oF REPRESENT ATNES:

Republic of the Philippines, RECEM a

HOUSE OF REPRESENTATIVES -
Quezon City { ee fet 1
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SEVENTEENTH CONGRES
First Regular Session

House Bill No. 29690

Introduced by Representative GLORIA MACAPAGAL ARROYO.

AN ACT
ALLOCATING FIVE PERCENT (5%) OF ANNUAL VALUE- ADDED TAX COLLECTIONS
TO FINANCE AGRICULTURE EXPENDITURES AMENDING FOR THIS PURPOSE THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED

EXPLANATORY NOTE

Agriculture is the foundation of the rural economy, Aside from providing the nation with the
basic necessities of food and raw materials, the sector also provides employment to one-
fifth of the country’s population. A force that drives the economy, the agriculture sector
contributes an annual 18% to the country’s GDP despite the onslaught of typhoons, drought,
pests, diseases, and high cost of fertilizers. As such, agriculture is regarded as the nation’s
weapon against poverty and hunger.

The growth of the sector however, has not been enough to improve the overall labor
productivity in the sector. Comparative yield, production cost and price data on various
agricultural commodities show that the gains posted by the country were not at pace with
those of its neighbors. As a result, the comparative advantage of Philippine agriculture
continued to decline resulting in our country increasingly becoming a net importer of
agricultural products since 1994,

These setbacks were mainly due to: 1) low public and private investments in the sector; 2)
higher cost of farm inputs; 3) high post-harvest losses due to inadequate equipment and
infrastructure; 4) poor post-harvest handling practices; and 5) inadequate skills and
technical support, among others. Investments in agriculture continued to lag behind the
actual food requirements of our increasing population. Thus, poverty and inequity have
remained a challenge in the countryside.

Funding support for agriculture is necessary because it leads to greater productivity, which
in turn translates to stale prices of commodities, and more affordable food on the table.

This bill allocated funds for farm inputs, post-harvest facilities, and infrastructure support. In
order to promote agribusiness as a tool for countryside development, this bill also provides
funding support to livelihood programs, capability programs and microfinance.


Since agriculture plays a major role in countryside income and employment generation, the
development of the sector is essential and should be given additional budgetary support.

In view of the foregoing, immediate passage of this bill is earnestly sought.

GLORIA MAGAPAGAL ARROYO
2" District, Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 2960

Introduced by Representative GLORIA MACAPAGAL ARROYO

AN ACT
ALLOCATING FIVE PERCENT (5%) OF ANNUAL VALUE-ADDED TAX
COLLECTIONS TO FINANCE AGRICULTURE EXPENDITURES AMENDING
FOR THE PURPOSE THE NATIONAL INTERNAL REVENUE CODE OF 1997,
AS AMENDED

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

SECTION 14, A new section, to be numbered Two Hundred Eighty-Seven,
shall be added to Chapter II, Title XI, of the National Internal Revenue Code, as
amended to read as follows:

"SEC. 287. DISPOSITION OF PROCEEDS OF VALUE-ADDED
TAX — FIVE PERCENT (5%) OF THE VALUE-ADDED TAX COLLECTED
UNDER TITLE IV OF THIS ACT, AS AMENDED, SHALL BE
ALLOCATED TO THE FOLLOWING AGRICULTURE EXPENDITURES:

4) TWENTY PERCENT (20%) FOR CONSTRUCTION,
REHABILITATION AND RESTORATION OF COMMUNAL IRRIGATION
SYSTEMS;

2) TEN PERCENT (10%) FOR POST-HARVEST FACILITIES
INCLUDING MECHANICAL AND SOLAR DRYERS AND
WAREHOUSES;

3) TEN PERCENT (10%) FOR SEED AND ORGANIC FERTILIZER
SUBSIDIES;


4) TWENTY PERCENT (20%) FOR FARM-TO-MARKET ROADS IN
MUNICIPALITIES WITH SIGNIFICANT AGRICULTURAL ACTIVITIES;

5) TEN PERCENT (10%) FOR LIVESTOCK DISPERSAL PROGRAM;

6) TEN PERCENT (10%) FOR TRAINING/CAP ABILITY BUILDING
PROGRAMS FOR AGRICULTURAL EXTENSION WORKERS AND
THEIR CLIENTELE;

7) TEN PERCENT (10%) FOR MICROFINANCE LENDING PROGRAMS
TO FINANCE SMALLHOLDER AGRICULTURE;

8) TEN PERCENT (10%) FOR THE ESTABLISHMENT AND
MAINTENANCE OF MARICULTURE AND AQUACULTURE PARKS.

THE FUND SHALL BE ADMINISTERED BY THE DEPARTMENT OF
AGRICULTURE (DA) IN CONSULTATION WITH THE LOCAL GOVERNMENT
UNIT CONCERNED.

ASIDE FROM THE ABOVE ITEMS OF EXPENSES, AT NO TIME
SHALL ANY PORTION OF THE EARMARKED FUNDS BE USED TO
AUGMENT PERSONAL SERVICES AND OTHER MAINTENANCE AND.
OTHER OPERATING EXPENSES.”

SECTION 2. The succeeding Sections of the National Internal Revenue
Code are hereby renumbered accordingly.

SECTION 3. Coverage of this Act. — The allocation of value-added tax
revenues shall commence in the fiscal year within which this Act shall take effect.

SECTION 4. Separability Clause. - If any part or provision of this Act shall
be held to be unconstitutional or invalid, other parts or provisions hereof which
are not affected thereby shall continue to be in full force and effect.

SECTION 5. Repealing Clause. — Ail laws, decrees, executive orders,
rules and regulations, or parts thereof which are inconsistent with this Act are
hereby repealed, amended or modified accordingly.

SECTION 6. Effectivity. - This Act shall take effect after its publication in
the Official Gazette or in two (2) newspapers of general circulation.

Approved,