Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
EIGHTEENTH CONGRESS 
Second Regular Session 
House Bill No. _________ 
Introduced by REP. JOEY SARTE SALCEDA 
AN ACT  
FURTHER AMENDING PRESIDENTIAL DECREE NO. 1467, AS AMENDED, 
OTHERWISE KNOWN AS THE CHARTER OF THE PHILIPPINE CROP 
INSURANCE CORPORATION (PCIC), TO ENCOURAGE PRIVATE SECTOR 
PARTICIPATION IN AGRICULTURAL INSURANCE, AND TO EXPAND 
THE INSURANCE SERVICES OF THE CORPORATION TO INCLUDE 
LIVESTOCK INSURANCE 
EXPLANATORY NOTE 
A 2019 discussion paper by the Philippine Institute of Development Studies (PIDS), titled 
“Towards a More Inclusive Agricultural Insurance Program,” found that agricultural insurance 
penetration rates in the Philippines remains in need of improvement, with programs focusing 
on mandatory insurance coverage.  
As of 2018, only 13.33% of the total agricultural land cultivated in the Philippines was insured 
with the Philippine Crop Insurance Corporation (PCIC). 
To improve insurance coverage, the PIDS paper recommended that the PCIC’s charter be 
expanded to make it a reinsurer for other entities willing to offer agricultural insurance. Such 
entities may include cooperatives, farmers’ associations, and other private sector participants, 
such as private financial institutions. 
Reinsurance is secondary insurance for primary insurance companies. Reinsurance allows 
primary insurers to hedge some of the risks they incur against another insurance product. By 
mitigating some of the risks to primary agricultural insurance, the PCIC will be able to lower 
the costs of private agricultural insurance. 
Creating this reinsurance system also encourages more private sector participating in the 
primary agricultural insurance business, which should increase penetration rates of agricultural 
insurance in the country. Having more entities that offer agricultural insurance will also 
improve competition in the sector and help keep insurance prices at affordable and competitive 
levels. 
April 27, 2021
9:04 am
9259


Reinsurance also allows the risks of primary insurance to be transferred to the capital markets. 
This transfer of risks is critical as in the wake of the increasing adverse impact of climate 
change. As the impacts of climate change, while a global problem, are local in scope, 
reinsurance and transfer of risk to the capital market allows hard-hit farmers in one locality to 
benefit from the risk-diversifying tools and effects of the national and even global financial 
markets. 
Expanding agricultural insurance coverage, and including livestock insurance in covered 
products, is especially relevant given the African Swine Fever (ASF) crisis that has affected 
our local meat industry.  
In view of the foregoing, the approval of this bill is urgently sought. 
JOEY SARTE SALCEDA 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
EIGHTEENTH CONGRESS 
Second Regular Session 
House Bill No. _________ 
Introduced by REP. JOEY SARTE SALCEDA 
AN ACT  
FURTHER AMENDING PRESIDENTIAL DECREE NO. 1467, AS AMENDED, 
OTHERWISE KNOWN AS THE CHARTER OF THE PHILIPPINE CROP 
INSURANCE CORPORATION (PCIC), TO ENCOURAGE PRIVATE SECTOR 
PARTICIPATION IN AGRICULTURAL INSURANCE, AND TO EXPAND 
THE INSURANCE SERVICES OF THE CORPORATION TO INCLUDE 
LIVESTOCK INSURANCE 
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 “Expanded Agricultural 
Insurance Act.” 
SEC. 2. Declaration of Policy. –  It shall be the policy of the State to develop and 
support an adequate agricultural insurance program as a mechanism for managing the risks 
inherent in agriculture and stabilizing the financial fluctuations suffered by agricultural 
producers in case of loss on all agricultural commodities, whether crops or livestock, and 
including the agricultural facilities and related infrastructures, with the end in view of 
encouraging lending institutions to extend credit to the agricultural sector. 
It shall also be the policy of the State to promote the modernization of the agricultural 
sector by mitigating the risks inherent to the industry and which increase the barriers to 
increased market participation in businesses related to agriculture.  
Towards this end, the State shall encourage active private sector participation in 
extending agricultural insurance to members of the agricultural sector by allowing the 
Philippine Crop Insurance Corporation to undertake reinsurance agreements with private sector 
agricultural insurers and to extend its insurance services to livestock insurance. 
SEC. 3. Section 1 of Presidential Decree No. 1467, as amended, is hereby further 
amended, to read as follows: 
“Section 1. Creation of the Philippine Crop Insurance Corporation. – There is 
hereby created a body corporate to be known as the “Philippine Crop Insurance 
Corporation” (PCIC and herein called the Corporation) which shall be attached 
to the Department of Agriculture for budgetary purposes. The Corporation shall 
9259


insure [qualified] farmers against losses arising from natural calamities, plant 
diseases, and pest infestations. [Initially,] [t]The Corporation shall provide 
insurance coverage for ALL AGRICULTURAL COMMODITIES, 
INCLUDING palay crops, and [later on] to other crops, without prejudice to 
the inclusion of other non-crop agricultural assets such as but not limited to 
LIVESTOCK, machineries, equipment, transport facilities, and other related 
infrastructures, as the Board of Directors of the Corporation may determine. 
Such [crop] insurance shall cover, in every case, the cost of production inputs, 
the value of the farmer'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 OFFER REINSURANCE SERVICES 
FOR 
ENTITIES 
WILLING 
TO 
OFFER 
AGRICULTURAL 
INSURANCE.” 
 
SEC. 4. Subsection 3.11 of Sec. 3 of Presidential Decree No. 1467, as amended, is 
hereby further amended to read as follows: 
 
“3.11. To generate internal funds by floating bonds, expansion to other 
insurance lines, INCLUDING REINSURANCE AGREEMENTS WITH 
AGRICULTURAL COOPERATIVES, FARMERS’ ASSOCIATIONS, 
AND 
OTHER 
PRIVATE 
SECTOR 
PARTICIPANTS 
IN 
THE 
AGRICULTURAL INSURANCE MARKET, and extending coverage to 
other areas of agriculture SUCH AS LIVESTOCK INSURANCE in order to 
address insurance needs of the target sector and to do and perform acts and 
things and to exercise all the general powers conferred by law upon the 
Corporation as are incidental or conducive to the attainment of the objectives 
of the Corporation.” 
 
SEC. 5. Separability Clause. – If any provision or part hereof is held unconstitutional 
or invalid, the remainder of the law, or the provisions not otherwise affected shall remain valid 
and subsisting. 
 
SEC. 6. Repealing Clause. – Any provisions of Presidential Decree No. 1467, as 
amended, and all other laws, inconsistent herewith is hereby repealed or modified accordingly. 
 
SEC. 7. Effectivity. – This Act shall take effect fifteen (15) days after its complete 
publication in at least two (2) newspaper of general circulation. 
 
 
Approved,