Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session © wing

HOUSE BILLNO. 6735

Introduced by Representative Michael L. Romero

EXPLANATORY NOTE

LANDBANK was established on August 8, 1963 as part of the Agricultural
Land Reform Code as part of a program of land reform in the Philippines. It was
to help with the purchase of agricultural estates for division and resale to small
landholders and the purchase of land by the agricultural lessee. In 1965,
LANDBANK's by-laws were approved and its first board of trustees was formed,
with the Secretary of Finance as Chairman.

On October 21, 1972, Presidential Decree No. 27, signed by
President Ferdinand Marcos, emancipated all tenant farmers working on private
agricultural lands devoted to tice and com, whether working on a landed
estate or not. The system was implemented through a system
of sharecropping or lease-tenancy. LANDBANK was tasked to collect 15-year
land amortizations from beneficiaries at the cost of the value of the land plus six
percent interest per annum.

By 1973, LANDBANK was in financial distress. It lacked the resources and
the capital needed to implement the land reform programs and lacked the
structure to implement the programs efficiently. On July 21, Marcos signed
Presidential Decree No. 251 which revitalized the bank. The decree granted
LANDBANK a universal banking license (the first bank in the Philippines to be
issued such a license) with a social mission to spur countryside development. The


decree expanded LANDBANK's powers to include lending for agricultural,
industrial, homebuilding and home-financing projects and other productive
enterprises, as well as lending to farmers’ cooperatives and associations to
facilitate production, marketing of crops and acquisition of essential
commodities. LANDBANK was also required by the decree to provide timely and
adequate support in all phases involved in the execution of agrarian reform and
also increased its authorized capital to 3 billion pesos. It also became exempted
from all national, provincial, city and municipal taxes and assessments.

LANDBANK was reorganized in 1977 when it was divided into three sectors
to better assess the needs of its customers. It was divided into Agrarian, Banking
and Operations sectors to strengthen operations and ensure long-term viability.

In 1982, the Agricultural Credit Administration (ACA), established under
the same law as Landbank, was abolished and all its assets and functions
transferred to Landbank. ACA's function was to extend credit to small farmers.
Also in this year, Union Bank of the Philippines (UnionBank) was formed, with
LANDBANK having a 40-percent stake in the government-owned commercial
bank.

LANDBANK became the financial intermediary for the Comprehensive
Agrarian Reform Program (CARP) in 1988. It was also in that year that UnionBank
started a gradual privatization. The Aboitiz Group of Companies acquired
Landbank's 40% share of UnionBank then which it continues to own. LANDBANK
also became the third member of Expressnet, aninterbank network in
December 1991 but now a BancNet member.

On February 23, 1995, LANDBANK's charter was once again amended. Its
authorized capital was increased to nine billion pesos and it became an official
government depository. The number of members of the board of trustees was
also increased to nine. On August 25, 1998, Landbank's authorized capital was
once again increased to 25 billion pesos, and it then increased to 200 billion
pesos, affer the DBP-LANDBANK merger in 2016.

AFFILIATES AND SUBSIDIARIES

+ LBP Leasing Corporation

+ LBP Insurance Brokerage

+ LBP Resources and Development Corporation (former LB (LANDBANK) Realty
Development Corporation)


+ Masaganang Sakahan, Inc.
+ LBP Countryside Development Foundation, Inc.

CURRENT OPERATIONS
LANDBANK competes against the major banks such as Metrobank, BPI, Banco
de Oro and Philippine National Bank. In rural areas, depending on the situation,
it either competes against or complements rural banks.

On the other end of the spectrum, LANDBANK takes on a dual role with
the Development Bank of the Philippines, which is another government-owned
bank. It either competes against or works with DBP, depending on the situation
involved.

This House Bill seeks to foster the continuity and expansion of responsive financial
and support services to all our farmers and fisher folk.

i bil is earnestly requested.



Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 6735

Introduced by Representative Michael L. Romero

AN ACT

MANDATING THE LAND BANK OF THE PHILIPPINES (LBP) TO FOCUS

ON ITS CHARTER TO ALLOCATE SIXTY (60) PERCENT OF ITS TOTAL

LOAN PORTFOLIO IN SOLELY PROVIDING SUPPORT AND FINANCING
SERVICES FOR FARMERS AND FISHERFOLKS ALL OVER THE

COUNTRY, TO PROMOTE INCLUSIVE GROWTH AND IMPROVE THE
QUALITY OF LIFE ESPECIALLY IN THE COUNTRYSIDE THROUGH
THE DELIVERY OF INNOVATIVE SCHEMES, AND FOR OTHER
PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. DECLARATION OF POLICY - It is hereby a declared policy of the state
to provide comprehensive livelihood programs and schemes to all our farmers

and fisherfolks.

a. It shall hereby be a policy of the state to mandate the Landbank of the
Philippines (LBP) to allocate sixty (60) percent of its total loan portfolio for


the sustainability and development of our thirty (30) million farmers and
fisherfolks;

. It shall hereby be a policy of the state to provide sustainable livelihood
support for agricultural cooperatives and farmer/fisherfolk associations all
over the country;

. It shall hereby be a policy of the state to establish and create micro-
financing schemes for developmental purposes, irrigational requirements
of farmlands, seedling and fertilizer requirements;

|. It shall hereby be a policy of the state to provide short term working
capital funding for the sole usage of our farmers and fisherfolks; and

. It shall hereby be a policy of the state to promote financial and support

services in a successive and progressive manner.

SECTION 2. 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 3. 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.

SECTION 4. 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 5. 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 6. 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,