Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

18TH CONGRESS
First Regular Session

HOUSE BILL NO. eee

Introduced by Representative Michaei 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 cf 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 rice and corn, 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
adequ.ite 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 commercia: bank.

LANDBANK became the financial intermediary for the Comprehensive
Agrarian Reform Program (CARP) in 1988. It was also in that year that
UnionRank started a gradual privatization. The Aboitiz Group of
Companies acquired Landbank's 40% share of UnionBank then which it
contiues to own. LANDBANK also became the third member of Expressnet,
an interbank 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 increared to 200 billion
Pesos, after 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.

La

€ of this bill is earnestly requested.

Thus, the early p

‘L L. ROM=RO Ph.D.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

18TH CONGRESS
First Regular Session

HOUSE BILL NO. ate ee

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 « declared policy of the
state to provide comprehensive livelihood programs a1d 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 fisherfoiks; and
t shall hereby be a policy of the state to pro.note 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,