Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
19TH CONGRESS 
First Regular Session 
HOUSE BILL NO. ___ 
Introduced by Representative Michael L. Romero 
    EXPLANATORY NOTE
The State recognizes the mandatory credit allocation in favor of 
agricultural and rural sector specially on government’s land distribution 
program and reform beneficiaries as a priority sector for credit extension. The 
Republic Act 10000 was introduced with a broader mission to promote rural 
development by enhancing access of the rural agricultural sector to financial 
services and programs that increase market efficiency.  
The poor are in the worse situation as deliverance has been elusive due to 
failure of the market to allocate resources in an equitable manner. The passage 
of the original decree and its subsequent version emerged from the need on the 
part of the government to intervene and help address this wealth and income 
disparity by mandating banks to lend to agriculture where financing is most 
needed. Thus, our country’s agricultural landscape is characterized by a 
multitude of small farmers cultivating a hectare on the average. Majority of them 
are unable to earn enough as advanced farming technologies are inaccessible to 
them and their financial requirements to boost productivity are often un-served. 
This House Bill seeks to provide for a comprehensive Agricultural and Rural 
Financing System. 
Thus, the early passage of this bill is earnestly requested. 
MICHAEL L. ROMERO 
August 4, 2022
4:40 pm
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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
19TH CONGRESS 
First Regular Session 
HOUSE BILL NO. ___ 
Introduced by Representative Michael L. Romero 
    AN ACT 
PROVIDING FOR A COMPREHENSIVE AGRICULTURAL AND 
RURAL FINANCING SYSTEM, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
CHAPTER I 
GENERAL PROVISIONS 
SECTION 
1. 
DECLARATION OF POLICY – It is hereby a declared 
policy of the state to create legislation that shall foster the principle of enhancing 
farmers’ access to financial services including other factors in the agriculture 
value chain.    
The state shall strengthen rural development by providing for a holistic 
approach that takes into account the broader agricultural financing ecosystem 
and rural community development requirements. 
SECTION 
2. 
SYSTEM : 
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a) The amount the non-compliant banks may invest in the equity 
structure of accredited Rural Financial Institutions (RFIs) is up 
to the level of penalties computed per reporting cut-off period;     
 
b) The equity investment is in the form of Tier 1 Preferred Shares 
which will be included as part of qualifying capital in the 
computation of Capital Adequacy Ratio (CAR); 
 
c) The amount of RA10000 Preferred Shares an RFI can accept 
from non-compliant banks is up to the limit of the amount of 
its excess compliance.  
 
d) In the event the aggregate investments exceed the amount of 
excess compliance per reporting cut-off the RFI must advise 
the lasts of its RA10000 investors to divest and place their 
investment in other qualified RFIs;  
 
e) The same eligibility requirements to qualify for accreditation 
as Rural Financial Institution (RFI) under RA10000 will apply; 
 
f) The same grounds for revocation of RFI accreditation will 
apply; and 
 
g) Once its accreditation is revoked, the concerned bank must 
advise its RA10000 investors to divest and place their 
investment in other qualified RFIs. 
 
SECTION 
3. 
FRAMEWORK : 
a) Unrestricted branching rights to set-up agriculture-oriented 
branches and exemption from payment of branch licensing 
fees 
in 
unbanked 
municipalities 
or 
predominantly 
agricultural communities subject to existing regulations on 
minimum capitalization for banks and the size of branch 
network; 
 
b) Automatic eligibility with Philippine Guarantee Corporation 
(with respect to agricultural credit guarantee), Philippine Crop 
Insurance Corporation (PCIC), Agricultural Credit and Policy 
Council (ACPC) and other governmental agencies providing 
services towards risk-mitigation in the agriculture sector. 
(Note: immediate crediting of funds equivalent to approved 


guarantee line in favor RFI’s deposit account with restricted 
utilization subject to claims evaluation);    
 
c) Priority status as credit delivery partner or conduit of 
government directed programs for agriculture, social housing, 
livelihood/ enterprise development and other initiatives 
towards inclusive growth through the Department of 
Agriculture, Department of Social Work Development, LGUs 
and other government agencies; 
 
d) Grant of “risk premium” in order to defray the higher cost of 
administering 
loans 
to 
small 
farmers 
and 
micro-
entrepreneurs and the cost of risk of default arising from 
vulnerability of farm production and microenterprises to 
adverse natural factors and unfavorable market forces. 
(premium shall be in the form of 50% reduction of the prevailing 
rediscounting rate of these government financial institutions) 
 
e) Eligibility for regulatory relief from the Bangko Sentral ng 
Pilipinas (BSP) and other regulatory agencies, for a period of 
one year from the time of occurrence of a natural or human-
induced calamity; 
 
f) Act as official depository of municipal, city, provincial or 
GOCC funds in the municipality, city, and province where the 
rural bank is located in areas where there are no government 
banks; and 
 
g) Entitlement to participate free of charge in capability-building 
activities in agriculture lending such as, but not limited to, 
exchange of best-practice experiences, study tour, technology 
transfer among ASEAN member`s states and other forum of 
international cooperation. 
 
 
CHAPTER II 
 
 
 
 
 
  FUNDING 
 
SECTION 
4. 
APPROPRIATIONS — The amount necessary to carry 
out the purposes of this Act shall be included in the General Appropriations Act 
(GAA) of the year following its enactment into law. 


The state shall hereby authorize the Department of Agriculture (DA) to re-
align its appropriations, in the current year of the date of the effectivity of this 
Act to conform with its mandate and requirements. 
  
CHAPTER III 
 
 
 
 
SUPPLETORY PROVISIONS 
SECTION 
5. 
ROLE OF THE DA – The Department of Agriculture, 
shall be primarily responsible on matters involving the threats against the 
effective implementation of this Act.  
The DA shall, through information gathering and performance of its 
functions, support this comprehensive agricultural and rural financing system 
on matters involving operational and organizational concerns. 
SECTION 
6. 
TRANSITORY 
PROVISION – 
Existing 
industries, 
businesses and offices affected by the implementation of this Act shall be given 
six (6) months transitory period from the effectivity of the IRR or such other 
period as may be determined, to comply with the requirements of this Act. 
SECTION 
7. 
IMPLEMENTING RULES AND REGULATIONS. – The 
departments and agencies charged with carrying out the provisions of this Act 
shall, within sixty (60) days after the effectivity of this Act, formulate the 
necessary rules and regulations for its effective implementation. 
 
   CHAPTER IV 
 
 
 
 
MISCELLANEOUS PROVISIONS 
SECTION 
8. 
REPEALING CLAUSE. – All laws, decrees, executive 
orders, rules and regulations, or parts thereof inconsistent with the provisions 
of this Act are hereby repealed or modified accordingly. 


SECTION 
9. 
SEPARABILITY CLAUSE. – If, for any reason, any 
section or provision of this Act is held unconstitutional or invalid, the other 
sections or provisions hereof shall not be affected thereby. 
SECTION 
10. 
EFFECTIVITY CLAUSE. – This Act shall take effect 
after fifteen (15) days from its publication in the Official Gazette or in at least two 
(2) national newspapers of general circulation whichever comes earlier. 
 
Approved,