Republic of the Philippines

House of Representatives
Quezon City

FIFTEENTH CONGRESS
Third Regular Session

HOUSE BILLNO.__5783

Introduced by Honorable Cresente C. Paez and
Honorable Jose R. Ping-ay

EXPLANATORY NOTE

Countryside rural development is predominant and more pronounced
by the programs of the Department of Agriculture and the Department of
Agrarian Reform. ‘These programs include the Credit Assistance Program —
Program Beneficiaries Development Program and Credit Program Scheme
of the Department of Agrarian Reform; and the Agricultural credit secured
through Microfinance Program of the People’s Credit and Finance

Corporation.

A grand total of roughly P 3.7 billion inclusive of interest was
released by all of these government agencies. Collections as of December
2011 amounted to P 1.3 billion which is 35 % of the total amount of the
loan. It is for this reason that we take measures in order to apply leniency to
this unpopular agrarian reform beneficiaries by condoning all interests,

surcharges and other penalties from the commencement of the loan.


Needless to say, all the payments made subsequent to the credit application

shall be applied retroactively to the principal amount only.

It is to be noted that farmers and agrarian reform beneficiaries are not
only entrepreneurs in bucolic areas but are also partners in the evolution of a
better and brighter country. It is therefore imperative upon us to take an
overwhelming care and attention by condoning these interests that burdened
the debt.

It is for this reason that the approval of this bill be given an immediate

positive response



Republic of the Philippines

House of Representatives
Quezon City

FIFTEENTH CONGRESS

Third Regular Session

HOUSE BILL NO._5783

introduced by Honorable Cresente C. Paez and
Honorable Jose R. Ping-ay

AN ACT PROVIDING FOR THE CONDONATION OF
PENALTIES AND INTEREST ON LOANS SECURED BY
THE AGRARIAN REFORM BENEFICIARIES, FARMERS
AND THEIR COOPERATIVES FROM THE DEPARTMENT
OF AGRARIAN REFORM, THE DEPARTMENT OF
AGRICULTURE AND PEOPLE’S CREDIT AND FINANCE
CORPORATION

SEC. 1. Title ~ This law shall be known as the “Agrarian and Agricultural
Credit Condonation Act of 2012”

SEC. 2 Declaration of Policy — The State shall promote a comprehensive
rural development and agrarian reform through a provision of measures that
will release the farmers and agrarian reform beneficiaries from the additional

burden of debt


SEC.3

a.

Definition of Terms

“Agrarian Reform Beneficiaries” — refers to farmers who were
granted lands under PD. No. 27, the Comprehensive Agrarian
Reform Law and RA 9700 or the Comprehensive Agrarian Reform
Law Extension with Reforms and regular farm workers,
irrespective of tenurial arrangement, who benefitted from the
redistribution of lands, regardless of crops and fruits produced, to
include the totality of fruits, and support services designed to lift
the economic status of the beneficiaries and all other alternative
arrangements to the physical distribution of lands, such as
production or profit sharing, labor administration and the
distribution of stocks which will allow beneficiaries to receive a

just share of fruits of the lands they work

“Agricultural and Agrarian Reform Credit” ~ shall refer 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, processing,
storage and marketing and such other facilities in support of
agriculture and for the efficient and effective merchandising of

agricultural and farm commodities

“Condonation” — refers to the relief granted by law in the payment

of penalties, surcharges and accrued interest

. “Delinquent Borrrower” — refers to the borrower with at least three

(3) months of unpaid monthly amortization as of the effectivity of
this Act

“Farmer” — shall refer to any natural person whose primary

livelihood is cultivation of land or the production of agricultural


crops, livestock and agricultural products, in small or commercial
scale, 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 tenancy agreement

or arrangement

f “Cooperative” — refers to organizations composed mostly of small
agricultural producers, farmers, farm workers or other agrarian
reform beneficiaries who voluntarily organized themselves for the
purpose of pooling land, manpower, technological, financial or
other economic resources, and operate on the principle of one
member one vote. It must be registered with the Cooperative

Development Agency

g. “Loan Restructuring” — refers to a process where the principal
terms and conditions of the original loan are modified in
accordance with an agreement setting forth a new plan of or

schedule of payment

SEC. 4 Condonation - All interest, penalties and surcharges of agricultural
and agrarian reform credit secured by agrarian reform beneficiaries, farmers
and their cooperatives from the Department of Agrarian Reform,
Department of Agriculture and the People’s Credit and Finance Corporation
prior to the effectivity of this Act are hereby condoned upon approval of the

borrowers application for condonation.

SE

5 Covered Account — The following accounts are covered by this

condonation program

a Agricultural and Agrarian Reform credit secured through the
Credit Assistance Program -— Program Beneficiaries

Development Program of the Department of Agrarian Reform;


b Agricultural and Agrarian Reform credit secured through the

Credit Program Scheme of the Department of Agrarian Reform;

© Agricultural credit secured through the High Yield Crop Loan

Assistance Program of the Department of Agriculture and;

d Agricultural credit secured through Microfinance Program for
Small Farmers and Fisherfolks and their Household of the

People’s Credit and Finance Corporation

Ss

Excluded Account ~ Any account without a single payment made

from the time of its take out is excluded from the coverage of this program

SEC. 7 Who May Apply — Any farmer, agrarian reform beneficiary,
fisherfolk, their legal heirs as well as their cooperatives who secured
agricultural and agrarian reform credit under any of the covered accounts
enumerated in Sec. 5 of this Act may apply for condonation of penalties and
interest with the government agency or corporation upon payment of at least

ten per

ent (10%) of the outstanding loan balance

SEC. 8 Approval — The government agency or corporation managing the
covered accounts shall review and approve the application for condonation
and loan restructuring. The period for payment of the restructured loan shall

not exceed eighteen (18) months after the approval of the application

SEC. 9 — Implementing Rules and Regulations — The Department of
Agrarian Reform, Department of Agriculture, People’s Credit and Finance,
Agricultural Credit and Policy Council and the Bangko Sentral ng Pilipinas
are hereby directed to issue the Implementing Rules and Regulations of this

program within sixty (60) days after the effectivity of this Act.


SEC. 10 Separability — If for any reason, any section or provision of this
Act shall be held unconstitutional or invalid by a competent authority, no
other section, provision or part thereof shall be affected and the same shall

remain in full force and effect.

SEC. 11 Repeal — All other laws, executive orders, issuances or parts
thereof inconsistent with the provisions of this Act are hereby amended,

repealed and modified accordingly

‘C. 12 Effectivity — This Act shall take effect immediately after its
publication in the Official Gazette or in two (2) newspaper of general

circulation.

Approved,