of Audit  (COA) shall be the ex-officio 
auditor of the SFABP and shall appoint a representative, who shall be the auditor in 
charge of the auditing office of the SFABP. The Auditor General shall, upon the 
recommendation of the auditor of the SFABP appoint or remove the personnel of the 
auditing office. The compensation, budget and operating expenses of the auditing office 
and the salaries and traveling expenses of the officers and employees thereof shall be 
fixed by the Board of Directors and paid by the SFABP notwithstanding any provision 
of law to the contrary. 
 


Section 15. Reportorial Requirements- The representative of the COA shall 
make a quarterly report on the condition of the SFABP to the President of the 
Philippines, to the Senate through its President, to the House of Representatives through 
its Speaker, to the Secretary of Finance, to the Auditor General and to the Board of 
Directors of the SFABP. The report shall contain, among other things, a statement of 
the resources and liabilities including earnings and expenses, investments, the amount 
of capital stock, surplus, reserve and profits, as well as losses, bad debts, and suspended 
and overdue paper carried in the books as assets of the SFABP, and personnel and 
workforce of the SFABP. 
 
Section 16. Auditing Rules and Regulations - The COA shall, with respect to 
the Bank, formulate improved and progressive auditing rules and regulations designed 
to expedite the operations of the SFABP and prevent the occurrence of delays and 
bottlenecks in its work. 
 
Section 17.Removal of Members- The President of the Philippines may, at any 
time, remove the Chairman or any member of the Board appointed by him if the interest 
of the SFABP so requires, for any of the following causes: 
(1) Mismanagement, grave abuse of discretion, infidelity in the conduct of 
fiduciary relations, or gross neglect in the performance of duties; 
(2) Dishonesty, corruption, or any act involving moral turpitude; and 
(3) Any act or performance tending to prejudice or impair the substantial rights 
of the government or any of the stakeholders of the Bank. 


Conviction of the Chairman or a member for a crime involving moral turpitude 
or carrying with it a penalty greater than arresto mayor shall cause the removal of such 
Chairman or member without the necessity of Presidential action. 
The Chairman or member may, in any of the above cases, be civilly liable for 
any damage that may have been suffered by the government or any of the stakeholders 
of the Bank.  
 
Section 18. Organization of SFABP - The Bank shall be organized within one 
(1) year from the date of effectivity of this Act. 
 
Section 19. Penalty for Violation of the Provisions of this Act - Any director, 
officer, employee or agent of the SFABP who violates or permits the violation of any 
of the provisions of this Act, or any person aiding or abetting the violations of any of 
the provisions of this Act, shall be punished by a fine not to exceed forty thousand pesos 
and/or by imprisonment of not more than five (5) years, at the discretion of the Court. 
 
Section 20.  Implementing Rules and Regulations. - The Department of Finance 
with the assistance of the Department of Agriculture and Bangko Sentral ng Pilipinas 
shall, within thirty (30) days from the effectivity of this Act, promulgate the rules and 
regulations necessary for the effective implementation of this Act. 
 
Section 21.  Separability Clause.  - If any provision or part hereof, is held 
invalid or unconstitutional, the remainder of the law or the provision not otherwise 
affected shall remain valid and subsisting. 
 


Section 22.   Repealing Clause.  - All laws, decrees, orders, rules and 
regulations, or parts thereof inconsistent with the provisions of this Act are hereby 
deemed repealed or modified accordingly. 
 
Section 23. Effectivity. – This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation.  
APPROVED.