,~tlll\h 
SIXTEENTH CONGRESS OF THE 
) 
{0Hlfl' {If Hllr ;ft.r'CH·tMU 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
'13 
JUL 30 P3 :;Zl 
SENATE 
1176 
S.NO. ____ _ 
Introduced by Senator Antonio "Sonny" F. Trillanes IV 
EXPLANATORY NOTE 
The fundamental precept of social justice is that "those who have less in life must have more in 
law." Social justice commands the protection by the state, as well as its forgiveness to the less 
fortunate members of the society. In cognizance of the above principle, this measure seeks 
legislative relief for the farmers, fisherfolks and agrarian reform beneficiaries by way of 
condonation of the unpaid interests, penalties and surcharges incurred by their loans secured 
from government agencies and agricultural financial institutions. 
This measure provides for the following conditions: 
• 
Among those to be covered by the condonation program are those loans incurred from the Department Of 
Agrarian Reform (DAR), Department Of Agriculture (DA), People's Credit And Finance Corporation 
(PCFC), Cooperative Development Authority (CDA), National Food Authority (NFA) and Quedan And 
Rural Credit Guarantee Corporation (QUEDANCOR). 
• 
The bill covers those applicants who have an accumulated payment of not less than 5% of the principal at 
the time of application for condonation. 
• 
Justifications that would merit loan condonation will be limited to force majeure, market aberration. The 
benefits will not be extended to persons who are willfully defaulting on loan payments; 
• 
The period of payment of the restructured loan shall be determined according to the financial capacity of 
the borrowers upon the approval of the application. Such approval for application for loan condonation 
shall serve as the basis for the concerned agencyicorporation to write off the unpaid interests, penalties 
and surcharges condoned. 
This bill was approved on third and final reading by the House of Representatives but failed pass 
the legislative mill of the Senate during the 15th Congress. It is hoped that the passage of this 
measure will pave the way for the reintegration into the financial and banking system of 
agricultural sector by giving them access to new and additional government credit programs. 
In view of the foregoing, immediate approval of this measure is earn tly s\gh{L-----
Y~ILLANES IV 
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j:(~n-<1tl' 
SIXTEENTH CONGRESS OF THE 
) 
/ OfHt,;r Hf H;r 1't",:ndMll 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
'13 
JULJO P 3 :21 
. 
SENATE 
11.76 
S.NO. ____ _ 
REC1I' 
:: 1;;Y:_~ 
Introduced by Senator Antonio "Sonny" F. Trillanes IV 
AN ACT 
PROVIDING FOR THE CONDONATION OF UNPAID INTERESTS, PENALTIES AND 
SURCHARGES ON LOANS SECURED BY FARMERS, FISHERFOLKS AND 
AGRARIAN REFORM BENEFICIARIES FROM THE DEPARTMENT OF AGRARIAN 
REFORM (DAR), THE DEPARTMENT OF AGRICULTURE (DA), THE PEOPLE'S 
CREDIT 
AND 
FINANCE 
CORPORATION 
(PCFC), 
THE 
COOPERATIVE 
DEVELOPMENT AUTHORITY (CDA), THE NATIONAL FOOD AUTHORITY (NFA) 
AND THE QUEDAN AND RURAL CREDIT GUARANTEE CORPORATION 
(QUEDANCOR) 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
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SECTION 1. Title. - This Act shall be known as the "Agrarian and Agricultural Credit 
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Condonation Act of 2013". 
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SEC. 2. Declaration of Policy. -The State shall promote comprehensive rural 
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development and agrarian reform through the provision of measures that will release farmers, 
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fisherfolks and agrarian reform beneficiaries from their bondage to debts. Towards this end, it 
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shall be the objective of the State to provide farmers, fisherfolks and agrarian reform 
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beneficiaries the opportunity to regain access to govermnent and commercial credit facilities 
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through the condonation of unpaid interests, penalties and surcharges on their existing loans 
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obtained through government lending programs and their eventual restructuring. 
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SEC. 3. Definition of Terms. - For the purpose of this Act, the following terms shall be 
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defined as follows: 
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(a) Agrarian reform beneficiaries refer to farmers who were granted 
lands under 
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Presidential Decree No. 27, known as the Comprehensive Agrarian Reform Law and 
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Republic Act No. 9700 or the Comprehensive Agrarian Reform Law Extension with 
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Reforms, and other existing agrarian refonn laws and regular farmworkers, 
irrespective of tenurial arrangement who benefited from the redistribution oflands. 
(b) Agricultural and agrarian reform credit refers to loan activities and purposes 
including, but not limited to, agricultural production; promotion of agribusiness and 
exports; acquisition of work animals, farm equipment and machinery, seeds, 
fertilizers, poultry, livestock, feeds and other similar items; construction, acquisition 
and repair of facilities for production, proc~ssing, storage and marketing, and such other 
facilities in support of agricultural and farm commodities. 
(c) Condonation refers to the relief granted by law in the payment of unpaid interests, 
penalties and surcharges. 
(d) Delinquent borrower refers to the borrower with at least three (3) consecutive unpaid 
amortizations or whose total unpaid amortizations reaches twenty percent (20%) of 
the total outstanding balance of the loan regardless of the number of unpaid 
amortizations as of the effectivity of this Act. 
(e) Farmer refers to any natural person whose primary livelihood is the cultivation of 
land or the production of agricultural crops, livestock and agricultural products, either 
by himself or primarily with the assistance of his immediate farm household or 
workers, whether the land is owned by him or by another person, under a leasehold 
agreement or other similar arrangements. 
(f) Fisherfolk refers to people directly or personally and physically engaged in taking 
and/or culturing and processing fishery and/or aquatic resources. 
(g) Force majeure refers to events whether natural or political, beyond the reasonable 
control and incurred not as a result of the negligence or willful act of the delinquent 
borrower, which has a material adverse effect on hislher ability to pay its obligation. 
(h) Market aberrations refer to unusual adverse movements in market prices which have 
detrimental effects on the yield and income of farmers, fisherfolks and agrarian 
reform beneficiaries. 
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(i) Loan restructuring refers to a process where the principal tenns and conditions of the 
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original loan are modified in accordance with an agreement setting forth a new plan 
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or schedule of payment. 
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SEC. 4. Condonation. - All unpaid interests, penalties and surcharges of agricultural and 
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agrarian refonn credit secured by fanners, fisherfolks and agrarian refonn beneficiaries from the 
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Department of Agrarian Refonn (DAR), the Department of Agriculture (DA), the People's Credit 
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and Finance Corporation (PCFC), the Cooperative Development Authority (CDA), the National 
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Food Authority (NFA), and the Quedan and Rural Credit Guarantee Corporation 
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(QUEDANCOR) prior to the effectivity of this Act are hereby condoned upon approval of the 
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application for condonation of a borrower qualified under this Act: Provided, That the basis for 
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the condonation shall be limited to force majeure or market aberration and shall, in no case, be 
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applied for the willful default of the borrower to pay such loans: Provided, further, That 
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accnrnulated payments of not less than five percent (5%) of the loan principal shall have been 
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paid at the time of application for condonation: Provided, furthermore, That, to encourage 
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borrowing discipline and enhance credit worthiness, a graduation process shall be followed in 
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consonance with the plan of payment such that a borrower shall only be granted a one-time 
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condonation: Provided, finally, That the condonation of unpaid interests, penalties and 
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surcharges from loans acquired through conduit banks and financial institutions shall be in 
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confonnity with the applicable general banking, laws and regulations of the Bangko Sentral ng 
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Pilipinas (BSP). 
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SEC. 5. Coverage of Condonation Program. - The following accounts are covered by 
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the condonation program: 
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(a) Agricultural and agrarian refonn credit secured through the Credit Assistance 
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Program - Program Beneficiaries Development of the DAR; 
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(b) Agricultural and agrarian refonn credit secured through the tenninated credit program 
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schemes of the DAR, i.e., Dutch Rural Development Assistance Progrannne 
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(DRDAP); DAR Direct Lending Financing Program (DDLFP); DAR Special Projects 
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Office (SPO) Direct; lmd DAR-DBP SPO Window III Financing Program for 
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agrarian refonn beneficiaries; 
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(c) Resettlement Loan Assistance Program of the DAR for individual agrarian reform 
beneficiaries; 
(d) Agricultural credit secured through the High Yield Crop Loan Assistance Program of 
theDA; 
( e) Agricultural credit secured through Microfinance Program for small fanners and 
fisherfolks and the household of the PCFC; 
(f) Cooperative Development Loan Fund of the CDA; 
(g) Fanners Level Green Center of the NFA; and 
(h) CARP-Barangay Marketing Center (CARP-BMC) of the QUEDANCOR. 
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SEC. 6. Qualified Beneficiaries. - Delinquent fanners, fisherfolks or agrarian reform 
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beneficiaries who secured agricultural and agrarian reform credit under any of the accounts 
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enumerated in Section 5 of this Act may apply for condonation of unpaid interests, penalties and 
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surcharges with the concerned government agency or corporation. 
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SEC. 7. Approval of Applications for the Condonation of Unpaid interests, Penalties and 
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Surcharges, and Loan Restructuring. - The government agency or corporation managing the 
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accounts enumerated in Section 5 hereof shall review and approve an application for 
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condonation and restructuring of the loan balance. The period for payment of the restructured 
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loan shall be determined according to the financial capacity of the fanners, fisherfolks and 
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agrarian reform beneficiaries upon the approval of the application. The approval of the 
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application for condonation shall serve as the basis for the concerned government 
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agency/corporation to write-off the unpaid interests, penalties and surcharges condoned. 
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SEC. 8. Collection of Payments. -The annual collection from payments of loans under 
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Section 5(b) by the Task Force Collection shall be remitted to the Bureau of Treasury and held as 
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trust fund to be called the Agrarian Reform Fund. 
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SEC. 9. Restoration of Nonperforming Loans to Performing Status. - Loans restructured 
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under the implementation of this Act shall be restored to performing status or status of good 
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standing upon three (3) consecutive payments by the borrower of the required periodic 
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amortizations. Government agencies may issue the appropriate certifications to the borrower 
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upon satisfaction of the said condition, thereby facilitating their reintegration into the financial 
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and banking system by allowing them to access new and additional credit and other government 
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programs. 
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SEC. 10. Implementing Rules and Regulations (fRR). - The DAR, the DA, the PCFC, the 
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Agricultural Credit Policy Council (ACPC) and the BSP are hereby directed to issue the IRR of 
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this Act within sixty (60) days after its effectivity. 
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SEC. 11. Separability Clause. - If, for any reason, any section or provision of this Act 
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shall be held unconstitutional or invalid by a competent authority, no other section, provision or 
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part hereof shall be affected and the same shall remain in full force and effect. 
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SEC. 12. Repealing Clause. - Section 36 of Presidential Decree No. 1445, all other laws, 
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executive orders, issuances or parts thereof inconsistent with the provisions of this Act are 
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hereby amended, repealed and modified accordingly. 
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SEC. 13. Effectivity Clause. - This Act shall take effect fifteen (15) days following its 
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publication in the Official Gazette or in at least two (2) newspapers of general circulation. 
Approved, 
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