Republic of the Philippines

nose or pepresentatives [3 RECEIVED
Quezon City are: APR 25 2017
SEVENTEENTH CONGRESS
First Regular Session
House Bill No 5486

Introduced by Representatives Peter “Sr. Pedro” M. Unabia,
Jocelyn S. Limkaichong, Ruwel Peter Gonzaga, Rodrigo A. Abellanosa,
Gil “Kabarangay” P. Acosta, Marisol C. Panotes, Carlito S. Marquez,
Jennifer Austria Barzaga, Rolando “Klarex” A. Uy, Teodoro G. Montoro,
‘Anna Marie Villaraza-Suarez and Anthony M. Bravo, Ph.D.

EXPLANATORY NOTE

‘Access to timely and affordable credit of farmers, fisherfolk and micro,
small and medium enterprises (MSMEs) engaged in agriculture and fisheries,
is the key to increasing agricultural productivity and food production.
However, credit access remains limited. This despite the government's
mandatory requirement of allocating 25% of their loanable funds to
agriculture and agrarian reform beneficiaries (RA 10000) and the existence of
‘number of government-funded lending programs for small farmers and
fisher folk. Government lending programs, under the AFMA credit
framework (RA 8435), are implemented through banks and other financing
institutions (such as the Land Bank of the Philippines, rural and cooperative
banks, cooperatives, and microfinance NGOs), _ which have
stringent requirements, long processing periods, and high interest rate
charges.

‘There is, therefore, a need to enact a law which would create a lending
facility that would provide farmers, fisherfolk and MSMEs engaged in
agriculture fisheries adequate, affordable, and timely credit for their farming,
fishing and agri-related activities, and establish the Agricultural Credit
‘Authority of the Philippines (ACAP), which is mandated to provide direct
lending to. small farmers, fisherfolk and MSMEs engaged in
agriculture /fisheries.

In view of the foregoing, the immediate passage of this bill is e: tly

*


RODRIGO A. ABELLANOSA

ennai ak

S. MARQUEZ JENNIFER AUSTRIA BARZAGA

ROLANDO “KLAREX” A. UY 0 G. MONTORO

ANNA MARIE VILLARAZA-SUAREZ ANTHONY ;RAVO, PH.D.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

5486

House Bill No.

Introduced by Representatives Peter “Sr. Pedro” M. Unabia,
Jocelyn S. Limkaichong, Ruwel Peter Gonzaga, Rodrigo A. Abellanosa,
Gil “Kabarangay” P. Acosta, Marisol C. Panotes, Carlito S. Marquez,
Jennifer Austria Barzaga, Rolando “Klarex” A. Uy, Teodoro G. Montoro,
Anna Marie Villaraza-Suarez and Anthony M. Bravo, Ph.D.

AN ACT
UNIFYING ALL EXISTING AGRICULTURAL CREDIT PROGRAMS FOR
THE FARMERS, FISHERFOLK AND MICRO, SMALL AND MEDIUM
ENTERPRISES (MSMEs) ENGAGED IN AGRICULTURE AND FISHERIES,
CREATING THE FARMERS AND FISHERFOLK QUICK CREDIT
PROGRAM, ESTABLISHING THE AGRICULTURAL CREDIT AUTHORITY
OF THE PHILIPPINES (ACAP), AND PROVIDING FUNDS THEREFOR, IN
ORDER TO PROMOTE THE DEVELOPMENT OF ENTREPRENEURSHIP IN
THE AGRICULTURE AND FISHERIES SECTORS

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 "Farmers,
Fisherfolk and MSMEs Engaged in Agriculture/ Fisheries Quick Credit Act of
2017."

SEC. 2. Declaration of Policy. - It is hereby declared the policy of the
State to increase agricultural productivity and food production in the
countryside through the provision of adequate, affordable, and timely credit
to small farmers and fisherfolk, including the micro, small, and medium

enterprises engaged in agriculture and fisheries.


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SEC. 3. Definition of Terms. - For purposes of this Act, the following
terms are herein defined:

a) "Agricultural Sector" refers to the sector engaged in the cultivation of the
soil, planting of crops, growing of fruit trees, raising of livestock, poultry,
or fish, including the harvesting and marketing of such farm products, and
other farm activities and practices;

b) "Department" refers to the Department of Agriculture;

©) "Fisheries Sector’ refers to the sector engaged in the production, growing,

harvesting, processing, marketing, developing, conserving, and managing
of aquatic resources and fisheries areas;

d) "Small Farmers and Fisherfolk" refers to natural persons dependent on
small-scale subsistence farming and fishing activities as their primary
source of income. Small crop growers are actual tillers of agricultural land
of not more than 3 hectares. Small fisherfolk includes: (i) those who own
or operate fishing boats and paraphernalia with a capacity of not more
than 3 gross tons; (ii) those whose fishing activities are within 25 kilometer

radius from the shoreline; (iii) owners or operators of not more than 5

hectares of fishpond; and (iv) workers of fishponds and fishing boats.
°)

"Micro, Small, and Medium Enterprise (MSME) in agriculture-related
business activities” refers to any business activity or enterprise engaged in
agribusiness and/or services related to agriculture, whether single
proprietorship, cooperative, partnership or corporation whose total assets,
inclusive of those arising from loans but exclusive of the land on which the
particular business entity's office, plant and equipment are situated, must
have value falling under the _—following —_categories:
(i) Micro - not more than 3,000,000; (ii) Small - 23,000,001 to
15,000,000; (iii) Medium - P15,000,001 to 2100,000,000.

SEC. 4. Creation of the Farmers and Fisherfolk Quick Credit Program. -
A lending facility to be called the Farmers and Fisherfolk Quick Credit Program
(FFQCP) is hereby created to provide small farmers, fisherfolk and MSMEs in
the agriculture and fisheries sectors direct, adequate, affordable, and timely
credit for their farming and fishing activities. FFQCP loan shall be provided


with no collateral, at a low interest rate and with minimal documentary/
identification requirements.

All existing agricultural credit programs, including the remaining loan
funds from the terminated programs, shall be unified/consolidated into the
FFQCP.

‘The FFQCP shall provide loans for the requirements for agricultural and
fisheries production, processing and trading, working capital, other
agricultural livelihood and agri-based enterprise projects of the small farmers
and fisherfolk, cooperatives, farmers’ /fisherfolk’'s organization, and MSMEs
engaged in agriculture and fisheries.

The FFQCP shall provide grant/financing assistance for the relief and
rehabilitation of small farmers, fishers and MSMEs engaged in
agriculture /fisheries affected by calamities/fortuitous events. The FFQCP
shall likewise provide grants and other subsidies for the education, institution
capacity building activities, and training of small farmers, fisherfolk and
MSMEs engaged in agriculture/fisheries, and their organizations on credit
awareness, loan acquisition, loan repayment, and on financial literacy.

SEC. 5. Termination of Agreements and Transfer of Resources. - Upon
the effectivity of this Act, all agreements providing for the administration and
implementation of previously created agricultural credit programs which are
herein being directed to be transferred to the FFQCP shall be deemed
terminated, and all government agencies concerned and partner financial
institutions, shall take steps, in no case later than three (3) months from
effective date hereof, for the smooth and expeditious transfer to the FFQCP of
said funds, as well as all assets and liabilities of such funds, and other
resources.

Upon the transfer of the said funds to the FFQCP, the Secretary of DA
shall assume all rights and obligations pertaining to the administration of the
funds transferred to the FFQCP: Provided, That the termination of the various
agreements shall not affect the obligations incurred by third parties, which
obligations shall continue to be in force and effect until such time that such
obligations are fully liquidated.


Funds involved in foreign-assisted projects may be transferred to the
FFQCP subject to negotiations with the respective foreign institutions
concerned.

SEC. 6. Revolving Fund of FFQCP. - Php 50 Billion shall be initially
appropriated for the use of the FFQCP. In addition, the remaining cash
balance from the consolidated credit programs shall also form part of the
FFQCP Fund. Collections from receivables under the
consolidated /terminated /pre-terminated credit programs and sourced from
the General Appropriations Act (GAA) for FFQCP shall accrue to the FFQCP
Fund. Likewise, all interest earnings shall be reverted to the FFQCP fund. The
FFQCP Fund shall be treated as a revolving fund and shall no longer pass
through the budgetary process. The FFQCF Fund shall be kept and deposited
in a designated authorized government depository bank.

SEC. 7. Creation of the Agricultural Credit Authority of the Philippines
(ACAP). - The Agricultural Credit Authority of the Philippines (ACAP),
hereinafter referred to as the “ACAP”, an agency to be governed by a Board, is
hereby established to replace the Agricultural Credit Policy Council (ACPC),
to administer and implement the Farmers and Fisherfolk Quick Credit Program
(FFOCP), a direct credit facility. The ACAP is authorized to lend directly to
the small farmers, fisherfolk and MSMEs engaged in agriculture /fisheries
and/or their organizations. The assets and other resources including the
manpower complement of the ACPC shall be transferred to the ACAP.

SEC. 8. Principal Office. - The ACAP shall maintain its principal office
in the Metro Manila area but it may establish branches or agencies within the
Philippines as may be necessary for the proper conduct of its operations.

SEC. 9. The ACAP Governing Board and Officers. - The Governing Board
shall be composed of: The Secretary, Department of Agriculture as Chairman;
the Administrator, ACAP and the Secretary, Department of Agrarian Reform
as Vice-Chairpersons; the Secretary, Department of Environment and Natural
Resources; the Secretary, Department of Budget and Management; the
Secretary, Department of Finance; one Farmer Sector Representative, and one
Fisherfolk Sector Representative, as members.


The Governing Board shall appoint an Administrator of the ACAP. The

Administrator shall implement the programs, projects and decisions of the
Board.

SEC. 10. Powers and Duties of the ACAP Governing Board. - The

Governing Board shall have the following powers and duties:

a)

b)
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4)
e)

To provide direction and formulate policies on the implementation of
the FFQCP;

To approve the annual budget of ACAP;

To approve programs and other projects to be financed under the
FFQCP;

To monitor the over-all performance of the program; and

To call on any instrumentalities of the Government for assistance and
support in the form of human, technical and financial resources toward
the attainment of the policy of the State.

SEC. 11. Powers and Duties of the Administrator of ACAP. - The

Administrator of the ACAP shall have the following powers and duties:

a)

b)

°)

d)

e)

h)

To oversee and implement the FFQCP;

To lend directly to small farmers, fisherfolk and MSMEs engaged in
agriculture/fisheries and/or their organizations using the FFQCP
Fund;

To administer, direct, and manage the implementation of the policies of
the Governing Board;

To act on issues or concerns relative to the program implementation;
To maintain a management information system on its clients consisting
of farmers, fisherfolk and MSMEs engaged in agriculture /fisheries;

To devise monitoring and evaluation system, including collection
strategies, for the program;

To conduct information dissemination campaigns on the credit facility
among farmers, fisherfolk and MSMEs engaged in agriculture /fisheries;
To conduct policy research studies, and other rural finance
empowerment activities;

To prepare the annual budget of ACAP;


j) To receive all reports and documents of all programs with agricultural
credit and financing components;

k) To enter into, make and execute contracts of any kind as may be
necessary or incidental to the attainment of ACAP and FFQCP’s
purposes and, generally, to exercise all the powers necessary to achieve
the purposes and objectives for which ACAP is organized;

}) To undertake measures of increasing FFQCP fund base;

m) To establish the internal organization of the ACAP and fix the salaries
and the remunerations, emoluments, allowances and other fringe
benefits of its officers and employees, subject to the provisions of
pertinent compensation law and regulations;

n) To establish or cause the establishment of branches or agencies, within
the Philippines, whenever deemed necessary by the Board;

0) To create and establish, a "Provident Fund" which shall consist of
contributions made both by the ACAP and its officers and employees to
common fund for the payment of retirement and other benefits to such
officers and employees or their heirs under such terms and conditions
as the Board may fix; and

p) To exercise such other powers as may be necessary and proper for the
effective enforcement of this law and the implementing rules and
regulations.

SEC. 12. Agricultural Insurance Coverage. - All FFQCP loans shall be
covered by the Philippine Crop Insurance Corporation.

SEC. 13. Use of Registry of Farmers, Fisherfolk and MSMEs Engaged in
Agriculture/ Fisheries. - FFQCP loans shall only be provided to small farmers,
fisherfolk and MSMEs engaged in agriculture /fisheries listed in an authorized
census or registry by the government. The governance and updating of a
registry system for farmers, fisherfolk and MSMEs engaged in
agriculture/fisheries shall be the responsibility of the Department of
Agriculture.

SEC. 14, Annual Appropriation. - The Department of Budget and
Management (DBM) is hereby mandated to include annually, in the
President's Program of expenditures for submission to Congress, and release,

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an amount proposed by the Department of Agriculture for the implementation
of this Act. The DBM shall expedite the approval of the staffing pattern of the
‘ACAP, not later than thirty (30) days from the effectivity of this Act.

SEC. 15. Operating Fund of the ACAP. - As operational funds, interest
earnings of the FFQCP Fund shall be used to augment the operating budget
of ACAP under the General Appropriations Act. Five percent (5%) of the
interest earnings shall be set aside annually for institution capacity building
activities to strengthen the small farmers, fisherfolk and MSMEs engaged in
agriculture/ fisheries, and their organizations.

SEC. 16. Implementing Rules and Regulations. - The Department of
Agriculture shall, within ninety (90) days after the effectivity of this Act,
prepare and issue the necessary policies, rules and regulations, and
guidelines to implement this Act.

SEC. 17. Automatic Review. - Every five (5) years after the effectivity of
this Act, an independent review panel, composed of experts to be appointed
by the Secretary of the Department of Agriculture, shall review the policies
and programs relevant to this Act and shall make recommendations, based
on its findings, to the President and to both Houses of Congress.

SEC. 18. Penalty for Delinquent Borrowers. - A farmer, fisherfolk or
MSME engaged in agriculture /fisheries borrower or its organization that fails
to pay the loan availed from FFQCP after being given re-structuring or re-
financing plans based on merit shall be blacklisted from the program.

SEC. 19. Repealing Clause. - All laws, decrees, executive issuance,
rules and regulations inconsistent with this Act are hereby repealed or
modified accordingly.

SEC. 20. Separability Clause. - The provisions of this Act are hereby
declared to be separable, and in the event one or more of such provisions are
held unconstitutional, the validity of the other provisions shall not be affected
thereby.

SEC. 21. Effectivity. - This Act shall take effect thirty (30) days from
the date of its publication in the Official Gazette or in at least two (2)
newspapers of general circulation.

Approved,