AN ACT PROVIDING FOR AN AGRICULTURE AND AGRARIAN REFORM CREDIT AND FINANCING SYSTEM THROUGH BANKING INSTITUTIONS

Fourteenth Congress

Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-seventh day of July, two thousand nine.

REPUBLIC ACT NO. 10000

AN ACT PROVIDING FOR AN AGRICULTURE AND AGRARIAN REFORM CREDIT AND FINANCING SYSTEM THROUGH BANKING INSTITUTIONS

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

ARTICLE I
GENERAL PROVISIONS

Section 1. Short Title. - This Act shall be known as "The Agri-Agra Reform Credit Act of 2009".

Section 2. Declaration of Policy. - It is hereby declared the policy of the State to promote equal access to opportunities under an environment of sustained growth and expanding productivity as the key to raising the quality of life for all. Towards this end, the State shall promote rural development by enhancing access of the rural agricultural sector to financial services and programs that increase market efficiency and promote modernization in the rural agricultural sector.

Section 3. Definition of Terms. - As used in this Act, the term:

ARTICLE II
AGRICULTURAL CREDIT, INSURANCE AND FINANCING SYSTEM

Section 4. Agriculture, Fisheries and Agrarian Reform Credit, Insurance and Financing System. - There shall be evolved an agriculture, fisheries and agrarian reform credit, insurance and financing system to improve the productivity of the agriculture and fisheries sectors, particularly the farmers, fisherfolk and agrarian reform beneficiaries, settlers, agricultural lessees, amortizing owners, farmworkers, fishworkers, owner-cultivators, compact farmers, farmer's and fisherfolk's cooperatives, organizations and associations, through government and private banking institutions.

Agriculture and agrarian reform credit, as used herein, shall consist of loans activities and purposes including, but not limited to, agricultural production, promotion of agribusiness and exports, acquisition of work animals, farm and fishery equipment and machinery, seeds, fertilizers, poultry, livestock, feeds and other similar items, acquisition of lands authorized under the Agrarian Reform Code of the Philippines and its amendments; construction, acquisition and repair of facilities for production, processing, storage and marketing and such other facilities in support of agriculture and fisheries; and efficient and effective merchandising of agricultural and fishery commodities stored and/or processed by the facilities aforecited in domestic and foreign commerce.

Section 5. Agriculture and Agrarian Reform Credit Beneficiaries. - The credit mentioned in the preceding section shall be extended to the beneficiaries named therein or to cooperatives and associations in good standing of such beneficiaries regardless of capitalization based on the feasibility of the project and their paying capacity, their estimated production, and/or securities they can provide from the proceeds of the loan.

Section 6. Credit Quota. - All banking institutions, whether government or private, shall set aside at least twenty-five percent (25%) of their total loanable funds for agriculture and fisheries credit in general, of which at least ten percent (10%) of the loanable funds shall be made available for agrarian reform beneficiaries mentioned in Section 5 hereof: Provided, however, That total loanable funds as used in the section shall refer to funds generated from the date of effectivity of this Act: Provided, further, That the twenty -five percent (25%) credit quota is subject to a joint review by the Department of Agriculture (DA), the Department of Agriculture Reform (DAR) and the Bangko Sentral ng Pilipinas (BSP) after three (3) years of implementation to determine whether the law has been effective in accomplishing its goals. The findings shall be submitted to Congress.

Section 7. Modes of Compliance. - The BSP, the DA and the DAR, in consultation with concerned agencies and sectors, shall promulgate such rules and regulations as may be necessary to implement the provisions of this Act within ninety (90) days after the approval of this Act. Such rules and regulations shall take effect fifteen (15) days after its publication in a newspaper of general circulation in the Philippines. Subject to such rules and regulations, banking institutions may be allowed to:

Section 8. The alternative compliance enumerated in the preceding section shall also be subject to joint review by the DA, the DAR and the BSP after three (3) years of the implementation to determine whether the modes of compliance directly target the agriculture, fisheries and agrarian reform sector. The Findings shall be submitted to Congress.

ARTICLE III
MISCELLANEUS PROVISIONS

Section 9. Annual Reports. - The BSP shall furnish reports on the compliance with the mandatory credit allocation to the DA, the DAR and Congress on a yearly basis.

Section 10. Penalty Clause. - The BSP shall impose administrative sanctions and other penalties on the lending institutions for noncompliance with the provisions of this Act. Penalties on noncompliance shall be computed at one-half of one percent (0.5%) of noncompliance and undercompliance and shall be directed to the development of the agri-agra sector. Ninety percent(90%) of the penalties collected shall be allocated between the AGFP and PCIC according to the needs of the agri-agra sector as provided for in implementing rules and regulations of this Act and the remaining ten percent (10%) shall be given to the BSP to cover administrative expenses.

Section 11. Repealing Clause. - Presidential Decree 717, the second paragraph under Section 8of Republic Act No. 7900, otherwise known as High-Value Crops Development Act of 1995, and Section 9 of Republic Act No. 7721, otherwise known as liberalizing the Entry and Scope of Operations of Foreign Banks in the Philippines, are all hereby repealed. Other laws, presidential decrees, executive orders, rules and regulations, or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

Section 12. Separability Clause. - If any part, section or provision of this Act is held invalid or unconstitutional, other provisions not affected thereby shall remain in force and effect.

Section 13. Transitory Provision. - Prior to the effectivity of the implementing rules and regulations of this Act, the provisions of Presidential Decree No. 717 shall remain in force.

Section 14. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.

Approved,

This Act which is a consolidation of Senate Bill No. 3431 and House Bill No. 6095 was finally passed by the Senate and the House of the Representatives on December 16, 2009 and December 15, 2009, respectively.

Approved: FEB 23, 2010

(Sgd.) GLORIA MACAPAGAL-ARROYO
President of the Philippines