EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S E N A T E
S. B. No. 822
: Cf 
'• 
l -
' 
i ' .  :■ t.i 1>
*19 
JUL30 
A 9 :1 3
Introduced by Senator SONNY ANGARA
R E C ci. 
.• • 
___
AN ACT
STRENGTHENING THE PHILIPPINE CROP INSURANCE CORPORATION 
(PCIC), AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1467, 
AS AMENDED, OTHERWISE KNOWN AS THE CHARTER OF THE PHILIPPINE 
CROP INSURANCE CORPORATION
EXPLANATORY NOTE
The Philippines is primarily an agrarian country, with up to 32 percent (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 25.44% of 
the working population. It is equivalent to about 10 million of the 41.16 million total 
employed workers, based on the Philippine Statistics Authority's (PSA) 2018 Labor 
Force Survey1.
However, farmers and fisherfolk have remained the poorest among the basic 
sectors of the country, with poverty incidence higher by roughly 15% than the general 
population2. 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 to assist farmers and fisherfolk 
through the agricultural insurance 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 sector3.
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, aquaculture and fishery products, agroforestry crops and 
forest plantations; provide life and accident insurance to both farmers and fisherfolk;
' http://www.psa.gov.ph/content/2018-annual-labor-and-employment-status
2 Risks, Shocks, Building Resilience: Philippines, PIDS 2015-2016 Economic Policy Monitor, 2016.
3 ibid.


strengthen the financial capacity of the PCIC by mandating the Philippine Charity 
Sweepstakes Office (PCSO) to remit P5 million 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 provided financial security 
that farmers and fisherfolk really needs and deserves. In view of the foregoing, 
immediate approval of this bill into law is earnestly sought.
SONNY ANGARA


EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
3U.,. ir  r t.rT
s e n a J 5 p
S. B. No.
Introduced by Senator SONNY ANGARA
19 
JUL 30 
A 9 :1 3
RECt!. ...
AN ACT
STRENGTHENING THE PHILIPPINE CROP INSURANCE CORPORATION 
(PCIC), AMENDING FOR THE 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 o f Representatives o f 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 o f 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 pest infestations. [leMaHyy] [t]T he 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 ereps-without prejudice to the -inclusion of other]
14 
non-crop agricultural 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 
FISH ERFOLK, as the Board of Directors of the Corporation may determine.
1


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as
Such crop insurance shall cover, in every case, the cost of production inputs, 
the value of the farmer's OR FISHERFOLK'S own labor and those of the 
members of his household, including the value of the labor of hired workers, 
and a portion of the expected yield as the Board of Directors, in its 
discretion, decide to insure. Such insurance protection, however, shall 
exclude losses arising from avoidable risks emanating from or due to the 
negligence, malfeasance or fraud committed by the insured or any member 
of his immediate farm household or employee or the failure of the insured 
to follow proven farm practices.
"THE CORPORATION SHALL ALSO INSURE PROPERTIES AND 
FACILITIES W HICH ARE OWNED OR USED BY GOVERNMENT 
AGENCIES 
INVOLVED 
IN  
AGRI-FISHERY-FORESTRY 
PROJECTS/ACTIVITIES 
AND 
GOVERNMENT-FINANCED 
AGRI- 
FISHERY-FORESTRY 
PROJECTS. 
THE 
CORPORATION 
SHALL 
PROVIDE 
REINSURANCE 
COVERAGE 
TO 
AGRI-FISHERY- 
FORESTRY PROPERTIES AND FACILITIES UNDERWRITTEN BY 
PRIVATE AND GOVERNMENT INSURANCE COMPANIES.''
Sec. 2. Subsections 3.5 and 3.11 of Section 3 of Presidential Decree No. 1467, 
amended, are hereby further amended to read as follows:
"Sec. 3. Powers. -  The Corporation shall have the following powers:
"x X X
"3.5. 
To 
insure 
the 
[riee— produetien] 
CROPS 
of farmers 
AND 
FISHERFOLK against loss, damage and destruction caused by natural 
calamities such as typhoons, floods, drought, earthquake, volcanic 
eruptions, rodents, verm in[s], disease, insects and other pests; and to carry 
on any business necessary, related to, and expedient for the above 
purpose;
"x  X X
"3.11. To generate internal funds by floating bonds, [expansion to other] 
EXPANDING THE CORPORATION'S insurance lines and extending 
coverage 
to 
other 
areas 
of agriculture 
SUCH 
AS 
LIVESTOCK, 
AQUACULTURE, 
FISHERY, 
AGROFORESTRY, 
AND 
FOREST


1 
PLANTATIONS in order to address insurance needs of the target sector
2 
and to do and perform acts 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 Presidential Decree No. 1467, as amended, is hereby further
6 
amended to read as follows:
7 
"Sec. 5. Rate o f Premium and its Sharing. -  The rate of premium, as well
8 
as the allocated sharing thereof [b y-the] OF farmers, FISHERFOLK, [th e ]
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, That 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 
FARMLANDS 
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 unforeseen and unavoidable risks such as, but not limited to
25 
typhoons, droughts, outbreaks of pets and diseases: Provided, finally, 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 Presidential Decree No. 1467,
32 
as amended, are hereby 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 1, 1981 up to [ the approval of thts
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-period of ten (10)
8 
years from the approval of this-Aet], 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 com ings e f] [t]T h e  Philippine Charity
14 
Sweepstakes Office (PCSO) [ from its lotto operation shall bo earmarked for]
15 
SHALL CONTRIBUTE A YEARLY AMOUNT OF FIVE M ILLIO N  PESOS
16 
(P 5 ,0 0 0 ,0 0 0 ) FROM ITS  CHARITY FUND TO the Crop Insurance
17 
Program and said amount shall be directly remitted by the PCSO to the
18 
Corporation [ every six- (6) months] YEARLY until the [ omount of
19 
government subscription] UNRELEASED PREM IUM  
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 Presidential
22 
Decree No. 1467, as amended, 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 
(02,000,-0007000)] TEN B ILLIO N  PESOS (P 1 0 ,0 0 0 ,0 0 0 ,0 0 0 ) divided
26 
into 
[Fifteen— mtHion— (4S7OOO7OOO)] 
SEVENTY-FIVE 
M ILLIO N
27 
(7 5 ,0 0 0 ,0 0 0 ) 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 million (5;0007000)] TW ENTY-FIVE M ILLIO N  (2 5 ,0 0 0 ,0 0 0 )
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.


1 
"x X X
2 
"8.3. The additional common capital 
stock of [ One billion 
pesos
3 
(P1/000,0007000 )] SIX BILLIO N PESOS (P6/000,000,000) shall be fully
4 
subscribed by the Government and the necessary funds shall 
be
5 
appropriated by Congress unless otherwise provided by existing laws:
6 
Provided, That Congress shall provide, on an annual basis, [at least fifty
7 
percent (50% ) of]  the needed capital, until the authorized capital stock is
8 
fully paid up.
9 
"8.4. The preferred shares shall be entitled to a preference over common
10 
shares in any declaration of dividends. They shall also be given priority in
11 
the distribution of assets in the event of liquidation of the Corporation. They
12 
shall have the following specific features:
13 
"8.4.1. Preferred as to dividends at a minimum of [ six per cent (6% )] ONE
14 
AND ONE-HALF PERCENT (1 .5 % ) OR THE PREVAILING THREE
15 
HUNDRED SIXTY (360)-D AY TREASURY BILL RATE AT THE TIME
16 
OF DECLARATION OF DIVIDENDS, WHICHEVER IS  HIGHER;
17 
"x  X X
18 
"8.4.3. NON-Participating;
19 
"x X X
20 
"8.5. AT LEAST FIVE HUNDRED M ILLIO N  PESOS (P500,000/000) OF
21 
PREFERRED SHARES SHALL BE SUBSCRIBED AND PAID FOR BY
22 
THE LAND BANK OF THE PHILIPPINES. THE BALANCE OF [T]The
23 
preferred shares may be available for sale or to subscription by the general
24 
public."
25 
Sec. 6. Section 8-A of Presidential Decree No. 1467, as amended, is hereby
26 
amended to read as follows:
27 
"Sec. 8-A. RESERVE FUND FOR CATASTROPHIC LOSSES. -  A State
28 
reserve fund for catastrophic losses in the amount of Five hundred million
29 
pesos (P500,000,000) shall be created exclusively to answer for the
30 
proportion of all losses in excess of risk (pure) premiums under the
31 
Corporation's 
Crop 
Insurance 
Program 
for 
small 
farmers 
AND
32 
FISHERFOLK. THE FUND MAY BE INCREASED SUBJECT TO THE


1 
APPROVAL OF THE PRESIDENT. The Fund shall be administered by a
2 
government financial institution to be designated by the Corporation's Board
3 
of Directors. Such sum as may be necessary for the purpose shall be funded
4 
by the National Government through the annual General Appropriations Act
5 
starting the calendar year immediately following the approval of this Act
6 
and every year thereafter until the full amount is completed. The mechanics
7 
of claims against the [f]Fund and to what extent the Fund shall be liable
8 
shall be determined jointly by the financial institution administering the
9 
Fund, subject to the approval by the President."
10 
Sec. 7. Subsection 9.1 of Section 9 of Presidential Decree No. 1467, as
11 
amended, is hereby further amended to read as follows:
12 
"Sec. 9. Board o f Directors. -
13 
"9.1. The powers of the Corporation shall be vested in and exercised by a
14 
Board of Directors now composed of seven (7) members and made up of
15 
the following: the President of the Land Bank of the Philippines (LBP), the
16 
President of the Corporation, the [ Executive Director of the AgHeuttufat
17 
Credit Policy Council (ACPC)] SECRETARY OF THE DEPARTMENT OF
18 
AGRICULTURE (DA), a representative from the private insurance industry
19 
to be nominated by the Secretary of Finance and three (3) representatives
20 
from the subsistence farmers sector, preferably representing agrarian
21 
reform beneficiaries/cooperatives/associations coming from Luzon, Visayas
22 
and Mindanao, who shall be selected and nominated by the different
23 
farmers organizations and/or cooperatives. The respective nominees of the
24 
private insurance industry and the farmer's sector shall be submitted to and
25 
appointed by the President. The chairman of the Board of Directors shall be
26 
appointed by the President from among the members of the Board of
27 
Directors. The President of the Corporation shall also be appointed by the
28 
President and shall be ex officio vice chairman who shall assist the chairman
29 
and act in his stead in case of absence or incapacity. In case of absence or
30 
incapacity of both the chairman and the vice chairman, the Board of
31 
Directors shall designate a temporary chairman from among its members.
32 
Except for the President of the LBP and the [Execu tive Director of the ACPC]


1 
SECRETARY OF THE DA, all members of the Board of Directors, including
2 
the President of the Corporation, shall be appointed by the President within
3 
a reasonable period of time after the approval of this Act."
4 
Sec. 8. Separability Clause. -  If any portion or provision of this Act is
5 
subsequently declared invalid or unconstitutional, other provisions hereof which are
6 
not affected thereby shall remain in full force and effect.
7 
Sec. 9. Repealing Clause. -  All other laws, acts, presidential decrees, executive
8 
orders, presidential proclamations, issuances, rules and regulations, or parts thereof
9 
which are contrary to or inconsistent with any of the provisions of this Act are hereby
10 
repealed, amended, or modified accordingly.
11 
Sec. 10. Effectivity. -  This Act shall take effect fifteen (15) days after its
12 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,